To The Member of
Macpower CNC Machines Limited
Opinion
We have audited the accompanying standalone Ind AS Financial Statementsof Macpower CNC Machines Limited("the Company") which comprises the BalanceSheet as at 31 March 2022 the statement of Profit & Loss (including statement ofOther Comprehensive Income) the Cash Flow Statements and the Statement of Changes inEquity for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information (herein afterreferred to as "the standalone Ind AS Financial Statement")
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Ind AS Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31st March2022 the Profit and other comprehensive Income changes in equity and its cash flows forthe year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing as specified under section 143(10) of the act.Our responsibilities under those Standards are further described in the 'Auditor'sresponsibilities for the audit of the standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the 'Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the act and rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for thefinancial year ended March 31 2022. These matters were addressed in the context of ouraudit of the standalone financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters.
| Key Audit Matter | Response to Key Audit Matter |
| Revenue recognition. | We assessed the Company's process to identify the impact of adoption of the revenue accounting standard. |
| As disclosed in note 2.2 Revenue in respect of sale of goods is recognized when control of the products being sold is transferred to our customer and measured at contracted price after deduction of any trade discounts and any taxes or duties collected on behalf of the Government such as goods and services tax etc. | Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
| The application of the revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. | • Evaluated the design of internal controls relating to implementation of the revenue accounting standard. |
| • It is observed that in majority of the cases transaction price is charged at ex-works price and revenue is booked at the time of dispatch of the goods. |
| • The above method followed by the company is in line the provisions of Ind AS 115 - 'Revenue from contracts with customers' Conclusion: |
| We agree with the management's evaluation. |
| Contingent liabilities relating to taxation litigations and claims (also refer Note 29) | Our audit procedures included: |
| The contingent liabilities relate to ongoing litigations and claims with various authorities and third parties. These relate to direct tax indirect tax transfer pricing arrangements claims general legal proceedings environmental issues and other eventualities arising in the regular course of business. | • Understanding the process followed by the Company for assessment and determination of the amount of contingent liabilities relating to taxation litigations and claims. |
| • Evaluating the design and implementation and testing operating effectiveness of key internal controls around the recognition and measurement of re-assessment of contingent liabilities. |
| The determination of contingent liability requires significant judgement by the Company because of the inherent complexity in estimating future costs. The contingent liabilities are subject to changes in the outcomes of litigations and claims and the positions taken by the Company. It involves significant judgement and estimation to determine the likelihood and timing of the cash outflows and interpretations of the legal aspects tax legislations and judgements previously made by authorities. | • Involving our tax professionals with specialised skills and knowledge to assist in the assessment of the value of significant contingent liabilities relating to taxation matter on sample basis in light of the nature of the exposures applicable regulations and related correspondence with the authorities. |
| • Inquiring the status in respect of significant contingent liabilities with the Company's internal tax and legal team including challenging the assumptions and critical judgements made by the Company which impacted the computation of the provisions and inspecting the computation. |
| • Assessing the assumptions used and estimates of outcome and financial effect including considering judgement of the Company supplemented by experience of similar decisions previously made by the authorities and in some cases relevant opinions given by the Company's advisors. |
| • Testing data used to develop the estimate for completeness and accuracy. |
| • Evaluating judgements made by the Company by comparing the estimates of prior year to the actual outcome. |
| • Evaluating the Company's disclosures in the standalone financial statements in respect of provisions and contingent liabilities |
| Conclusion: We agree with the management's evaluation |
Information Other than Financial Statements and Auditor's ReportThereon
The company's board of directors and management is responsible for thepreparation of the other information. The other information comprises the informationincluded in Management discussion and analysis Board's report including Annexure toboard's report business responsibility reports corporate governance and shareholder'sinformation but doesn't include standalone financial statements and our auditor's reportthereon.
Our opinion on standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of standalone financial statement ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statement orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information; we are required to report that fact. Wehave nothing to report in this regard.
