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Sandur Manganese & Iron Ores Ltd.

BSE: 504918 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE149K01016
BSE 00:00 | 24 Jun 2284.70 16.95
(0.75%)
OPEN

2297.00

HIGH

2299.80

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2250.00

NSE 05:30 | 01 Jan Sandur Manganese & Iron Ores Ltd
OPEN 2297.00
PREVIOUS CLOSE 2267.75
VOLUME 18670
52-Week high 5075.00
52-Week low 1551.00
P/E 3.05
Mkt Cap.(Rs cr) 2,056
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2297.00
CLOSE 2267.75
VOLUME 18670
52-Week high 5075.00
52-Week low 1551.00
P/E 3.05
Mkt Cap.(Rs cr) 2,056
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sandur Manganese & Iron Ores Ltd. (SANDURMANGANESE) - Auditors Report

Company auditors report

To the Members of

The Sandur Manganese & Iron Ores Limited Report on the audit of FinancialStatements

OPINION

We have audited the financial statements of The Sandur Manganese & Iron OresLimited ("the Company") which comprise the balance sheet as at 31stMarch 2021 and the statement of Profit and Loss including the statement of OtherComprehensive Income Statement of Changes in Equity and Statement of Cash Flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information . In our opinion and to the best ofour information and according to the explanations given to us the aforesaid financialstatements give the information required by the Companies Act 2013 ("Act") inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2021 and profit including Other Comprehensive Income changes in equity and its cashflows for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial 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 together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended March31 2021. These matters were addressed in the context of our audit of the 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.

Key Audit Matter (KAM) Response to Key Audit Matter and Conclusion
Evaluation of uncertain tax positions Principal Audit Procedures
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Obtained details of completed tax assessments and demands for the year ended March 31 2021 from management. We involved our internal experts to analysis the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. We also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions as of April 1 2020 to evaluate whether any change was required to management's position on these uncertainties.
Capitalization of Property Plant and Equipment Capital Work-in-process and related Depreciation and Amortization Principal Audit Procedures
As on March 31 2021 the company carries Property Plant and Equipment (PPE) balances of 75422.33 lakhs and during the financial year 2020-21 company has capitalized 53288.17 worth of PPE. Our audit procedures included and were not limited to the following:
We considered the amount of PPE and Capital Work-in- process balance as a key audit matter given the relative size of the balance in the financial statements • A ssessing the nature of the costs incurred for the new Coke plant and Ferro alloy plant to test whether such costs are incurred specifically for trial runs and meet the recognition criteria as set out in para 16 to 22 of Ind AS 16.
• E valuating the assessment provided by third party vendors involved in the construction and testing process to determine whether capitalization ceased when the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management.
• T esting the design implementation and operating effectiveness of controls in respect of review of Capital Work-in-process particularly in respect of timing of the capitalization.
Substantive testing procedures including testing necessary authorizations for capitalization of items of PPE testing supporting documentation for consumption of capital goods inventory comparison of actual pattern of consumption of benefits for current year with the budget and testing the mathematical accuracy of computation of amortization / depreciation charge for the year.

Segment Reporting

Commercial operations of new 0.4 MTPA coke oven plant new 24 MVA ferro alloy furnaceand refurbished 20 MVA ferro alloy furnace are commenced from January 18 2021. Aftercommencement of commercial production Company's management has changed its review ofcompany's operation to make decisions about resources allocation to the segment and assessits performance. Pursuant to this change segment reporting has also changed from itspreviously reported.

Segment and accordingly previous year reported segments are reclassified as below.

Segment reported in Segment reported in
previous year Current year
Mining Mining
Ferroalloys and Energy Ferroalloys
Coke and Energy
Unallocable Unallocable

Principal Audit Procedures

• W e understood assessed and tested the design and operating effectiveness ofkey controls surrounding identification of Segments.

• W e discussed with management the recent changes in review of its operation tomake decisions about resources allocation to the segment and assess its performance.

• W e performed our assessment on a test basis on the underlying calculationssupporting the segment reporting disclosed in the Financial Statements.

• W e assessed the adequacy of the Company's disclosures.

Based on the above work performed the assessment in respect of segment reporting inthe Financial Statements is considered to be reasonable

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON

• The Company's Board of Directors is responsible for the other information. Theother information comprises the Director's report and its annexures but does not includethe consolidated financial statements financial statements and our auditor's reportthereon.

• Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

• In c onnection with our audit of the financial our responsibility is to read theother information and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated.

• If based on the work we have performed we that if there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance (changes in equity) and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate implementation andmaintenance of 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 financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error. In preparing the financial statements management is responsiblefor assessing the Company's 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. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

• Identify and assess the risks of misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

• 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.

• E valuate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• E valuate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements. We communicate with those chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat we identify during our audit. We also provide those charged with governance with astatement that we have complied with relevant ethical requirements regarding independenceand to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence and where applicable related safeguards. From thematters communicated with those charged with governance we determine those matters thatwere of most significance in the audit of the financial statements of the current periodand are therefore the key audit matters. We describe these matters in our Auditor's Reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. A s required by Section 143(3) of the Act we report

a. W e have sought and obtained all the and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b. In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c. The Balance Sheet the Statement of Profitand Loss including Other Comprehensive Income the Statement of Cash Flows and Statementof Changes in Equity dealt with by this Report are in agreement with the books of account.d. In our opinion the aforesaid financial statements comply with the Accounting Standardsspecified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in termsof Section 164 (2) of the Act. f. With respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure A". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting. g. With r espect to the other matters to beincluded in the Auditor's Report in accordance with the requirements of section 197(16) ofthe Act as amended In our opinion and to the best of our information and according tothe explanations given to us the remuneration paid by the Company to its directors duringthe year is in accordance with the provisions of section 197 of the Act. h. With r espectto the other matters to be included in the Auditor's Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 29 to that: the financialstatements. ii. The Company has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts. iii. Ther e has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company{or following are the instances of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company or there were noamounts which were required to be transferred to the Investor Education and ProtectionFund by the Company.

2. A s required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure B" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

Annexure-A to the Independent Auditors' Report

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatoryrequirements' section of our report of even date to the Ind AS financial statements of thecompany for the year ended March 31 2021.)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to the Ind AS financialstatements of The Sandur Manganese & Iron Ores Limited ("theCompany") as of March 312021 in conjunction with our audit of the financialstatements of the Company for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is primarily responsible for establishing and maintaininginternal financial controls with reference to the Ind AS financial statements. Theseresponsibilities include the design implementation and maintenance of internal financialcontrols with reference to the Ind AS financial statements that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's existence and operatingefficiency of internal financial controls systems with reference to the Ind AS financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls With Reference to Ind AS Financial Statements (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether internal financialcontrols with reference to the Ind AS financial statements was established and maintainedand if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about existence ofthe internal financial controls with reference to the Ind AS financial statements andtheir operating effectiveness. Our audit of internal financial controls over financialreporting included obtaining an understanding of the internal financial controls withreference to the Ind AS financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls with reference to the Ind AS financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITH REFERENCE OVERFINANCIAL REPORTING WITH REFERENCE TO THESE FINANCIAL STATEMENTS

A Company's internal financial controls with reference to the Ind AS financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles including the Ind AS. Acompany's internal financial controls with reference to the Ind AS financial statementsincludes those policies and procedures that (1) pertain to the maintenance of recordsthat 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of un authorized acquisition use or disposition of thecompany's assets that could have a material effect on the Ind AS financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITHREFERENCE OVER FINANCIAL REPORTING WITH REFERENCE TO THESE FINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls with reference tothe Ind AS financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to the Ind AS financial statements to future periods are subjectto the risk that the internal financial controls with reference to the Ind AS financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

OPINION

In our opinion to the best of our information and according to the explanation givento us the Company has in all material respects there exists an adequate internalfinancial controls with reference to the Ind AS financial statements and such internalfinancial controls with reference to the Ind AS financial statements were operatingeffectively as at March 31 2021 based on the internal financial controls with referenceto the Ind AS financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India.

Annexure-B to the Independent Auditors' Report

Referred to in paragraph (2) under the heading ‘Report on Other Legal &Regulatory Requirement' of our report of even date to the Ind AS financial statements ofthe company for the year ended March 31 2021.

1. a) The Company has maintained proper records showing full particulars includingquantitative details and Situation of fixed assets.

b) The fixed assets were physically verified during the year by the Management inaccordance with a regular program of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification. c) A ccording to the information and given to us and the records examined byus and based on the examination of the registered sale deed/transfer deed/conveyance deedprovided to us we report that the title deeds comprising all immovable properties ofland and building which are freehold are held in the name of the Company as at thebalance sheet date. The Company does not have any immovable properties of land andbuildings that have been taken on lease and disclosed as fixed asst in the financialstatements.

