To the Members of TIRUPATI FORGE LTD.
Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of TIRUPATI FORGELTD.("the Company") which comprise the Balance Sheet as at March 31 2020the Statement of Profit and Loss and Cash Flow Statement for the year ended and a summaryof significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the standalone financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
a. In the case of the Balance Sheet of the state of affairs of the Company as at March31 2020:
b. In the case of the Statement of Profit and Loss of the profit for the year ended onthat date; and
c. In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibility for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made there under andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.
Emphasis of Matter
We would like to draw your attention to Note No. 41 of the Standalone FinancialStatements which states the management's estimation of impact of COVID-19 on financialstatements of the company for the year ended 31st March 2020.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not
provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in the'Auditor's responsibilities for the audit of the standalone financial statements' sectionof our report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.
|Sr. No. Key Audit Matters ||How our audit addressed the key audit matter |
|1 Revenue Recognition and determination of point of time when revenue should be recognised (refer Note 1(e) for accounting policy on Revenue Recognition.) || |
|The Company has revenue from sale of products which includes finished goods and sale of services in the form of Job Work charges. The Company manufactures finished goods as per the specification provided by the customers and based on the schedules from the customer. ||We analysed the Company accounting policies for revenue recognition including the criteria for revenue recognition and sales incentives classification. |
|The company recognises revenue from sale of finished goods at a point of time based on terms of the contract with customers which varies for each customer. Determination of point in time includes assessment of timing of transfer of significant risk and rewards of ownership establishing right to receive payments for the products sold timing of transfer of legal title of the goods. Further the pricing of the products dependent on metal indices and foreign exchange movements making the price volatile. In this regard revenue recognition was on of the key audit matters. ||We developed an understanding of the systems controls and processes associated with the recording of sales transactions. |
| ||We analysed transaction of customers on sample basis to assess performance obligation of the company the point of time of transfer of control and pricing terms. |
| ||We performed analytical procedures in respect of revenue that included among others the analysis of half-yearly sales to detect unusual fluctuations (by type of goods and services by geographical areas) and reconciliation with comparative information for prior periods and the anticipated results of the Company. |
| ||We have also checked the following documents on sample verification during our audit visit: |
| || Sales invoices |
| || E-Way bill / delivery challan |
| || Proforma invoice |
| || Bill of lading / Consignment note |
| || Customers confirmation |
| || Accounting entry in system |
| || Statutory records / Inventory records |
| ||In this way we have addressed the completeness of revenue recognition. |
|2 Impact of COVID-19 on the Company's financial statements (Refer Note 41 to Standalone Financial Statements) || |
|Coronavirus disease 2019 ('COVID19') was declared a global pandemic by World Health Organization. ||We have performed the following procedures to assess and evaluate the impact on financial statements because of business decisions government actions or economic environment developments: |
|In line with the directions on lockdown issued by the State Governments of Gujarat the Company temporarily suspended the operations of its manufacturing units from 25 March 2020 till 31 March 2020; and subsequently up to further dates as instructed by the State Governments. || Performed cut-off procedures for a larger sample of invoices during the lockdown period for both domestic as well as export sales. |
|COVID-19 has resulted in restriction in movement of goods during the period from 25 March 2020 till 31 March 2020 impacting normal business operations for the Company including revenues receivables purchases including services and inventories at the year- end and hence considered key audit matter. || Enquired with the Company on the manner of financial support (if any) provided to the customers vendors and service providers; and their recognition in the financial statements. |
| || We assessed the disclosures on COVID-19 made in the financial statements. |
| ||Our ability to perform regular audit procedures has been impacted which has required us in certain cases to perform alternative audit procedures and exercise significant judgment in respect of the following: |
| ||Audit and quality control procedures which were earlier performed in person could not be performed; and hence alternative procedures have been performed based on inquiries (through phone calls video calls and e-mail communications) and review of scanned documentation sent through emails followed up with sighting with original documents. |
| ||Year-end inventory observation of inventory counts could not be performed. However inventory counts were observed subsequent to year-end; and rolled back to year-end. |
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 preparation andpresentation of these standalone financial statement that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe Accounting principles generally accepted in India including the Accounting Standardsspecified u/s 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding 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 financialcontrol that were operating effectively for
ensuring the 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.
In preparing the financial statements management is responsible for assessing theCompany's ability to
continueas a going concern disclosing as applicable matters relatedto going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process. Information Other than the Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in Board's Reportincluding Annexure to Board's Report but does not include the financial statements andour auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any formof assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other
information we are required to report that fact. We have nothing to report in thisregard.
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a 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 statements.
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 statements 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 financial controls relevant to the audit inorder to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(I) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' 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 inthe "Annexure A"
a statement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
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 purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by theCompany so far
aappears 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 financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
e. On the basis of written representations received from the directors as on March 312019 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2019 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" and
g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us. and
h. With respect to the other matters to be included in the Auditor's Report inaccordance withRule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanation given to us;
I. According to records of the companyinformation and explanation given by managementof the companythere are no disputes or case pending against the Company.
ii. The company does not have any long-term contracts including derivative contracts;hence the question of any material foreseeable losses does not arise;
iii. The company does not declare dividend during the year hence no amounts wererequired to be transferred to the Investor Education and Protection Fund by the company.
