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Orissa Sponge Iron & Steel Ltd.

BSE: 504864 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE228D01013
BSE 00:00 | 04 Mar Orissa Sponge Iron & Steel Ltd
NSE 05:30 | 01 Jan Orissa Sponge Iron & Steel Ltd
OPEN 159.70
PREVIOUS CLOSE 160.00
VOLUME 881
52-Week high 160.00
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 477
Buy Price 0.00
Buy Qty 0.00
Sell Price 160.00
Sell Qty 64.00
OPEN 159.70
CLOSE 160.00
VOLUME 881
52-Week high 160.00
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 477
Buy Price 0.00
Buy Qty 0.00
Sell Price 160.00
Sell Qty 64.00

Orissa Sponge Iron & Steel Ltd. (ORISSASPONGE) - Auditors Report

Company auditors report

TO THE MEMBERS OF ORISSA SPONGE IRON & STEEL LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Orissa Sponge Iron& Steel Limited( the Company ) which comprise the Balance Sheet as at March 31 2020the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as the Standalone Financial Statements ).

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ( the Act ) in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended (Ind AS ) and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2020 the profit and total comprehensive incomechanges in equity and its cash flows for the year ended on that date

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor sResponsibilities for the Audit of the Standalone Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI s Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Reference to Note 19 as per the assessment made by the management liabilitiesappearing in the books of account for considerably long period of time and on which thereis no movement amounting to Rs. 168.70 lakhs were written back as no longer required.Similarly Sundry Debtors Advances and claims receivables amounting to Rs 12.17 lakhs werewritten off as they were found to be no longer recoverable. The net effect of Rs. 156.53is shown under other Income.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company s Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board s Report including Annexures to Board s Report BusinessResponsibility Report Corporate Governance and Shareholder s Information but does notinclude the Standalone Financial Statements and our auditor s report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone Financial Statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

The Company s Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Standalone Financial Statements management is responsible forassessing the Company s ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company s financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor s report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

i) Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.ii) Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to financial statements inplace and the operating effectiveness of such controls

iii) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management

iv) Conclude on the appropriateness of management s use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor s report to the related disclosures inthe Standalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor s report. However future events or conditions may cause the Company to cease tocontinue as a going concern

v) Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation

Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Standalone Financial Statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor s report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication

Report on Other Legal and Regulatory Requirements

As required by Section 143(3) of the Act based on our audit we report that:

We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit

In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account

In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014

On the basis of the written representations received from the Directors as on March 312020 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.

With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure A . Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company s internal financial controls withreference to financial statements.

With respect to the other matters to be included in the Auditor s Report in accordancewith the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

With respect to the other matters to be included in the Auditor s Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements

ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

As required by the Companies (Auditor s Report) Order 2016 ( the Order ) issued by theCentral Government in terms of Section 143(11) of the Act we give in Annexure B astatement on the matters specified in paragraphs 3 and 4 of the Order.

For A.K.Bhardwaj & Co Chartered Accountants

FRN 316085E

(A.K.Bhardwaj)

Partner Membership No. 052723

UDIN: 20052723AAAABJ7183

Place : New Delhi/Kolkata

Dated: 15.10.2020

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in our independent Auditors Report of even date to the members of

Orissa Sponge Iron & Steel Limited on the Standalone Ind AS financial statementsfor the year ended 31st March 2020)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of ORISSASPONGE IRON & STEEL LIMITED ( the Company ) as of 31 March 2020 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the Guidance Note ) issued by the Institute of Chartered Accountants of India and theStandards on Auditing prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the standaloneInd AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For A.K.Bhardwaj & Co Chartered Accountants

FRN 316085E

(A.K.Bhardwaj)

Partner Membership No. 052723

UDIN: 20052723AAAABJ7183

Place : New Delhi/Kolkata

Dated: 15.10.2020

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 10 of the Independent Auditors Report of even date to themembers of Orissa Sponge Iron & Steel Limited on the Standalone Ind AS financialstatements as of and for the year ended 31st March 2020)

1. In respect of fixed assets (Property plant and equipment):

(a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets

(b) The Fixed Assets of the Company have been physically verified by the Managementduring the year and no material discrepancies have been noticed on such verification. Inour opinion the frequency of such verification is reasonable

(c) According to the information and explanation given to us and the records examinedby us and based on the examination of the registered sale deed/transfer deed/conveyancedeed provided to us we report that the title deed comprising all the immovable propertiesof land and building which are freehold are held on the name of the Company as at theBalance Sheet date. In respect of immovable properties of land and building that have beentaken on lease and disclosed as fixed assets in the Standalone Ind AS financialstatements the lease agreements are in the name of the Company where the Company is thelessee in the agreement

2. In respect of Inventories

a) The inventory of the Company has been physically verified by the managementduring the year. In our opinion the frequency of such verification is reasonable.

b) The procedures of physical verification of the inventories followed by themanagement are reasonable and adequate in relation to the size of the company and thenature of the business.

c) On the basis of our examination of the records of inventory we are of theopinion that the company is maintaining proper records of inventories. The discrepanciesnoted on physical verification between the physical stocks and the book records were notmaterial.

