EL Forge Ltd.
|BSE: 531144||Sector: Engineering|
|NSE: ELFORGE||ISIN Code: INE158F01017|
|BSE 00:00 | 04 Mar||EL Forge Ltd|
|NSE 05:30 | 01 Jan||EL Forge Ltd|
|BSE: 531144||Sector: Engineering|
|NSE: ELFORGE||ISIN Code: INE158F01017|
|BSE 00:00 | 04 Mar||EL Forge Ltd|
|NSE 05:30 | 01 Jan||EL Forge Ltd|
To the Members of El Forge Limited
Report on the Audit of the Financial Statements 01. Qualified Opinion
We have audited the financial statements of El Forge Limited ("the Company")which comprise the balance sheet as at 31stMarch 2021 and the statement ofProfit and Loss (including Other Comprehensive Income) the statement of cash flows andthe Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information. In our opinion and tothe best of our information and according to the explanations given to us except for thepossible effects of the matter described in the Basis for Qualified Opinion' sectionof our report the aforesaid Ind AS financial statements give a true and fair view inconformity with the accounting principles generally accepted in India including Indian
Accounting Standards (Ind AS') specified under Section 133 of the Companies Act2013 ("the Act") of the state of affairs (financial position) of the Company asat 31 March 2021 and its loss (financial performance including other comprehensiveincome) its cash flows and the changes in equity for the year ended on that date.
02. Basis for Qualified Opinion
(01) 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 arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI')together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the rules there under and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
(02) We draw attention to the following matters:
i. Non provision of loss or gains on account of Actuarial Valuation as required by theIndian Accounting Standards namely Employees Benefit as per Ind AS 19 due tonon-payment of contribution to Employees Gratuity Plan agreed upon with Life InsuranceCorporation of India.
ii. The Company's investment as at 31st march 2021 has not been measured andrecorded in its fair value consequently the increase or decrease if any in value is notprovided in the financial statements.
03. Emphasis of Matter
(01) We draw attention to Sl No. 18 of Note 3.01 to the financial statements whichexplain the uncertainties and the impact of COVID-19 pandemic situation on the Company'sfinancial results as assessed by the management.
(02) We also draw the attention to the following: i. Sl No.09 of Note 3.02 namelyStatutory dues in the Ind AS financial statements relating to Other Information; (03)Our opinion is not modified in respect of the above matters.
04. Key Audit Matters
(01) Key audit matters are those matters those in our professional judgment were ofmost significance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters.
(02) Based on the examination of books of account and explanations provided to us weare of the opinion that there are no materially significant key audit matters thatrequires disclosure in this report.
05. Information Other than the Financials Statements and Auditor's Report thereon(Other Information)
(01) The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Management Discussion andAnalysis Board's Report including Annexure to Board's Report Corporate Governance andCorporate Information but does not include the financial statements and our auditor'sreport thereon.
(02) Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.
(03) In connection with our audit of the financial statements our responsibility is toread the other Information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
(04) When we read the Directors' Report to the Shareholders if we conclude that thereis a material misstatement therein we are required to communicate the matter to thosecharged with governance and we are further required to report such fact. In the aboveregard we have nothing to report.
06. Responsibility of Management and Board of Directors for Financial Statements
(01) The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the state of affairs (financial position) profit orloss(financial performance) cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act.
(02) This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting 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 statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
(03) In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
(04) That Board of Directors is also responsible for overseeing the company's financialreporting process.
07. Auditor's Responsibilities for the Audit of the Financial Statements.
(01) Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards of Auditing 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.
(02) As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for explaining our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are 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 our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters if theyare materially significant in our auditor's report unless labor regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
08. Report on Other Legal and Regulatory Requirements
(01) As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
(02) 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 bestof 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 theCompany so far as it appears from our examination of those books.
(c) The financial statements dealt with by this report are in agreement with the booksof account;
(d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31stMarch2021 taken on record by the Board of Directors none of the directors is disqualified ason 31stMarch 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous: i. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
ii. We draw your attention to item no.12 of Note No.3.02 to the Financial statementsrelating to money that are required to be transferred to the Investor Education andProtection Fund by the Company.
(h) With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act as amended:
In our opinion and according to the information and explanations given to us theremuneration paid or provided by the Company to its directors during the current year isin accordance with the provisions of Section 197 of the Act.
Annexure A to the Independent Auditor's Report
Statement of matters specified in Para 3 & 4 of the order referred to insub-section (11) of 143.
The annexure referred to in paragraph 08 (01) of Main Audit Report under the headingof "Report on other Legal and Regulatory Requirements" of our report to themembers of EL FORGE LIMITED of even date:
1. In respect of company's fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) As per the information and explanation given to us all the fixed assets have beenphysically verified by the Company at reasonable intervals and no material discrepancieswere noticed on such verification. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies as compared to book records were noticed on suchverification.
c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered conveyance deed provided to us wereport that the title deeds comprising all the immovable properties of land are held inthe name of the Company as at the balance sheet date. In respect of immovable propertiesof land that have been taken on lease and disclosed as fixed asset in the financialstatements the lease agreements are in the name of the Company where the Company is thelessee in the agreement.
2. The inventories have been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable and adequate in relation tothe size of the company and nature of its business. No material discrepancies were noticedon physical verification of inventories as compared to the book records.
3. During the year the company has not granted any loans secured or unsecured tocompanies firms or other parties covered in the Register maintained under Section 189 ofthe Companies Act 2013. Accordingly the provisions of clauses (iii) (a) (b) & (c)of Para 3 of the Order are not applicable.
