To the Members of
Sharda Ispat Limited
Report on the IND AS Financial Statements Opinion
1. We have audited the accompanying IND AS Financial Statements of Sharda Ispat Limited('the Company') which comprise the Balance Sheet as at 31st March 2019 the Statement ofProfit and Loss (including the statement of Other Comprehensive Income) the Cash flowStatement and the Statement of Changes in Equity for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid IND AS Financial Statements give the information required bythe Companies Act 2013 (the 'Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs (financial position) of the Company as at 31st March 2019 its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date. Basis for Opinion
3. We conducted our audit of the IND AS Financial statement in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements" section of our report. Weare independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 and the Rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the IND AS Financial statement.
Key Audit Matters
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the IND AS financial statements for the financial year endedMarch 31 2019. 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.
5. We have determined the matters described below to be the key audit matters to becommunicated in our report:
|Key audit matter ||How our audit addressed the key audit matters |
|Valuation of Inventories (as described in note VIII of the IND AS Financial statement) ||Our audit procedures include the following: |
|- We evaluated the inventory valuation accounting policies. |
|As at March 31 2019 inventories constitute approximately 19.94% of total assets of the company. |
|- We assessed the key assumption made by the management in valuing inventories. |
|Inventories are valued at lower of cost or net realizable value. ||- We verified the cost of finished goods based on cost sheet prepared by the management in accordance with valuation principles prescribed under IND AS-2 "Inventory. |
|a) Identification completeness and correctness of direct and indirect cost in valuation of inventory is a key audit matter. |
|We have verified the net realizable value of finished goods based on actual sales transaction incurred subsequent to reporting date |
|b) Calculation of net realizable value is also a key audit matter due to significant movement in price of raw-material and finished goods. |
Information other than the Financial Statements and Auditor's Report thereon
6. 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 IND AS financial statements and our auditor's report thereon.
Our opinion on the IND AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.
In connection with our audit of the IND AS financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the IND AS Financial Statements
7. 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 preparationof these IND AS Financial Statements that give a true and fair view of the state ofaffairs (financial position) profit and loss (financial performance including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (IND AS) prescribed under Section 133 of the Act read with relevant rules issuedthere under. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe IND AS Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
8. In preparing the IND AS 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.
9. Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
10. Our objectives are to obtain reasonable assurance about whether the IND ASfinancial 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 nr in theaggregate they could reasonably he expected to influence the economic decisions of userstaken on the basis of these IND A3 financial statements.
11. 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 material misstatement of the IND AS 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.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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 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. It 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.
Evaluate the overall presentation structure and content of the IND AS financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the 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
15. As required by the Companies (Auditor's Report) Order 2016 ("the Order)issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4of the Order to the extent applicable.
16. As required by Section 143 (3) of the Act 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 Financial Statements dealt with by this Report are in agreement with the booksof account;
(d) In our opinion the aforesaid IND AS Financial Statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with relevant rulesissued there under;
(e) On the basis of the written representations received from the directors and takenon record by the Board of Directors none of the directors is disqualified as on 31stMarch 2019 from being appointed as a Director in terms of Section 164 (2) of the Act;
(f) We have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit of the financialstatements of the Company for the year ended on that date and our report as perAnnexure B" expressed an unmodified opinion;
(g) 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.
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules2014in our opinionand to the best of our information and according to the explanation given to us:
(I) The Company has disclosed the impact of pending litigations on its financialposition in the IND AS financial statements as at March 31 2019. Refer Note 31 to the INDAS financial statements on Contingent Liabilities;
ii. The company did not have any material foreseeable losses on long term contractsincluding derivative contracts;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 312019
| ||For Subhash Chand Jain |
| ||Anurag & Associates |
| ||Chartered Accountants |
| ||Firms Reg. No. 004733C |
|Nagpur dated the ||CA. Swastik Jain |
|30th May 2019 ||Partner (M.No.111580) |