To the Members of
Shivalik Bimetal Controls Limited
Report on the Audit of Standalone Financial Statements
We have audited the accompanying standalone financial statements ofShivalik Bimetal Controls Limited ("the Company") which comprise the StandaloneBalance Sheet as at 31st March 2021 the Statement of Profit and Loss(including Other Comprehensive Income) Statement of Cash Flows the Statement of Changesin Equity for the year then ended and notes to the standalone financial statementsincluding a summary of significant accounting policies and other explanatory information .(hereinafter referred as "Standalone Financial Statements").
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 Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31stMarch 2021 and profit (including other comprehensive income) changes in equity and itscash flows for the year ended on that date
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion
Key Audit Matters
Key audit matters (KAM') are those matters that in ourprofessional judgment were of most significance in our audit of the standalone financialstatements of the current period These matters were addressed in the context of our auditof the standalone financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters
|The Key audit matters ||How our audit addressed the key audit matters |
|Capitalisation of property plant and equipment || |
|During the year ended 31st March 2021 the Company has incurred significant capital expenditure Further the total additions to property plant and equipment (incl Capital Work in Progress) at various locations of the Company was '1327.11 lakhs in the current year as set out in Note No. 3 . ||1 We assessed the capitalisation process and tested the design and operating effectiveness of the controls in the process |
|Significant level of judgement is involved to ensure that the aforesaid capital expenditure/ additions meet the recognition criteria of Ind AS 16 - Property Plant and Equipment. As a result the aforesaid matter was determined to be a key audit matter ||2 Assessed the nature of the additions made to property plant and equipment and capital work-in-progress on a test check basis to test that they meet the recognition criteria as set out in para 16 to 22 of Ind AS 16 . |
| ||3 . Reviewed the project completion details provided by the management to determine whether the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management |
| ||Based on the above procedures management's assessment in respect of Capitalisation of property plant and equipment in the Standalone Financial Statements are considered to be adequate |
|Revenue Recognition || |
|Revenue is recognised when the control over the underlying products has been transferred to the customer. Due to the Company's sales under various contractual terms and across the world delivery to customers in different regions might take different time periods and may result in undelivered goods at the period end . We consider a risk of misstatement of the Financial Statements related to transactions occurring close to the year end as these transactions could be recorded in the incorrect financial period (cut-off risk). ||1. Assessing the Company's revenue recognition for compliance with Ind AS; |
|Accordingly cut-off risks in revenue recognition are considered as a key audit matter ||2 . Testing the design implementation and operating effectiveness of the Company's manual and automated controls on recording revenue We focussed on controls around the timely and accurate recording of sales transactions which included evaluating the Company's lead time assessment and quantification of any sales reversals for undelivered goods based on the terms and conditions set out in the sales contracts and the transit time required to deliver the goods; |
| ||3 . Performing testing on selected statistical samples of revenue transactions recorded during the year end; |
The Company's managsmsnt and Board of Dirsctors arerssponsibls for the other information . Ths other information comprises theinformation included in the Company's annual report but does not include thefinancial statements and our auditors' report thereon . Our opinion on the financialstatements does not cover the other information and we do not express any form ofassurance conclusion thereon . In connection with our audit of the financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated . Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact .
Management's Responsibility for the Standalone FinancialStatements
The Company's management and Board of Directors are responsiblefor the matters stated in Section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs profit / loss (including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under Section 133 ofthe Act This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error
In preparing the standalone financial statements management and Boardof 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 management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so
The Board of Directors is also responsible for overseeing theCompany's financial reporting process .
Auditor's Responsibilities for Audit of Standalone FinancialStatements
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 it exists. Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof 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 control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances .Under Section 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to standalonefinancial statements in place 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 thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern . If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion Our conclusions are based on the auditevidence obtained up to the date of our auditors' report. However future events orconditions may cause the Company to cease to continue as a going concern
Evaluate the overall presentation structure and content of thestandalone financial 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 period and are therefore the key audit matters Wedescribe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so 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 2016("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 statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable
2 . As required by section 143(3) of the Act we report that:
a we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;
b in our opinion proper books of account as required by law have beenkept by the Company so far as appears from our examination of those books;
c . the Standalone balance sheet Standalone Statement of Profit andLoss (including other comprehensive income) Standalone Statement of Changes in Equity andStandalone Statement of Cash Flow with by this Report are in agreement with the books ofaccount;
d. in our opinion the aforesaid standalone Ind AS financial statementscomply with the Indian Accounting Standards specified under Section 133 of the Act
e . on the basis of written representations received from the directorsas on 31st March 2021 and taken on record by the Board of Directors none ofthe directors is disqualified as on 31st March 2021 from being appointed as
a dirsctor in terms of section 164 (2) of the Companies Act 2013 .
