Cochin Shipyard Ltd.
|BSE: 540678||Sector: Others|
|NSE: COCHINSHIP||ISIN Code: INE704P01017|
|BSE 15:30 | 30 Nov||665.00||
|NSE 15:14 | 30 Nov||666.40||
|Mkt Cap.(Rs cr)||8,747|
|Mkt Cap.(Rs cr)||8747.41|
Cochin Shipyard Ltd. (COCHINSHIP) - Auditors Report
Company auditors report
To the Members of Cochin Shipyard Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements ofCochin Shipyard Limited ("the Company") which comprise the Balance Sheet as at31st March 2022 and the Statement of Profit and Loss (including Other ComprehensiveIncome) and the Statement of Changes in Equity and the Statement of Cash Flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Ind AS prescribed undersection 133 of the Act read with the Companies (Ind AS) Rules 2015 as amended ("IndAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2022 and its profit (including Other ComprehensiveIncome) 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 thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial
Key Audit Matters
Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone financial statementsof the current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.
1. Measurement of Physical Completion of Ship Building and Ship Repairactivities.
The company recognises revenue from ship building and ship repairactivities based on percentage of completion method. The percentage of completion isarrived at based on estimated percentage of physical completion as assessed by themanagement of the company which involves exercise of significant judgements. lRefer Note2.4 (Critical Accounting Estimates & Judgements) & 2.19(a) (Revenue fromoperations) to the Standalone Financial Statements]. The physical completion isascertained as per an in-house procedure developed by the management of the company. Theprocedure and the assumptions therein are based on certain judgements made by themanagement based on inputs received from the planning design and technical departments ofthe company. Further the ascertainment of the actual physical completion of eachsub-activity on reporting date also involves management estimation. Our audit approachconsisted of understanding the basis and assumptions made in adopting such procedureunderstanding the system for capturing data and monitoring the progress of completion ofvarious works for internal reporting to the management evaluating the internal controlsin such system selecting samples and performing substantive checking and analyticalprocedures. However we have placed substantial reliance on the technical andactivity-based assessment made by the management for the purpose of recognition of income.
Information Other than the Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the Director's Report Management Discussionand Analysis Business
Responsibility Report Report on Corporate Governance but does notinclude the standalone financial statements and our auditor's report thereon. The annualreport is expected to be made available to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance / conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
When we read the other information if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance and take necessary actions as per applicable laws and regulations.
Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance (including Other Comprehensive Income) changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards specified in theCompanies (Indian Accounting Standards) Rules 2015 (as amended) under section 133 of theAct. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in aggregate they could reasonably be expected to influence the economicdecisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsiblefor expressing our opinion on whether the company has adequate internal financial controlssystem in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements
of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order
2020 ("the Order") issued by the Central Government of Indiain terms of sub-section (11) of section 143 of the Companies Act 2013 we give in"Annexure A" a statement on the matters specified in paragraph 3 and 4 of theOrder to the extent applicable.
2. Based on the verification of records of the Company and based oninformation a nd explanati on gi ven to us we give in "Annexure B" a report onthe Directions and SubDirections issued by the Comptroller and Auditor General of India interms of sub-section (5) of Section 143 of the Companies Act 2013.
3. As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all information and explanations whichto 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 examinationof those books.
(c) The Standalone Balance Sheet the standalone Statement of Profitand Loss (including Other Comprehensive
Income) the standalone Statement of Changes in Equity and standaloneStatement of Cash Flows dealt with by this Report are in agreement with the books ofaccount.
(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) In view of the exemption given vide notification no. G.S.R 463(E)dated June 5 2015 issued by Ministry of Corporate Affairs provisions of Section 164(2)of the Act regarding disqualification of Directors are not applicable to the Company.
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and
the operating effectiveness of such controls refer to our separateReport in "Annexure C".
(g) 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 we offer nocomments as the Company is exempted from the provisions of Section 197 vide notificationno. G.S.R. 463(E) dated June 5 2015.
(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 (asamended) in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone financial statements (refer Note Nos. 444546 of theStandalone Financial Statements).
ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.
iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.
iv. (a) The Management has represented that to the best of itsknowledge and belief as disclosed in the Note 48 to the accounts no funds have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other person or entity includingforeign entities ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that to the best of its knowledgeand belief as disclosed in the Note 48
to the accounts no funds have been received by the Company from anyperson or entity including foreign entities ("Funding Parties") with theunderstanding whether recorded in writing or otherwise that the Company shall directlyor indirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under sub-clause (a) and (b) above containany material misstatement.
v. The dividend declared/paid by the Company during the year is incompliance with section 123 of the Companies Act 2013.
Annexure-A to the Independent Auditors' Report
With reference to the Annexure A referred to in the IndependentAuditors' Report to the members of the Company on the standalone financial statements forthe year ended 31st March 2022 we report the following:
(i) (a) (A) In our opinion the company is maintaining
proper records showing full particulars including quantitative detailsand situation of Property Plant and Equipment.
(B) In our opinion the company is maintaining proper records showingfull particulars of intangible assets.
(b) There is a regular program of physical verification of PropertyPlant and Equipment which in our opinion is reasonable having regard to the size of thecompany and the nature of assets. During the year no material discrepancies were noticedon such verification.
(c) The title deeds of immovable properties (other than the propertieswhere the company is the lessee and the lease agreements are duly executed in favour ofthe Company) disclosed in the financial statements are held in the name of the Company.
(d) The company has not revalued its Property Plant and Equipment orintangible assets during the year.
(e) According to the information and explanations given to us and onthe basis of our examination of the records of the Company we report that no proceedingshave been initiated or are pending against the company for holding any benami propertyunder the Benami Transactions (Prohibition) Act 1988 and rules made thereunder.
(ii) (a) Inventories were physically verified during the year in
accordance with the inventory verification procedure adopted by themanagement. In our opinion the coverage and procedure of such verification by themanagement is appropriate. No discrepancy of 10% or more in the aggregate for each classof inventory were noticed during such verification.
(b) The company has been sanctioned Non-Fund Based limits in excess ofRs. 5 crores by banks which are availed as and when required. It has also been sanctionedFund Based limits in excess of Rs. 5 crores by banks which have not been availed by thecompany. The company is not required to file quarterly returns or statements with thebanks.
(iii) During the year the company has invested Rs. 10 Crores and Rs.31 Crores in Non-Convertible Debenture of its wholly owned subsidiaries M/s Udupi CochinShipyard Limited (formerly Tebma Shipyard Limited) and M/s Hoogly Cochin Shipyard Limitedrespectively. Also advances have been given to directors during the year on the sameterms and conditions at which it is given to other employees of the company.
a) During the year the company has not provided loans or providedadvances in the nature of loans or stood guarantee or provided security to any otherentity except advances given to directors on the same terms and conditions at which it isgiven to other employees. Loan had been given to subsidiary in the preceding year andremains receivable as on Balance Sheet the details of which are as follows :-
(b) In our opinion the investments made and the terms and conditionsof the grant of loans and advances provided are not prejudicial to the company's interest.
(c) In respect of the loans and advances the schedule of repayment ofprincipal and payment of interest has been stipulated and the repayments / receipts areregular.
(d) As per our examination of the company's records no amount isoverdue in respect of the above loans and advances.
(e) There has been no such instance where any loan or advance in thenature of loan granted which has fallen due during the year has been renewed or extendedor fresh loans granted to settle the over dues of existing loans given to the sameparties.
(f) Based on the information and explanations given to us andprocedures performed by us we are of the opinion that the company has not granted anyloans or advances in the nature of loans either repayable on demand or without specifyingany terms or period of repayment.
(iv) In our opinion and according to the information and explanationprovided to us the company has complied with the provisions of Sections185 and 186 of theCompanies Act 2013 in respect of loans investments guarantees and security.
(v) According to the information and explanation given to us thecompany has not accepted any deposits from public and hence the directives issued by theReserve Bank of
India and the provisions of Section 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed thereunder are not applicable.
