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M M Forgings Ltd.

BSE: 522241 Sector: Engineering
NSE: MMFL ISIN Code: INE227C01017
BSE 09:23 | 20 Jul 634.80 -8.50
(-1.32%)
OPEN

634.80

HIGH

634.80

LOW

634.80

NSE 09:07 | 20 Jul 649.50 2.45
(0.38%)
OPEN

649.50

HIGH

649.50

LOW

649.50

OPEN 634.80
PREVIOUS CLOSE 643.30
VOLUME 1
52-Week high 743.40
52-Week low 273.50
P/E 22.41
Mkt Cap.(Rs cr) 1,532
Buy Price 625.50
Buy Qty 1.00
Sell Price 629.90
Sell Qty 14.00
OPEN 634.80
CLOSE 643.30
VOLUME 1
52-Week high 743.40
52-Week low 273.50
P/E 22.41
Mkt Cap.(Rs cr) 1,532
Buy Price 625.50
Buy Qty 1.00
Sell Price 629.90
Sell Qty 14.00

M M Forgings Ltd. (MMFL) - Auditors Report

Company auditors report

To the Members of M M FORGINGS LIMITED

Report on the IND AS Standalone Financial Statements

We have audited the accompanying Standalone Ind AS Financial statements of M/S. M.M.Forgings Limited ("the Company") which comprises the Balance Sheet as at March31 2018 the Statement of Profit and Loss (including other comprehensive income) thestatement of changes in equity and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

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 Companies Act 2013 (The Act) with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income and cash flows and changes inequity of the Company in accordance with the Accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) prescribed under section 133 ofThe Act read with relevant rules issued thereunder.

This responsibility also includes the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the company andfor preventing and detecting frauds and other irregularities selection and application ofappropriate accounting policies making judgments and estimates that are reasonable andprudent and design and 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

In conducting our Audit We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theAuditor's report under the provisions of the Act and rules made there under and the Orderissued under Section 143 (11) of The Act.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act and other applicableauthoritative pronouncements issued by The Institute of Chartered Accountants of India.Those standards require that we comply with ethical requirements and plan and perform theAudit to obtain reasonable assurance about whether the standalone financial statements arefree from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company's Directors as well as evaluating theover all presentation of the financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

1) 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the financial position of the companyas at 31st March 2018 and its PROFIT and cash flows for the year endedon 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 of section 143 of the Act wegive in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of thesaid Order.

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

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit; b) In ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books;

c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under section 133 of the Act read with relevant rule issuedthereunder.

e) On the basis of written representations received from the Directors as on March 312018 and taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2018 from being appointed as a Director in terms of section 164(2) of theAct.

f) With respect to the adequacy of the Internal Financial Controls over financialreporting of the Company and the Operating effectiveness of such controls refer to ourseparate Report in Annexure B. Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's Internal Financial Controls over financialreporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of The Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us :

i) The Company does not have any pending litigation which would impact its financialposition.

ii) The Company does not have any long term contract including derivative contract forwhich there were any material foreseeable losses.

iii) There has been no delay in transferring the amounts required to be transferredto the investor education and protection fund.

iv) The reporting on disclosure relating to Specified Bank Notes is not applicable tothe Company for the year Ended 31.03.2018.

For G R N K & Co
Chartered Accountants
FRN: 016847S
G R Naresh Kumar
Place : Tiruchirapalli Proprietor
Date : 28 May 2018 Membership No. 215577

ANNEXURE A TO THE AUDITOR'S REPORT

The Annexure referred to in Independent Auditor's Report to the members of the Companyon the Financial Statements for the Year Ended 31.03.2018: We report that I a) The Companyhas maintained proper records showing full particulars including quantitative details andsituation of fixed assets; b) As explained to us all the assets have not been physicallyverified by the management during the year but there is a regular program of verificationto cover all the items of Fixed Assets in a phased manner which in our opinion isreasonable considering the size and the verification having regard to the size of thecompany and the nature of its assets. Pursuant to the program certain Fixed Assets werephysically verified by the Management during the year. No material discrepancies have beennoticed on such physical verification. c) According to the information and explanationsfurnished to us the records examined by us and based on the examination of the conveyancedeeds provided to us we report that the Title Deeds comprising of all the immoveableproperties of the Land Buildings which are Freehold are held in the name of the companyas at the Balance Sheet date. Based on the above we also report that all the assets ofthe Company are Freehold and the Company has not acquired any Asset on Lease. Also allthe assets are held for the use of the Company only and none of the assets are held foruse by others.

II a) The inventories have been physically verified by the management during the yearat reasonable intervals except materials lying with third parties where confirmationsare obtained. In our opinion the frequency of verification is reasonable. Thediscrepancies noticed on verification between the physical stocks and the book recordswere not material.

