To the Board of Directors of INDIASTEEL WORKS LIMITED
Report on the Audit of the Standalone Ind AS Financial Statements
Qualified Opinion
We have audited the standalone financial statements of INDIA STEEL
WORKS LIMITED (Hereinafter referred to as company), which comprise the standalone
balance sheet as at 31 March 2023, and the standalone statement of profit and loss
(including other comprehensive income), standalone statement of changes in equity and
standalone statement of cash flows for the year then ended, and notes to the standalone
financial statements, including a summary of 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
explanations given to us, except for the matters described in basis of qualified opinion
and emphasis of matter paragraph, the aforesaid standalone financial statements give the
information required by the Companies Act, 2013 ("Act") in the manner so
required and give a true and fair view in conformity with the accounting principles
generally accepted in India, of the standalone state of affairs of the company as at 31
March 2023, of its standalone profit and other comprehensive income, standalone changes in
equity and standalone cash flows for the year then ended.
Going Concern
The Companys current liabilities exceeded its current assets as of the
previous year balance sheet date. Operations of the company has ceased since long and the
company is not in the position to discharge its liabilities. These events or conditions,
along with other matters indicate that a material uncertainty exists that may cast
significant doubt on the Companys ability to continue as a going concern. However,
the books of the company are still prepared on historical cost basis. In our opinion the
accounts of the company should not be prepared on going concern basis i.e., the assets and
liabilities of the company should be stated at net realizable value. The financial
statements do not adequately disclose this fact. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Basis for Qualified Opinion
a. Inventories amounting to Rs13,607.12 Lakhs have not been valued at
lower of cost or Net realisable value which is against the significant accounting policies
of the company and is not consistent with Ind AS 2 "Inventories". These
inventories held by the company include obsolete and non-moving stock which are valued at
cost and is inconsistent with provisions of Ind AS 2. As per the information and documents
provided to us, we are of the opinion that work-in-progress amounting to Rs10,609.92 Lakhs
and Raw Material amounting to Rs1,739.54 Lakhs held by the company can only fetch scrap
value. In the absence of quantitative information and supporting documents of Finished
Goods, Stock in Trade and Stores and Spares amounting toRs1,257.65 lakhs, we are unable to
comment on carrying value of the same and its effect on the financial statements for the
year.
b. Company has not done physical verification or valuation of
inventories. On account of the same we are unable to comment on the physical status and /
or recoverable value of such inventories.
c. Company has shown insurance claim receivable amounting to Rs1,120.27
Lakhs. The said claim is outstanding since long back and the same has not been approved by
appropriate authority till date. In our opinion, showing the said insurance claim as
receivable is not showing true and fair view. On account of the same assets of the company
are overstated by Rs1,120.27.
d. Confirmations of the balances of sundry creditors and debtors, loans
and advances, Advances given to suppliers have not been obtained and they are subject to
reconciliations and subsequent adjustments if any. As such we are unable to express any
opinion as to the effect on thefinancial statements for the year.
e. Sufficient and appropriate documentary audit evidence in respect of
Contingent liabilities were not provided to us. As such we are unable to express any
opinion as to the effect on the financial statements for the year.
f. The company has not assessed the impact of various disputed
statutory liabilities/ liabilities on account of lawsuits as per the requirement of Ind AS
37 "Provision, Contingent Liabilities, Contingent Asset" and hence the effect of
the same, if any, on the financial results. The cases are pending with multiple tax
authorities and the said claims have not been acknowledged as debt by the company.
g. The company has not assessed the Fair Value of various Assets and
Liabilities as per the requirement of Ind AS 103 "Fair Value Measurement", the
effect of the same, if any, on thefinancial results is not identifiable. Therefore, we are
unable to comment on its impact on the financial results for the year ended March 31,2023.
h. The company has not reviewed the impairment of its tangible assets
and other financial and non-financial assets as of March 31, 2023. Hence, no provision in
the books of account has been made by the Company. In the absence of assessment of
impairment/ provisions by the Company, we are unable to comment on the recoverable amount
regarding said items.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the current period.
These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. During the year under consideration, we do not have any key audit matters
to report.
