To the Members of Federal-Mogul Goetze (India) Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Federal-MogulGoetze India Limited (the Company') which comprise the Balance Sheet as at 31 March2019 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting p o l i c i e s a n d o t h e r e x p l a n a t o ry information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (Ind AS') specified under section 133 of the Act of thestate of affairs (financial position) of the Company as at 31 March 2019 and itsprofit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
5. We have determined the matters described below to be the key audit matters to becommunicated in our report.
|Key audit matter ||How our audit addressed the key audit matter |
|Provisions and contingent liabilities relating to litigations ||Our audit procedures in relation to the provisions and contingent liabilities relating to litigations included but were not limited to the following: |
|As disclosed in Note 37 to the standalone financial statements the Company is involved in various direct taxes indirect taxes labour laws and other litigations (litigations') that are pending with various tax authorities and courts. The Company has recognised provisions aggregating to Rs. 2181.50 lacs and disclosed contingent liabilities of Rs. 8301.59 Lacs related to the same. || Obtained an understanding of the management process for: |
| ||- identification of legal and tax matters initiated against the Company |
| ||- assessment of accounting treatment for each such litigation identified under accounting principles of Ind AS 37 - Provisions Contingent Liabilities and Contingent Assets and |
| ||- for measurement of amounts involved. |
|Whether a liability is recognised as a provision or disclosed as a contingent liability in the financial statements is inherently judgmental dependent on a number of significant assumptions and assessments. || Evaluated the design and tested the operating effectiveness of key controls around above process. |
|These include assumptions relating to the likelihood and/or timing of the cash outflows from the business and the interpretation of local laws and pending assessments at various levels of the statute. We placed specific focus on the judgements in respect to these demands against the Company. ||Test of details included but were not limited to the following- |
| || Obtained an understanding of the nature of litigations pending against the company and discussed the key developments during the year for key litigations with the management and respective legal counsels handling such cases on behalf of the Company. |
|The amounts involved are potentially significant and due to the range of possible outcomes and considerable uncertainty around the various claims the determination of the need for creating a provision in the financial statements is inherently subjective and therefore is considered to be a key audit matter in the current year || Assessed the Company's assumptions and estimates in respect of litigations including the liabilities or provisions recognised or contingent liabilities disclosed in the financial statements. This involved assessing the probability of an unfavorable outcome of a given proceeding and the reliability of estimates of related amounts; |
| || Assessed management's conclusions through discussions held with the in house legal counsel and understanding precedents set in similar cases; |
| || Obtained and evaluating the responses in the independent confirmations obtained from the consultants representing the Company before the various authorities. |
| || For cases represented by consultants reviewed each attorney's response obtained as above to ensure that the conclusions reached by the management are supported by sufficient legal rationale and adequate information is included for the management to determine the appropriate accounting treatment of such cases in the financial statements. |
| || Involved auditor's experts to assess the Company's interpretation and application of relevant tax laws to evaluate the appropriateness of key assumptions used and the reasonableness of estimates in relation to uncertain tax positions taking into account past precedents. |
| || Evaluated the disclosures made relating to provisions and contingent liabilities for their appropriateness. |
Information other than the financial statements and Auditor Report thereon
6.The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. The Annual Report is expectedto be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
7.The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the state of affairs (financial position) profit orloss (financial performance including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Ind AS specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
8.In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
9.Those Board of Directors are also responsible for over seeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
10. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances Under section 143(3)(i)of the Act we are also responsible for explaining our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
13. We also provide those charged with governance with a statement that we have c o m pl i e d w i t h r e l e v a n t e t h i c a l 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.
14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
15. As required by section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditor's Report) Order 2016 (the Order')issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure Aa statement on the matters specified in paragraphs 3 and 4 of the Order.
