Force Motors Ltd.
|BSE: 500033||Sector: Auto|
|NSE: FORCEMOT||ISIN Code: INE451A01017|
|BSE 13:44 | 21 Jan||1331.45||
|NSE 13:34 | 21 Jan||1331.10||
|Mkt Cap.(Rs cr)||1,755|
|Mkt Cap.(Rs cr)||1754.85|
Force Motors Ltd. (FORCEMOT) - Auditors Report
Company auditors report
To the Members of Force Motors Limited
Report on the audit of Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements ofForce Motors Limited (the Company) which comprise the Balance Sheet asat March 312021 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as the standalone financialstatements).
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the Act) in the mannerso required and give a true and fair view in conformity with the Indian AccountingStandards prescribed under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended (Ind AS) and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2021 the loss and total comprehensive income changes in equity and its cash flowsfor the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under Section 143(10) of theAct. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements 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 independence requirements thatare relevant to our audit of the financial statements under the provisions of the Act andthe Rules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
Information other than the Standalone Financial Statements andAuditor's Report thereon
The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the Management Discussion andAnalysis Board's Report including Annexures to Board's Report Corporate Governance andBusiness Responsibility Report but does not include the financial statements and ourauditor's report thereon.
Management Discussion and Analysis Board's Report including Annexuresto Board's Report Corporate Governance and Shareholder's Information is expected to bemade available to us after the date of this auditor's report hence our opinion is basedon Standalone Financial Statements only.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. When we read Management Discussion and Analysis Board's Reportincluding Annexures to Board's Report Corporate Governance and Business ResponsibilityReport if we conclude that there is material misstatement therein we are required tocommunicate the matter to those charged with governance.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin Section 134 (5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting 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 responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone 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 thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations orthe overrideof internal control.
Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under Section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained
whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on the Company's ability to continue as a going concern.If we conclude that a material uncertainty exists we are required to draw attention inour auditor's report to the related disclosures in the standalone financial statements orif such disclosures are inadequate to modify our opinion. Our conclusions are based onthe audit evidence obtained up to the date of our auditor's report. However future eventsor conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
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 standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. 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 account as required by law have beenkept 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 OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of the written representations received from thedirectors as on March 312021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312021 from being appointed as a director in termsof 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 A.
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 the Auditor'sReport in accordance with the requirements of Section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of Section 197 of the Act.
h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 30(a) to the standalonefinancial statements
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
-Refer Note 41 to standalone financial statements.
2. As required by the Companies (Auditor's Report) Order 2016(the Order) issued by the Central Government in terms of Section 143 (11) ofthe Act we give in Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order.
ANNEXURE A TO THE INDEPENDENTAUDITOR'S REPORT
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub- section 3 of Section 143 of the Companies Act 2013 (theAct)
We have audited the internal financial controls over financialreporting of FORCE MOTORS LIMITED (the Company) as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company fortheyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishingand maintaining 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 issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding 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 underthe Companies Act 2013.
Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the Guidance Note) issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and 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 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 judgement including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is aprocess 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 controloverfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflectthetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Limitations of Internal Financial Controls Over Financial Reporting
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 to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal andRegulatory Requirements' section of our report to the Members of FORCE MOTORS LIMITED ofeven date)
(i) In respect of the Company's property plant and equipment:
(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment.
(b) As explain to us considering the nature of the Fixed Asset thesame have been physically verified by the management at reasonable intervals during theyear as per verification plan adopted by the Company which in our opinion is reasonablehaving regards to size of the Company and the nature of its assets. According toinformation and explanation give to us and the records produced to us for ourverification no material discrepancies noticed during such physical verification;
(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds comprisingall the immovable properties of land and buildings which are freehold are held in thename of the Company.
In respect of immovable properties been taken on lease and disclosed asproperty plant and equipment in the standalone financial statements the lease agreementsare in the name of the Company.
(ii) As informed to us the physical verification of inventory has beenconducted by the management at reasonable intervals and the discrepancies noticed duringsuch physical verification were not material. The discrepancies noticed on physicalverification of Inventory as compared to the book records have been properly dealt withthe Books of Account.
(iii) The Company has not granted any loans secured or unsecured toCompanies Firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Companies Act. Accordingly paragraph 3(iii) of theOrder is not applicable.
(iv) In our opinion and according to information and explanations givento us the Company has complied with the provisions of Sections 185 and 186 of theCompanies Act 2013 in respect investments made. Further the Company has not granted anyloans given any guarantee or security in connection with a loan to a director or anyother person in whom any of the director of the company is interested.
(v) In our opinion and according to the information and explanationsgiven to us the company has complied with the directives of the Reserve Bank of India andthe provision of Sections 73 to 76 of the Companies Act 2013 and the rules framed thereunder wherever applicable. As informed to us no order has been passed against theCompany by the Company Law Board the National Company LawTribunal RBI or any court orany tribunal.
(vi) The Central Government has specified maintenance of cost recordsunder Sub-Section (1) of Section 148 of the Act and we are of the opinion that prima faciesuch records are made and maintained. We have not however made a detailed examination ofthe records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us inrespect of statutory dues:
(a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax Goodsand Service Tax Customs Duty Cess and other material statutory dues applicable to itwith the appropriate authorities.
There were no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income Tax Goods and Service Tax Customs Duty Cess andother material statutory dues in arrears as at March 312021 for a period of more than sixmonths from the date they became payable.
(b) Details of dues of Income Tax Sales Tax Service Tax Excise Dulyand Value Added Tax which have not been deposited as at March 312021 on account ofdispute are given below:
* amount as per demand orders including penalty wherever quantified inthe Order.
(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings tobanks. Further the Company did not have any outstanding loans or borrowings from financialinstitutions or government. Further payables towards non-convertible debentures are notdue for repayment.
(ix) In our opinion and according to the information and explanationsgiven to us the term loans taken by the Company have been applied for the purpose forwhich they were raised. The Company had not raised money byway of further public offer(including debt instruments) during the year.
(x) According to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees has been noticed or reportedduring the year.
(xi) In our opinion and according to the information and explanationsgiven to us the Company has paid/provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
(xii) The Company is not a Nidhi Company and hence reporting underparagraph 3 (xii) of the Order is not applicable to the Company.
(xiii) In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Sections 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.
(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or persons connected with him. Accordingly paragraph 3 (xv) of theOrder is not applicable.
(xvi) The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.