THE MEMBERS OF S.A.L. STEEL LIMITED
Report on the Audit of the Standalone IND AS Financial Statements Opinion
We have audited the accompanying standalone IND AS financial statements of S.A.L. STEELLIMITED (the "Company") which comprise the Balance Sheet as at March 312022the 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 significant accounting policies and other explanatory information (hereinafterreferred 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 trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 312022 and its Profits totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing ("SA"s)specified under section 143(10) of the Act. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("ICAI") together with the ethical requirements that are relevant to ouraudit of the standalone financial statements under the provisions of the Act and the Rulesmade thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidenceobtained by us is sufficient and appropriate to provide a basis for our audit opinion onthe standalone IND AS 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 IND AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalone IND ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.
|Description of Key audit Matter ||Our response and results |
|REVENUE (Refer note 45) to the standalone Ind AS financial statements) ||Our key audit procedures to assess the recognition of revenue on sale of goods included the following: |
|Revenue of the company comprises of sale of Sponge Iron Ferro alloys as well as sale of power. The company sells its products directly to the end use customers. ||We assessed the appropriateness of the Company's revenue recognition policies including those related to discounts and incentives; |
|Revenue recognition is a significant audit risk across the company. Specifically there is a risk that revenue is recognized on sale of goods before the control in the goods is transferred. ||We obtained an understanding of process and assessed the design implementation and operating effectiveness of management's key internal controls in relation to revenue recognition from sale of goods. We also tested the Company's controls over timing of revenue recognition; |
| ||We also tested on a sample basis whether specific revenue transactions around the year end had been recognized in the appropriate period on the basis of the terms of sale of the contract particularly with reference to the transfer of control in the goods in question with regard to the year end transactions. |
| ||We inspected key customer contracts/ purchase orders to identify terms and conditions related to acceptance of goods and the right to return and assessing the Company's revenue recognition policies with reference to the requirements of the prevailing accounting standards; |
|Litigations and claims (Refer note 31A) to the standalone Ind AS financial statements) ||Our audit procedures inter alia included following: |
|The cases are pending with multiple tax authorities like Service tax VAT Excise. & customs and there are claims against the company which have not been acknowledged as debt by the company. ||- Discussed disputed litigation matters with the company's management. |
|In normal course of business financial exposures may arise from pending proceedings and from claims of the customers not acknowledged as debt by the company. Whether a claim needs to be recognized as liability or disclosed as contingent liability in the standalone Ind As financial statements is dependent on a number of significant assumptions and judgments. The amounts involved are potentially significant and determining the amount if any to be recognized or disclosed in the standalone Ind AS financial statements is inherently subjective. ||- Evaluated the management's judgment of tax risks estimates of tax exposures other claims and contingencies. Past and current experience with the tax authorities and management's correspondence / response including on the claims lodged by customers were used to assess the appropriateness of management's best estimate of the most likely outcome of each uncertain contingent liability. |
|We have considered Litigations and claims; a Key Audit Matter as it requires significant management judgement including accounting estimates that involves high estimation uncertainty. ||- Critically assessed the entity's assumptions and estimates in respect of claims included in the contingent liabilities disclosed in the standalone Ind AS financial statements. Also assessed the probability of negative result of litigation and the reliability of estimates of related obligations. |
| ||Conclusion: Based on the procedures described above we did not find any material exceptions to the management's assertions and treatment presentation & disclosure of the subject matter in the standalone Ind AS financial statements. |
Emphasis of Matter
1. Financial statements describes about the Non disclosure of Reportable Segments asrequired under Indian Accounting Standard - 108 'Operating Segments'. As IND AS 108Operating Segments mandates the disclosure requirements there is no impact on thefinancial results due to non disclosure.(Refer Note No 32 of notes forming part ofStandalone Ind AS financial statement)
Our opinion is not modified on the above matters.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone IND AS financial statements and our auditor's report thereon.