17. Further to our comments in Annexure A as required by section 143(3) of the Act wereport that:
a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) the standalone financial statements dealt with by this report are in agreement withthe books of account;
d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act;
e) on the basis of the written representations received from the directors and taken onrecord by the
Board of Directors none of the directors is disqualified as on 31 March 2019 frombeing appointed as a director in terms of section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31 March 2019in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date and our report dated28 May 2019as per Annexure B expressed an unmodified opinion
g) with respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:
i. the Company as detailed in note 37 to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position as at 31 March 2019;
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2019;
iii.there has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended 31 March 2019;
iv.the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.
|For Walker Chandiok & Co LLP |
|Chartered Accountants |
|Firm's Registration No.: |
|Anamitra Das |
|Membership No.:062191 |
|Place: Gurugram |
|Date: 28 May 2019 |
Annexure A to the Independent Auditor's Report of even date to the members of FederalMogul Goetze (India) Limited on the standalone financial statements for the year ended 31March 2019
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(I) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. In accordance with this program certain fixed assets were verifiedduring the year and no material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties (which are included under the headProperty plant and equipment') are held in the name of the Company.
(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book records were noticed on physical verification
(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable.
(iv) In our opinion the Company has complied with the provisions of Section 186 inrespect of investments. Further in our opinion the Company has not entered into anytransaction covered under Section 185 and Section 186 of the Act in respect of loansguarantees and security.
(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central
Government for the maintenance of cost records under sub-section (1) of Section 148 ofthe Act in respect of Company's products and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
(vii)(a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax goods and services tax actsales-tax service tax duty of customs duty of excise value added tax cess and othermaterial statutory dues as applicable to the appropriate authorities. Further noundisputed amounts payable in respect thereof were outstanding at the year-end for aperiod of more than six months from the date they become payable.
(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:
Statement of Disputed Dues
|Name of the statute ||Nature of Dues ||Amount (Rs. in lacs) ||Amount paid under ||Period to which the amount relates ||Forum where dispute is pending |
| || || ||(Rs. in lacs) || || |
|Income tax Act 1961 ||Income tax ||16.54 ||- ||1995-1996 and 1996-1997 ||Honorable High Court Delhi |
|Income tax Act 1961 ||Income tax ||432.49 ||- ||1997-98 ||Honorable High Court Delhi |
|Income tax Act 1961 ||Income tax ||122.25 ||- ||1998-99 ||Supreme Court |
|Income tax Act 1961 ||Income tax ||118.69 ||- ||1999-00 ||Supreme Court |
|Income tax Act 1961 ||Income tax ||57.58 ||- ||2000-01 ||Honorable Supreme Court |
|Income tax Act 1961 ||Income tax ||26.49 ||- ||2001-02 ||Income Tax Appellate Tribunal |
|Income tax Act 1961 ||Income tax ||166.48 ||- ||2007-08 ||High Court |
|Income tax Act 1961 ||Income tax ||71.55 ||- ||2008-09 ||High Court |
|Income tax Act 1961 ||Income tax ||944.68 ||- ||2010-11 ||Income Tax Appellate Tribunal |
|Income tax Act 1961 ||Income tax ||343.34 ||- ||2011-12 ||Commissioner of Income Tax (Appeals) |
|Income tax Act 1961 ||Income tax ||318.31 ||- ||2012-13 ||Commissioner of Income Tax (Appeals) |
|Income tax Act 1961 ||Income tax ||21.37 ||- ||2014-15 ||Commissioner of Income Tax (Appeals) |
|Income tax Act 1961 ||Income tax ||0.71 ||- ||2015-16 ||Assessing officer |
