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Ganga Forging Ltd.

BSE: 535094 Sector: Engineering
NSE: GANGAFORGE ISIN Code: INE691Z01023
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Ganga Forging Ltd. (GANGAFORGE) - Auditors Report

Company auditors report

To the Members of Ganga Forging Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of GANGA FORGINGLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2022the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2022 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial 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 aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matter Auditor's Response
1 Recoverability of Trade Receivables Rs. 72.15 Lakhs classified as doubtful under Note 5 to the Audited Financial Statement. i. Obtained an understanding of the determination of recoverability and assessed and tested the reasonableness of the significant judgements applied by the management.
ii. Evaluated the design of internal controls relating to the trade receivable and also tested the operating effectiveness of the aforesaid controls.
iii. Performed analytical procedure and test of details for reasonableness of efforts by the management.
2 Inventory Valuation and existence Our Audit procedures for assessing the
Inventory valuation and existence was an audit focus area because of number of locations that inventory was held at and judgement applied in the valuation of inventory to incorporate inventory shrinkage. valuation of inventories as per Company's policy included but were not limited to the following.
i. Understood the management process for determining valuation of inventories and tested whether the same is consistency applied;
As described in notes to financial statements inventories are carried at the lower of cost and net realizable value on weighted average basis. ii. Evaluated and tested on a sample basis the design and operating effectiveness of key controls around inventory valuation operating within the Company.
iii. Inquired with the management about the slow moving and obsolete inventories as at 31 March 2022 and evaluated the assessment prepared by the management including forecasted uses of these inventories on a test check basis.
iv. Assessed the appropriateness of disclosures in the financial statements in accordance with the applicable accounting standards.

Information Other than the Standalone Financial Statements and Auditor's report thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

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 standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrols.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's However future events or conditions may cause the Company to cease to continueas a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theorder.

2. As required by Section 143(3) of the Act based on our audit we report that

i. 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.

ii. 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.

iii. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

iv. In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

v. On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) of theAct.

vi. 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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial.

vii. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

viii. 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 has disclosed the impact of pending litigations on its financialposition in its standalone financial

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

 

iii. The company is not required to transfer any amounts to the Investor Educationand Protection Fund by the Company

 

iv. (a) The Management has represented that to the best of its knowledge andbelief no funds (which are material either individually or in the aggregate) have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other person or entity includingforeign entity ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

v. (b) the Management has represented that to the best of its knowledge and beliefno funds (which are material either individually or in the aggregate) have been receivedby the Company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries;

vi. (c) Based on the audit procedures that have been considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement.

For Nitesh A. Joshi & Co.
Chartered Accountants
F.R.N. 127578W
Date : 24-05-2022
Place: Rajkot
(Nitesh A Joshi)
Partner
Membership No. 124272
UDIN : 22124272AKNEIQ1737

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Ganga Forging Limited of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GANGAFORGING LIMITED ("the Company") as of March 31 2022 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting 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 under the Companies Act 2013.

Auditor's Responsibility

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 performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial 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 internal financial controls system overfinancial reporting of the Company.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting 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 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 over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2022 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 FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Nitesh A. Joshi & Co.
Chartered Accountants
F.R.N. 127578W
Date : 24-05-2022
Place: Rajkot
(Nitesh A Joshi)
Partner
Membership No. 124272
UDIN : 22124272AKNEIQ1737

Annexure ‘B' to the Independent Auditor's Report

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Ganga Forging Limited of even date)

1 a. In respect to the Company's Property Plant and Equipment and Intangible Assets;

i. The company is maintaining proper records showing full particulars includingquantitative details and situation of Property Plant & Equipment.

ii. The company is maintaining proper records showing full particulars of intangibleassets.

b. As explained to us all the Property Plant & Equipment have been physicallyverified by the management at reasonable intervals.

c. The title deeds of immovable properties shown in the financial statements are heldin the name of the company

d. The company has not revalued its Property Plant & Equipment or Intangibleassets or both during the year.

e. As explained to us no proceedings have been initiated against the company forholding benami property under The Benami Transactions (Prohibition) Act 1988 and rulesmade thereunder and the details have been appropriately disclosed in the financialstatements.

2 a. Physical verification of inventory has been conducted at reasonable intervals bymanagement.

