To the Members of
WIRES AND FABRIKS (S.A.) LIMITED
Report on the Audit of the Ind AS Financial Statements
We have audited the financial statements of Wires and Fabriks (S.A.) Limited ("theCompany") which comprises the Balance sheet as at 31st March 2021 and the Statementof Profit and Loss (Including Other Comprehensive Income) Cash Flow Statement and theStatement of changes in equity for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation for the year ended on that date (hereinafter referred to as "Ind ASfinancial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 and its profits (including othercomprehensive income) and its cash flows and the changes in equity for the year ended onthat date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics 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 Companies Act 2013 and the Rules made thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on financial Statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
|Key Audit Matter ||Auditor's Response |
|1 Accuracy of recognition measurement presentation and disclosures of receivable and expected credit loss. ||Our procedures included:- |
|A receivable shall be classified as 'trade receivable' if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business. Hence amounts due under contractual rights other than arising out of sale of goods or rendering of services cannot be included within Trade Receivables. ||Accounting policies: Trade receivable which are likely to be realized within twelve months from the date of Balance Sheet or within the operating cycle than it shall be classifying as current assets. Control testing: |
|As per Ind AS 109 the company is required to recognize a loss allowance (i.e. impairment) for expected credit losses on financial assets including trade receivables. ||Testing the effectiveness of the company controls over the calculation of trade receivable as 'doubtful'. |
| ||Tests of details: |
| ||- Obtaining supporting documentation for sales transactions recorded either side of year end as well as credit notes issued after the year end date to determine whether trade receivable corresponding to revenue was recognised in the correct period. |
| ||- Documentation for a sample invoice of goods or services sold and supporting documentation. |
| ||- Credit loss is the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. cash shortfalls) including cash flows from the sale of collateral held.' |
| ||Credit Risk: Credit risk is the risk that counterparty will not meet its obligation under customer contract leading to a financial loss. |
| ||The company is exposed to credit risk from its operating activities primarily to trade receivable. |
| ||Assessing disclosures: |
| ||Considering the adequacy of the Group's disclosures in respect of Trade receivable. |
| ||Our results : |
| ||- The results of our testing were satisfactory and we considered that the trade receivable were recorded on amount due on goods and services rendered in the normal course of business and company has a credit review and monitoring system which includes credit approvals credit limits and monitoring. |
|2 Assessment of Provisions and Contingent liabilities. ||Our procedures included:- |
|Assessment of Provisions and Contingent liabilities in respect of certain provisions including claim filed by other parties not acknowledged as debt. (refer note no. 22 and 32 to the financial statements). ||We understood assessed and tested the design and operating effectiveness of key controls surrounding assessment of provisions created relating to the claims for compensations filed to the company for performance of the products supplied by the Company. |
|Significant management judgement is required to assess such matters to determine the probability of occurrence of material outflow of economic resources and whether a provision should be recognized or a disclosure should be made. ||We discussed with management the recent developments and the status of the material claims which were reviewed and noted by the technical team of the company. |
|The management judgement is also supported with legal advice in certain cases as considered appropriate. ||Tests of details: |
|As the ultimate outcome of the matters are uncertain and the positions taken by the management are based on the application of their best judgement So it is considered to be a Key Audit Matter. ||We performed our assessment on a test basis on the underlying calculations supporting the provisions created relating to the claims and compensations made in the Standalone Financial Statements. |
| ||We evaluated management's assessments by understanding precedents set in similar cases and assessed the reliability of the management's past estimates/judgements. |
| ||We evaluated management's assessment around those matters that are not disclosed or not considered as contingent liability as the probability of material outflow is considered to be remote by the management; and |
| ||Assessing disclosures: |
| ||We assessed the adequacy of the Company's disclosures. |
| ||Our results : |
| ||Based on the above work performed management's assessment in respect of provisions and related disclosures relating to contingent liabilities in the Standalone Financial Statements are considered to be reasonable. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Corporate Governance andShareholder's Information but does not include the standalone financial statements andour auditor'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 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 in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Responsibility of the Management for the Ind AS financial statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat gives a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing 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 Ind AS financialstatements that gives a true and fair view and are free from material misstatementwhether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS 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 Ind ASfinancial 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 theaudit in order to design audit procedures that are appropriate in the circumstances.
