We have audited the accompanying financial statements of
Bajaj Steel Industries Limited (‘the Company'), which comprise
the Balance Sheet as at March 31, 2025, the Statement of
Profit and Loss (including Other Comprehensive Income),
Statement of Changes in Equity and Statement of Cash Flow
for the year then ended, and Notes to the financial statements,
including a summary of significant accounting policies and
other explanatory information.
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid 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 including Indian Accounting Standards (‘Ind
AS') specified under section 133 of the Act, of the state of affairs
(financial position) of the Company as at March 31, 2025, and
profit (financial performance including other comprehensive
income), its cash flows and the changes in equity for the year
ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the Companies
Act, 2013. Our responsibilities under those Standards are
further described in the Auditor's Responsibilities for the Audit
of the Financial Statements section of our report. We are
independent of the Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant
to our audit of the financial statements under the provisions of
the Companies Act, 2013 and the Rules there under, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained 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 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. For each matter
below, our description of how our audit addressed the matter
is provided in that context.
We have determined the matters described below to be the
key audit matters to be communicated in our report. We
have fulfilled the responsibilities described in the Auditor's
responsibilities for the audit of the Ind AS financial statements
section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material
misstatement of the standalone Ind AS financial statements.
The results of our audit procedures, including the procedures
performed to address the matters below, provide the
basis for our audit opinion on the accompanying Ind AS
financial statements.
a) Property, Plant and Equipment and Intangible Assets (refer note- 2.4 & 2.5 of the standalone
financial statements)
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Key Audit Matter
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How the matter was addressed in our audit
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There are areas where management judgement impacts the
carrying value of Property, Plant and Equipment, Intangible Assets
and their respective depreciation/amortisation rates. These includes
the decision to capitalise or expenses costs; the annual asset life
review; the timeliness of the capitalisation of assets and the use
of management assumptions and estimates for the determination
or the measurement and recognition criteria for assets retired from
active use. Due to the materiality in the context of the Balance sheet
of the Company and the level of judgement and estimates required,
we consider this to be as area of significance.
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Our audit procedures included:
We assessed the controls in place over the fixed asset cycle,
evaluated the appropriateness of capitalisation process, performed
tests of details on costs capitalised, the timeliness of the capitalisation
of assets and the de-recognition criteria for assets retired from active
use.
In performing these procedures, we reviewed the judgements,
made by the management including the nature of underlying costs
capitalised, determination of realisable value of the assets retired
from active use, the appropriateness of assets lives applied in the
calculation of depreciation; the useful lives of assets prescribed in
Schedule II to the Act and the useful lives of certain assets as per
the technical assessment of the management. We observed that the
management has regularly reviewed the aforesaid judgement and
there are no material changes.
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b) Inventories (refer note- 2.7 of the standalone financial statements)
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Key Audit Matter
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How the matter was addressed in our audit
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Inventories held by the Company comprising of Raw Material, Stores
& Spares, Work-in-Progress, Finished Goods and Others represents
23.88% of the Company’s total assets.
Under Ind AS, the Company is required to measure inventory at
lower of Cost or Net Realizable Value (NRV). However, the raw
material and work-in progress is not written down below cost when
finished goods are expected to be sold at or above cost.
Assessing NRV
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Our audit procedures included:
• Through discussions with the management, we understood the
Company's basis of cost of material and estimated selling price
for the goods;
• Evaluating the design & testing controls related to Company's
review of key estimates, including estimated future selling
prices and estimated cost of completion for work-in-progress
inventory.
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Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and the
estimated costs necessary to make the sale.
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The assessment and application of write-down of inventory to NRV
are subject to significant judgement by Company.
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Considering the company’s present situation, significant judgements
made by the company in light of future market & economic conditions
for determination of NRV and considering materiality in context of
total assets of the Company, we have considered the valuation of
inventory to be the key audit matter.
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c) Revenue recognition (refer note - 2.11 to the standalone financial statements)
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Key Audit Matter
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How the matter was addressed in our audit
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Revenue from Exported goods represents 59.95% of the total
revenue from operations of the Company.
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can
be reliably measured, regardless of when the payment is received.
Revenue is measured at the fair value of the consideration received
or receivable, taking into account contractually defined terms of
payment and excluding taxes, duties or other charges collected on
behalf of the government/authorities.