4. Relating to loans investments guarantees and security a. Compliance of Section185 of the Act (Loan to directors etc.):
i. Based on verification as per the information and explanations given to us theCompany has not given any loan to any directors of the company.
ii. Accordingly we have not made any observation on the compliance of the aforesaidsection.
b. Compliance of Section 186 of the Act 2013 (Loans investments guarantees andsecurity)
i. Relating to the Current Financial Year:
A. The Company has not (i) given any loan to any person or other body corporate (ii)given any guarantee or provide security in connection with a loan to any otherbody-corporate or person and (iii) acquired by way of subscription purchase orotherwise the securities of any other body corporate during the year; B. In view of theabove the provisions of section 186 of the Act are not applicable to the Company for theyear under report; accordingly we have not made any observation on the compliance of theaforesaid section.
5. Relating to Deposits
a. In our opinion and according to the information and explanations given to us. theCompany has accepted or renewed deposit from the public to which the directives issued bythe Reserve bank of India provisions of sections 58A and 58AA of the Companies Act 1956and the Companies Acceptance of Deposits Rules 1975 are applicable.
b. The company has paid all the fixed deposits which have been matured and claimed; butthe company has not paid the Fixed Deposits matured but not claimed. The amount of suchunclaimed deposits works out to Rs. 3.81 Lakhs as at 31-03-2021; since the amount is duefor payment the same has been included and or shown under the under the grouping CurrentLiabilities in the Balance Sheet.
c. The company has not made any amount as are required to be kept as liquid assets inrespect of public deposit since no deposit is going to be matured in the immediatelysucceeding year.
d. It has been explained to us that no order (not the CARO-Order referred by us) hasbeen passed by Company Law Board or National Company Law Tribunal or Reserve Bank of Indiaor any court or any other tribunal; accordingly the remaining part of the sub-clause ofthe aforesaid Clause of the Order namely "Whether the same (order) has beencomplied with or not' is not applicable for the financial year under report.
e. As required by Paragraph 4 of the order we give reason for our unfavorable orqualified remarks (Answers) as follows:
The company has not repaid the amount of deposits outstanding and became due butremained unclaimed. Hence we have qualified the same together with the amount remainingunpaid
6. We have broadly reviewed the books of accounts maintained by the Company pursuant tothe rules prescribed by the Central Government for the maintenance of cost records underSub Section (1) of section 148 of the Companies Act 2013 and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.
7. Relating to Statutory Dues
a. As per the records examined by us the company is not regular in depositingundisputed statutory dues including Provident Fund Employees' State Insurance Income-taxetc. with the appropriate authorities. As per the records examined by us an amount ofRs. 156.37 Lakhs has been outstanding towards statutory dues as at the last day of thefinancial year under report for a period of more than six months from the date theybecame payable.
b. As required by Paragraph 4 of the order we give reason for our unfavorable orqualified remarks (Answers):
Since the company has not paid the undisputed statutory dues even though they are duewe have qualified the same together with the amount as per the aforesaid clause of theOrder. c. As at the end of the financial period under report no undisputed amount ofincome tax / sales tax / Wealth tax / Service Tax / Custom duty / Excise duty /Cess hasbeen outstanding except those given below:
8. Relating to Repayment of Loans:
a. The Company has not borrowed amount from bank (No loan has been obtained fromfinancial institution government or debenture holders) during the year under report.
b. During the earlier years the company has borrowed money both Long Term and Short
Term from a few banks under consortium. The company has repaid the amount to the bank(or the Assets Reconstruction company) and amount outstanding with the banks as at31-03-2021 is Rs. Nil.
c. Accordingly the remaining part of the Clause relating to reporting of the periodand the amount of default (lender wise) is not applicable to the company for the yearreport.
d. The option exercising conversion of preferential share (Optionally Convertiblepreference shares) to equity shares has not been received by the company.
9. In our opinion and according to the information and explanations given to us theCompany has not availed any term loan from the financial institutions during the yearunder audit. The Company has not raised monies by way of initial public offer or furtherpublic offer (including debt instruments) during the year.
10. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements to the best of our knowledge and belief and as perthe information and explanations given to us by the Management and the representationsobtained from the management no material fraud by the Company and no fraud on the companyby its officers or employees has been noticed or reported during the year.
11. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid or provided managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
12. Nidhi Company
The company is not a Nidhi Company and hence reporting under clause 3 paragraph 3(xii)of the Order is not applicable to the company.
13. According to the information and explanations given to us and based on ourexamination of the records and approvals of the Audit Committee of the Company alltransactions with the related parties are in compliance with sections 177 and 188 of theAct where applicable and the details of such transactions have been disclosed in thefinancial statements as required by the applicable accounting standards.
14. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year and hence reporting under Clause 3 (xiv) of the Order is not applicable to theCompany.
15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with its directors or persons connected to its directors. Accordinglyparagraph 3(xv) of the Order is not applicable.
16. According to the information and explanation given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable.
Annexure - B to the Independent Auditors' Report
(Referred to in paragraph 08(02)(f) of the Main Audit Report under the headingReport on Other Legal and Regulatory Requirements' section of our report to themembers of EL FORGE LIMITED of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the Internal Financial Controls over financial reporting of EL FORGELIMITED ("the Company") as of March 31 2021 in conjunction with our auditof the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting (IFCoFR)criteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting
Meaning of Internal Financial Controls over Financial Reporting
A Company's IFCoFR is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A Company'sIFCoFR includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's 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 IFCoFR including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the IFCoFR to futureperiods are subject to the risk that IFCoFR may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControl over Financial Reporting issued by the ICAI.