3. The company has not granted any loans secured or unsecured to companiesfirms Limited Liability Partnership or other parties covered in the register maintainedunder Section 189 of the Companies Act 2013. Therefore the provisions of Clause (3) (iii)(a) (b) and (c) of the said Order are not applicable to the Company.

4. In our opinion and according to the information and explanation given to usthe Company has complied with the provisions of Section 185 and 186 of the Companies Act2013 in respect of investments made Guarantee and Security provided by it. The Companyhas not given any loan but has provided guarantee for loans taken by a related party frombanks or financial institutions terms and conditions whereof are not prejudicial to theinterest of the company.

5. According to the information and explanation given to us the Company has notaccepted any deposit from the public and hence reporting under Clause (v) of the CARO 2016is not applicable

6. The maintenance of cost records has been specified by the Central Governmentunder Section 148(1) of the Companies Act 2013. We have broadly reviewed the books ofaccount maintained by the Company pursuant to the Companies (Cost Records and Audit)Rules 2014 as amended prescribed by the Central Government under Section 148 (1) of theCompanies Act 2013 and are of the opinion that prima facie the prescribed accounts andrecords have been maintained. However we have not made a detailed examination of suchrecords.

7. (a) According to the information and explanation given to us except CentralSales Tax Orissa Sales Tax and Entry Tax Liability totaling Rs.

30.91 lakhs and Provident Fund dues to the extent of Rs. 910.02 lakhs no undisputeddues payable in respect of Provident Fund Employees State Insurance Income Tax SalesTax Service Tax Customs duty Excise duty value added tax cess and other materialstatutory dues were outstanding at the year-end for a period of more than six months fromthe date they became payable.

(b) There are no disputed dues which have remained unpaid as on 31st March2020 on account of Provident Fund Employees State Insurance Income Tax Sales TaxWealth Tax Service Tax Customs duty Excise duty value added tax cess except asfollows:

Nature of Dues Amount (Rs in Lakh) Period to which the amount relates Forum where dispute is pending
Income Tax 13.55 2007-08 to 2013-14 TDS assessing authority
Orissa Sales Tax & VAT 817.44 1985-86 to 2006-07 Various Authorities
Central Sales Tax 2495.87 1985-86 to 2006-07 Various Authorities
Provident Fund & Pension Fund 1099.12 2007-08 to 2018-19 Regional Provident Fund Commissioner Keonjhar Orissa High court & Tribunal

8. In our opinion and according to the information and explanation given to usmoney raised by the Company by way of initial public offer or further public offer(including debt instruments) and term loans have been applied for the purpose for which itwas raised.

9. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no fraud on the Company by itsofficer or employees has been noticed or reported during the year

10. In our opinion and according to the information and explanations given tous the Company has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013

11. The Company is not a Nidhi Company and hence reporting under Clause (xii) ofthe CARO 2016 is not applicable

12. In our opinion and according to the information and explanations given tous the Company is in compliance with Section 177 and 188 of the

Companies Act 201 where applicable for all transactions with the related parties andthe details of the related party transactions have been disclosed in the Standalone Ind ASfinancial statements etc. as required under Ind AS 24 Related party disclosures specifiedunder Section 133 of the Act.

13. During the year the Company has not made any preferential allotment orprivate placement of the shares or fully or party convertible debentures and hencereporting under Clause (xiv) of CARO 2016 is not applicable to the Company.

14. In our opinion and according to the information and explanations given tous the Company has not entered into any non-cash transactions during the year with itsDirectors or associate companies as applicable or persons connected with them and hencethe provisions of Section 192 of the Companies Act 2013 and Clause 3 (xv) of the Orderare not applicable. The Company has no Subsidiary on the reporting date. 15. Thecompany is not required to be registered under Section 45-IA of the Reserve bank of IndiaAct 1934.

For A.K.Bhardwaj & Co Chartered Accountants

FRN 316085E

(A.K.Bhardwaj)

Partner Membership No. 052723

UDIN: 20052723AAAABJ7183

Place : New Delhi/Kolkata

Dated: 15.10.2020

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