To the Members of BMW INDUSTRIES LIMITED
Report on the Standalone Financial Statements
Opinion
We have audited the accompanying Standalone Financial Statements of BMW Industries Limited ("the Company”), which comprise the Balance Sheet as at March 31, 2024, and 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 significant accounting policies and Other Explanatory Notes for the year ended on that date (hereinafter referred to as "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 March 31, 2024, its profits, total comprehensive Income, changes in equity and its 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 Auditors' Responsibility 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 (‘ICAI') together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made 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 obtained by us is sufficient and appropriate to provide a basis for our audit opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, 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. We have determined the matters described below to be the key audit matters for incorporation in our report.
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Key audit Matters
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Addressing the Key Audit Matters
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Trade Receivables
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Our audit procedures based on which we arrived at
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Gross Trade Receivable of the Company is Rs. 10,838.57 Lakhs as on March 31, 2024. This includes significant
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the conclusion regarding the carrying amount of Trade Receivables include the following:
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amounts, which have fallen due for payment including
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• We obtained an understanding from the Management,
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the amounts outstanding for a considerable period of
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assessed and tested the design and operating
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time. (Note No. 9 of the Standalone Financial Statements).
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effectiveness of the Company's key controls over
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The Company is exposed to potential risk of financial
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the recoveries against the outstanding amounts
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loss when the customers fail to meet their contractual
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and resultant impairment assessment of material
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obligations.
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Trade Receivables;
• We reviewed Management's assessment and evaluation of the credit worthiness of the major trade receivables and historical trends and current dealing with the customers;
• Assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management's assessment keeping in view the credit profile, historical payments, publicly available information and latest correspondence with customers and to consider if any provision should be made;
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Key audit Matters
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Addressing the Key Audit Matters
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The recoverable amount was estimated by management
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•
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Tested settlement of trade receivables subsequent to
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based on assessment of recoverability on case to case basis and this requires significant audit attention. The Company evaluates whether there is any objective evidence that trade receivables are impaired and determines the amount of impairment allowance as a result of the inability of the customers to make required payments. This has been based on the ageing of the trade receivables, credit worthiness of the of the parties and historical write-off experience.
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•
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the Balance Sheet date on a sample basis;
Reliance has also been placed on the management's representation and confirmation for amount recoverable against the outstanding balances.
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Verification of Inventories and Valuation thereof
As at March 31, 2024, the Company has Rs. 6,819.27 Lakhs
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Our audit procedures based on which we arrived at the conclusion regarding reasonableness of determination
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of
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year-end inventory and valuation thereof include following:
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of Inventories (Note No. 8 of the Standalone Financial Statements). Given the size of the Inventory relative to
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the
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the total assets of the Company and the estimates and judgements described below, the determination and valuation of Inventory required significant audit attention.
Given the nature of Industry and volume of inventory and physical verification being undertaken by the
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•
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Ensuring the effectiveness of the design, implementation and maintenance of controls over changes in inventory to determine whether the conduct of physical inventory verification at a date other than the date of the financial statement is
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management in phases and all the locations not being covered at a time , determination thereof in absence of
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appropriate and testing of those controls whether those have operated effectively;
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specific identification, batches etc. has largely been done
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•
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Verification of Inventories at the year end have been
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on theoretical basis considering cross-sectional weight
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undertaken by the management;
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including for the locations not covered for verifications. Moreover, certain materials are lying in heaps and /
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•
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We have obtained and reviewed necessary evidences,
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or are suspectable to obsolescence and deterioration
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working papers and documents for the physical
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in quality. All these require specific procedures based
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verification carried out as above. This includes
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on technical experience for arriving at the ground
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verification report from independent professionals
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stock of usable / saleable inventory. The result of these
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and third party verification. Inventories at one of the
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procedures may not always be accurate and involves
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location in Kolkata was even attended by us;
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significant management judgement and estimation.