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Our audit procedures included:
Our audit procedures on Revenue recognition included the following:
• Evaluating that the Company's revenue recognition accounting
policies are in line with the applicable accounting standards
and their application to the key customer contracts including
consistent application;
• Sales cut-off procedures for determination of revenue in the
correct reporting period;
• Scrutinising all the revenue journal entries raised throughout the
reporting period and comparing details of a sample of these
journals, which met certain risk-based criteria, with relevant
underlying documentation;
• Considered the adequacy of the disclosures in note 2.11 to the
standalone financial statements in respect of the judgments
taken in recognising revenue for residential units.
In addition, we have performed the following procedures:
• Discussing and challenging key management judgments in
interpreting contractual terms including obtaining in house legal
interpretations;
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Information other than the Financial
Statements and Auditor’s Report thereon
The Company's Board of Directors is responsible for the other
information. The other information comprises the information
included in the Annual Report, but does not include the
financial statements and our auditor's 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.
Responsibilities of Management and Those
charged with Governance for the Financial
Statements
The Company's Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect to
the preparation of these financial statements that give a true
and fair view of the state of affairs (financial position), profit
or loss (financial performance including other comprehensive
income), changes in equity and cash flows of the Company in
accordance with the accounting principles generally accepted
in India including the Ind AS specified under section 133 of the
Act. This responsibility also includes 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 implementation
and maintenance of accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring
the 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.
In preparing the financial statements, the Board of Directors
is responsible for assessing the Company's ability 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 but to do so.
That Board of Directors are also responsible for overseeing
the company's financial reporting process.
Auditor’s Responsibility for the Audit of the
Standalone Financial Statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor's 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 financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
• I dentify and assess the risks of material misstatement of
the financial statements, 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.
• 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 Companies Act, 2013, we are also responsible
for expressing our opinion on whether the company has
adequate internal financial controls system in place and
the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of management's 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 Company's ability
to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures
in the 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's report. However, future events or conditions
may cause the Company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures,
and whether the financial statements 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.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We
describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of
such communication.
Report on Other Legal and Regulatory
Requirements
1. As required by the Companies (Auditor's Report) Order,
2020 (“the Order”) issued by the Central Government of
India in terms of sub-section (11) of section 143 of the Act,
we give in the Annexure A, a statement on the matters
specified in the paragraph 3 and 4 of the order.
2. 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 best of our knowledge
and belief were necessary for the purposes of
our audit.
(b) i n our opinion proper books of account 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 changes in equity and the cash flow
statement dealt with by this Report are in agreement
with the books of account;
(d) i n our opinion, the aforesaid standalone financial
statements comply with the Accounting Standards
specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
(e) on the basis of the written representations received
from the directors as on March 31, 2025 taken
on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2025 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 our separate report in “Annexure B”; and
(g) With respect to the other matters to be included
in the Auditor's Report in accordance with
the requirements of section 197(16) of the Act,
as amended:
I n our opinion and to the best of our information
and according to the explanations given to us, the
remuneration paid by the Company to its directors
during the year is in accordance with the provisions
of section 197 of the Act.
(h) with respect to the other matters to be included in
the Auditor's Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and
according to the explanations given to us:
i. The financial statements has, to the extent
ascertainable, disclosed the impact of
pending litigations on the financial position
of the Company - Refer Note 25 to the
financial statements;
ii. the Company does not have any material
foreseeable losses on long term contracts
including derivative contracts which would
impact its financial position;
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by
the Company.
iv. (a) 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 entity (“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;
(b) 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 entity (“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;
(c) Based on the audit procedures that
have been 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) above, contain any
material misstatement.
v. the dividend declared or paid during the year
by the Company is in compliance with section
123 of the Act.
vi. Based on our examination which included test
checks, the company has used an accounting
software for maintaining its books of account
which has a feature of recording audit trail
(edit log) facility throughout the year except for
property, plant and equipments wherein the
accounting software did not have the audit trail
feature enabled throughout the year. Further,
during the course of our audit we did not come
across any instance of audit trail feature being
tampered with. Additionally, the audit trail has
been preserved by the company as per the
statutory requirements for record retention.
Place: Nagpur For B. Chhawchharia & Co.
Date: May 28, 2025 Chartered Accountants
Firm Registration No. 305123E
Ketan Chhawchharia
Partner
Membership No. 063422
UDIN:
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