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Bemco Hydraulics Ltd Auditor Reports

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Bemco Hydraulics Ltd Share Price Auditors Report

TO THE MEMBERS OF

BEMCO HYDRAULICS LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of BEMCO HYDRAULICS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2024, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of the material accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (The Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS"), and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2024, and its profit, total comprehensive income,changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conductedour audit of the standalone financial statements in accordance with the Standards on Auditing%5As) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the standalone financial statements section of our report. 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 standalone financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Descriptions of Key Audit Matters are given below-:

SI No. Key Audit Matters

Auditors Response

1 Appropriateness of the carrying amount of trade receivables (Unsecured & Considered Good) at amortized cost

Our procedures, regarding obtaining the balance confirmation of Trade Receivable and verifying the same

(Refer Note - 5.09 to the standalone financial statements) • Designing the external confirmation procedures to obtain additional corroborative information as a response to address the assessed risks of material misstatement, including determining that external confirmation requests are properly addressed and contain return information for responses to be sent directly to the auditor and maintaining control over external confirmation requests
Trade receivables aggregating to Rs 2,565.49 Lakhs as at March 31, 2024 comprise a significant portion of the assets of the Company and serve as security for the Companys short-term debts.
Letters have been sent to majority of the debtor for confirmation of balances and reconciliation, in case of differences, but replies have not been received from all. • Evaluating whether the results of the external confirmation procedures provide relevant and reliable audit evidence, or whether performing further audit procedures is necessary including In the case of each non-response, perform alternative audit procedures to obtain relevant and reliable audit evidence
This is determined as a key audit matter as balance confirmation is one of the evidences which establish the authenticity of the receivables which comprise significant portion of the Assets of the entity.
• Performing Alternative audit procedures include examining specific subsequent cash receipts, transport documentation, and sales near the period-end.
Based on the above procedures performed, we did not find any significant exceptions to the Balances of trade receivables.

Investment

Our audit procedures included the following:
(Refer note 5.04 "Investments" of the standalone financial statement.) • Assessed the indications of impairment of investments in subsidiary We have also examined the basis of estimates of the recoverable amounts of these investments, the assumptions used in making such estimates, and the allowance for impairment.
Recovery of carrying value of investment The Company has investments in subsidiaries.
. These investments are accounted for at cost less any provision for impairment. The Company evaluates the indicators of impairment of the said investments regularly by reference to the requirements under Ind AS 36 Impairment of Assets.
• Comparison of the carrying values of the Companys investment in subsidiary with their respective net asset values/ recoverable values and the consequent allowance for impairment if any.
• Evaluated key assumptions in the Companys valuation models used to determine recoverable amount including assumptions of projected adjusted EBITDA, growth rate, rate used for discounting cash flows etc.
The Company carries out impairment assessment for each investment by:
• Comparing the carrying value of each investment with the net asset values of each company.
• Assessment for indications of impairment of such investments. In cases where such indicators existed, we have assessed for the estimation made by the Company for the recoverable
• Comparing the performance of the investee companies with projections used for valuations and approved
business plans. The recoverable amounts of the above investments are estimated in order to determine the extent of the impairment amounts.
• Tested the arithmetical accuracy of the computation of recoverable amounts of cash generating units.
loss. As impairment assessment involves significant assumptions and judgment, we regard this as a key audit matter. • Involved internal valuation expert to assist in evaluating the key assumptions of the valuations. We tested the related disclosures in Note 5.04 of the financial statements.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements, consolidated financial statements and our auditors report thereon. The Companys annual report is expected to be made available to us after the date of this auditors report.

Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the >1

Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India, 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 the assets of the Company and for preventing and detecting frauds dnd 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, Board of Directors is responsible for assessing the Companys 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.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to

, continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be 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, 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 the paragraph 3 and 4 of the Order to the extent applicable.

2. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our"opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

3. As required by Section 143 (3) of the Act, we report that:

i) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit,

ii) In our opinion, 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 except for the matters stated in the paragraph 3 (viii) (f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.,

iii) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, tne Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

iv) In our opinion, the aforesaid standalone 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, as amended.

v) On the basis of the written representations received from the directors as on 31st March, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2024 from being appointed as a director in terms of Section 164(2) of the Act.

vi) The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 3 (ii) above on reporting under Section 143(3)(b) of the Act and paragraph 3 (viii) (f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

vii) With respect to the adequacy of the internal financial controls with reference to the financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

viii) With respect to the other matters to be included in the Auditors 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:

a. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 5.28 to the standalone financial statements.

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

d. (i) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, 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;

(ii) The management has represented, that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, 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

(iii) Based on such audit procedures we have considered reasonable and appropriate in the circumstances, nothing has come to our notice that the representations made by the management as stated in (i) and (ii) herein above, contain any material misstatement.

e. The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Companies Act, 2013.

f. Based on my examination which included test checks, the company has not used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility.