For Maharishi & Co.
Chartered Accountants Firm Registration No. 124872W
Dushyant Maharishi Partner
Membership No. 146144
Signed at Hadamtala (Dist. Rajkot) on 15th June 2020 UDIN : 20146144AAAAEQ4231
ANNEXURE A TO INDEPENDENT AUDITORS' REPORT
[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'in the
Independent Auditors' Report of even date to the members of TIRUPATI FORGE LTD. on the
standalone financial statements for the year ended 31st March 2020
(i) (a) The Company has maintained proper records showing full parficulars including
quanfitafive details and situafion of fixed assets.
(b) All the fixed assets have not been physically verified by the management during theyear
but there is a regular programme of verificafion which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. As informed nomaterial discrepancies were noficed on such verificafion.
(c) According to the informafion and explanafions given to us and on the basis of ourexaminafion of the records of the company the fitle deeds of immovable properfies are inthe name of the relafive of directors.
(ii) The inventory (excluding stocks with third parties and work in progress) has beenphysically
verified by the management during the year. In respect of inventory lying with thirdparties these have substantially been confirmed by them. In our opinion the frequency ofverification is reasonable. Discrepancies noticed during physical verification were notmaterial and the same has been dealt with in the books of account.
(iii) As informed the company has not granted any loans secured or unsecured tocompanies firms or other parties covered in the register maintained under section 189 ofthe Act accordingly the provisions stated in paragraph 3 (iii)(a) and 3(iii)(b) of theOrder are not applicable.
(iv) In our opinion and according to the information and explanations given to us thecompany
has not granted any loans or guarantees and has not provided any security or made any
investments as envisaged in section 185 and 186 and hence therefore the said provisionsdo not apply to the company.
(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from the public within the provisions of section 73to 76 of the Act and rules framed there under.
(vi) The Central Government has prescribed the maintenance of cost undersubsection (1) of Section 148 of the Act for the products of the company and according towhich products of company falls under Nonregulated sector. The company has maintained thecost records according to rules framed there under.
(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed
statutory dues including provident fund investor education and protection fundincome- tax sales-tax Goods and service tax customs duty excise duty cess and othermaterial
statutory dues applicable to it.
( b) According to the records of the Company information and explanation given by
management of the company there are no dues outstanding of income-tax sales-taxGoods and service tax customs duty excise duty and cess on account of any dispute.
(viii) Company has not defaulted in repayment of loans or borrowing to a financialinstitution bank.
(ix) The Company has not raised money by way of public issue during the ye ar.
(x) During the course of our examination of the books and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud on or by the company noticed or reported during the year nor have webeen informed of such case by the management.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion the Company is not a nidhi company. Accordingly the provisionsof clause
(xii) of paragraph 4 of the Companies (Auditor's Report) Order 2016 are not applicable to the Company.
(xiii) According to information and explanation given to us and on the basis of booksof accounts
and other relevant records of the company all transactions with the related partiesare in compliance with section 177 and 188 of Companies Act 2013 where applicable and the
details have been disclosed in the Note 35 of the standalone Financial Statements asrequired by the applicable accounting standards.
(xiv) According to information and explanation given to us and based on our examinationof books of
accounts and other relevant records the Company has made Preferential allotments of1188000 convertible Share warrants to be converted into equal number of equity sharesduring the year under review in accordance requirement of section 42 of the Companies Act2013 and the amount raised have been used for the purpose for which the funds were raised.The details of utilization of proceeds from Preferential allotments have been disclosed inthe Note 40 of the standalone Financial Statements.
(xv) According to information and explanation given to us and on the basis of books ofaccounts of the company no non-cash transaction is entered into by the company during theyear.
(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of
India Act 1934.
For Maharishi & Co.
Chartered Accountants Firm Registration No.l24872W
Dushyant Maharishi Partner
Membership No. 146144
Signed at Hadamtala (Dist. Rajkot) on 15th June 2020 UDIN :20146144AAAAEQ4231
Annexure B to the Auditors' report
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ('the act')
We have audited the internal financial control over financial reporting of TirupatiForge Limited('the company') as of 31st March 2020 in conjunction with ouraudit of the standalone financial statement of the company for the year ended on thatdate.
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 ofinternal 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 and accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 were 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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
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 controls systemover financial reporting.
Meaning of Internal Financial Control 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 purpose in accordance with generallyaccepted accounting principles.
A company's internal financial control over financial reporting includes those policiesand
(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorization of the management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 misstatement due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the
internal financial controls over financial reporting to future periods are subject tothe risk that the internal financial control over financial reporting may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
In our opinion the company has in all material respects an adequate internalfinancial control
system over financial reporting and such internal financial controls over financialreporting were
operating effectively as at 31st March 2020 based on the internal controlover financial reporting criteria established by the company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For Ma harishi & Co.
Chartered Accountants Firm Registration No.l24872W
Dushyant Maharishi Partner
Membership No. 146144
Signed at Hadamtala (Dist. Rajkot) on 15th June 2020 UDIN :20146144AAAAEQ4231