Birla Precision Technologies Ltd.
|BSE: 522105||Sector: Engineering|
|NSE: N.A.||ISIN Code: INE372E01025|
|BSE 00:00 | 02 Dec||46.15||
|NSE 05:30 | 01 Jan||Birla Precision Technologies Ltd|
|Mkt Cap.(Rs cr)||301|
|Mkt Cap.(Rs cr)||301.13|
Birla Precision Technologies Ltd. (BIRLAPRECISION) - Auditors Report
Company auditors report
Birla Precision Technologies Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone financial statements ofBirla Precision Technologies Limited ("the Company") which comprise the BalanceSheet as at 31st March 2021 the Statement of Profit Flow Statement for the year thenended and notes to the financial statements including a summary of significant accountingpolicies and other explanatory information. In our opinion and to the best of ourinformation and according to the explanations given to us the aforesaid financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia
a) In the case of the Balance Sheet of the state of affairs of theCompany as at 31st March 2021
b) In the case of the Statement of Profit and Loss of the profit forthe year ended on that date; and
c) In the case of the Cash Flow Statement cash flows for the yearended 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 ("Act"). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of Financial Results section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India ("ICAI") together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence obtained by us in is sufficient and appropriateto provide a basis for our opinion.
Key Audit Matters
We draw your attention to Note no. 40 of the Ind AS Financial statementfor the year ended March 31 2021 which describes the impact of the outbreak ofCoronavirus (COVID-19) on the business operations of the Company. Our opinion is notmodified in respect of this matter.
Information other than the Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for thepreparation of the other information. The other information and Loss and the Cashcomprises the information included in the Management Discussion and Analysis Board'sreport including the Annexures to Board's Report Corporate Governance andShareholder's Information but does not include the financial statements and ourauditor's report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of the Financial Statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of The Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's as a going concern. If we conclude that a material uncertainty exists weare required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the resultsof our work; and
(ii) to evaluate the effect of any identified misstatements in thestatements financial
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit significantdeficiencies in internal during our audit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of current period and are therefore the key audit matters. We describe thesematters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016("the Order") as issued by Central Government of India in terms of Sub Section(11) of Section 143 of the Act we hereby give in the "Annexure A" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act based on our audit wereport that:
a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;
b. In our opinion proper books of accounts as required by law havebeen 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 and the CashFlow Statement dealt with by this Report are in agreement with the books of accounts;
d. In our opinion the aforesaid financial statements comply with theAccounting Standards referred to in Section 133 of the Act read with Rule 7 of TheCompanies (Accounts) Rules 2014;
e. On the basis of written representations received from the Directorsand taken on record by the Board of Directors none of the Directors is disqualified as on31st March 2021 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 overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure
B". Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting.
g. With respect to the other matters to be included in theAuditor'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 theexplanations given to us:
i. The Company does not have any pending litigations which would impactits financial position;
ii. The Company did not have any long-term contracts includingderivatives contracts for which there were any material foreseeable losses;
iii. There were no amounts required to be transferred to the InvestorEducation and Protection Fund by the Company.
h. With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended: In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid to the directors is in accordance with theprovisions of Section 197 along with Schedule V of Companies Act 2013 and theremuneration limit is in accordance with Section 197 and Schedule V of Companies Act 2013and approved by the Shareholders. The Ministry of Corporate Affairs has not prescribedother details under Section 197(16) which are to be required to be commented upon by us.
Annexure A to the Independent Auditors' Report
(Referred to in para 1 under "Report on other Legal and RegulatoryRequirement" of our report of even date)
1. According to the information and explanations given to us inrespect of the fixed assets:
(b) There is a phased program for verification assets over a period ofthree years which in our opinion is reasonable having regard to the size of the companyand nature of its assets. According to the information and explanation given to us nomaterial discrepancies were noticed on such verification.
(c) As per the information and explanations provided to us and onbehalf of the examination of the records of the company title deeds of immovableproperties are generally in the name of the company except in case of 4 leaseholdproperties acquired by the entities valued at Rs. 356 Lakhs gross and Rs. 263 Lakhs netthat have been amalgamated with the company.
