To the Members of TIRUPATI FORGE LTD.
Report on the audit of Standalone Ind AS Financial Statements Opinion
We have audited the accompanying Standalone Ind AS financial statements of TIRUPATIFORGE LTD. ("the Company") which comprise the Balance Sheet as at March 312021 the Statement of Profit and Loss including the statement of other comprehensiveincome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas 'standalone financial statements').
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 as amended ('the Act') in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2021 its profit includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.
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 draw attention to note 39(b) of the Standalone Ind AS financial Statement whichdescribes the management's evaluation of impact of uncertainties related to COVID -19 andits consequential effects on the carrying value of its assets as at March 312021 and theoperations of the Company.
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 aseparate 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 Ind AS 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 2.2(d) for accounting policy on Revenue Recognition.) ||Our audit procedures included the following: |
|The Company has revenue from sale of products which includes finished goods and tooling income and sale of services in the form of Job Work charges. The Company manufactures forged and machined 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 design and implementation of controls and tested the operating effectiveness of these controls. |
|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 delivery specifications including inco terms timing of transfer of legal title of the goods. Further the pricing of the products dependent on metal indices and foreign exchange fluctuation making the price volatile including variable considerations. ||We read the Company^ accounting policies pertaining to revenue recognition and assessed compliance with Ind AS 115 - Revenue from Contracts with Customers. |
|Due to judgments relating to determination of point in time in satisfaction of performance obligations with respect to sale of products this matter has been considered as key audit matter. ||We obtained and read the terms of customer contracts on sample basis to assess various performance obligations in the contract the point in time of transfer of control and pricing terms. |
| ||We performed analytical procedures in respect of revenue that included among others the analysis of quarterly sales for full financial year to detect unusual fluctuations (by type of goods and services by geographical areas). |
| ||We have also checked the following documents on sample verification during our audit visit for identification of point in time for transfer of control: |
| || Sales invoices |
| || E-Way bill / delivery challan |
| || Proforma invoice |
| || Bill of lading / Consignment note |
| || Customers confirmation |
| || Accounting entry in system |
| || Statutory records / Inventory records |
| ||We assessed the disclosure is in accordance with applicable accounting standards. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in Chairman'sLetter Management Discussion and Analysis and Directors' Report including Annexure toDirectors' Report but does not include the standalone financial statements and ourauditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.
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 havenothing to report in this regard.
Management and Those Charged with Governance Responsibilities for the Standalone Ind ASFinancial 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 including other comprehensive income cash flowsand changes in equity of the Company in accordance with the Accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act read with Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of thecompany and 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 control 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 is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditors' Responsibility for the audit of Standalone Ind AS Financial Statements
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 section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such 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 ofthe Order to the
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 as appears from our examination of those books:
c. The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive Income Cash Flow Statement and Statement of Changes in Equity dealt with bythis 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 Companies (Indian AccountingStandards) Rules 2015;
e. The matter described in Emphasis of matter paragraph above in our opinion may nothave an adverse effect on the functioning of the Company;
f. On the basis of written representations received from the directors as on March 312021 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.
g. 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" to this report
h. 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 theManagerial remuneration paid/payable by the Company to its directors during the currentyear is in accordance with the provisions of Section 197 of the Act with respect torequisite approval of the member.
I. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanation given to us;
i. According to records of the company information and explanation given by managementof the company there 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. According to records of the company information and explanation given bymanagement of the company there is no dividend outstanding to be paid hence no amountswere required to be transferred to the Investor Education and Protection Fund by thecompany.
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 Ind-AS financial statements for the year ended 31st March 2021]
(i) (a) The Company has maintained proper records showing full particulars includingquantitative
details and situation 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 verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. As informed nomaterial discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable propertiesincluded in property plant and equipments are in the name of the company.
In respect of land taken on lease from managing director of the company on whichfactory building has been constructed and disclosed as right-of-use assets in thestandalone financial statements. The title deeds of building constructed and land taken onlease arrangements are in the name of the company.