Our opinion on the standalone IND AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone IND AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone INDAS 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 IND AS financialstatements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the IND AS and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone INDAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone IND AS financial statements management is responsible forassessing the Companys ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companys financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone IND AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone IND ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone IND AS financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial control relevant to the audit inorder to 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 system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of managements use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalone INDAS financial statements including the disclosures and whether the standalone IND ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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 Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by section 197(16) of the Act we report that the company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under section 197 read with schedule V to the Act. The remuneration paidto any director is not in excess of the limit laid down under section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.
2. As required by the Companies (Auditors Report) Order 2020 (the"Order") issued by the Central Government in
terms of Section 143(11) of the Act we give in "Annexure A" a statement onthe matters specified in paragraphs 3 and 4 of the Order.
3. As required by Section 143(3) of the Act based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) 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.
c) The standalone Balance Sheet the standalone Statement of Profit and Loss includingOtherComprehensive Income standalone Statement of Changes in Equity and the standaloneStatement of Cash Flows dealt with by this Report are in agreement with the books ofaccount.
d) In our opinion the aforesaid standalone financial statements comply with the IND ASspecified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March312022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312022 from being appointed as a director in terms of Section 164(2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Companys internal financial controlsover financial reporting.
g) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous
I) The Company has disclosed the impact of pending litigations on its financialposition in the standalone Ind AS Financial Statements (Refer Note No. 31-A to theStandalone Ind AS Financial Statements.
ii) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses
iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv) a. The Management has represented that to the best of its knowledge and belief nofunds (which are materialeither individually or in the aggregate) have been advanced orloaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person or entity including foreignentity ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;
b. The Management has represented that to the best of its knowledge and belief nofunds (which are material either individually or in the aggregate) have been received bythe Company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries;
c. Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b) above contain any material misstatement.
v) The company has not declared and paid any Interim divided nor has proposed any finaldividend during theprevious year and hence the question of Compliance and applicabilityof Section 123 of the Companies Act does not arise.
|FOR PARIKH & MAJMUDAR || |
|CHARTERED ACCOUNTANTS || |
|FRN - 107525W || |
|Sd/- || |
|[CA SANJAY MAJMUDAR] || |
|PARTNER || |
|[MEMBERSHIP NO. 036791] ||Date : 28-05-2022 |
|UDIN: 22036791AJUWLE6947 ||PLACE:AHMEDABAD |
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT (Referred to inparagraph 1 under Report on Other Legal and Regulatory Requirements section ofour report to the Members of S.A.L. STEEL LIMITED of even date)
With reference to the Annexure A referred to in the Independent Auditors Report to themembers of the Company on the
Standalone IND AS financial statements for the year ended on 31st March 2022 wereport following :
I. (a) (A) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment.
(B) The Company has maintained proper records showing full particulars of intangibleassets.
(b) According to the information and explanations given to us the property plant andequipment are physically verified in a phased manner by the management during the year which in our opinion is reasonable having regard to the size of the Company and nature ofits assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties otherthan the self constructed property are held in the name of the Company.
(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not revalued any of itsProperty Plant and Equipment and intangible assets during the year.
(e) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company No proceedings have been initiated during theyear or are pending against the Company as at March 312022 for holding any Benamiproperty under the Benami Transactions (Prohibition) Act 1988 (as amended in 2016) andrules made thereunder.
ii. (a) As explained to us the inventories were physically verified by the managementat reasonable intervals during the year. In our opinion the frequency of verification isreasonable and the coverage and procedure of such verification by the management isappropriate. As explained to us there were no discrepancies of 10% or more in aggregatefor each class on physical verification of inventory as compared to the book records.