(vi) We have broadly reviewed the books of account maintained by thecompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under section 148 of the Companies Act 2013 and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We havehowever not made a detailed examination of these records with a view to determine whetherthey are accurate and complete.
(a) The company is regular in depositing undisputed
statutory dues including Goods and Service Tax provident fundemployees' state insurance income- tax sales tax service tax duty of customs duty ofexcise value added tax cess and other statutory dues to the appropriate authorities.According to the information and explanation given to us no undisputed amounts payable inrespect of the above were in arrears as at 31st March 2022 for a period of more than sixmonths from the date they become payable.
(b) There are no statutory dues referred to in sub-clause
(a) above which have not been deposited with the appropriateauthorities on account of disputes except the following:
*Adjusted against the refund due for the subsequent years
(viii) Based on our examination of the books and other records of thecompany and based on the information and explanations given to us we are of the opinionthat there are no instances of transactions not recorded in the books of account andsurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961.
(ix) (a) The company has not defaulted in repayment of
loans or other borrowings or in the payment of interest thereon to anylender.
(b) According to the information and explanations given to us and onthe basis of our audit procedures we report that the company has not been declared as awillful defaulter by any bank or financial institution or other lender.
(c) The company has not availed any term loan.
(d) The company has not raised any funds on short term basis.
(e) Based on the information and explanations given to us and auditprocedures performed by us we report that the company has not taken any funds from anyentity or person on account of or to meet the obligations of its subsidiaries associatesor joint ventures.
(f) The company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies.
(x) (a) The company did not raise any money by way of
initial public offer or further public offer (including debtinstruments) during the year.
(b) The company has not made any preferential allotment or privateplacement of shares or convertible debentures during the year.
(xi) (a) To the best of our knowledge and according to the
information and explanations given to us and audit procedures performedby us we report that no fraud by the company or on the company has been noticed orreported during the year other than a petty theft of materials valued at approximately Rs.6000/- by an on-contract employee.
(b) No report in Form ADT-4 under sub-section (12) of
Section 143 of the Companies Act has been filed by us. Based oninformation and explanations provided to us and other audit procedures performed by uswe report that Form ADT-4 has not been filed by cost auditors or secretarial auditors ofthe company.
(c) Based on the information and explanations provided to us by themanagement we report that no whistle blower complaints were received during the year.
(xii) The Company is not a Nidhi company as prescribed under Section406 of the Companies Act 2013. Accordingly the reporting requirement under clause (xii)of paragraph 3 of the Order is not applicable.
(xiii) In our opinion and based on the information and explanationsprovided to us all transactions with related parties are in compliance with Section 177and 188 of the Companies Act 2013 wherever applicable and the details have beendisclosed in the standalone Financial Statements as required by the applicable IndianAccounting Standards.
(xiv) (a) In our opinion and based on our examination
the company has an internal audit system commensurate with the size andnature of its business.
(b) We have considered the internal audit reports of the company issuedtill date for the period under audit.
(xv) In our opinion and according to the information and explanationsgiven to us the company has not entered into any non-cash transactions with its directorsor persons connected with its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the company.
(xvi) (a) In our opinion the company is not required to be
registered under Section 45-IA of the Reserve Bank of India Act 1934.
(b) In our opinion the company has not conducted any Non-BankingFinancial or Housing Finance activities during the year.
(c) In our opinion the company is not a Core Investment Company (CIC)as defined in the regulations made by the Reserve Bank of India.
(d) In our opinion the group has no Core Investment Companies.
(xvii) The company has not incurred cash losses in the financial yearand in the immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors duringthe year. Accordingly the reporting requirement under clause (xviii) of paragraph 3 ofthe Order is not applicable.
(xix) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realization of financialassets and payment of
financial liabilities other information accompanying the financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that company is not capable of meeting its liabilities existing at the dateof balance sheet as and when they fall due within a period of one year from the balancesheet date. We however state that this is not an assurance as to the future viability ofthe company. We further state that our reporting is based on the facts up to the date ofthe audit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the company as and when they fall due.