Management's and Board of Director's Responsibility for the StandaloneInd AS Financial Statement
The Company's Management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairsprofit/loss and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements the Management andBoard of Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.
The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's 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 statements.
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 statements 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 financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's 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 theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's 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 thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance 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 wehave 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.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current year and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure A" a statement on thematters specified in the paragraph 3 and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act based on our audit wereport that:
(a) 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;
(b) 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;
(c) The Standalone Balance Sheet the Standalone Statement of Profitand Loss (including Other Comprehensive Income) the Standalone Statement of Cash Flowsand the Standalone Statement of Changes in Equity dealt with by this Report are inagreement with the books of account;
(d) In our opinion the aforesaid Standalone Financial Statementscomply with the Indian Accounting Standards specified under Section 133 of the Act readwith the Companies (Indian Accounting Standards) Rules 2015 as amended;
(e) On the basis of the written representations received from thedirectors as on 31st March 2022 and taken on record by the Board of Directors none ofthe directors is disqualified as on 31st March 2022 from being appointed as a director interms of Section 164(2) of the Act;
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure B"; Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
(g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
A. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements Refer Note 29 to the standalone financialstatements;
B. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
C. There have been no delays in transferring the amounts required tobe transferred to the Investor Education and Protection Fund by the Company.
D. (i) The Management of the Company has represented that to the bestof it's knowledge and belief no funds have been advanced or loaned or invested (eitherfrom borrowed funds or share premium or any other sources or kind of funds) by the companyto or in any other person(s) or entity(ies) including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of thecompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;
(ii) The Management of the Company has represented that that to thebest of it's knowledge and belief no funds have been received by the Company from anyperson(s) or entity(ies) including foreign entities ("Funding Parties") withthe understanding whether recorded in writing or otherwise that the Company shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries; and
(iii) Based on such audit procedures that we have considered reasonableand appropriate in the circumstances; nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) above contain any materialmis-statement.
E. The dividend declared or paid during the year by the Company is incompliance with Section 123 of the Act.
3. With respect to the matters to be included in the Auditor's Reportin accordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during thecurrent year is in accordance with the provisions of section 197 of the Act. Theremuneration paid to any director is not in excess of limit laid down under section 197 ofthe Act. The Ministry of Corporate Affairs has not prescribed other details under section197 (16) which are required to be commented upon by us.
ANNEXURE(A) REFERRED TO IN PARAGRAPH 1 OF INDEPENDENT AUDITOR'S REPORTOF EVEN DATE TO THE MEMBERS OF MACPOWER CNC MACHINES LIMITED ON THE FINANCIAL STATEMENTSOF THE COMPANY FOR THE YEAR ENDED 31ST MARCH 2022.
In terms of Companies (Auditor's Report) Order 2020 issued by theCentral Government of India in terms of section 143(11) of The Companies Act 2013 wefurther report on the matters specified in paragraph 3 and 4 of the said Order that: -
(i) (a) A The company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant &Equipments.
(i) (a) B The company has maintained proper records showing fullparticulars of intangible assets.
(i) (b) The Company has a program of verification to cover all theitems of Property Plant & Equipment which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain property Plant & Equipment were physically verified by the management duringthe year on reasonable intervals. According to the information and explanations given tous no material discrepancies were noticed on such verification.
(i) (c) According to the information and explanations given to us andon the basis of our examination of the records of the company the title deeds ofimmovable properties disclosed in the financial statements are held in the name of thecompany (Other than immovable properties where the company is the lessee and the leaseagreements are duly executed in favour of the lessee).
(i) (d) The company has not revalued its Property Plant &Equipment or Intangible assets or both during the year. Accordingly clause 3(i)(d) of theorder is not applicable.
(i) (e) According to the information and explanations given to us andon the basis of our examination of the records of the company No proceedings have beeninitiated against the company for holding benami property under The Benami Transactions(Prohibition) Act 1988 and rules made thereunder and the details have been appropriatelydisclosed in the financial statements.