(b) The Company has not been sanctioned working capital in excess of the limit of Rs. 5crores during any point of time of the year in aggregate from a bank & financialinstitutions on the basis of security of the current assets. Hence reporting under clause3(ii)(b) of the order is not applicable.
iii. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made investments in orprovided any guarantee or security or granted any loans or advances in nature of loanssecured or unsecured to companies firms limited liability partnerships or any otherparties. Accordingly clause 3(iii) (a) (A) & (B) (b) (c)(d)(e) and (f) of theorder are not applicable.
iv. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the company has not made any investment orgiven guarantee or security during the year under review. Accordingly clause 3(iv) of theorder is not applicable.
v. The Company has not accepted any deposits from the public during the year underreview. Accordingly clause 3(v) of the Order is not applicable.
vi We have broadly reviewed the books of accounts maintained by the company pursuant tothe rules made by the Central Government of India for the maintenance of Cost recordsspecified under section 148 of Companies Act 2013 and are of the opinion that prima faciethe prescribed accounts & records have been made and maintained. We have however notmade a detailed examination of the cost records with a view to determine whether they areaccurate or complete.
vii. (a) The company does not have liability in respect of Service Tax Duty of exciseSales tax and value added tax during the year since effective 1st July 2017 thesestatutory dues has been subsumed in to Goods & Service Tax.
According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund ESICincome-tax duty of customs Goods & Service Tax cess and other material statutorydues have generally been regularly deposited during the year by the Company with theappropriate authorities.
According to the information and explanation given to us no undisputed amounts payablein respect of provident fund ESIC income-tax Goods & Service Tax duty of customscess and other statutory dues were outstanding as at 31st March2022 for a period of morethan six months from the date of becoming payable except dues for (1) deferred sales taxliability amounting to Rs.135.78 lakhs(2) dues of value added tax (VAT) to the tune ofRs.1777.90 lakhs.
(b) According to the information and explanations given to us there are no materialdues of Goods & Service Tax & Income Tax which have not been deposited with theappropriate authorities on account of any dispute. However according to information andexplanations given to us the following dues of Customs Sales tax VAT Service Tax andDuty of Excise have not been deposited by the company on account of Dispute:
|Sr. No ||Name of the statue ||Nature of Dues ||Financial year to which It relates ||From where the dispute is pending ||Amount under dispute not yet deposited (Net of Payments) (in Rs lakhs.) |
|1 ||Custom Act1962 ||Custom Duty ||2011-12 ||Appellate Tribunal Ahmedabad ||50.00 |
|2 ||Custom Act 1962 ||Custom Duty ||2012-13 ||Appellate Tribunal Ahmedabad ||449.85 |
|3 ||Central Excise Act 1994 ||Central Excise Act 1994 ||2008-09 to 20102011 ||Supreme Court of India ||590.14 |
|4 ||Central Excise Act 1994 ||Central Excise Duty ||2005-06 to Sept- 2014 ||Central Excise Commissioner ||626.28 |
|5 ||Central Service Tax Act 1994 ||Service Tax ||2016- 17 & 2017- 18 ||Deputy commissioner Audit Rajkot ||150.26 |
|6 ||Gujarat Value Added Tax Act 2003 ||Value Added Tax ||2015-16 ||Jt. Value Added Tax Commissioner (Appeal) Rajkot ||478.81 |
|7 ||Gujarat Value Added Tax Act 2003 ||Value Added Tax ||2016-17 ||Jt. Value Added Tax Commissioner (Appeal) Rajkot ||818.95 |
|8 ||Gujarat Value Added Tax Act 2003 ||Value Added Tax ||2017-18 ||Jt. Value Added Tax Commissioner (Appeal) Rajkot ||238.74 |
|9 ||Gujarat Value Added Tax Act 2003 ||Value Added Tax ||2012-13 ||Jt. Value Added Tax Commissioner (Appeal) Rajkot ||29.47 |
viii. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there were no transactions relating topreviously unrecorded income that have been surrendered or disclosed as income during theyear in the tax assessments under the Income Tax Act 1961 (43 of 1961).
ix. (a) According to information & explanations given to us the company has notdefaulted in repayment of loans or borrowings or in the payment of interest to financialinstitutions during the year.