Annexure A to Independent Auditors Report referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.

(a) (A) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant & Equipment.

(B) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company is maintaining proper records showing full particulars of intangible assets.

(b) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has a regular programme of physical verification of its property, plant and equipment by which property, plant and equipment are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the property, plant and equipment has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the title deeds of all immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements are held in the name of the Company.

(d) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not revalued any class of its Property, Plant and Equipment during the year. The Company has not revalued its

. Intangible Assets, The Company does not have any Right of Use assets.

(e) in our opinion and according to the information and explanations given to us and based onexamination of records we considered necessary, no proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, para 3(i)(e) of the order is not applicable.

(ii) (a) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, physical verification of inventories have been conducted at reasonable intervals by the management. In our opinion the coverage and procedure of such verification is appropriate. No discrepancies of 10% or more in the aggregate for each class of inventory were noticed.

(b) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. The Company has no borrowings from financial institutions on the basis of security of currents assets. The quarterly returns or statements filed by the Company with such banks are not in agreement with the books of accounts of the Company. Details are as follows:

Quarter

Name of the Bank

Particulars

Amount as per Books of Account (Rs in Lakhs) Amount as reported in the quarterly return/state ment (Rs in Lakhs) Amoun t of D if fere nee ( in Lakhs)
June, 2023 Bank of Baroda Advance To Suppliers 172.14 174.51 (2.37)
June, 2023 Bank of Baroda Sundry Creditors 1,472.27 1,421.86 50.41
September, 2023 Bank of Baroda Value Of Stock 1,663.73 1,658.79 4.94
September, 2023 Bank of Baroda Sundry Creditors 1,455.40 1,422.41 32.99
December, 2023 Bank of Baroda Advance To Suppliers 137.68 142.04 (4.36)
December, 2023 Bank of Baroda Sundry Creditors 1,468.78 1,429.79 38.99
March, 2024 Bank of Baroda Advance To Suppliers 137.68 142.04 (4.36)
March, 2024 Bank of Baroda Sundry Creditors 1,468.78 1,429.79 38.99

(iii) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not granted any loans or provided any guarantee or security or advances in the nature of loans, secured or unsecured, to companies, firms, limited liability partnerships or any other parties. Accordingly Para (iii)(a), (c), (d), (e) and (f) of the Order is not applicable. The investment made are not prejudicial to the interest of the company.

(b) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the investments made are not prejudicial to the companys interest.

(iv) 3 In our opinion and according to the information and explanations given to us and based on"examination of records we considered necessary, the Company has not given any loans/guarantees/security to or on behalf of any party referred to in Section 185 of the Companies Act 2013. The Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of investments made. The Company has not given any loan, guarantee or provided any security in connection with a loan to any body corporate or any other person.

(v) In our opinion and according to the information and explanations given to us and based onexamination of records we considered necessary, the Company has not accepted deposits or amounts which are deemed to be deposits during the year and therefore the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under are not applicable to the Company. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vi) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, we have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii)(a) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company is regular in depositing undisputed statutory dues including Goods and Services Tax, provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues applicable to it with the appropriate authority.

There are no undisputed amount payable in respect of applicable statutory dues including Goods and Services Tax, provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess which were in arrears as at 31.03.2024 for a period of more than six months from the date they became payable except for a sum ofRs 6,31,952/- on account of Goods and Service Tax.

(b) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, there are no dues of Income tax, Sales tax, Value Added Tax, Service Tax, Custom duty, Excise duty or Goods and Services Tax (GST)which have not been deposited on account of any dispute except as stated as below:

Name of the Statute Nature of the Dues Amount (Rs in lakhs) Period to which the amount relates (Financial year) Forum where dispute is pending
Karnataka Tax on Entry of Goods, 1979 Entry Tax 0.76 2006-07 Joint Commissioner of Commercial Taxes (Appeals)
Karnataka Tax oh Entry of Goods, 1979 Entry Tax 0.29 2007-08 Joint Commissioner of Commercial Taxes (Appeals)
Karnataka Tax on Entry of Goods, 1979 Entry Tax 0.35 2008-09 Joint Commissioner of Commercial Taxes (Appeals)
Karnataka Tax on Entry of Goods, 1979 Entry Tax 0.71 2009-10 Joint Commissioner of Commercial Taxes (Appeals)
Goods and Services Tax Act 2017 Interest due to late filing of GSTR 3B and late payment of taxes 10.84 2017-18 Joint Commissioner of Commercial Taxes (Appeals) Belagavi:Reg
Goods and Services Tax Act 2017 Tax, interest and penalty payable due to difference between GSTR 2A and GSTR 3B 21.54 2017-18 Joint Commissioner of Commercial Taxes (Appeals) Belagavi-Reg

Note: Out of the total amount of Rs4.20 lakhs, 50% of the amount has been deposited.