2. A s explained to us the inventories were verified during the year by the Managementat reasonable intervals and no material discrepancies were noticed on physicalverification.

3. A s informed the Company has not granted any secured or unsecured to companiesfirms Limited Liability partnerships or other parties covered in the Register maintainedunder Section 189 of the Act. Accordingly reporting under clause 3(iii)(a) to (c) of theOrder are not applicable to the Company.

4. The Company has not granted any loans made investments or provided guarantees andhence reporting under clause 3(iv) of the order is not applicable.

5. A ccording to the information and explanations given to us the Company has notaccepted any deposits from the public and does not have any unclaimed deposits.Accordingly the provisions of clause 3(v) of the Order are not applicable to the Company.

6. The Maintenance of cost records have been specified by the central government undersection 148(1) of The Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under Section 148(1) of the Companies Act2013 and are of the opinion that prima facie the prescribed cost records have been madeand maintained. We have however not made a detailed examination of the cost records witha view to determine whether they are accurate or complete.

7. A ccording to the information and explanations given to us and based on examinationof the records of the Company in respect of statutory dues:

a) The company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Sales Tax Income Tax Service TaxCustom Duty Excise Duty Value Added Tax Goods and Service Tax cess and other materialstatutory dues with the loans appropriate authorities.

b) Ther e were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Sales Tax Income Tax Service Tax Custom Duty Excise Duty Value AddedTax Goods and Service Tax cess and other material statutory dues in arrears as at 31stMarch 2021 for a period of more than six months from the date they became payable.

c) De tails of dues of Sales Tax Income Tax Service Tax Custom Duty Excise DutyValue Added Tax and Goods Service Tax which have not been deposited as on 31stMarch 2020 on

Name of Statute Nature of Dues Amount ( Lakh) Period to which the amounts relates Forum where dispute is pending
Income Tax Act1961 Income tax including Interest 427.79* 2010-11 to 2011-12 Income Tax Appellate Tribunal
2159.35** 2012-132013-14 2015-16 and 2016-17 Commissioner of Income Tax (Appeals)
504.44 2017-18 Commissioner of Income Tax (Appeals)##
Customs Act1952 Customs duty Including Interest 393.13*** 1986-2021 Hon'ble High Court of Andhra Pradesh
The Central Excise Act 1944 Service Tax Including Interest 293.34 April 2005 to September 2007 Hon'ble Supreme Court of India
Service Tax Service Tax on Royalty 570.16# April 2016 to June 2017 Hon'ble High Court of Karnataka

*Net of 182 lakhs Paid under protest. ** Net of 556.50 lakhs Paid under protest.

*** Net of 42.22 lakhs Paid under protest # excluding Interest and Net of 100 lakhsPaid under protest. ## company is in the process of filing Appeals.

8. In our opinion and according to the information and explanations given to us thecompany has no outstanding dues to any financial institutions or banks or any governmentor any debenture holders during the year. Hence reporting under clause 3(viii) of theOrder are not applicable to the Company. Accordingly paragraph 3 (viii) of the order isnot applicable.

9. T o the best of our knowledge and according to information and explanations given tous the company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans during the year and hence the provisionsof clause 3(ix) of the Order are not applicable to the Company.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India we haveneither come across any instance of fraud on or by the Company noticed or reported duringthe year nor have we been informed of such case by the management. 11. Based upon theaudit procedures performed and the information and explanations given by the managementthe managerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013; 12. The Company is not a Nidhi Company. Accordingly clause 3(xii) of the Orderis not applicable.

13. In our opinion and according to the information and explanations given to us andbased on our examination of the record of the company transactions with the relatedparties are in compliance with section 177 and 188 of Companies Act 2013 and details ofsuch transactions have been disclosed in the Financial Statements as required by theapplicable Indian Accounting Standards.

14. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares the or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

15. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withits directors or directors of its holding or subsidiary company or persons connected withthem and hence provisions of Section 192 of the Companies Act 2013 are not applicable.16. In our opinion the company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company.

for R Subramanian and Company LLP

Chartered Accountants

Firm Regn.No004137S/S200041

Gokul Dixit

Partner

M. No. 209464

UDIN: 21209464AAAAAF7645

Place: Bengaluru

Date: June 28 2021

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