1. We have audited the standalone financial statementsof VISA Steel Limited (“the Company”) which comprisethe standalone balance sheet as at March 31, 2025, thestandalone statement of profit and loss (including othercomprehensive income), the standalone statement ofchanges in equity and the standalone statement of cashflows for the year then ended, and notes to the standalonefinancial statements, including material accounting policiesother explanatory information (hereinafter referred to as“the financial statements”).
In our opinion and to the best of our information andaccording to the explanations given to us, except for theeffect of matter referred to in Basis of Qualified Opinionparagraph 2 below, the aforesaid standalone financialstatements give the information required by the CompaniesAct, 2013 (“Act”) in the manner so required and give a trueand fair view in conformity with the accounting principlesgenerally accepted in India, of the state of affairs ofthe Company as at March 31, 2025, and loss and othercomprehensive income, changes in equity and its cash flowsfor the year then ended.
2. We draw attention to Note 17B of the accompanyingStandalone Financial Statements with regard to non¬recognition of interest expense on the borrowings of theCompany. The accumulated interest not provided as onMarch 31, 2025 is H 13,246.23 million (including H1,459.69million for FY 2016-17, H1,552.29 million for FY 2017-18,H1,465.46 million for FY 2018-19, H1,443.39 million forFY 2019-20, H1,286.83 million for FY 2020-21, H1,289.27million for FY 2021-22, H1,404.62 million for FY 2022-23,H1,743.58 million for FY 2023-24, H 1601.10 million for theyear ended March 31,2025) which is not in accordance withthe requirement of Ind AS 23: ‘Borrowing Cost' read with IndAS 109: ‘Financial Instruments'.
Had the aforesaid interest expense been recognized, financecost for the year ended March 31, 2025 would have beenH 1,909.04 million instead of the reported amount of H 307.94million. Total expenses for the year ended March 31, 2025would have been H 7,747.72 million instead of the reportedamount of H 6,146.62 million. Net loss after tax for the yearended March 31, 2025 would have been H 6,766.61 millioninstead of the reported amount of H 5,165.51 million. TotalComprehensive Income for the year ended March 31, 2025would have been H (6,768.52) million instead of the reportedamount of H (5,167.42) million, other equity would have beenH (28,012.48) million against reported H (14,766.25) million,other current financial liability would have been H 15,126.08
million instead of reported amount of H 1,879.85 million andLoss per share for the year ended March 31,2025 would havebeen H 58.44 instead of the reported amount of H 44.61.
The above reported interest has been calculated usingSimple Interest rate.
3. We conducted our audit in accordance with the Standardson Auditing (SAs) specified under section 143(10) of the Act.Our responsibilities under those SAs are further described inthe Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We areindependent of the Company in accordance with the Codeof Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevantto our audit of the standalone financial statements underthe provisions of the Act and the Rules there under, and wehave fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified opinion.
4. We draw attention to Note - 34 of the standalone financialstatements regarding the preparation of the statement ona going concern basis, for the reason stated therein. TheCompany has accumulated losses and has also incurredlosses during the year ended March 31,2025. As on date, theCompany's current liabilities are substantially higher than itscurrent assets and the Company's net worth has also beenfully eroded.
Oriental Bank of Commerce, since merged with PunjabNational Bank, had filed an application for initiating CIRPunder IBC which was admitted vide NCLT order dated 28November 2022 and an Interim Resolution Professional hadbeen appointed. Meanwhile, Hon'ble Orissa High Court hasstayed the operation of the NCLT order dated 28 November2022. PNB had since assigned its debt to Assets Care andReconstruction Enterprise Limited (ACRE) on 25 August 2023and subsequently ACRE had filled substitution application inthe matter.
These conditions indicate the existence of a materialuncertainty that may cast significant doubt on theCompany's ability to continue as a going concern andtherefore it may be unable to realise its assets and dischargeits liabilities including potential liabilities in the normal courseof business. All the assets and liabilities are still being carriedat their book value except property, plant and equipment,which have been impaired in the current year, and are beingcarried at its recoverable value. The appropriateness ofassumption of going concern, and evaluation of recoverablevalue of its non-current assets is critically dependent uponthe debt resolution of the Company which is under process,the Company's ability to raise requisite finance, generatecash flows in future to meet its obligations and to earnprofits in future. The ability of the Company to continue as a
going concern is solely dependent on the successful outcomeof these conditions, which are not wholly within the controlof the Company.
The Management of the Company has prepared thisfinancial statement on a going concern basis based ontheir assessment of the successful outcome of the debtresolution which will enhance the Company's viability,till then the Company's operations continue underconversion arrangement.
Our opinion is not qualified in respect to the above matter.