(viii) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, there are no transactions that are not recorded in the books of account that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).Accordingly, para 3(viii) of the Order is not applicable.

(ix)(a) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender. Further, deferred payment liabilities are not considered borrowings/dues to a lender and hence not commented upon.

(b) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not been declared wilful defaulter by any bank or financial institution or other lender.

(c) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has applied the term loans for the purpose for which those were obtained.

(d) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, and on overall examinations of the Balance Sheet of the company,funds raised on short term basis have not been utilised for long term purposes by the company.

(e) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries. The company .does hot have any associate or joint ventures. Accordingly, para 3(ix)(e) of the order is not applicable.

(f) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not raised loans during the year on the pledge of securities held in its subsidiaries. The Company does not have any joint ventures or associate companies. Accordingly, para 3(ix)(f) of the order is not applicable.

(a) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, para 3(x)(a) of the order is not applicable.

(b) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year. Accordingly, para 3(x)(b) of the order is not applicable.

(xi)(a) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, no fraud by the company or on the Company has been noticed or reported during the year. Accordingly, para 3(xi)(a) of the order is not applicable.

(b) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, no report under Section 143(12) of the Companies Act, 2013 has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government. Accordingly, para 3(xi)(b) of the order is not applicable.

(c) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, no whistle-blower complaint has been received by the Company during the year. Accordingly, para 3(xi)(c) of the order is not applicable.

(xii) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary,the Company is not a Nidhi Company. Accordingly, paragraphs 3(xii)of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, all transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 and details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) (a) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has an internal audit system commensurate with the size and nature of its business.

(b) The reports of the Internal Auditors for the period under audit were considered by us during the course of the audit.

(xv) , -Wfjyour opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not entered into any noncash transaction with directors or persons connected with him as specified under Section 192 of the Companies Act, 2013.Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi)(a) In our opinion and according to the information and explanation given to us and , examination of books and records, the Company is not required to be registered undersection 45-IA of the Reserve Bank of India Act, 1934 as a Non-Banking Finance Company. Accordingly, para 3(xvi)(a) of the Order are not applicable.

(b) In our opinion and according to the information and explanation given to us and examination of books and records, the company has not conducted any Non-Banking Financial activities or any Housing Finance activities. Accordingly, para 3(xvi)(b) of the Order are not applicable.

(c) In our opinion and according to the information and explanation given to us and examination of books and records, the company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, paragraph 3(xvi)(c) of the Order is not applicable.

(d) In our opinion and according to the information and explanation given to us andexamination of books and records, there is no Core Investment Company (CIC) in the group.

(xvii) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, the Company has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

(xviii) In our opinion and according to the information and explanations given to us and based on examination of records we considered necessary, there has been no resignation of the statutory auditors during the year.

(xix) In our opinion and according to the information and explanation given to us and examination of books and records we consider necessary, on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, and our knowledge of the Board of Directors and management plans, we are of the opinion that no material uncertainty exists as on the date of the audit report that company is capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) In our opinion and according to the information and explanation given to us and examination of books and records we considered necessary, the Company does not have any ongoing projects and neither has any unspent amount for the current financial year ended March 31, 2024 required to be transferred to a fund specified in Schedule VII of the Companies Act, 2013.

Annexure B to the Independent Auditors Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

Opinion

We have audited the internal financial controls with reference to the financial statements of BEMCO HYDRAULICS LIMITED ("the Company") as of 31st March 2024 in conjunction with our audit of the standalone Ind AS Financial Statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, an adequate internal financial controls with reference to the financial statements and such internal financial controls with reference to the financial statements were operating effectively as at 31st March 2024, based on the internal control with reference to the financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls With reference to the financial statements issued by the Institute of Chartered Accountants of India.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to the financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding gf its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to the financial statements based on our audit. We conducted our audit in accordance with 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 be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to the financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to the financial statements and their operating effectiveness. Our audit of internal financial controls with reference to the financial statements included obtaining an understanding of internal financial controls with reference to the financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to the financial statements.

Meaning of Internal Financial Controls with reference to the financial statements

A companys internal financial control with reference to the financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control with reference to the financial statements includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls With reference to the Financial Statements

Because of the inherent limitations of internal financial controls with reference to the financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to the financial statements to future periods are subject to the risk that the internal financial control with reference to the financial statements may become inadequate because of changes in conditions, or that the degree of compflafftre with the policies or procedures may deteriorate.

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