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M M Forgings Ltd.

BSE: 522241 Sector: Engineering
NSE: MMFL ISIN Code: INE227C01017
BSE 10:04 | 26 Jul 729.70 13.60
(1.90%)
OPEN

720.95

HIGH

731.45

LOW

720.95

NSE 09:54 | 26 Jul 730.75 13.65
(1.90%)
OPEN

718.00

HIGH

730.75

LOW

718.00

OPEN 720.95
PREVIOUS CLOSE 716.10
VOLUME 69
52-Week high 787.00
52-Week low 183.30
P/E 37.79
Mkt Cap.(Rs cr) 1,762
Buy Price 727.75
Buy Qty 1.00
Sell Price 729.35
Sell Qty 1.00
OPEN 720.95
CLOSE 716.10
VOLUME 69
52-Week high 787.00
52-Week low 183.30
P/E 37.79
Mkt Cap.(Rs cr) 1,762
Buy Price 727.75
Buy Qty 1.00
Sell Price 729.35
Sell Qty 1.00

M M Forgings Ltd. (MMFL) - Auditors Report

Company auditors report

To the Members of M M Forgings Limited

Report on the Audit of Standalone Financial Results

Opinion

1. We have audited the standalone annual financial results of M M Forgings Limited(hereinafter referred to as the "Company") for the year ended March 31 2020 andthe standalone statement of assets and liabilities and the standalone statement of cashflows as at and for the year ended on that date (together referred to as the‘standalone financial results') attached herewith being submitted by the Companypursuant 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 to the explanationsgiven to us the aforesaid standalone financial results:

(i) are presented in accordance with the requirements of Regulation 33 of the ListingRegulations in this regard; and

(ii) give a true and fair view in conformity with the recognition and measurementprinciples laid down in the applicable accounting standards prescribed under Section 133of the Companies Act 2013 (the "Act") and other accounting principlesgenerally accepted in India of net profit and other comprehensive loss and otherfinancial information of the Company for the year ended March 312020 and the standalonestatement of assets and liabilities and the standalone statement of cash flows as at andfor the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act and other applicable authoritative pronouncements issuedby the Institute of Chartered Accountants of India. Our responsibilities under thoseStandards are further described in the ‘Auditors' Responsibilities for the Audit ofthe Standalone Financial Results' section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules there under and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence obtained by us is sufficientand appropriate to provide a basis for our opinion.

Emphasis of Matter

4. We draw your attention to the standalone financial results which explains theuncertainties and the management's assessment of the financial impact due to lock-downsand other restrictions and conditions related to the COVID- 19 pandemic situation forwhich a definitive assessment of the impact in the subsequent period is highly dependentupon circumstances as they evolve. Our opinion is not modified in respect of this matter.

Board of Directors' Responsibilities for the Standalone Financial Results

5. These Standalone financial results have been prepared on the basis of the standaloneannual Ind AS financial statements. The Company's Board of Directors are responsible forthe preparation and presentation of these standalone financial results that give a trueand fair view of the net profit and other comprehensive loss and other financialinformation of the Company and the standalone statement of assets and liabilities and thestandalone statement of cash flows in accordance with the recognition and measurementprinciples laid down in the Indian Accounting Standards prescribed under Section 133 ofthe Act read with relevant rules issued thereunder and other accounting principlesgenerally accepted in India and in compliance with Regulation 33 of the ListingRegulations. The Board of Directors of the Company are responsible for maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; 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 of Directors of the Companyare responsible for assessing the ability of the Company to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

7. The Board of Directors of the Company are responsible for overseeing the financialreporting process of the Company.

Auditors' Responsibilities for the Audit of the Standalone Financial Results

8. Our objectives are to obtain reasonable assurance about whether the standalonefinancial results as a whole are free from material misstatement whether due to fraud orerror and to issue an auditors' report that includes our opinion. Reasonable assurance isa 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 results.

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

• Identify and assess the risks of material misstatement of the standalonefinancial results 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 internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the companyhas adequate internal financial controls with reference to financial statements in placeand the operating effectiveness of such controls. (Refer paragraph 12 below)

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

• Conclude on the appropriateness of the Board of Directors use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theability of the Company to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors' report to therelated disclosures in the standalone financial results or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However future events or conditions maycause the Company to cease to continue as a going concern.

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

10. We communicate with those charged with governance of the Company regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

Other Matters

11. The Financial Results include the results for the quarter ended March 31 2020being the balancing figures between the audited figures in respect of the full financialyear and the published unaudited year to date figures up to the third quarter of thecurrent 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 : 29/07/2020 Sole Proprietor
Membership No.215577
UDIN:20215577AAAABC7595

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 31.03.2020:

We report that

I a) The Company has maintained proper records showing full particulars includingquantitative details and

situation of fixed assets;

b) As explained to us all the assets have not been physically verified by themanagement during the year but there is a regular program of verification to cover all theitems 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 the records examinedby us and based on the examination of the conveyance deeds provided to us we report thatthe Title Deeds comprising of all the immoveable properties of the Land Buildings whichare Freehold are held in the name of the company as at the Balance Sheet date. Based onthe above we also report that all the assets of the Company are Freehold and the Companyhas not acquired any Asset on Lease. Also all the assets are held for the use of theCompany only and none of the assets are held for use 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 confirmations are obtained. In ouropinion the frequency of verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material.

III According to the information and explanations furnished to us apart from the Loanof Rs. 8981.55 Lakhs to M/S. DVS Industries Private Limited subsidiary of the Companythe Company has neither granted nor taken any loans to and from companies firms or otherparties covered in the Register maintained under Section 189 of the Companies Act 2013.In respect of the loan to such subsidiary company:-

a) The Terms and conditions of the grant of such loan is in our opinion notprejudicial to the interest of the Company;

b) The repayment of the said loan is yet to commence as per the schedule stipulated forthe repayment;

c) There is no overdue amount remaining outstanding as on the date of the BalanceSheet.

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 (vi) 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 Employees State Insurance IncomeTax GST Sales Tax Value Added Tax Wealth Tax Customs Duty Excise Duty Service TaxCess and other material statutory dues applicable to it.

b) There were no undisputed amounts payable in respect of any of the above statutorydues..

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 reduced the following term loans / Working Capital facilities fromBanks:

Net Long Term Borrowings Rs. (4380.72) Lakhs
Net Short Term Borrowings Rs. (7764.80) Lakhs

Based on our audit we report that the proceeds of the Term Loan / Working Capital havebeen utilized for the

purpose for which they were borrowed - namely creation of Fixed Assets of the Company.The total investment in Fixed Assets / Current Assets for the year is at Rs. 8759.76 Lakhsas against reduction in Term Loan of Rs. 4380.72 Lakhs. Further as against WorkingCapital Borrowings of Rs. 7764.80 Lakhs during the Year the application for Short Termuses is at Rs. 13887.70 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 information and explanations given bythe management all the transactions with the related parties are in compliance withSections 177 / 188 of the Companies Act 2013 were applicable and details of suchtransactions are duly reported in the standalone Financial Statements as required by theapplicable 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
Firm Reg No. 016847S
Place : Tiruchirapalli G.R. Naresh Kumar
Date : 29/07/2020 Sole Proprietor
Membership No.215577
UDIN:20215577AAAABC7595

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 31st March 2020 in conjunction with ouraudit of the standalone Ind AS financial statements of the company for the year ended onthat 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 2020 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
Firm Reg No. 016847S
Place : Tiruchirapalli G.R. Naresh Kumar
Date : 29/07/2020 Sole Proprietor
Membership No.215577
UDIN:20215577AAAABC7595

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