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M M Forgings Ltd.

BSE: 522241 Sector: Engineering
NSE: MMFL ISIN Code: INE227C01017
BSE 00:00 | 25 Sep 340.95 30.50
(9.82%)
OPEN

319.95

HIGH

349.00

LOW

319.25

NSE 00:00 | 25 Sep 344.45 33.40
(10.74%)
OPEN

315.00

HIGH

350.95

LOW

314.00

OPEN 319.95
PREVIOUS CLOSE 310.45
VOLUME 6825
52-Week high 470.55
52-Week low 151.00
P/E 32.94
Mkt Cap.(Rs cr) 823
Buy Price 340.95
Buy Qty 5.00
Sell Price 340.00
Sell Qty 45.00
OPEN 319.95
CLOSE 310.45
VOLUME 6825
52-Week high 470.55
52-Week low 151.00
P/E 32.94
Mkt Cap.(Rs cr) 823
Buy Price 340.95
Buy Qty 5.00
Sell Price 340.00
Sell Qty 45.00

M M Forgings Ltd. (MMFL) - Auditors Report

Company auditors report

To the Members of M M FORGINGS LIMITED

Report on the IND AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial statementsof M/s. M M Forgings Limited ("the Company") which comprises the Balance Sheetas at March 31 2019 the Statement of Profit and Loss (including other comprehensiveincome) the statement of changes in equity and Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone FinancialStatements

Board of Directors of the Company is responsible for the matters statedin section 134(5) of The Companies Act 2013 (The Act) with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income and cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed undersection 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting frauds and other irregularitiesselection and application of appropriate accounting policies making judgments andestimates that are reasonable and prudent and design and implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalonefinancial statements based on our audit.

In conducting our audit we have taken into account the provisions ofthe Act the accounting and auditing standards and matters which are required to beincluded in the Auditor's report under the provisions of the Act and rules made thereunder and the Order issued under Section 143(11) of the Act.

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act andother applicable authoritative pronouncements issued by The Institute of CharteredAccountants of India. Those standards require that we comply with ethical requirements andplan and perform the Audit to obtain reasonable assurance about whether the standalonefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone financial statements. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence obtained by us is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.

Opinion

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 Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the financialposition of the company as at 31st March 2019 and its PROFIT and cashflows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government 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 said Order.

2. As required by section 143(3) of the Act we report that:

1. 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;

2. 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;

3. The Balance Sheet Statement of Profit and Loss and Cash FlowStatement dealt with by this Report are in agreement with the books of account;

4. In our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards specified under section 133 of the Act read withrelevant rule issued thereunder.

5. On the basis of written representations received from the Directorsas on March 31 2019 and taken on record by the Board of Directors none of the Directorsis disqualified as on March 31 2019 from being appointed as a Director in terms ofsection 164(2) of the Act.

6. With respect to the adequacy of the internal financial controls overthe financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in Annexure B. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controlsover financial reporting.

7. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of The Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us :

1. The Company does not have any pending litigation which would impactits financial position.

2. The Company does not have any long term contract includingderivative contract for which there were any material foreseeable losses.

3. There has been no delay in transferring the amounts required to betransferred to the investor education and protection fund.

4. The reporting on disclosure relating to Specified Bank Notes is notapplicable to the Company for the year Ended 31.03.2019.

For G R N K & Co
Chartered Accountants
FRN: 016847S
Place : Tiruchirapalli PROPRIETOR
Date : 28 May 2019 Membership No. 215577

ANNEXURE A TO THE AUDITOR'S REPORT

The Annexure referred to in the Independent Auditor's Report tothe members of the Company on the Financial Statements for the Year Ended 31.03.2019:

We report that

1. 1. The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets;

2. 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 on such physicalverification.

3. 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 immovable properties of the landand building 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. 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 र 8404.96 Lakhs to M/s. DVS Industries Private Limited subsidiaryof the 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:-

1. The terms and conditions of the grant of such loan is in ouropinion not prejudicial to the interest of the Company;

2. The repayment of the said loan is yet to commence as per theschedule stipulated for the repayment;

3. 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 Act.

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 (v) of the Order is not applicable to the Company.

7. 1. 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.

2. There were no undisputed amounts payable in respect of any of theabove statutory dues.

3. There are no taxes under Tamil Nadu VAT Act which are under dispute.

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 availed the following term loans / Working Capitalfacilities from Banks:

Net Long Term Borrowings ` 24484.47 lakhs
Net Short Term Borrowings / Current Assets ` 6170.42 lakhs

Based on our audit we report that the proceeds of the term loan /working capital loan have been utilized for the purpose for which they were borrowed– namely creation of fixed assets of the Company as applicable. The total investmentin fixed assets / current assets for the year is at र 28917.41 lakhs as against termloan availed of र 24484.47 lakhs.

Further as against Working Capital Borrowings of र 6170.42 lakhsduring the Year the application for Short Term uses is at र 10153.04 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 Act were applicable and details of suchtransactions are duly reported in the standalone financial statements as required by theapplicable 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 Act 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 : 28 May 2019 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 Act.

We have audited the internal financial controls over financialreporting of M M Forgings Ltd (‘the Company') as of 31st March 2019in 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 Act.

Auditor's Responsibility

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 Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal financial controls and both issued by the Institute of Chartered Accountants ofIndia. Those standards and the guidance note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's 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 the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

2. provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company are beingmade only in accordance with authorizations of the management and Directors of thecompany; and

3. provide reasonable assurance regarding prevention or timelydirection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Inherent Limitations of internal financial controls over financialreporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material mis-statements 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.

Opinion

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 31 March 2019 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India.

For G R N K & Co
Chartered Accountants
FRN: 016847S
Place : Tiruchirapalli PROPRIETOR
Date : 28 May 2019 Membership No. 215577

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