Emphasis of Matter
a. In absence of information of investee company, we are unable to
determine the value of the investments hence the same are carried at cost and no provision
for diminution, if any in value of such investments in made.
b. The company does not have internal audit system to commensurate with
the size and nature of its business. In absence of the same we are unable to comment
whether an adequate internal financial controls system over financial reporting and such
internal financial controls over financial reporting were operating effectively as of
March 31,2023.
c. In absence of proper records maintained in India related to Foreign
Branch, the Financial Statement of Foreign Branch is not audited by us. Our opinion is
based on unaudited figures provided by the management.
d. In the absence of uncertainties of making profit in immediate future
the company has decided not to create Asset/ Liability on account of Deferred Tax.
e. Fire Insurance Policy of the company is pending renewal as on the
date. The risk on account of the same is not ascertainable.
f. Assessment of the Impairment of Assets has not been done by the
company, which is inconsistent with lndAS-36 "Impairment of Assets".
Other Information
The Companys management and Board of Directors are responsible
for the other information. The other information comprises the information included in the
Companys annual report but does not include the financial statements and our
auditors report thereon. Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon. In connection
with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements, or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Managements Responsibilities for the Standalone Financial Results
These Standalone Financial Results have been prepared on the basis of
the annual financial statements. The Companys Board of Directors are responsible for the
preparation and presentation of these Standalone Financial Results that give a true and
fair view of the net profit and other comprehensive income and other financial information
of the Company and the balance sheet and the statement of cash flows in accordance with
the recognition and measurement principles laid down in the Indian Accounting Standards
prescribed under Section 133 of the Act read with relevant rules issued thereunder and
other accounting principles generally accepted in India and in compliance with Regulation
33 and Regulation 52 of the Listing Regulations. The Board of Directors of the Company are
responsible for maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and
the design, implementation and maintenance of adequate internal financial controls, that
were operating effectively for ensuring accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or
error, which have been used for the purpose of preparation of the Standalone Financial
Results by the Directors of the Company, as aforesaid.
In preparing the Standalone Financial Results, the Board of Directors
of the Company are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Board of Directors either intends to
liquidate the Company or to cease operations, or has no realistic alternative buttodoso.
The Board of Directors of the Company are responsible for overseeing
the financial reporting process of the Company
Auditors Responsibilities for the Audit of the Standalone
Financial Results
Our objectives are to obtain reasonable assurance about whether the
Standalone Financial Results as a whole are free from material misstatement, whether due
to fraud or error, and to issue an auditoris report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these Standalone Financial Results.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatement of the
Standalone Financial Results, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
b. Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances. Under Section
143(3)(i)of the Act, we are also responsible for expressing our opinion on whether the
company has adequate internal financial controls with reference to financial statements in
place and the operating effectiveness of such controls.
c. Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the Board of
Directors.
d. Conclude on the appropriateness of the Board of Directors use of the
going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant
doubt on the Companys ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditors
report to the related disclosures in the Standalone Financial Results 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 auditors report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
e. Evaluate the overall presentation, structure and content of the
Standalone Financial Results including the disclosures, and whether the Standalone
Financial Results represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our
audit. We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020 (the
Order) issued by the Central Government of India in terms of Section 143(11) of the Act,
we give in the "Annexure A" statement on the matters specified in paragraphs 3
and 4 of the Order.
2. As required by Section 143(3)of theAct,wereportthat:
a) Expect for the matters stated in basis of qualified opinion,
emphasis of matter paragraph, we have sought and obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purpose
of our audit.
b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including other
comprehensive income, the statement of change in equity and the Cash Flow Statement dealt
with by this Report are in agreement with the relevant books of account.
d) With reference to matters stated in basis of qualified opinion and
going concern paragraph, in our opinion, the aforesaid financial statements do not comply
with I nd AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the
directors and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31,2023, from being appointed as a director in terms of Section
164(2)of the Act.
f) With respect to the adequacy of the internal financial controls over
financial reporting of the Company and the operating effectiveness of such controls, refer
to ourseparate report in "Annexure B" to this report.
g) With respect to the other matters to be included in the Auditors
Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as
amended), in our opinion and to the best of our information and according to the
explanations given to us:
a) Expect for the matters as described in basis of qualified opinion,
the Company has disclosed the impact of pending litigations as of March 31,2023 on its
financial position in its standalone financial statements.
b) The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable losses.
c) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
The management has represented that, to the best of its knowledge and
belief, no funds have been advanced or loaned or invested (either from borrowed funds or
share premium or any other sources or kind of funds) by the Company to or in any other
person or entity, including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall,
whether, directly or indirectly lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries")
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
The management has represented that, to the best of its knowledge and belief, no funds
have been received by the Company from any person or entity, including foreign entities
("Funding Parties"), with the understanding, whether recorded in writing or
otherwise, that the Company shall, whether, directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries; and Based on such audit procedures that
were considered reasonable and appropriate in the circumstances, nothing has come to our
notice that has caused us to believe that the representations under sub-clause (a) and (b)
contain any material misstatement.
3. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is
applicable for the Holding Company or any of its subsidiary companies incorporated in
India only with effect from 1 April 2023, reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014 is not applicable.
4. With respect to the other matters to be included in the Auditors
Report in accordance with the requirements of section 197(16) of the Act.
In our opinion and to the best of our information and according to the
explanation given to us, the remuneration paid/ provided by the company to its directors
during the year is in accordance with the provisions of Section 197 of the Act. The
remuneration paid to any directors is not in excess of the limit laid down U/s 197 of the
IT Act. The Ministry of Corporate Affairs has not prescribed other details U/s 197 (16)
which requires to be commented by us.
ANNEXURE A" TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in Independent Auditors Report to the members
of the Company on the financial statements for the year ended 31st March 2023, we report
that:
i.
a. The Company has not maintained proper records showing full
particulars, including quantitative details and situation of its fixed assets.
b. The Company does not have a regular programme of physical
verification of its property plant and equipment. Due to this we are unable to comment on
the same.
c. According to the information and explanations given to us and on the
basis of our examination of the records of the company, all immovable properties are held
in the name of the Company.
d. The Company has not revalued its Property, Plant and Equipment
(including Right of use assets) during the year ended 31 st March 2023.
e. There are no proceedings initiated or are pending against the
Company for holding any benami property under the Prohibition of Benami Property
Transactions Act, 1988 and rules made thereunder.
ii.
a. The management has not conducted physical verification of inventory
during the year. Due to this we are unable to comment on the same. As mentioned in the
basis of qualified opinion, the inventories have not been valued at lower of cost or
market value which has led to overvaluation of inventory in books of accounts.
b. During the year, no working capital limits has been sanctioned in
excess of five crore rupees, in aggregate, from banks or financial institutions.
Accordingly, clause 3(ii)(b) of the Order is not applicable to the company.
iii. During the year the company has not made any investments in or
provided any guarantee or security or granted any loans or advances in the nature of
loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any
other parties or to promoters or related parties. Accordingly, clause 3(iii) of the order
is not applicable to the company.
iv. During the year, the company has not granted any loans, or made any
investments, guarantees, and security, to which the provisions of sections 185 and 186 of
the Companies Act 2013 apply.
v. The Company has neither accepted any deposits from the public nor
accepted any amounts which are deemed to be deposits within the meaning of Sections 73 to
76 of the Companies Act and the rules made thereunder, to the extent applicable.
Accordingly, the requirement to report on clause 3(v) of the Order is not applicable to
the Company.
vi. The company has not maintained the books of accounts and records
pursuant to the Rules prescribed by the Central Government under sub section (1) of
section 148 of the Act. Accordingly, we are unable to comment on the same.
vii.
a. According to the information and explanations given to us and on the
basis of our examination of the records of the company, amounts deducted / accrued in the
books of account in respect of undisputed statutory dues including Provident Fund,
Employees State Insurance, Income-Tax, Sales Tax, Goods and Services Tax, Duty of Customs
and other material statutory dues have not been deposited during the year by the Company
with the appropriate authorities.