f. with respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company internal financialcontrols over financial reporting
g . In our opinion the managerial remuneration for the year ended 31stMarch 2021 has been paid / provided by the company to its directors in accordance withthe provisions of Section 197 read with Schedule V of the Companies Act 2013; and
h . 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:
i the Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements-Refer Note 39 to thefinancial statements;
ii . the Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; and
iii . there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
ANNEXURE- A TO
THE INDEPENDENT AUDITORS' REPORT
The Annsxurs referred to in Indspsndsnt Auditors Report toths members of the Company on the standalone annual financial statements for the yearended 31st March 2021 we report that:
(i) a . The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets
b According to information and explanations given to us the assetshave been physically verified by the management during the year as per the regular programof verification which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets . No material discrepancies were noticed on suchverification
c According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company
In respect of immovable properties taken on lease and disclosed asright-of-use assets in the standalone financial statements the lease agreements are inthe name of the company
(ii) a The management has conducted physical verification of inventoryat reasonable intervals during the year
b In our opinion and according to the information and explanationsgiven to us the procedures of physical verification of inventories followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business
c In our opinion and according to the information and explanationsgiven to us the Company is maintaining proper records of inventory No materialdiscrepancies were noticed on verification between the physical stocks and the bookrecords
(iii) According to the information and explanation given to us thecompany has not granted any loans to Companies firms or other parties covered inregister maintained under section 189 of the Companies Act 2013 . Accordingly theprovisions of clause 3 (iii) (a)(b) & (c) of the Companies (Auditor's Report)Order 2016 (hereinafter referred to as the said Order) are not applicable to the company.
(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct to the extent applicable in respect of loans investments guarantees and security
(v) The Company has not accepted any deposits from the publicprovisions of clause 3(v) of the order are not applicable to the company
(vi) According to the information and explanation given to us Companyhas maintained the Cost records as prescribed by the Central Government under sub-section(1) of section 148 of the Companies Act 2013 .
(vii) a According to information and explanations given to us and onthe basis of our examination of the records of the Company the undisputed statutory duesincluding provident fund employees' state insurance income- tax sales-tax wealthtax service tax duty of customs duty of excise value added tax cess and any otherstatutory dues have been deposited regularly with the appropriate authorities
b According to the information and explanations given to us there wereno undisputed dues outstanding of income tax or sales tax or wealth tax or service tax orduty of customs or duty of excise or value added tax or cess for a period of more than sixmonths from the date they became payable
(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of dues to financial institutionbanks and debenture holders
(ix) According to information and explanations given to us the Companydid not raise any money by way of initial public offer or further public offer (includingdebt instruments) during the year. Term loans raised during the year have been applied forthe purpose for which they were raised
(x) According to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees has been noticed or reportedduring the course of our audit
(xi) According to the information and explanation given to usmanagerial remuneration has been paid/provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with schedule V of the Companies Act 2013.
(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly clause 3(xii) is notapplicable .
(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable Indian Accounting Standards .
(xiv) According to the information and explanations give to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year
(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him . Accordingly clause3(xv) is not applicable .
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
ANNEXURE- B TO THE INDEPENDENT AUDITORS' REPORT
(Referred to paragraph 1(f) under Report on Other Legal andRegulatory Requirements' section of our report to the members of Shivalik BimetalControls Limited of even date)
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
Ws have audited ths internal financial controls over financialreporting of Shivalik Bimetal Controls Limited ("the Company") as of 31stMarch 2021 in conjunction with our audit of the standalone Ind AS financial statements ofthe Company for the year ended on that date .
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishingand maintaining 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 tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's 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 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 financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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
Limitations of Internal Financial Controls over Financial Reporting
Bscauss of the inherent limitations of internal financialcontrols over financial reporting including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected Also projections of any evaluation of the internal financial controlsover financial reporting to future periods are subject to the risk that the internalfinancial control over financial reporting may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate
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 March2021 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India
| ||For Arora Gupta & Co. |
| ||Chartered Accountants |
| ||Firm Registration No:- 0021313C |
| ||Sd/- |
| ||Amit Arora |
| ||Partner |
|Place : New Delhi ||Membership No:- 514828 |
|Dated : June 29 2021 ||ICAI UDIN No:21514828AAAACB2093 |