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Samkrg Pistons & Rings Ltd Auditor Reports

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Dec 6, 2024|02:04:00 PM

Samkrg Pistons & Rings Ltd Share Price Auditors Report

To the Members of SAMKRG Pistons and Rings Limited

Report on the Indian Accounting Standards (Ind AS) Financial Statements Opinion

We have audited the accompanying Ind AS financial statements of SAMKRG Pistons and Rings Limited ("the Company"), which comprises 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 financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Ind AS Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, the afore said 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 accounting principles generally accepted in India, of the standalone state of a airs of the Company as at March 31, 2024 and its standalone profit (including Other Comprehensive Income), standalone changes in equity and its standalone cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Ind AS 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 Ind AS financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, 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.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Following is the Key Audit Matter identified which is of most signifi cance:

TRADE RECEIVABLES: Trade Receivables accounts for 62.03% of total current assets of the company.

The Company is not exposed to potential risk of financial loss as there is no risk of default on receivables from the customers. As the company has good valued customers both in domestic OEM’s and Replacement market and Export.

We have performed the following procedures in relation to recoverability of Trade Receivables Tested the accuracy of trade receivables at year end on sample basis

Obtained a list of Outstanding Receivables and evaluated its recoverability through discussion with management.

Assessed the recoverability Trade Receivables through sample basis through our evaluation of management assessment with reference to

(a) Credit Profi le of Customers

(b) Historical Payment pattern of customers

(c) Tested subsequent settlement of trade receivables after the balance sheet date on a sample basis.

Based on above procedures we found the key judgements and assumptions used by management in the recoverability of assessment of Trade Receivables to be supported based on available evidence.

Other Information

The Company’s 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 Ind AS Financial Statements, Secretarial Report and our auditor’s report thereon, which we obtained prior to the date this auditor’s reports. Our opinion on the Standalone Ind AS 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 other information and, in doing so, consider whether the other information is materially inconsistent with the standalone Ind AS Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and those Charged with Governance for the Standalone Ind AS Financial 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 standalone Ind AS Financial Statements that give a true and fair view of the standalone financial position, standalone financial performance (including other comprehensive income), standalone changes in equity and standalone cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 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, the management 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 management 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 Company’s financial reporting process.

Auditor’s Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 standalone 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 Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls. and 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 management’s 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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s 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.

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 Ind AS Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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 (Auditor’s Report) Order, 2020 ("the Order"), issued by 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, 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 best of 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 the Company so far as it appears from our examination of those books. c. The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. d. In our opinion, the aforesaid standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended. e. 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 are disqualified as on 31st March, 2024 from being appointed as a director in terms of Section 164 (2) of the Act. f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "AnnexureB". g. As required by section 197 (16) of the Act; in our opinion and according to information and explanation provided to us, the remuneration paid by the company to its directors is in accordance with the provisions of section 197 of the Act and remuneration paid to its directors is not in excess of the limit laid down under this section. h. 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, in our opinion and to the best of our information and according to the explanations given to us: i) The Company has not any pending litigations and disclosure of the same is not applicable. ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31st March 2024 iii) There has not been any delay in transferring amounts, required to be transferred, to the investor Education and Protection Fund by the Company

MVN MURTHY

Chartered Accountant
Place: HYDERABAD M.NO- 201445
Date: 29-05-2024 UDIN:24201445BKCIHV9590

Annexure - A to the Auditor’s Report

Referred to in paragraph 1 of our Report on Other Legal and Regulatory Requirements of even date to the Members of SAMKRG Pistons and Rings Limited.

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets with respect to most of its fixed assets and is in the process of updating quantitative and situation details with respect to certain fixed assets in the records maintained by the Company.

(b) The fixed assets of the Company are physically verifi ed by the Management as per policy. In our opinion, the frequency of verifi cation is reasonable.

(c) The title deeds of immovable properties as disclosed in note 1 on Property, Plant & Equipment to the financial statements, are held in the name of the Company.

(d) The company has not revalued its PPE or intangible assets or both during the year.

(e) There are no proceedings initiated or pending as specified in clause 3(i)(e) of CARO 2020 against the company, as per the information and explanations from the company.

(ii) (a) The inventory was physically verifi ed during the year by the management. In our opinion the frequency of verifi cation is reasonable. Discrepancies between the physical stock and the book records noticed on verifi cation were properly dealt with in the books of accounts.

(b) The company has been sanctioned working capital limits in excess of Rs. 5 Crore rupees in aggregate, from STATE BANK OF INDIA, IFB, SOMAJIGUDA, HYDERABAD on the basis of security of its current assets. The quarterly returns/statements fi led by the company with such bank are in agreement with the books of accounts of the company (iii) According to information and explanations given to us, the Company has not granted loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013, accordingly the reporting under Clause 3 (iii)(a) to 3(iii)(f) of the Companies (Auditor’s report) Order, 2020, is not applicable to the Company.

iv) According to information & explanations given to us, the company has not granted any loans, secured or unsecured to firms, LLP’S or other parties covered by provisions Sections 185 and 186 of the Companies Act, 2013.Hence reporting on whether there is a compliance with the said provisions does not arise.

v) According to information and explanation given to us, the Company has not accepted any deposits from public, accordingly the reporting under Clause 3 (v) of the Companies (Auditor’s report) Order, 2020, is not applicable to the Company.

