CHASE BRIGHT STEEL LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of CHASE BRIGHT STEEL LIMITED (“the Company”)(CIN : L99999MH1959PLC011479), 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 Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the financial statements”).
Opinion
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 (“the 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 state of affairs of the Company as at March 31, 2025, and Loss (including other comprehensive income), changes in equity and its cash flows 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 Act. 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 Act and the Rules thereunder, 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.
Material Uncertainty Related to Going Concern
The operating results have been adversely affected due to very low level of activities and the accumulated losses of the Company as at 31st March, 2025 stand at Rs. 1,588.80 Lakhs as against the share capital of Rs. 167.50 Lakhs. Also current liabilities as at 31st March, 2025 exceed current assets by Rs. 1,279.30 Lakhs. At present the Company does not have any manufacturing facility of its own and most of the workers / staff of the Company have left the
employment. These conditions indicate the existence of material uncertainty about the Company's ability to continue as a going concern, which is dependent on the Company establishing profitable operations and sustainable cash flows. The Management is in the process of further rationalizing the expenses, continuously reducing its liabilities and also considering the measures to generate additional revenue apart from revenue generated during the year. Accordingly, the Company continues to prepare its accounts on a "Going Concern" basis. (Please refer Note No. 26(i)).
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters (‘KAM’) 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.
|
The Key Audit Matters
|
How our audit addressed the Key Audit
|
| |
Matters
|
|
As at 31 March 2025, the gross carrying amount of trade receivables was Rs. 141.97 lakhs, The Company determines, at each balance sheet date, the existence of any objective evidence of impairment of trade receivables. Basis this evaluation, the Company provides for impairment allowance which comprises of a specific element based on individual debtors and a collective element based on historical experience adjusted for certain current factors. In computing the allowance, Company considers factors such as type of products sold, credit terms, ageing
|
Our audit procedures to assess the recoverability of trade debtors included the following:
• Assessing the design and implementation of the Company’s internal control in relation to the revenue and collection cycle, particularly the controls over receivables collection;
• Obtaining an understanding Company’s judgment about recoverability of individual trade debtor balances. Evaluating the provisions for doubtful debts made by Company for these individual balances with
|
|
of receivables, current creditworthiness, past
|
reference to the debtors’ financial condition,
|
|
collection history, insurance cover as also historical loss experience. We focused on this area because: Trade receivables and its loss
|
industry in which the debtors are operating, ageing of balances, historical and post
|
|
allowance are significant to the Company. We identified recoverability of trade debtors as a key audit matter because of delays in
|
yearend collection records;
• Assessing, on a sample basis, items in the
|
|
collections of amounts due as also the
|
trade receivables’ ageing report were
|
|
recognition of expected credit losses which is inherently subjective and requires the exercise
|
classified within the correct ageing bracket by comparing individual items in the report with underlying documentation;
|
|
of significant company judgment.
|
• Comparing, on a sample basis, cash receipts from customers subsequent to the financial year-end relating to trade receivable balances as at 31 March 2025 with bank statements and relevant remittance documentation; and
• Evaluate the rationale of Company’s loss allowance estimates by inspecting the information used by the Company such as ageing of overdue balances, extent of insurance coverage, historical and post year-end collection trend from debtors, legal notices issued to overdue debtors and the historical and estimated loss rate.
|
| |
|
|
The company has not made any contribution to the approved gratuity fund during the year. As a result, the entire gratuity liability as per the actuarial valuation is unfunded, increasing the company’s future cash outflow obligations. This required significant auditor attention due to the judgments involved in actuarial assumptions and the impact on financial statement presentation and disclosure under Ind AS 19
|
• Obtained and reviewed the actuarial valuation report to assess the measurement of the gratuity liability.
• Verified that no contribution was made during the year and that the liability is appropriately presented as unfunded.
• Ensured that interest income on plan assets
was not recognized, in line with Ind AS 19, due to the absence of any actual plan assets
|
| |
|
|
The Company has received loans from directors and corporate entities amounting to Rs. 6,14,32,221 as at March 31, 2025. These borrowings form a significant component of the Company’s overall financing and have a material impact on its financial position. The assessment of classification, terms and conditions, interest, and disclosure of these loans under the relevant financial reporting framework involves significant auditor judgment, particularly in evaluating whether the transactions are at arm’s length and
|
• Obtaining confirmations from directors and corporate entities regarding the loan balances as at the reporting date.
• Examining the loan agreements and board/shareholder resolutions to verify the terms and authorisations.
• Evaluating the Company’s accounting policy and checking the appropriateness of classification and disclosure in the financial statements in accordance with Ind AS and
|
|
properly approved and disclosed under applicable laws and regulations
|
Schedule III of the Companies Act.
• Assessing whether the transactions were carried out at arm’s length and disclosed as related party transactions where applicable.
|
Other Information
The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company’s 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.
Responsibility of Management and those Charged with Governance for the Financial Statements
The Company's management and Board of Directors are 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, profit / loss (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 Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.
This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of 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.
The Members of the Board of Directors are also responsible for overseeing the company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Ind AS 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.
Annexed herewith “Annexure A” to this report, the Auditors responsibility under Standards of Auditing, Assurance and Limitations of Audit.
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 B”, 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) in 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, Cash Flow Statement and Statement of Change in Equity, dealt with by this Report is in agreement with the books of account;
(d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant Rules issued thereunder;
(e) on the basis of the written representations received from the directors as on 31 March 2025 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 C”. Our report expresses an unmodified opinion on adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
(g) 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 Company has a pending litigation under the CGST Act, 2017 involving a demand of Rs. 245.52 Lakhs for the financial year 2018-19. The matter is currently under appeal before the Appellate Authority. The management believes that the demand is not tenable and accordingly, no provision has been made in the financial statements. However, the outcome of the matter may have an impact on the Company’s financial position depending on the final decision of the appellate authority
- (ii) The Company did not have any material foreseeable losses on long-term contracts including derivative contracts.
- (iii) There were no 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 persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall :
1. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company or
2. provide any guarantee, security or the like to or 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 persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall
1. directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party
or
2. Provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures as 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 (d)(i) and (d)(ii) contain any material misstatement
(d) The Company has not declared or paid any dividend during the year under Audit.
(e) The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is applicable from 1 April 2023.
Based on our examination, the Company has not used accounting softwares for maintaining its books of account, which have a feature of recording audit trail (edit log) facility throughout the year for all relevant transactions recorded in the respective software.
3. With respect to the matter to be included in the Auditors’ Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with section 197 of the Act.
The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For A S K A & CO
Chartered Accountants Firm’s registration No.: 122063W
VIJAY V SHELAR
Partner
Membership number: 101504
Mumbai
May 29, 2025
UDIN : 25101504BMOBBC4608
|