5. We draw attention to Note - 34 of the standalone financialstatements which describes that majority of the lendershave assigned their debt to ACRE, and more than 95% of thedebt has been assigned to ACRE. The Company is currentlyengaged in discussions with ACRE for restructuring of itsoutstanding loan exposure, including waiver of interest,through an out-of-court settlement, and no adjustment hasbeen carried out in the books of accounts.
6. The Company's Board of Directors is responsible for thepreparation of the other information. The other informationcomprises the information included in the annual report, butdoes not include the standalone financial statements andour auditor's report thereon. The annual report is expectedto be made available to us after the date of this auditor'sreport. Our opinion on the standalone financial statementsdoes not cover the other information and we will not expressany form of assurance conclusion thereon. In connectionwith our audit of the financial statements, our responsibilityis to read the other information identified above whenit becomes available and, in doing so, consider whetherthe other information is materially inconsistent with thestandalone financial statements or our knowledge obtainedduring the course of our audit, or otherwise appears to bematerially misstated. When we read the annual report, if weconclude that there is a material misstatement therein, weare required to communicate the matter to those chargedwith governance.
7. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalonefinancial statements of the current period. These matters were addressed in the context of our audit of the standalone financialstatements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For thematter below, our description of how our audit addressed the matter is provided in that context.
No.
Key Audit Matter
How our audit addressed the key audit matters
1
Related Party Transaction (See Note - 43 to the Standalone Financial Statements)
The Company has entered into a long-termconversion arrangement with a related party forearning conversion income for conversion of inputraw materials into finished goods for the relatedparty. The above transaction has a possible arm'slength pricing risk associated with it.
We addressed the Key Audit Matter as follows: -
1) Obtained and read the Company's policies, processes and procedures in respect ofidentification of such related parties in accordance with relevant laws and standards,obtaining approval, recording and disclosure of related party transactions and identifiedkey controls. For selected controls we have performed tests of controls.
2) Reviewed the minutes of the meeting of the Audit Committee and Board and examinedthe approvals and modifications of the transactions.
3) Reviewed the list of Related party identified by the Company.
4) Performed the sales process / procurement process walk through and tested the controls.
5) Obtained the arm's length pricing document prepared by the Company and assessedthe Key Assumptions.
6) Assessed the application of arm's length price documents in executing the transactions.
7) Reviewed compliance with Section 177 & 188 of the Companies Act 2013 for relatedparty transaction.
8) Reviewed whether transactions between related parties are on normal commercialterms and conditions no more favorable than those otherwise available to other partiesconsidering the present financial position of the Company.
9) We reviewed the disclosure of related party transactions as per Ind AS 24.
10) Held discussion and obtained written representations from the management in relationto such transactions.
Conclusion:
• Our audit procedures did not lead to any reservations regarding the related partytransactions and its disclosure.
2.
Impairment of property, plant and equipment in
accordance with Ind AS 36 ‘Impairment of Assets'. (Refer paragraph -4 above)
The Company has performed an impairment
Understanding and assessment of the Impairment indicators - Obtained and read
assessment of its manufacturing unit (cash
Company's policies, processes and procedures in respect of identification of impairment
generating unit or CGU) during the financial year
indicators, recording & disclosure,
ended 31 March 2025. The company has identified
Assessed through an analysis of internal & external factors impacting the Company whether
the entire fixed assets of its manufacturing unit
there were any indicators in line with Ind As-36;
as a CGU as they collectively contribute to the
Identification: Obtained an understanding of Company's evaluation of identification of
generation of cash flows.
entire assets of a company as a cash generating unit;
The impairment arises due to idling of the assetsand external factors beyond the control of the
Controls: Tested management review controls on the assumptions including underlyingcash flow forecasts and impact of macro-economic factors on the forecasts. Tested
Company, resulting in sub-optimal utilization anddiminished economic performance of the assets
management's review of the discounted cash flow calculations performed to support theimpairment assessment including benchmarking of key assumptions (discount rates, growth
causing operating losses and adversely impactingthe operational and financial performance of the
rate) and assessment of sensitivities;
Company.