(i) We have broadly reviewed the books of accounts and records maintained by the Company relating to manufacture of base metals castings (Auto-components of Aluminium& Steel) pursuant to the rules made by Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, (ii) (a) According to information and explanation given to us, the Company is generally regular in depositing undisputed statutory dues with appropriate authorities including Provident fund, Employees’ State insurance, Income tax, Sales tax, Service Tax, Duty of Customs, Duty of excise, Value added tax, Goods and Services tax, cess and any other statutory dues applicable to it.

(a) According to the information and explanations provided to us, no disputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income Tax, Service Tax, Sales Tax, Goods and Services Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and Other Statutory Dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to information and explanation given to us, there are no dues of Income tax, Sales Tax, Service Tax, Duty of Custom, Duty of Excise, Goods and Services tax and Cess which have not been deposited on account of any dispute other than those mentioned below.

(c) Details of Statutory dues pending at various Forums:

Rupees in Lakhs

S. No

Statutory Dues, Nature of Dues Forum

Outstanding Balance
1 Sales Tax Act,1956 – Entry tax ADC (IT) 22.47

2

VAR ACT, 2005 – Entry Tax 2011-12 to Assistant Commissioner State Tax, 2016-17 Punjagutta, Hyderabad

48.85
3 Income Tax (2015-16) Appellate Tribunal< Hyderabad 16.02

(viii) According to information and explanation given to us, in our opinion the Company not having any unrecorded income disclosed in the tax assessments as per the clause 3(viii) of CARO 2020.

(ix) (a) According to the information and explanation given to us, in our opinion the company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.

(b) The company has not been declared a willful defaulter by any bank of financial institution or other lender.

(c) As per the information and explanation given to us there were no term loans raised by the company during the year under audit. Hence clause 3(ix)(c) of CARO 2020 does not apply to this company.

According to the information and explanations given to us and on overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment by the company.3(ix)(d) of CARO 2020.

As per the information and explanations and overall examination of books of account the company has not any subsidiary/associate/joint venture. Hence reporting requirements of this clause 3(ix)(e) of CARO 2020 does not apply to this company.

As the company has not any subsidiary etc, as mentioned above clause 3 (ix)(f) is not applicable to this company.

(x) (a) The company has not raised any moneys by way of IPO or further public offer during the year under audit. The reporting requirements of clause 3(x)(a) does not apply to this company.

(b) The company has not made any preferential allotment or private placement of shares and the company does not have debentures during the year and clause 3(x)(b) does not apply to this company (xi) As per the information and explanation produced before us there were no frauds by the company or any fraud on the company has been noticed or reported during the year under clause 3(xi) of CARO,2020 (xii) The Company is not a Nidhi Company, accordingly the reporting under Clause 3 (xii) of the Companies (Auditor’s report) Order, 2020, is not applicable to the Company.

(xiii) According to information and explanation given to us, in our opinion all transactions with related parties are in compliance with sections 177 & 188 of Companies Act, 2013 wherever applicable and the details have been disclosed in notes to accounts of Financial Statements as per Ind AS 24 - Related Party Disclosures. (xiv) The company has got adequate internal audit system commensurate with the size and nature of business (xv) According to information and explanation given to us, the Company has not entered into non-cash transactions with directors or persons connected with him; accordingly, provisions of section 192 are not applicable to the Company.

(xvi) According to information and explanation given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

(xvii)The company has not incurred cash losses in the financial year and in the immediately preceding financial years.

(xviii)There has not been any resignation of statutory auditor during the year clause 3(xviii) of CARO,2020

(xix) On overall analysis of financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, knowledge of the Board of Directors and Management plans we are of the opinion that there is no material uncertainty exists as on the date of the audit report that the 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.

(xx) As per the information and explanations produced before us the company has spent an amount of Rs.32.06 lakhs towards CSR and there is no unspent amount on that account.

(xxi) The information required to be furnished under clause 3(xxi) is not applicable to this company.

MVN MURTHY

Chartered Accountant
Place: HYDERABAD M.NO- 201445
Date: 29-05-2024 UDIN:24201445BKCIHV9590

Annexure - B to the Auditor’s Report

(Referred to in paragraph 2(f) of our Report on Other Legal and Regulatory Requirements of even date to the Members of Samkrg Pistons& Rings Limited)

Report on the Internal Financial Controls with reference to Standalone Ind AS Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls with reference to Standalone Ind AS Financial Statements of Samkrg Pistons& Rings Limited ("the Company") as of 31st March, 2024 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 company’s policies, the safeguarding of 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 Company’s internal financial controls with reference to 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 internal financial controls with reference to Financial Statements were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the existence of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to Financial Statements included obtaining an understanding of internal financial controls with reference to 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 auditor’s judgment, including the assessment of the risks of material misstatement of the 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 Company’s internal financial controls with reference to financial statements.

Meaning of Internal Financial Controls over Financial Reporting

A Company’s internal financial control over financial reporting 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 Company’s internal financial control over financial reporting 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 authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting with reference to Standalone Ind AS 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 over financial reporting with reference to Standalone Ind AS Financial Statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to Standalone Ind AS Financial Statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at March 31, 2024 based on the internal control over financial reporting 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

MVN MURTHY

Chartered Accountant
Place: HYDERABAD M.NO- 201445
Date: 29-05-2024 UDIN:24201445BKCIHV9590

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