To the Members of M M Forgings Limited
Report on the Audit of Standalone Financial Results
1. We have audited the standalone annual financial results of M MForgings Limited (hereinafter referred to as the "Company") for the year endedMarch 31 2021 and the standalone statement of assets and liabilities and the standalonestatement of cash flows as at and for the year ended on that date (together referred to asthe standalone financial results') attached herewith being submitted by theCompany pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations').
2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid standalone financial results:
(i) are presented in accordance with the requirements of Regulation 33of the Listing Regulations in this regard; and
(ii) give a true and fair view in conformity with the recognition andmeasurement principles laid down in the applicable accounting standards prescribed underSection 133 of the Companies Act 2013 (the "Act") and other accountingprinciples generally accepted in India of net profit and other comprehensive loss andother financial information of the Company for the year ended March 312021 and thestandalone statement of assets and liabilities and the standalone statement of cash flowsas at and for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act and other applicable authoritativepronouncements issued by the Institute of Chartered Accountants of India. Ourresponsibilities under those Standards are further described in the Auditors'Responsibilities for the Audit of the Standalone Financial Results' section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence obtained by us is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
4. We draw your attention to the standalone financial results whichexplains the uncertainties and the management's assessment of the financial impactdue to lock-downs and other restrictions and conditions related to the Second Wave ofCOVID-19 pandemic situation for which a definitive assessment of the impact in thesubsequent period is highly dependent upon circumstances as they evolve. Our opinion isnot modified in respect of this matter.
Board of Directors' Responsibilities for the Standalone FinancialResults
5. These Standalone financial results have been prepared on the basisof the standalone annual Ind AS financial statements. The Company's Board ofDirectors are responsible for the preparation and presentation of these standalonefinancial results that give a true and fair view of the net profit and other comprehensiveloss and other financial information of the Company and the standalone statement of assetsand liabilities and the standalone statement of cash flows in accordance with therecognition and measurement principles laid down in the Indian Accounting Standardsprescribed under Section 133 of the Act read with relevant rules issued thereunder andother accounting principles generally accepted in India and in compliance with Regulation33 of the Listing Regulations. The Board of Directors of the Company are responsible formaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error whichhave been used for the purpose of preparation of the standalone financial results by theDirectors of the Company as aforesaid.
6. In preparing the standalone financial results the Board ofDirectors of the Company are responsible for assessing the ability of the Company tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless the Board of Directors eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so.
7. The Board of Directors of the Company are responsible for overseeingthe financial reporting process of the Company.
Auditors' Responsibilities for the Audit of the StandaloneFinancial Results
8. Our objectives are to obtain reasonable assurance about whether thestandalone financial results as a whole are free from material misstatement whether dueto fraud or error and to issue an auditors' 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 results.
9. 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 results 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 or the overrideof internal control.
Obtain an understanding of internal 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 with reference to financialstatements in place and the operating effectiveness of such controls. (Refer paragraph 12below)
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the Board ofDirectors.
Conclude on the appropriateness of the Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the ability of the Company to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditors'report to the related disclosures in the standalone financial results or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditors' report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial results including the disclosures and whether the standalonefinancial results represent the underlying transactions and events in a manner thatachieves fair presentation.
10. We communicate with those charged with governance of the Companyregarding among other matters the planned scope and timing of the audit and significantaudit findings including any significant deficiencies in internal control that weidentify during our audit. We also provide those charged with governance with a statementthat we have 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.
11. The Financial Results include the results for the quarter endedMarch 31 2021 being the balancing figures between the audited figures in respect of thefull financial year and the published unaudited year to date figures up to the thirdquarter of the current financial year which were reviewed by us.
| ||For G R N K & Co |
| ||Chartered Accountants |
| ||Firm Reg No. 016847S |
|Place : Tiruchirapalli ||G.R. Naresh Kumar |
|Date : 21/06/2021 ||Sole Proprietor |
| ||Membership No.215577 |
| ||UDIN: 21215577AAAADI3830 |
ANNEXURE A TO THE AUDITOR'S REPORT
The Annexure referred to in Independent Auditor's Report to themembers of the Company on the Financial Statements for the Year Ended 31.03.2021:
We report that
1. a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets;
b) As explained to us all the assets have not been physically verifiedby the management during the year but there is a regular program of verification to coverall the items of Fixed Assets in a phased manner which in our opinion is reasonableconsidering the size and the verification having regard to the size of the company and thenature of its assets. Pursuant to the program certain Fixed Assets were physicallyverified by the Management during the year. No material discrepancies have been noticed onsuch physical verification.
c) According to the information and explanations furnished to us therecords examined by us and based on the examination of the conveyance deeds provided tous we report that the Title Deeds comprising of all the immoveable properties of theLand Buildings which are Freehold are held in the name of the company as at the BalanceSheet date. Based on the above we also report that all the assets of the Company areFreehold and the Company has not acquired any Asset on Lease. Also all the assets areheld for the use of the Company only and none of the assets are held for use by others.
2. a) The inventories have been physically verified by the managementduring the year at reasonable intervals except materials lying with third parties whereconfirmations are obtained. In our opinion the frequency of verification is reasonable.The discrepancies noticed on verification between the physical stocks and the book recordswere not material.