|The Central Excise Act 1944 ||Excise Duty ||9.34 ||- ||1987-1990 ||Honorable High Court of Punjab and |
| || || || || ||Haryana |
|The Central Excise Act1944 ||Excise Duty ||1.18 ||- ||1995-1996 ||Joint Commissioner of Central Excise |
|The Central Excise Act 1944 ||Excise Duty ||1.36 ||- ||2003-2004 ||Joint Commissioner of Central Excise |
| || || || || ||Patiala Punjab |
|The Central Excise Act 1944 ||Excise Duty ||1.76 ||- ||1997-1999 ||Assistant Commissioner of Central Excise |
| || || || || ||Patiala Punjab |
|The Central Excise Act 1944 ||Excise Duty ||1.86 ||- ||1997-98 ||Joint Commissioner of Central Excise |
| || || || || ||Patiala Punjab |
|The Central Excise Act 1944 ||Excise Duty ||6.96 ||- ||1998-1999 ||Joint Commissioner of Central Excise |
|The Central Excise Act1944 ||Excise Duty ||15.13 ||- ||2000-2001 ||Honorable Supreme Court and 2001-2002 |
|The Central Excise Act 1944 ||Excise Duty ||104.54 ||3.21 ||2001 - 2004 ||Commissioner Appeals |
|The Central Excise Act 1944 ||Excise Duty ||44.12 ||- ||2004-05 ||Central Excise and Service Tax Appellate Tribunal. |
|The Central Excise Act 1944 ||Excise Duty ||3.32 ||- ||2001-2002 ||Additional Commissioner of Central Excise |
|Finance Act 1994 ||Service tax ||96.11 ||- ||2005-2011 ||Joint Commissioner of Central Excise Patiala Punjab |
|Finance Act 1994 ||Service tax ||86.44 ||25.00 ||2006-2007 ||Central Excise and Service Tax Appellate Tribunal |
|Finance Act 1994 ||Service tax ||3.55 ||- ||2008-11 ||Assistant Commissioner Bhiwadi Rajasthan |
|Finance Act 1994 ||Service tax ||55.28 ||- || ||Joint commissoner jaipur Rajasthan |
|Finance Act 1994 ||Service tax ||310.40 ||330.18 ||2008-12 ||CESTAT |
|Finance Act 1994 ||Service tax ||16.61 ||- ||2009-10 ||Joint Commissioner Jaipur Rajasthan |
|Finance Act 1994 ||Service tax ||10.70 ||- ||2011-2013 ||Joint Commissioner (Appeals) |
|Finance Act 1994 ||Service tax ||5.81 ||0.58 ||2012-2013 ||Commissioner of Central Excise |
|Finance Act 1994 ||Service tax ||18.12 ||- ||2012-2013 ||Joint Commissioner (Appeals) |
|Finance Act 1994 ||Service tax ||113.70 ||4.60 ||May 2005 to ||Central Excise and |
| || || || ||July 2005 ||Service Tax Appellate Tribunal |
|Finance Act 1994 ||Service tax ||194.00 ||14.60 ||Oct 2008 to March 2013 ||CESTAT |
|Finance Act 1994 ||Service tax ||5.90 ||- ||2014 ||Additional Commissioner |
|Finance Act 1994 ||Service tax ||19.11 ||- ||2013-14 ||Additional Commissioner |
|Finance Act 1994 ||Service tax ||48.53 ||- || ||Deputy Commissioner |
|West Bengal VAT Act2003 ||Value added tax ||1.56 ||- ||2001-2002 ||Commissioner (Appeals) |
|West Bengal VAT Act2003 ||Value added tax ||1.87 ||- ||2004-2005 ||Commissioner (Appeals) |
|West Bengal VAT Act2003 ||Value added tax ||1.76 ||- ||2006-2007 ||Commissioner (Appeals) |
|West Bengal VAT Act2003 ||Value added tax ||1.18 ||- ||2006-2007 ||Commissioner (Appeals) |
|Karnataka VAT Act 2003 ||Value Added tax ||1.36 ||- ||2007-2008 ||Assistant . Commissioner Banglore |
|Karnataka VAT Act 2003 ||Value Added tax ||410.00 ||- ||2007-2011 ||ACCT Audit Banglore |
|Kanrataka VAT Act 2003 ||Value added tax ||13.38 ||- ||2008-09 ||Joint Commissioner Appeal |
|Uttranchal VAT Act2005 ||Value Added Tax ||33.38 ||33.39 ||2010-11 ||Special Commissioner Objection Hearing |
|Maharastra VAT Demand Act 2002 ||Value Added Tax ||23.88 ||2.50 ||2012-13 ||Special Commissioner Objection Hearing |
|Gujarat VAT Demand Act 2003 ||Value Added Tax ||568.25 ||56.83 ||2012-13 ||Special Commissioner Objection Hearing |
|Gujarat CST Demand ||Value Added Tax ||39.28 ||3.93 ||2012-13 ||Special Commissioner Objection Hearing |
|Andhra Pradesh ||Value added tax ||35.00 ||5.48 ||2013-14 ||Deputy Commissioner Appeal |
|Rajasthan VAT Act 2003 ||Value Added Tax ||3491.31 ||- ||2015-17 ||Assistant Commissioner Bhiwadi Rajasthan |
|Income tax Act 1961 ||Wealth Tax ||4 ||- ||2005-06 ||Income Tax Appellate Tribunal |
(viii) The Company has not defaulted in repayment of loans or borrowings to anyfinancial institution or a bank or government. The Company did not have any outstandingdebentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments) and did not have any term loans outstanding during theyear. Accordingly the provisions of clause 3(ix) of the Order are not applicable.