2. The inventory (excluding stock with third parties) has beenphysically verified by the management during the year. In respect of the inventory lyingwith the third parties these have been confirmed by them. In our opinion the frequency ofverification The discrepancies noticed on physical verification inventory as compared tothe book records were not material. Further our attendance at the physical inventoryverification not practical under current restrictions imposed by the government and wehave relied on the related alternate audit procedure.
3. According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to Companies Firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of The Companies Act 2013 and therefore clause (iii) of paragraph 3 of the Order isnot applicable.
4. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of loans guarantee investments and security provided. Thecompany has given a Corporate guarantee of Rs. 25030 Lakhs to banks for a loan taken bythe group company.
5. As per the Ministry of Corporate Affairs notification dated March31 2014 the provisions of Sections 73 to 76 or any other relevant provisions of TheCompanies of fixed Act 2013 and The Companies (Acceptance of Deposits) Rules 2014 asamended with regard to the deposits accepted are not applicable to the Company. Accordingto information and explanations given to us the Company has not accepted any depositsduring the year.
6. We have broadly reviewed the books of accounts maintained by thecompany and are of the opinion that prima facie the cost records and accounts prescribedby the Central Government under Sub-Section (1) of Section 148 of the Companies Act 2013have been made and maintained. However we have not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.
7. According to the information and explanations given to us:
a) The Company is regular in depositing undisputed statutory duesincluding Employees State Insurance Income Tax Cess Goods and Service Tax and any othermaterial statutory dues as applicable with theis reasonable. appropriate authorities. of
b) There are no undisputed statutory dues payable in respect ofEmployees' State Insurance Income-tax done by the management was Cess Goods andService Tax and other material statutory dues in arrears as at March 31 2021 for a periodof more than six months from the date they became payable.
c) According to the information and explanation given to us and onbasis of our examination of the records of the company details of dues of Income TaxSales Tax Service Tax Goods and Service Tax (GST) Duty of Customs Duty of Excise andValue added Tax which have not been deposited as on 31st March 2021 on account of disputesis given below:
8. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings toFinancial Institutions and Banks. The Company has not taken loans or borrowings fromGovernment or by way of Debentures.
9. According to the information and explanations given to us the termLoans have been applied by the company during the year for the purpose for which they wereobtained. The Company has not raised moneys by way of Initial Public Offer or FurtherPublic Offer during the year. The Company has not raised funds by way of Term loans duringthe year.
10. According to the information and explanations given to us no fraudby the Company and no fraud on the Company by its officers or employees has been noticedor reported during the year.
11. According to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to The CompaniesAct 2013.
12. The Company is not a Nidhi Company; hence reporting under clause(xii) of paragraph 3 of the Order is not applicable to the Company.
13. According to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of The Companies Act 2013 whereverapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the notes on Financial Statements as required by theapplicable accounting standards
14. The Company has during the year issued 8431703 Equity Shares onpreferential basis against consideration received by the Company. The requirement ofSection 42 of the Companies Act 2013; Chapter V of SEBI (ICDR) Regulations 2018 and Rule14 of the Companies(Prospectus and Allotment of Securities) Rule 2014 have been compliedwith and the amount raised has been used for the purpose for which the funds were raised.
15. According to the information and explanations given to us theCompany has not entered into any non-cash transactions with Directors or persons connectedwith him under provisions of Section 192 of The Companies Act 2013.
16. According to the information and explanations given to us wereport that the Company has registered as required under section 45-IA of the Reserve Bankof India Act 1934.
Annexure-B to the Independent Auditor's Report
(Referred to in para 2(f) under "Report on other Legal andRegulatory Requirement" of our report of even date) Report on the Internal FinancialControls under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls over financialreporting of Birla Precision Technologies Limited ("the Company") as of March31 2021 in conjunction with our audit of the financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the 'Guidance Note") issued by The Institute ofChartered Accountants of India (ICAI). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based our audit. We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing issued by theICAI and prescribed under Section 143(10) of the Act 2013 to the extent applicable to anaudit of internal financial controls both issued by The Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlover financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflectthe transactions and dispositions of the assets of theCompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Financial Statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of management and Directors of theCompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assetsthat could have a material effect on the Financial Statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon "the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial
Reporting issued by The Institute of Chartered Accountants ofIndia".