(ii) (a) According to the information and explanations given to us andon the basis of our
examination of the records of the company physical verification ofinventory has been conducted at reasonable intervals by management. In our opinion thecoverage and procedure by the management is appropriate. During physical verification nomaterial discrepancies noticed.
(ii) (b) According to the information and explanations given to us andthe records produced to us for our verification the company has been sanctioned workingcapital limit in excess of five crore rupees in aggregate from bank or financialinstitution on the basis of security of current assets and the quaterly reture filed bythe company with such bank or financial institution are inagreement with books of accountof the company and no material descripencies were noted. Accordingly clause3(ii)(b) of the order is not applicable.
(iii) The company has not made investments in provided any guaranteeor security granted any loans or advances in the nature of loans secured or unsecured tocompanies firms LLPs or any other parties therefore reporting to sub clause(iii)(a)/(b)/(c )/(d)/(e)/(f) is not be applicable.
(iv) In our opinion and according to the information and explanationsgiven to us and on the basis of our examination of the records of the company The companyhas not given any loans or guarantees made any investments within the meaning of sections185 & 186 of The Companies Act 2013.
(v) In our opinion and according to the information and explanationsgiven to us the company has not accepted any deposits from the public in terms of Section73 to 76 or any other relevant provisions of the Companies Act2013.
(vi) In our opinion and according to the information & explanationsgiven to us and on the basis of our examination of record Company has maintained costrecords as prescribe under section 148(1) of the Act for the notified products.
(vii) a According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted/accrued inthe books of account in respect of undisputed statutory dues including Provident FundEmployee State Insurance Income-Tax Sales Tax/Value added Tax Goods and Services TaxExcise Duty Duty of Customs cess and other material statutory dues have generally beendeposited regularly during the year by the Company with the appropriate authorities.
(vii) b According to the information and explanation given to us noundisputed amounts payable in respect of aforesaid dues were outstanding as on 31 March2022 for a period of more than six months from the date of become payable.
(vii) c According to the information and explanations given to usthere are no material statutory dues of Provident Fund Employee State Insurance andwealth Tax which have not been deposited with the appropriate authorities on account ofany dispute. However according to the information and explanation given to us thefollowing dues of the Gujarat Value Added Tax & Central Sales Tax which have not beendeposited by the Company on account of disputes are as follows:
| Name of the Statute | Nature of Dues | Amount (Rs) | Period to which the amount relates | Forum where dispute is pending | Amount paid under Protest |
| Gujarat Value Added Tax Act 2003 | VAT | 326954 | 2017-18 | Deputy State Tax Commissioner of Appeals | 36400 |
| Gujarat Value Added Tax Act 2003 | VAT | 121060 | 2016-17 | Deputy State Tax Commissioner of Appeals | 56443 |
| Central Sales Tax Act1956 | CST | 762283 | 2016-17 | Deputy State Tax Commissioner of Appeals | 294058 |
(viii) According to the information and explanations given to us andbased on our examination of the records of the Company the company has not surrendered ordisclosed previously undisclosed transactions as income during the year in the taxassessments under the Income Tax Act 1961 (43 of 1961). Accordingly clause 3(viii) ofthe Order is not applicable to the Company.
(ix) (a) In our opinion and according to the information andexplanations given to us the company has not defaulted in any repayment of dues to anyfinancial institution or bank or debenture holders.
(ix) (b) According to the information and explanations given to us andon the basis of our examination of the records of the company The company has not beendeclared as a wilful defaulter by any bank or financial institution or other lender.
(ix) (c) According to the information and explanations given to us andon the basis of our examination of the records of the company during the year company hasnot borrowed or is not using any term loans therefore question of its utilisation does notarise.
(ix) (d) According to the information and explanations given to us andon the basis of our examination of the records of the company the funds raised on a shortterm basis have not been utilised for long term purposes.