III According to the information and explanations furnished to us the Company hasneither granted nor taken any loans to and from companies firms or other parties coveredin the Register maintained under Section 189 of the Companies Act 2013 except the Loanof Rs. 4628.36 Lakhs to M/S. DVS Industries Private Limited subsidiary of the Company inrespect of which 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 loanis yet to commence as per the schedule stipulated for the repayment; c) There is nooverdue amount remaining outstanding as on the date of the Balance Sheet.

IV In our opinion and according to the information and explanations furnished to usthe Company has complied with the Provisions of Sections 185 and 186 of The Act in respectof Grant of Loans and making investments. The Company has not given any Guarantees andsecurities falling under section 185 / 186 of The Companies Act 2013.

V During the year the Company has not accepted any Deposits from the Public or fromthe members. The Company does not have any Deposits on the date of the Balance Sheet. TheCompany does not have any Unclaimed Deposits on the date of the Balance Sheet. Thereforethe provisions of Clause 3 (v) of the Order are not applicable to the Company.

VI The maintenance of Cost Records under section 148 (1) of The Act has not beenspecified by The Central Government for the Business activities carried on by the Company.Thus reporting under Clause 3 (vI0 of the Order is not applicable to the Company.

VII a) According to the records of the Company the Company is regular in depositingwith appropriate authorities undisputed statutory dues including Provident Fund EmployeesState Insurance Income Tax GST Sales Tax Value Added Tax Wealth Tax Customs DutyExcise Duty Service Tax Cess and other material statutory dues applicable to it. b)There were no undisputed amounts payable in respect of any of the above statutory dues. c)The following taxes under Tamil Nadu VAT Act are under dispute and appeals are pendingbefore various forums. The company has already paid a sum of Rs. 116.38 Lakhs against thedisputed TN VAT.

Nature Of the Statute Nature of Dues Amount in Rs. in Lakhs Period to which it relates Forum where Appeal is Pending
TN VAT Act Vat 196.64 Various Years DC- Appeals

VIII Based on our audit procedure and on the information and explanation given by themanagement we are of the opinion that the company has not defaulted in repayment of itsdues to Financial Institutions Banks and debenture holders.

IX The Company has not raised any money by way of initial public offer or other publicoffer. The Company has availed the following term loans / Working Capital facilities fromBanks: Net Long Term Borrowings Rs. 7979.04 Lakhs Net Short Term Borrowings Rs. 9814.15Lakhs Based on our audit we report that the proceeds of the Term Loan / Working Capitalhave been utilized for the purpose for which they were borrowed – namely creation ofFixed Assets of the Company. The total investment in Fixed Assets / Current Assets for theyear is at Rs. 10812.98 Lakhs as against Term Loan availed of Rs. 7979.04 Lakhs.

Further as against Working Capital Borrowings of Rs. 9814.15 Lakhs during the Yearthe application for Short Term uses is at Rs. 12556.42 Lakhs.

X To the best of our knowledge and based on the audit procedures performed andinformation and explanations given by the management we report that no fraud by theCompany or no material fraud on the Company by its officers or employees has been noticedor reported during the year.

XI Based on the audit procedures performed and information and explanations given bythe management we report that the Company has paid / provided for Managerial Remunerationin accordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to The Act.

XII The Company is Not a Nidhi Company. Accordingly para 3 (xii) of The Order is notapplicable to the Company. XIII Based on the audit procedures performed and informationand explanations given by the management all the transactions with the related partiesare in compliance with Sections 177 / 188 of the Companies Act 2013 were applicable anddetails of such transactions are duly reported in the standalone Financial Statements asrequired by the applicable Accounting Standards.

XIV During the Year The Company has not made any preferential allotment or Privateplacement of shares or fully / partly convertible debentures during the year. Hencereporting under Clause 3 (xiv) of the Order is not applicable to the Company.

XV Based on the audit procedures performed and information and explanations given bythe management The Company has not entered in to any Non Cash Transactions with Directorsor persons connected with him and hence the provisions of section 192 of The CompaniesAct 2013 are not applicable to the Company.

XVI. No registration is required under Section 45 IA of The Reserve Bank of India Act.

For G R N K & Co
Chartered Accountants
FRN: 016847S
G R Naresh Kumar
Place : Tiruchirapalli Proprietor
Date : 28 May 2018 Membership No. 215577

Annexure B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub – section 3 ofSection 143 of the Companies Act 2013 (‘the Act')

We have audited the internal financial controls over financial reporting of M.MForgings Ltd (‘the Company') as of 31 March 2018 in conjunction with our audit of thestandalone Ind AS financial statements of the company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). 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 the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the timely preparation of reliable financial information as requiredunder the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(‘the Guidance Note') and the standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. 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 standalone Ind AS financial statements whether due to fraudor error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial control systemsover financial reporting.

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 authorizations of themanagement and Directors of the company; and (3) provide reasonable assurance regardingprevention or timely direction of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of 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 the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2018 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.

For G R N K & Co
Chartered Accountants
FRN: 016847S
G R Naresh Kumar
Place : Tiruchirapalli Proprietor
Date : 28 May 2018 Membership No. 215577