(xx) (a) In our opinion and according to the information
and explanations given to us there is no unspent amount required to betransferred to a Fund specified in Schedule VII to the Companies Act 2013.
(b) In our opinion and according to the information and explanationsgiven to us there is no unspent amount required to be transferred to a special account incompliance with the provision of subsection (6) of Section 135 of the Companies Act 2013.
(xxi) There are no qualifications or adverse remarks by the respectiveauditors in the Companies (Auditor's Report) Order (CARO) reports of the companiesincluded in the consolidated financial statements except for the following:
Annexure-B to the Independent Auditors' Report
With reference to the Annexure B referred to in the IndependentAuditor's Report to the members of the Company on the audit of standalone financialstatements for the year ended March 31 2022 we report the following:
A. General Directions
1. Whether the company has system in place to process all theaccounting transactions through IT system? If yes the implications of processing ofaccounting transactions outside IT system on the integrity of the accounts along with thefinancial implications if any may be stated.
In our opinion the company has a system in place to process all theaccounting transactions through IT system. Based on the information and explanations givento us and based on procedures performed by us we are of the opinion that the company hasan adequate internal control system to prevent and detect processing of accountingtransactions outside the IT system. As per information provided to us there has been nosuch instance reported during the year.
2. Whether there is any restructuring of any existing loan or cases ofwaiver/write off of debts/loans/ interest etc. made by a lender to the company due to thecompany's inability to repay the loan? If yes the financial impact may be stated. Whethersuch cases are properly accounted for?
According to the information and explanation given to us and based onour examination of the records of the company there has not been any restructuring of anyexisting loan or cases of waiver/write off of debts/loans/ interest etc. made by a lenderto the company.
3. Whether funds (grant/subsidy etc.) received/receivable for specificschemes from Central/ State Government or its agencies were properly accountedfor/utilized as per its terms and conditions? List the cases of deviation.
In our opinion and based on the information and explanations given tous the funds received/ receivable for specific schemes from Central/ State Government orits agencies were properly accounted for/in lines with applicable Indian AccountingStandards and utilized (wherever received) as per their terms and conditions.
B. Sub Directions
1. Whether revenue sharing/ revenue recognition and cost allocationwere properly accounted for in the books as per agreement in the case of leased shiprepair facilities in Kochi Mumbai Kolkata and Andaman.
In our opinion and based on the information and explanations given tous revenue sharing/ revenue recognition and cost allocation in the case of leased shiprepair facilities wherever operations have commenced were properly accounted for in thebooks as per agreement.
Annexure-C to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to themembers of Cochin Shipyard Limited on the audit of standalone financial statements for theyear ended 31st March 2022.
Report on the Internal Financial Controls under clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Cochin Shipyard Limited ("the Company") as of March 312022 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2022 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on
the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION143(6)(b) OF THE COMPANIES ACT 2013 ON THE FINANCIAL STATEMENTS OF COCHIN SHIPYARDLIMITED FOR THE YEAR ENDED 31 MARCH 2022
The preparation of financial statements of Cochin Shipyard Limited forthe year ended 31 March 2022 in accordance with the financial reporting frameworkprescribed under the Companies Act 2013 (Act) is the responsibility of the management ofthe company. The statutory auditors appointed by the Comptroller and Auditor General ofIndia under section 139(5) of the Act is responsible for expressing opinion on thefinancial statements under section 143 of the Act based on independent audit in accordancewith the standards on auditing prescribed under section 143(10) of the Act. This is statedto have been done by them vide their Audit Report dated 20 May 2022.
I on behalf of the Comptroller and Auditor General of India haveconducted a supplementary audit of the financial statements of Cochin Shipyard Limited forthe year ended 31 March 2022 under section 143(6)(a) of the Act. This supplementary audithas been carried out independently without access to the working papers of the statutoryauditors and is limited primarily to inquiries of the statutory auditors and companypersonnel and a selective examination of some of the accounting records.
On the basis of my supplementary audit nothing significant has come tomy knowledge which would give rise to any comment upon or supplement to statutoryauditors' report under section 143(6)(b) of the Act.