Completeness and accuracy of the VIU model: Obtained valuation computation
The impairment testing of manufacturing unit
performed by the Company for its impairment assessment and agreed the mathematical
involves significant judgements and estimates in
accuracy of the VIU by recalculating the cash flow build up & comparing prior year forecasts
assessing the recoverable value. The recoverable
to actual results and assessing the potential impact of any variances;
value is considered to be the higher of the
Cash flow forecast assumptions: Involved independent valuation specialists to assist in
Company's assessment of the value in use (VIU)
the evaluation of the assumptions (discount rate which included comparing the weighted
and fair value less cost of disposal (FVLCD).
average cost of capital with sector averages for the relevant markets in which the CGU
There is a risk over the Company's assessment and
operates and long-term growth rate) and challenged the key assumptions and judgements
measurement of impairment due to:
within the build - up of the cash flow forecast (such as future sales volumes and prices,
• VIU: uncertainties involved in forecasting of
margins, overheads etc.) and methodologies used by the Company and its experts;
cash flows, including key assumptions such
Sensitivity analysis: Assessed the sensitivity of the outcome of impairment assessment to
as future sales volumes, prices, margins,
changes in key assumptions such as volumes and margins;
overheads, growth rates and weighted average
FVLCD assumptions: Compared the market multiple used in the FVLCD to comparative
cost of capital.
companies and to market data sources with the assistance of experts.
• FVLCD: uncertainties involved in identifying
Conclusion :
appropriate comparable companies, estimating
Our audit procedures did not lead to any reservations regarding the impairment assessment
their market multiple and estimating thedepreciated replacement cost of fixed assets.
and its disclosure.
8. The Company's management and Board of Directors areresponsible for the matters stated in section 134(5) of theAct with respect to the preparation of these standalonefinancial statements that give a true and fai r view of the stateof affairs, loss and other comprehensive income, changesin equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India,including the Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assetsof the Company and for preventing and detecti ng frauds andother irregularities, selection and application of appropriateaccounting policies, making judgments and estimates thatare reasonable and prudent and design, implementationand maintenance of adequate internal financial controlsthat were operating effectively for ensuring the accuracyand completeness of the accounting records, relevant to thepreparation and presentation of the standalone financialstatements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
In preparing the standalone financial statements,management and Board of Directors are responsible forassessing the Company's ability to continue as a goingconcern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accountingunless management either intends to liquidate the Companyor to cease operations, or has no realistic alternative but todo so.
Board of Directors is also responsible for overseeing theCompany's financial reporting process.
9. Our objectives are to obtain reasonable assurance aboutwhether the standalone financial statements as a wholeare free from material misstatement, whether due to fraudor error, and to issue an auditor's report that includes ouropinion. Reasonable assurance is a high level of assurance,but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, theycould reasonably be expected to influence the economic
decisions of users taken on the basis of these standalonefinancial statements.
As part of an audit in accordance with SAs, we exerciseprofessional judgment and maintain professional skepticismthroughout the audit. We also:
• Identify and assess the risks of material misstatementof the standalone financial statements, whether dueto fraud or error, design and perform audit proceduresresponsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basisfor our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, orthe override of internal control.
• Obtain an understanding of internal control relevant tothe audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing ouropinion on whether the company has adequate internalfinancial controls with reference to financial statementsin place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimatesand related disclosures made by management.
• Conclude on the appropriateness of management's useof the going concern basis of accounting and, basedon the audit evidence obtained, whether a materialuncertainty exists related to events or conditions thatmay cast significant doubt on the Company's abilityto continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to drawattention in our auditor's report to the related disclosuresin the standalone financial statements or, if suchdisclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtainedup to the date of our auditor's report. However, futureevents or conditions may cause the Company to ceaseto continue as a going concern.
Evaluate the overall presentation, structure and contentof the standalone financial statements, including thedisclosures, and whether the standalone financialstatements represent the underlying transactions andevents in a manner that achieves fair presentation.
0. Materiality is the magnitude of misstatements in thestandalone financial statements that, individually or inaggregate, makes it probable that the economic decisions ofa reasonably knowledgeable user of the financial statementsmay be influenced. We consider quantitative materialityand qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work and (ii) toevaluate the effect of any identified misstatements in thefinancial statements.
11. We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includingany significant deficiencies in internal control that weidentify during our audit.
12. We also provide those charged with governance with astatement that we have complied with relevant ethicalrequirements regarding independence, and to communicatewith them all relationships and other matters that mayreasonably be thought to bear on our independence, andwhere applicable, related safeguards.
13. From the matters communicated with those charged withgovernance, we determine those matters that were ofmost significance in the audit of the standalone financialstatements of the current period and are therefore the keyaudit matters. We describe these matters in our auditors'report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances,we determine that a matter should not be communicatedin our report because the adverse consequences of doingso would reasonably be expected to outweigh the publicinterest benefits of such communication.
Report on Other Legal and RegulatoryRequirements
14. As required by the Companies (Auditors' Report) Order, 2020(“the Order”) issued by the Central Government in terms ofsection 143 (11) of the Act, we give in the “Annexure A” astatement on the matters specified in paragraphs 3 and 4 ofthe Order, to the extent applicable.
15. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.
b) In our opinion, except for the matter referred toin paragraph 2 above, proper books of account asrequired by law have been kept by the Company sofar as it appears from our examination of those booksexcept for the matters stated in the paragraph 15(i) (vi)below on reporting under Rule 11(g) of the Companies(Audit and Auditors) Rules, 2014
c) The standalone balance sheet, the standalonestatement of profit and loss (including othercomprehensive income), the standalone statement ofchanges in equity and the standalone statement ofcash flows dealt with by this Report are in agreementwith the books of account.
d) I n our opinion, except for the matter referred to inparagraph 2 above, the aforesaid standalone financialstatements comply with the Ind AS specified undersection 133 of the Act.
e) On the basis of the written representations receivedfrom the directors as on March 31, 2025 taken onrecord by the Board of Directors, none of the directorsis disqualified as on March 31, 2025 from beingappointed as a director in terms of Section 164(2) ofthe Act.
f) The qualification relating to the maintenance ofaccounts and other matters connected therewith areas stated in the Basis for Qualified Opinion paragraphand paragraph 15(b) above on reporting under Section143(3)(b) of the Act and paragraph 15(i)(vi) below onreporting under Rule 11(g) of the Companies (Auditand Auditors) Rules, 2014.
g) With respect to the adequacy of the internal financialcontrols with reference to financial statements of theCompany and the operating effectiveness of suchcontrols, refer to our separate Report in “Annexure B”.
h) With respect to the matter to be included in theAuditors' Report under section 197(16):
In our opinion and according to the information andexplanations given to us, the remuneration paid bythe company to its directors during the current yearis in accordance with the provisions of Section 197 ofthe Act.
i) With respect to the other matters to be included inthe Auditors' Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014, inour opinion and to the best of our information andaccording to the explanations given to us:
i. The Company has disclosed the impact ofpending litigations as at March 31, 2025 on itsfinancial position in its standalone financialstatements - Refer Note- 33 to the standalonefinancial statements.
ii. The Company did not have any long-termcontracts including derivative contracts for whichthere were any material foreseeable losses.
iii. There were no amounts which were required tobe transferred, to the Investor Education andProtection Fund by the Company during the yearended March 31,2025.
iv. a) The management has represented that,
to the best of its knowledge and belief, asdisclosed in the notes to the accounts, nofunds have been advanced or loaned orinvested (either from borrowed funds orshare premium or any other sources or kindof funds) by the company to or in any otherperson 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 otherpersons or entities identified in any mannerwhatsoever by or on behalf of the Company(“Ultimate Beneficiaries”) or provide anyguarantee, security or the like on behalf ofthe Ultimate Beneficiaries.(Refer note -45(h) to the financial statements);
b) The management has represented, that,to the best of its knowledge and belief, asdisclosed in the notes to the accounts, nofunds have been received by the companyfrom any person or entity, including foreignentities (“Funding Parties”), with theunderstanding, whether recorded in writingor otherwise, that the company shall,whether, directly or indirectly, lend or investin other persons or entities identified in anymanner whatsoever by or on behalf of theFunding Party (“Ultimate Beneficiaries”) orprovide any guarantee, security or the like onbehalf of the Ultimate Beneficiaries. (Refernote - 45(h) to the financial statements);
c) Based on such audit procedures that weconsidered reasonable and appropriate inthe circumstances, nothing has come to ournotice that has caused us to believe that therepresentations under sub-clause (a) and (b)contain any material mis-statement.
v. The Company has not declared any dividend inthe last year which has been paid in the currentyear. Further, no dividend has been declared inthe current year.
vi. The reporting under Rule 11 (g) of the Companies(Audit and Auditors) Rules, 2014 is applicable from1 April 2023. Based on our examination, whichincluded test checks, except for the instancesmentioned below, the company has used anaccounting software for maintaining its books ofaccount which has a feature of recording audittrail (edit log) facility and the same has operatedthroughout the year for all relevant transactionsrecorded in the software and we did not comeacross any instances of audit trail feature beingtampered with during the course of our audit:
The feature of recording audit trail (edit log)facility was not enabled at the database level tolog any direct data changes for the accountingsoftware used for maintaining the books ofaccount from April 01, 2023 to January 26, 2025.
The audit trail has been preserved by the companyas per statutory requirements for record retentionexcept at database level for the period from April1,2023 to January 26, 2025 [Refer note no 44 (iii)to financial statements].
For SINGHI & CO.,Chartered Accountants
Firm's Registration No.302049E
(Rahul Bothra)Partner
Place: Kolkata Membership No. 067330
Date: May 29,2025 UDIN: 25067330BMLGPN3784