b. According to the information and explanations given to us, and on
the basis of our examination of books of accounts following amount are outstanding as at
the last day of the Financial Year concerned for a period of more than six months from the
date, they become payable to-
| Sr. No. Particulars |
Amounting |
| 1 TDS Payable |
71,30,201 |
| 2 PF&ESIC&MLWF Payable |
55,97,247 |
| 3 PT Payable |
11,97,274 |
| 4 Property Tax/cess Payable |
1,12,04.809 |
| 5 GST Payable |
8,93,069 |
| 6 TCS Payable |
4,12,570 |
c. According to the information and explanations given to us, there are
no material statutory dues which have not been deposited with the appropriate authorities
on account of any dispute, other than the following dues of Income Tax, Excise Duty and
Value Added Tax:
| Name of Status |
Nature of dues |
Rs in lakhs |
Period |
Forum where the dispute is pending |
| Sales Tax Act |
Sales Tax |
160.11 |
FY-2014/2015 |
Sales Tax Department |
| Sales Tax Act |
Sales Tax |
115.28 |
FY-2015/2016 |
Sales Tax Department |
| Goods & Services Tax |
GST |
39.82 |
FY-2017/2018 |
Dy. Com. Of State Tax (E-635) |
| Goods & Services Tax |
GST |
375.42 |
FY-2018/2019 |
Dy. Com. Of State Tax (E-635) |
| Central Excise Act |
Excise |
53.53 |
FY-2012/2013 |
Directorate General of Central Excise
Intelligence |
| Central Excise Act |
Excise |
406.30 |
FY-2012/2013 |
CESTAT |
| Central Excise Act |
Excise |
37.99 |
FY-2005/2006 |
Com. of Central Excise |
| Central Excise Act |
Excise |
9.64 |
FY-2012/2013 |
Addl. Com. of Central Excise |
| Income Tax |
Income Tax |
214.58 |
FY 2017-18 |
CIT(A) |
viii. The Company has not surrendered or disclosed any transaction,
previously unrecorded in the books of account, in the tax assessments under the Income Tax
Act, 1961 as income during the year. Accordingly, the requirement to report on clause
3(viii) of the Order is not applicable to the Company.
ix. a. In our opinion and according to the information and explanations
given to us, details of defaults in repayment of dues to Banks is asunder:
| Particulars |
Overdue (Rs in Lakhs) |
| Kotak Manindra Bank Ltd. - Term Loan |
30.40 |
| DNSB-Term Loan |
243.93 |
| Kotak Manindra Bank Ltd. - Letter of Credit |
930.80 |
| Kotak Mahindra Bank Ltd. |
94.64 |
| Sundaram Finance Ltd. |
7.42 |
| Kotak Mahindra Bank Ltd. - CC |
688.66 |
| Dombivali Nagri Sahakari Bank Ltd. - CC |
2,842.50 |
| Total |
4,838.35 |
b. The Company has not been declared as a wilful defaulter by any bank
or financial institution or government or any government authority during the year.
However, the company has defaulted in repayment of dues to banks and financial
institutions and their account has been declared has NPA.
c. During the year the company has not availed of or has been disbursed
any term bans
d. On an overall examination of the financial statements of the
Company, no funds raised on short-term basis have been used for long-term purposes during
the year by the Company.
e. In our opinion, the company has not taken any funds from any entity
or person on account of or to meet the obligations of its subsidiaries, associates,
orjoint ventures.
f. The company has not raised any loans during the year on the pledge
of securities held in its subsidiaries, joint ventures or associate companies.
x
a. The Company has not raised any money during the year by way of
initial public offer/ further public offer (including debt instruments) hence, the
requirement to report on clause 3(x)(a)of the Order is not applicable to the Company.
b. During the year the Company has not made any preferential allotment
or private placement of shares or convertible debentures (fully or partly or optionally)
and hence reporting under clause (x)(b) of the Order is not applicable to the Company.
xi.
a. No fraud by the Company or no fraud on the Company has been noticed
or reported during the year
b. There is no instance, during the year that necessitates reporting in
the form ADT-4
c. There are no instances of whistle-blower complaints received by the
company during the year.
xii. The Company is not a Nidhi Company as per the provisions of the
Companies Act, 2013. Therefore, the requirement to report on clauses 3(xii)(a), (b) and
(c) of the Order is not applicable to the Company.
xiii. In our opinion, transactions with the related parties are in
compliance with Sections 177 and 188 of Companies Act, 2013 where applicable and the
details have been disclosed in the notes to the financial statements, as required by the
applicable accounting standards.
xiv.
a. We are unable to comment whether the Company has an internal audit
system commensurate with the size and nature of its business as we have not received any
documents or information in relation to the same.