3. According to the information and explanations furnished to us apartfrom the Loan of Rs. 8298.49 Lakhs to M/S. DVS Industries Private Limited subsidiary ofthe Company the Company has neither granted nor taken any loans to and from companiesfirms or other parties covered in the Register maintained under Section 189 of theCompanies Act 2013. In respect of the loan to such subsidiary company:-
a) The Terms and conditions of the grant of such loan is in ouropinion not prejudicial to the interest of the Company;
b) The repayment of the said loan is yet to commence as per theschedule stipulated for the repayment;
c) There is no overdue amount remaining outstanding as on the date ofthe Balance Sheet.
4. In our opinion and according to the information and explanationsfurnished to us the Company has complied with the Provisions of Sections 185 and 186 ofThe Act in respect of Grant of Loans and making investments. The Company has not given anyGuarantees and securities falling under section 185 / 186 of The Companies Act 2013.
5. During the year the Company has not accepted any Deposits from thePublic or from the members. The Company does not have any Deposits on the date of theBalance Sheet. The Company does not have any Unclaimed Deposits on the date of the BalanceSheet. Therefore the provisions of Clause 3 (v) of the Order are not applicable to theCompany.
6. The maintenance of Cost Records under section 148 (1) of The Act hasnot been specified by The Central Government for the Business activities carried on by theCompany. Thus reporting under Clause 3 (vI0 of the Order is not applicable to theCompany.
7. a) According to the records of the Company the Company is regularin depositing with appropriate authorities undisputed statutory dues including ProvidentFund Employees State Insurance Income Tax GST Sales Tax Value Added Tax Wealth TaxCustoms Duty Excise Duty Service Tax Cess and other material statutory dues applicableto it.
b) There were no undisputed amounts payable in respect of any of theabove statutory dues..
8. Based on our audit procedure and on the information and explanationgiven by the management we are of the opinion that the company has not defaulted inrepayment of its dues to Financial Institutions Banks and debenture holders.
9. The Company has not raised any money by way of initial public offeror other public offer. The Company has repaid / availed the following term loans / WorkingCapital facilities from Banks:
|Net Long Term Borrowings Repaid ||' 3737.97 Lakhs |
|Net Short Term Borrowings Availed ||' 7838.23 Lakhs |
Based on our audit we report that the proceeds of the Term Loan /Working Capital have been utilized for the purpose for which they were borrowed - namelycreation of Fixed Assets of the Company. The total investment in Fixed Assets / CurrentAssets for the year is at Rs. 3009.17 Lakhs as against reduction in Term Loan of Rs.3737.97 Lakhs. Further as against Working Capital Borrowings of Rs. 7838.23 Lakhs duringthe Year the application for Short Term uses is at Rs. 10919.59 Lakhs.
10. To the best of our knowledge and based on the audit proceduresperformed and information and explanations given by the management we report that nofraud by the Company or no material fraud on the Company by its officers or employees hasbeen noticed or reported during the year.
11. Based on the audit procedures performed and information andexplanations given by the management we report that the Company has paid / provided forManagerial Remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to The Act.
12. The Company is Not a Nidhi Company. Accordingly para 3 (xii) ofThe Order is not applicable to the Company.
13. Based on the audit procedures performed and information andexplanations given by the management all the transactions with the related parties are incompliance with Sections 177 / 188 of the Companies Act 2013 were applicable and detailsof such transactions are duly reported in the standalone Financial Statements as requiredby the applicable Accounting Standards.
14. During the Year The Company has not made any preferentialallotment or Private placement of shares or fully / partly convertible debentures duringthe year. Hence reporting under Clause 3 (xiv) of the Order is not applicable to theCompany.
15. Based on the audit procedures performed and information andexplanations given by the management The Company has not entered in to any Non CashTransactions with Directors or persons connected with him and hence the provisions ofsection 192 of The Companies Act 2013 are not applicable to the Company.
16. No registration is required under Section 45 IA of The Reserve Bankof India Act.
| ||For G R N K & Co |
| ||Chartered Accountants |
| ||FRN:016847S |
|Place : Tiruchirapalli ||PROPRIETOR |
|Date : 21.06.2021 ||Membership No. 215577 |
ANNEXURE B TO THE AUDITORS' REPORT
Report on the Internal Financial Controls 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 M.M Forgings Ltd (the Company') as of 31st March 2021in conjunction with our audit of the standalone Ind AS financial statements of the companyfor the year 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 issued by the Institute of Chartered Accountants of India(ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the timely preparation of reliablefinancial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the Guidance Note') and the standards on Auditing issuedby ICAI and deemed to be prescribed under Section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 judgement including the assessment ofthe risks of material misstatement of the standalone Ind AS financial statements whetherdue 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 control systems 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 themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions 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 authorizations ofthe management and Directors of the company; and (3) provide reasonable assuranceregarding prevention or timely direction of unauthorized acquisition use or dispositionof the company's assets that could have a material effect on the financialstatements.
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 control system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March2021 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India.
| ||For G R N K & Co |
| ||Chartered Accountants |
| ||FRN:016847S |
|Place : Tiruchirapalli ||PROPRIETOR |
|Date : 21.06.2021 ||Membership No. 215577 |