(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not been declared wilfuldefaulter by any bank or financial institution or government or any government authority.
(c) The Company has not taken any term loan during the year and hence reporting underclause 3(ix)(c) of the Order is not applicable.
(d) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company funds raised on short- term basisof Rs. 149.55 lakhs have prima facie been used during the year for long-term purposes bythe Company.
(e) According to the information and explanations given to us the company does nothave subsidiaries associates or joint ventures. Accordingly clause 3(ix)(e) of the Orderis not applicable.
(f) According to the information and explanations given to us The company does nothave subsidiaries associates or joint ventures. Accordingly clause 3(ix)(f) of the Orderis not applicable.
x. (a) The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year . Accordingly clause 3(x)(a) ofthe Order is not applicable.
(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or convertible debentures (fully or partly oroptionally) during the year. Accordingly clause 3(x)(b) of the Order is not applicable.
xi. (a) According to the information and explanations given to us no fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(b) According to the information and explanations given to us no report undersub-section (12) of section 143 of the Companies Act has been filed in Form ADT - 4 asprescribed under rule 13 of Companies (Audit and Auditors) Rules 2014 with the CentralGovernment during the year and upto the date of this report.
(c) As represented by the management there are no whistle blower complaints receivedby the company during the year.
xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly clause 3(xii) of the Order is not required.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. (a) In our opinion the Company has an adequate internal audit system commensuratewith the size and the nature of the entity.
(b) We have considered the internal audit reports for the year under audit issued tothe Company during the year and till date in determining the nature timing and extent ofour audit procedures.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi. (a) The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.
Accordingly 3(xvi)(a) and 3(xvi) (b) of the Order are not applicable.
(b) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve bank of India. Accordingly 3(xvi)? of the Order is not applicable.
( c) According to the information and explanations provided to us during the course ofaudit the Group does not have any CICs. .
xvii. The Company has not incurred cash losses during the financial year covered by ouraudit and the immediately preceding financial year.
xviii. There has been no resignation of the statutory auditors of the Companyduring the year. Accordingly 3(xviii) of the Order is not applicable.
xix. According to the information and explanations given to usOn the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the financial statements and ourknowledge of the Board of Directors and Management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit reportindicating that Company is not capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of one year from the balance sheetdate. We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.
xx. In our opinion and according to the information and explanations give to us thereis no unspent amount under subsection (5) of Section 135 of the Companies Act2013pursuant to any project. Accordingly clause 3(xx)(a) and (b) of the Order are notapplicable.
|FOR PARIKH & MAJMUDAR || |
|CHARTERED ACCOUNTANTS || |
|FRN - 107525W || |
|Sd/- || |
|[CA SANJAY MAJMUDAR] || |
|PARTNER || |
|[MEMBERSHIP NO. 036791] ||Date : 28-05-2022 |
|UDIN: 22036791AJUWLE6947 ||PLACE:AHMEDABAD |
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT (Referred to inparagraph 1(f) under Report on Other Legal and Regulatory Requirements sectionof our report to the Members of S.A.L. STEEL LIMITED of even date)
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 S.A.L.STEEL LIMITED (the "Company") as of March 31 2022 in conjunction with our auditof the standalone IND AS financial statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Management of the Company 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 (the "ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the ICAI and the Standardson Auditing prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial 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 judgement 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the 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.
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 March 312022 based on the criteria forinternal financial control over financial reporting established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.
|FOR PARIKH & MAJMUDAR || |
|CHARTERED ACCOUNTANTS || |
|FRN - 107525W || |
|Sd/- || |
|[CA SANJAY MAJMUDAR] || |
|PARTNER ||Date : 28-05-2022 |
|[MEMBERSHIP NO. 036791 ||PLACE : AHMEDABAD |
|UDIN: 22036791AJUWLE6947 || |