(ix) (e) According to the information and explanations given to us andon the basis of our examination of the records of the company the Company has not takenany funds from any entity or person on account of or to meet the obligations of itssubsidiaries associates or joint ventures.
(ix) (f) The company does not have any Subsidiaries joint ventures orassociate companies.
(x) (a) The company has not made any initial public offer during theyear.
(x) (b) The company has not made any preferential allotment or privateplacement of shares/debentures during the year.
(xi) (a) Based on examination of the books and records of the companyand according to the information and explanation given to us considering the principlesof materiality outlined in the standard on auditing we report that no fraud by thecompany or on the company has been noticed or reported during the course of the audit.
(xi)(b) According to the information and explanations given to us andon the basis of our examination of the records of the company No report under sub-section(12) of Section 143 of the Companies Act has been filed by the auditors in Form ADT-4 asprescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014 with the CentralGovernment.
(xi)(c) According to the information and explanations given to us andon the basis of our examination of the records of the company No complaints have beenreceived from the whistle-blower during the year by the Company.
(xii) As company is not Nidhi Company Reporting to clause (xii)(a)/(b)/(c) is not applicable
(xiii) According to information and explanation given to us and on thebasis of books of accounts and other relevant records of the company all transactionswith the related parties are in compliance with section 177 and 188 of Companies Act 2013where applicable and the details have been disclosed in the notes to Financial Statementsas required by applicable accounting standards.
(xiv) (a) Based on information and explanations provided to us and ouraudit procedures in our opinion the Company has an internal audit system commensuratewith the size and nature of its business.
(xiv) (b) We have considered the internal audit reports of the Companyissued till date for the period under audit.
(xv) According to information and explanation given to us and on thebasis of examination of books of accounts and other relevant records of the company thecompany has not entered into any non-cash transactions with directors or persons connectedwith directors during the year.
(xvi) (a) The company is not required to be registered under section45-IA of The Reserve Bank of India Act 1934.
(xvi) (b) The Company has not conducted any Non-Banking Financial orHousing Finance activities without a valid Certificate of Registration (CoR) from theReserve Bank of India as per the Reserve Bank of India Act 1934.
(xvi) (c) The Company is not a Core Investment Company (CIC) as definedunder the Regulations by the Reserve Bank of India.
(xvi) (d) Reporting to this clause is not applicable as company is notCIC.
(xvii) The company has not incurred cash losses during the year or theimmediately preceding Financial Year.
(xviii) There has not been any resignation of the statutory auditorsduring the year.
(xix) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realization of financialassets and payment of financial liabilities other information accompanying the financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that company is not capable of meeting its liabilities existing at the dateof balance sheet as and when they fall due within a period of one year from the balancesheet date. We however state that this is not an assurance as to the future viability ofthe company. We further state that our reporting is based on the facts up to the date ofthe audit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the company as and when they fall due.
(xx) (a) According to information and explanation given to us and onthe basis of examination we state that there is no unspent amount as per section 135 atend of the year in respect of other than ongoing projects.
(xx) (b) As per the information and explanation given to us and on thebasis of examination there is no ongoing projects. Therefore reporting to this clause isnot applicable.
(xxi) As the company is not subsidiary or holding company reporting onqualifications or adverse remarks by the respective auditors in the Companies (Auditor'sReport) Order (CARO) reports of the companies included in the consolidated financialstatements is not required.
ANNEXURE-B
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Macpower CNC Machines Limited as of 31st March 2022 in conjunctionwith our audit of the standalone 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 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. 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 company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Auditors' Responsibility :
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on "Audit of Internal Financial Controls OverFinancial Reporting" 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 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 judgment including the assessment of therisks of material misstatement of the financial statements whether due 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 controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting:
A company's internal financial control over financial reporting is aprocess 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 control overfinancial 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 ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection 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 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.
Opinion:
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2022 basedon the internal control over financial reporting criteria established by the Co mpany considering 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.