b. We have not received the internal audit reports of the Company
issued till the date of the audit report. Due to this we are unable to comment on the
same.
xv. The Company has not entered into any non-cash transactions with its
directors or persons connected with its directors and hence requirement to report on
clause 3(xv) of the Order is not applicable to the Company.
xvi.
a. The provisions of Section 45-IA of the Reserve Bank of India Act,
1934 (2 of 1934) are not applicable to the Company. Accordingly, the requirement to report
on clause (xvi) (a) of the Order is not applicable to the Company
b. The Company has not conducted any Non-Banking Financial or Housing
Finance activities without obtaining a valid Certificate of Registration (CoR)from the
Reserve Bank of India as per the Reserve Bank of India Act, 1934.
c. The Company is not a Core Investment Company as defined in the
regulations made by Reserve Bank of India. Accordingly, the requirement to report on
clause 3(xvi) of the Order is not applicable to the Company
d. There is no Core Investment Company as a part of the Group, hence,
the requirement to report on clause 3(xvi) of the Order is not applicable to the Company.
xvii. The Company has incurred cash losses in the current financial
year and in the previous financial year.
xviii. There has been no resignation of the statutory auditors during
the year and accordingly requirement to report on Clause 3(xviii) of the Order is not
applicable to the Company
xix. On the basis of the financial ratios, ageing and expected dates of
realization of financial assets and payment of financial liabilities, other information
accompanying the financial statements, our knowledge of the Board of Directors and
management plans and based on our examination of the evidence supporting the assumptions,
we believe that there exists some material uncertainty as on the date of the audit report
that Company is not capable of meeting its liabilities existing at the date of balance
sheet as and when they fall due within a period of one year from the balance sheet date.
We, however, state that this is not an assurance as to the future viability of the
Company. We further state that our reporting is based on the facts up to the date of the
audit report and we neither give any guarantee nor any assurance that all liabilities
falling due within a period of one year from the balance sheet date, will get discharged
by the Company as and when they fall due.
xx. According to the information and explanation given to us provisions
of section 135 of the CompaniesAct2013are not applicable to the company. Accordingly, the
requirement to report on clause 3(xx) of the Order is not applicable to the Company.
xxi. There are no qualifications or adverse remarks by the respective
auditors in the Companies (Auditors Report) Order (CARO) reports of the companies
included in the consolidated financial statements
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
Referred to in paragraph 10(f) of the Independent Auditors Report
of even date to the members INDIA STEEL WORKS LIMITED on the financial statements for the
year ended March 31,2023
Report on the internal financial controls under clause(i) of
sub-section 3 of section 143 of the Act
We have audited the internal financial controls over financial
reporting INDIA STEEL WORKS LIMITED (‘the Company) as of March 31,2023, in
conjunction with our audit of the standalone financial statements of the Company for the
year ended on that date.
Managements responsibility for internal financial controls
The Companys Management is responsible for establishing and
maintaining internal financial controls based on the internal control over financial
reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI).
These responsibilities include the design, implementation and maintenance of adequate
internal financial controls that were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence to Companys policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information, as required under the Act.
Auditors responsibility
Our responsibility is to express an opinion on the Companys internal
financial controls over financial reporting based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the Guidance Note) and the Standards on Auditing deemed to be prescribed
under section 143(10) of the Act to the extent applicable to an audit of internal
financial controls, both applicable to an audit of internal financial controls and both
issued by the ICAI. Those Standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about
the adequacy of the internal financial controls system over financial reporting and their
operating effectiveness. Our audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial controls over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditors judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the Companys internal financial
controls system over financial reporting.
Meaning of internal financial controls over financial reporting
A companys internal financial control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.
A companys internal financial control over financial reporting
includes those policies and procedures that:
1. Pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the
company.
2. Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the
company.
3. Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use. or disposition of the companys 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
financial reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial controls over
financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company does not have an adequate internal
financial controls system over financial reporting as of March 31, 2023. based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
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For Laxmikant Kabra & Co LLP |
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Chartered Accountants |
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Firm Reg. No.: 117183W/ W100736 |
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CA Laxmikant Kabra |
|
Partner |
| Place: Thane |
Membership No.: 101839 |
| Date: 18th July 2023 |
UDIN: 23101839BGZHYK8579 |
+91-9892691696