(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 withthird parties these have substantially been confirmed by them as at 31stMarch 2021 and no material discrepancies were noticed in respect of such confirmations.In our opinion the frequency of verification is reasonable. Discrepancies noticed duringphysical verification were not material and the same has been dealt with in the books ofaccounts.
(iii) According to the information and explanations given to us the company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under section 189 of the Act accordingly the provisions statedin paragraph 3 (iii)(a) and 3(iii)(b) of the Order are not applicable and hence notcommented upon.
(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 madeany investments as envisaged in section 185 and 186 and hence therefore the saidprovisions do not apply to the company and hence not commented upon.
(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 the Companies (Acceptance of Deposits) Rules 2014 (as amended).
(vi) To the best of our knowledge and as explained The Central Government hasprescribed the maintenance of cost under sub-section (1) of Section 148 of the Act for theproducts of the company and according to which products of company falls underNon-regulated sector. We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Act related to the manufacture of forged products andother products and are of the opinion that prima facie the specified accounts andrecords have been made and maintained. We have not however made a detailed examinationof the same.
(vii) (a) The Company is generally regular in depositing with appropriate authoritiesamounts
deducted/ accrued in the books of account in respect of undisputed statutory duesincluding provident fund income-tax Goods and service tax customs duty cess and othermaterial statutory dues applicable according to the information and explanations given tous and on the basis of our examination of the records of the Company.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax customs duty goods and service taxcess and other statutory dues applicable to the Company were outstanding at the yearend for a period of more than six months from the date they became payable.
(c) According to the records of the Company information and explanation given bymanagement of the company there are no dues outstanding of income-tax Goods and servicetax customs duty and cess on account of any dispute.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks during theyear.
(ix) The Company has not raised money by way of public issue during the year. In ouropinion and according to the information and explanations given to us company has raisedworking capital term loan during the year which has been applied for the purpose for whichit was raised.
(x) Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by Management we report that no fraud by the Company or no fraud on the Company bythe officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given to us by the management andbased on our examination of the records of the company the company has paid / providedfor managerial remuneration are in accordance with the requisite approvals mandated by theprovisions of section 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 notapplicable 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 relatedparties are in compliance with section 177 and 188 of Companies Act 2013 where applicableand the details have been disclosed in the standalone Financial Statements as required bythe 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 Preferentialallotments of 1188000 convertible Share warrants which are converted in equal number ofequity shares during the year under review in accordance requirement of section 42 of theCompanies Act 2013 and the amount raised have been used for the purpose for which thefunds were raised except the unutilized amount of Rs. 121.99 Lakhs. The details ofutilization of proceeds from Preferential allotments have been disclosed in the Note 36 ofthe 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) According to the information and explanations given by Management the provisionsof section 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Companyand hence not commented upon.
Annexure B to the Independent Auditors' report on standalone financial statement forthe year ended 31st March 2021
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ('The act') (Referred to in paragraph 2(A)(g) under 'Reporton Other Legal and Regulatory Requirements' section of our report of even date)
We have audited the internal financial control over financial reporting of TirupatiForge Limited ('the company') as of 31st March 2021 in conjunction with ouraudit of the standalone Ind AS financial statement of the company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls over financial reportingwith reference to these standalone Ind AS financials
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 and accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Auditors' Responsibility for Internal Financial Controls over financial reporting withreference to these standalone Ind AS financials
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 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 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 Ind AS financial statements for external purpose in accordance withgenerally accepted accounting principles.
A company's internal financial control over financial reporting includes those policiesand procedures that
(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 reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies 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 controlsover financial reporting were operating effectively as at 31st March 2021based on the internal financial controls with reference to standalone Ind AS financialstatements 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.
|For Maharishi & Co. |
|Chartered Accountants |
|Firm Registration No.124872W |
|Dushyant Maharishi |
|Membership No. 146144 |
|Signed at Jamnagar on 08th June 2021 |
|UDIN: 21146144AAAADV5501 |