(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid by the Company in accordance with therequisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
|For Walker Chandiok & Co LLP |
|Chartered Accountants |
|Firm's Registration No.: 001076N/N500013 |
|Anamitra Das |
|Membership No.: 062191 |
|Place: Gurugram |
|Date: 28 May 2019 |
Annexure B to the Independent Auditor's Report of even date to the members ofFederal-Mogul Goetze (India) Limited on the standalone financial statements for the yearended 31 March 2019
Independent Auditor's Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143of the Companies Act 2013 (the Act')
1. In conjunction with our audit of the consolidated financial statements of
Federal-Mogul Goetze (the Holding Company') and its subsidiary (the HoldingCompany and its subsidiary together referred to as the Group') as at and for theyear ended 31 March 2019 we have audited the internal financial controls over financialreporting (IFCoFR') of the Holding Company and its subsidiary company which arecompanies covered under the Act as at that date.
Management's Responsibility for Internal Financial Controls
2. The respective Board of Directors of the Holding Company and its subsidiary companywhich are companies covered under the Act are responsible for establishing andmaintaining internal financial controls based onthe internal control on 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 (the "Guidance Note") issued by the Institute of CharteredAccountants of India (the ICAI'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of the company's businessincluding adherence to the Company 's policies the safeguarding of itsassets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
3. Our responsibility is to express an opinion on the IFCoFRof the Holding Company andits subsidiary companyas aforesaid based on our audit. We conducted our audit inaccordance with the Standards on Auditing issued by the Institute of Chartered Accountantsof India(ICAI') and deemed to be prescribed under Section 143(10) of the Act to theextent applicable to an audit of IFCoFR and the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the Guidance Note') issued by the ICAI.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate IFCoFRwere established and maintained and if such controls operated effectively in all materialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness .Our audit of I F C o F R i n c l u d e so b t a i n i n g a n understanding of IFCoFR assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.
5.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the IFCoFR of the Holding Company and itssubsidiary company as aforesaid.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR include those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations 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.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7.Because of the inherent limitations of IFCoFR including the possibility of collusionor improper management o v e r r i d e o f c o n t r o l s m a t e r i a l misstatementsdue to error or fraud may occur and not be detected. Also projections of any evaluationof the IFCoFR to future periods are subject to the risk that the IFCoFR may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
8. In our opinion the Holding
Company and its subsidiary company which are companies covered under the Act have inall material respects adequate internal financial controls over financial reporting andsuch controls were operating effectively as at 31 March 2019 based on Internal FinancialControls Over Financial Reporting criteria established by the Company considering theessential components of Internal Control stated in the Guidance Note issued by the ICAI.
|For Walker Chandiok & Co LLP |
|Chartered Accountants |
|Firm's Registration No.: |
|Anamitra Das |
|Membership No.:062191 |
|Place: Gurugram |
|Date:28 May 2019 |