In our opinion the coverage and procedure by the management is appropriate. Theaggregate of discrepancies of 10% or more in each class of inventory noticed have beenproperly dealt with in the books of account.

b. The quarterly statements filed by the company with banks agree with the books of thecompany

3 i According to the information and explanations given to us during the year theCompany has not made investments in provided any guarantee or security granted any loansor advances in the nature of loans secured or unsecured to companies firms LLPs or anyother parties.

Accordingly the provisions of clause 3 (i) (a) to (f) of the Order are not applicableto the Company.

4 The company has not given any loans or guarantees/made any investments within themeaning of sections 185 & 186 of The Companies Act 2013.

5 The company has not accepted any deposits from the public in terms of Section 73 to76 or any other relevant provisions of the Companies Act2013. According to theinformation and explanations given to us no order has been passed by the Company LawBoard or the National Company Law Tribunal or The Reserve Bank of India or any Court orany other Tribunal.

6 The company is not required to maintain cost records as prescribed by the CentralGovernment under Section 148(1) of the Act.

7 a As per information and explanations given to us the company is regular indepositing Undisputed statutory dues including provident fund employees' state insuranceincome tax sales tax service tax duty of customs duty of excise value added taxgoods and services tax cess and others as applicable have generally been regularlydeposited with the appropriate authorities except delay in few cases. There are noundisputed amounts payable in respect of aforesaid dues outstanding as at 31 March 2022for a period of more than six months from the date they became payable except GST PayableRs. 1505307.

b According to the information and explanation given to us there are no dues of Goodsand Service Tax sales tax income tax custom duty wealth tax service tax excise dutyand cess which have not been deposited on account of any dispute

8 There were no transactions relating to previously unrecorded income that have beensurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961.

9 i Based on our audit procedures and as per the information and explanations given bythe management the company has not defaulted in repayment of loans or borrowings or inthe payment of interest thereon from any lender.

ii The Company has not been declared wilful defaulter by any bank or financialinstitution or other lender.

iii The Company has applied term loan for the purpose for which the loans wereobtained.

iv The funds raised on a short-term basis have not been utilised for long termpurposes.

v According to the information and explanations given to us and on an overallexamination of the financial statements of the Company the Company has not taken anyfunds from any entity or person on account of or to meet the obligations of its subsidiaryand joint venture.

vi According to the information and explanations given to us and on an overallexamination of the financial statements of the Company the company has not raised loansduring the year on the pledge of securities held in its subsidiary and joint venture.

10 a The company has not raised money by way of initial public offer or further publicoffer (Including debt instruments) during the year and hence reporting under clause3(x)(a) of the Order is not applicable.

b According to the information and explanations given to us and on the basis of 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. Accordingly clause 3(x)(b) of the Order is not applicable.

11 a During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company noticed or reported duringthe year nor have we been informed of any such case by the Management.

b No report under sub-section (12) of section 143 of the Companies Act has been filedby the Auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government during the year and up to the date ofthis report.

c As represented to us by the management there are no whistle blower complaintsreceived by the company during the year.

12 In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Order are not applicable to the Company.

13 The Company has entered into transactions with related parties in compliance withSections 177 and 188 of Act. The details of such related party transactions have beendisclosed in the standalone Ind AS financial statements as required under AccountingStandard (AS) 24 Related Party Disclosures specified under Section 133 of the Act.

14 a As explained to us and in our opinion the Company has adequate internal auditsystem commensurate with the size and the nature of its business.

b We have considered the internal audit reports of the Company issued till date for theperiod under audit.

15 Based upon the audit procedures performed and the information and explanations givenby the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3(xv) ofthe Order are not applicable to the company.

16 In our opinion the Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934. Hence reporting under sub-clause(b)(c) and (d) ofclause 3(xvi) of the Order are not applicable.

17 The Company has not incurred cash losses during the financial year covered by ouraudit and the immediately preceding financial year.

18 There has been no resignation of the statutory auditors of the Company during theyear.

19 On the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the Board of Directors and Management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date.

20 Reporting under clause 3(xx) of the Order is not applicable to the Company.

21 The reporting under clause 3(xxi) of the Order is not applicable in respect of auditof Standalone Financial Statements. Accordingly no comment in respect of the said clausehas been included in this report.

For Nitesh A. Joshi & Co.
Chartered Accountants
F.R.N. 127578W
Date : 24-05-2022
Place: Rajkot
(Nitesh A Joshi)
Partner
Membership No. 124272
UDIN : 22124272AKNEIQ1737

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