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 going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theability of the Company to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Ind AS 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 the Ind ASfinancial statements including the disclosures and whether the Ind AS 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the "Annexure A" 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 explanations which to the bestof our knowledge and belief were necessary for the purposes 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 the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Changes in Equity and the Statements of Cash Flows dealt with bythis report are in agreement with the books of account;
d. In our opinion the Balance sheet the Statement of Profit and Loss including OtherComprehensive Income the Statement of changes in Equity and the Statement of Cash flowscomply with the Indian Accounting Standards (Ind AS) specified under section 133 of theAct;
e. On the basis of the written representations received from the directors as on 31stMarch 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of section164 (2) of the Act;
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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting;
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 opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
h. 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 explanations given to us:
i. The company has disclosed the impact of pending litigations which would impactfinancial position.(Refer Note 32 to Ind AS Financial statement)
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There has been no delay in transferring amounts which were required to betransferred to the Investor Education and Protection Fund by the Company.
Annexure -A to the Independent Auditors' Report
The Annexure referred to in our Independent Auditor's Report to the members of Wiresand Fabriks (S.A.) Limited (the Company') on the Ind AS financial statements for the yearended on 31st March 2021.
We report that:
i. In respect of the Company's fixed Assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of Physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) According to information and explanation given to us and the records examined by usincluding registered title deeds we report that the title deeds comprising all theimmovable properties of land and building are held in the name of company as at balancesheet date.
ii. The inventories have been physically verified during the year by the management atregular intervals. In our opinion and according to the information and explanations givento us no material discrepancies were noticed on physical verification.
iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013 ('the Act'). Accordingly paragraph 3(iii)(a)3(iii)(b) and 3(iii)(c) of the Order is not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us theCompany has not given any loans guarantees or security or made any investments to whichprovisions of sections 185 and 186 of the Companies Act 2013 is applicable andaccordingly reporting under clause (iv) of the Order is not applicable.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits under the provisions of Sections 73 to Section 76 ofthe Companies Act2013 during the year. Hence the provisions of Clause (v) of the Orderare not applicable to the Company.
vi. We have broadly reviewed the book of account maintained by the Company pursuant tothe rules prescribed by the Central Government for maintenance of cost records U/s 148(1)of the Act relating to activities for such rules are applicable and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.
vii. According to the information and explanations given to us in respect of statutorydues:
(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees State Insurance Income Tax Service Tax Sales Tax Value AddedTax duty of Custom duty of Excise Cess Goods and Service Tax and other statutory dueswith the appropriate authorities during the year. According to the information andexplanations given to us no undisputed amounts payable in respect of the aforesaid dueswere outstanding as at 31st March 2021 for a period of more than six months from the datethey became payable.
(b) According to the information and explanations given to us there are no dues ofincome tax duty of customs and Goods and Service Tax which have not been deposited withthe appropriate authorities on account of any dispute.
viii. In our opinion and according to information and explanations given by themanagement we are of the opinion that the Company has not defaulted in the repayment ofdues to financial institution and banks. The Company does not have any loans or borrowingsfrom Government and has not issued any debentures.
ix. The Company did not raise any moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Money raised by way of termloans have been applied by the company during the year for the purposes for which thosewere raised.
x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.
xi. According to the information and explanations given to us the company has paid orprovided for managerial remuneration in accordance with requisite approvals mandated bythe provisions for managerial remunerations of Section 197 read with Schedule V to theCompanies Act.
xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Ind AS financial statements as required by theapplicable Indian Accounting Standards.
xiv. According to the information and explanations give to us and based on ourexamination of the records the Company has not made had made any preferential allotmentor private placement of shares or fully or partially convertible debentures during theyear.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Accordingly paragraph 3(xvi) of the Order is not applicable.
ANNEXURE -B TO THE INDEPENDENT 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 controls over financial reporting of Wires andFabriks (S.A.) Limited ("the Company") as of 31st March 2021 in conjunction withour audit of the Ind AS financial statements 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 of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or 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 Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance 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 authorisation of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised 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 misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2021 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 Jain Shrimal & Co. |
| ||Chartered Accountants |
| ||FRN: 001704C |
|Place: Jaipur ||(Narendra Shrimal) |
|Dated: 31st May 2021 ||Partner |