We were engaged to audit the accompanying financial statements of Kalyani Forge Limited ("the Company"), which comprise the Balance sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity, the Statement of Cash Flows for the year then ended and Notes to the Financial Statements, including a summary of material accounting policies and other explanatory information (hereinafter referred as the "financial statements").
We do not express an opinion on the accompanying financial statements of the Company because of the significance of the matters described in the basis for disclaimer of opinion paragraph of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements as to whether these financial statements give a true and fair view in conformity with the applicable accounting standards ("Ind-AS") and other accounting principles generally accepted in India of the net profit and other comprehensive income and other financial information of the Company for the year ended March 31, 2024.
Basis for Disclaimer of Opinion
I. The Company is in the process of refining its stock valuation process by updating the standard rates of material,
labour and overheads based on the current prevailing rates and relevant data. Accordingly, we were unable to determine the consequential impacts thereof, on inventory and other elements of financial statements, if any. As represented to us, the quantities and the valuation of the inventories amounting to INR 5,610.03 Lakh was determined by the Company based on available records.
II. Balance of Trade receivables, Trade payables are subject to confirmations, reconciliations, and consequential adjustments, if any, as a result of which we are unable to obtain sufficient and appropriate audit evidence.
III. As mentioned in note '36' of the financial statements, the Company has restated the financial statements of previous
year ended March 31, 2023 and Opening Balance Sheet as at April 01, 2022 due to prior period errors identified in various account balancesbasis a review and analysis conducted during the year. Consequently, adjustments have been made to the balances of Inventories, Trade payables, Trade receivables, Deposits and Balance with Government authorities. In the absence of sufficient and appropriate information and necessary evidence, we are unable to comment on the accuracy and completeness of such adjustments and their consequential impact on the financialstatements for the year ended March 31, 2024 and the respective comparative previous years.
IV. We have been given to understand that the Company is in the process of updating the relevant documenta
tion for internal financial control over financial reporting. In the absence of necessary documentation, we could not determine if the Company has established adequate internal financial control with reference to financial statements and whether such internal financial controls were operating effectively as at March 31, 2024.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Board's Report but does not include the financial statements and our auditor's report thereon. The Company's board report is expected to be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materiallyinconsistent with the financial statements, or our knowledge obtained in the audit ootherwise appears to be materially misstated.
When we read the board's report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for theFinancial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Act, with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Ind AS specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our responsibility is to conduct an audit of the Company's financial statements in accordance with Standards on Auditing and to issue an auditor's report. However, because of the matters described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial statements.
We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act, and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.
Other Matters
The comparative financial information of the Company for the year ended March 31, 2023 included in these financial statements, are audited by the predecessor auditor whose report for the year ended March 31, 2023 dated May 30, 2023 expressed a qualified opinion on those financial statements.
These financial amounts have been adjusted to give the effects of the prior period adjustments as stated in paragraph (iii) of Basis of Disclaimer of Opinion.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order"), issued by the Central Government of
India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 'A' a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a. As described in Basis for Disclaimer of Opinion paragraph, we have sought but were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b. Due to possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. Due to possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows, dealt with by this Report are in agreement with the books of account.
d. Due to possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. The matters described in the Basis for Disclaimer of Opinion paragraph above, inour opinion, may have an adverse effect on the functioning of the Company.
f. On the basis of the written representations received from the directors as on March 31, 2024, taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2024, from being appointed as a director in terms of Section 164 (2) of the Act.
g. With respect to the adequacy of the internal financial controls with reference to these Financial Statements and the operating effectiveness of such controls, refer to our separate Report in Annexure 'B'. Our report expresses disclaimer of opinion on the Company's internal financial control over financial reporting with reference to financial statements.
h. Due to the possible effects of the matters described in the "Basis for Disclaimer of Opinion" section of this report, we are unable to comment whether the managerial remuneration paid/provided by the Company during the year is in accordance with the provisions of Section 197 of the Act.
i. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. Due to the possible effects of the matters described in the "Basis for Disclaimer of Opinion" Section of this report, we are unable to state whether the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 32.1 to the financial statements.
ii. The Company does not have any material foreseeable losses on long term contracts including derivative contracts requiring provision under the applicable law or Indian Accounting Standards.
iii. There has been delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company on account of unclaimed dividend.
iv. (a) The Management has represented that, to the best of it's knowledge and belief, no funds
have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of it's knowledge andbelief, no funds
have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (i)(iv)(a) and (i) (iv)(b) above contain any material misstatement.
v. The dividend declared or paid during the year by the Company is in compliance with section 123 of the Companies Act, 2013.
vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the year ended March 31, 2024, which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except for the Accounting Software (SAP ERP) wherein the audit trail has not been enabled at application level for modification to customized tables and at database level. Further, during the course of our audit, we did not come across any instance of the audit trail feature being tampered with for softwares maintained by the Company.
vii. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 01, 2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the year ended March 31, 2024.
For Kalyaniwalla & Mistry LLP
Chartered Accountants
Firm Registration No.: 104607W/W100166
Anil A. Kulkarni Partner
Membership No.: 047576 UDIN:
Place: Pune
Date: May 30, 2024
Certificate No: XKF034
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