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In cases where inventories have been scrapped and
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Management reviews the Ageing reports together with
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are carried at estimated realizable price, reliance
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historical trends to estimate the likely future saleability of
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has been placed on management's estimate provided
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slow moving and older inventory items and performed a line-by-line analysis to ensure that it is stated at the lower
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in this respect to us.
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of cost or net realizable value.
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We have examined the valuation process/ methodology and checks being performed at multiple
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As disclosed in Note 1(C) (i), Inventories are held at
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levels to ensure that the valuation is consistent with
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lower of cost or Net Realizable Value determined using the First in First Out/ Weighted Average cost method. At year end, valuation of Inventories have been reviewed by the management and the cost of Inventory is reduced in cases where the Net Realizable value is lower.
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and as per the policy followed in this respect.
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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 other information comprises the information included in the Annual Report but does not include the consolidated financial statements, standalone financial statements and our auditor's report thereon.
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 and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our 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 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 Financial Statements that give a true and fair view of the state of affairs (financial position), Profit or Loss (financial performance including other comprehensive income), Changes in Equity and Cash Flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards 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 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, 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.
Auditors’ Responsibility 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 Standard on Auditing (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 financial 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the 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 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
I. 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 based on our audit and on the consideration of the report of other auditors on the financial statements of subsidiaries amalgamated with the Company as per Para (1) of Other Matters, we give in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
II. Further to our comments in the annexure referred to in the paragraph above, as required by Section 143(3) of the Act based on our audit and on the consideration of the report of other auditors on the financial statements of subsidiaries amalgamated with the Company as per Para (1) of Other Matters, 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 except for the matters stated in paragraph III(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended from time to time;
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flow dealt with by
this Report are in agreement with the relevant 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 Rule 7 of the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time;
e) 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;
f) With respect to the maintenance of accounts and other matters connected therewith, reference is invited to paragraph II(b) above on reporting under section 143(3)(b) of the Act; and
g) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal control with reference to financial statements;
III. With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditor's) 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 standalone financial statements -Refer Note no. 40 of the standalone financial statements;
b) The Company did not have any material foreseeable losses against long-term contracts, including derivative contracts and thereby requirement for making provision in this respect is not applicable to the company;
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 as disclosed in Note No.50 to the Standalone financial statements, no funds (which are material either individually or in the aggregate) 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 as disclosed in Note No.50 to the financial statements, no funds (which are material either individually or in the aggregate) have been received by the Company from any person(s) or entity(ies), including foreign entity ("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 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) and (ii) above, contain any material misstatement. The comments made under this para relate to the year under audit and therefore in respect of the earlier years' transactions dealing with investments, loans, etc, it is neither required nor possible to ascertain and/or comment under this para; and
Place: Kolkata Date: May 15, 2024
e) The dividend declared and paid during the year by the Company is in compliance with section 123 of the Act.
f) Based on our examination which included test checks, the Company has used accounting software incorporating all the financial and other transactions involving various operational areas and functions for maintaining its books of account which have the tables where audit trail (edit log) for changes made in the transactions at application level through standard tables are available and have been operated throughout the year for all relevant transactions recorded in the said software. Audit trail (edit log) with respect to the direct changes at database level have not been enabled.
In respect of the above software, other than the exceptions noted hereinabove, we have, however, not come across any instance of the same being tampered with.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from 1st April, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, on preservation of audit trail (edit log) as per the statutory requirements for record retention is not applicable for the financial year ended 31st March, 2024.
IV. With respect to the reporting under Section 197 (16) of the Act to be included in the Auditors' Report, in our opinion and according to the information and explanations given to us, the Remuneration (including Sitting fees) paid by the Company to its Directors during the current year is in accordance with the provisions of Section 197 of the Act and is not in excess of the limit laid down therein.
For Lodha & Co LLP
Chartered Accountants Firm's ICAI Registration No.:301051E/E300284
Boman R Parakh
Partner
Membership No: 053400 UDIN:24053400BKFCFU5965
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