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Fiem Industries Ltd.

BSE: 532768 Sector: Auto
NSE: FIEMIND ISIN Code: INE737H01014
BSE 00:00 | 18 Oct 360.95 14.85
(4.29%)
OPEN

352.00

HIGH

363.40

LOW

349.25

NSE 00:00 | 18 Oct 360.20 10.15
(2.90%)
OPEN

349.25

HIGH

365.75

LOW

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OPEN 352.00
PREVIOUS CLOSE 346.10
VOLUME 204
52-Week high 660.10
52-Week low 313.10
P/E 8.30
Mkt Cap.(Rs cr) 475
Buy Price 360.00
Buy Qty 10.00
Sell Price 371.00
Sell Qty 1.00
OPEN 352.00
CLOSE 346.10
VOLUME 204
52-Week high 660.10
52-Week low 313.10
P/E 8.30
Mkt Cap.(Rs cr) 475
Buy Price 360.00
Buy Qty 10.00
Sell Price 371.00
Sell Qty 1.00

Fiem Industries Ltd. (FIEMIND) - Auditors Report

Company auditors report

To The Members of

Fiem Industries Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Fiem IndustriesLimited ("the Company") which comprise the balance sheet as at 31st March 2019the Statement of Profit and Loss (including Other Comprehensive Income) statement ofchanges in equity and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information. (hereinafter referred to as "the standalone financialstatements")

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 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affiairs of the Company as at March 31 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor’s Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI’s Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit maters to be communicatedin our report.

Information Other than the Financial Statements and Auditor’s Report thereon.("Other information")

The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the "the management reportand chairman’s statement report but does not include the financial statements andour auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe 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 effiectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

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.

The Board of Directors are also responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

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 ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffiectiveness of such controls.

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

• Conclude on the appropriateness of management’s use of the going concernbasis 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 our auditor’s report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

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

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effiect ofany identified misstatements in the standalone financial statements.

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication..

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure- A" a statement on the mattersspecified in the paragraph 3 and 4 of the Order to the extent applicable.

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

a. we have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as appears from our examination of those books.

c. the Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and Cash Flow Statement and dealt with by thisReport are in agreement with the books of account.

d. In our opinion the aforesaid standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act

e. On the basis of written representations received from the directors as on 31 March2019 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2019 from being appointed as a director in terms of Section 164(2) of theAct.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effiectiveness of such controls refer to ourseparate Report in "Annexure B" and

g. With respect to the other matters to be included in the Auditor’s Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h. With respect to the other matters included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us :

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 35(A) to the standalone Ind ASfinancial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

for V. Sachdeva & Associates
Chartered Accountants
Firm Registration Number -004417N
Sd/-
(V. Sachdev)
Place: Rai Sonepat (HR.) Proprietor
Dated: 14/05/2019 Membership No.:-083435

Annexure-A to the Independent Auditors’ Report

The Annexure referred to in our Independent Auditors’ Report to the members of theCompany on the standalone Ind AS financial statements for the year ended on 31.03.19 wereport that:

1. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) As explained to us the company has a planned programme for physically verifying allfixed assets once in three years which in our opinion is reasonable having regard to thesize and nature of assets. During the year the fixed assets have been physically verifiedby the management in accordance with the programme and no material discrepancies wereidentified on such verification.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company except for freehold land situated in Ahmedabad Gujaratacquired during the Fy 16-17 for Rs 18.23 Lakhs wherein final registration is pending asdisclosed in Note 2 on "Property Plant and equipment "to the standalone Ind ASfinancial statements.

2. The inventories have been physically verified by the management at regular intervalsduring the year. In our opinion the frequency of verification is reasonable and therewere no material discrepancies noticed on physical verification of the inventory ascompared to the book of accounts.

3. According the information and explanations given to us the Company has grantedunsecured loans to one of its wholly owned foreign subsidiary -M/s Fiem Research andTechnology S.r.l. covered in the register maintained under section 189 of the CompaniesAct 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company’s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(c) There is no overdue amount remaining outstanding as at the year-end.

4. In our Opinion and as per information and explanation given to us the company hascomplied the provisions of section 185 section 186 of the companies act 2013.

5. The c ompany has not accepted any deposits public. Accordingly paragraph 3(v) ofthe order is not applicable to the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 and are of the opinion that prima facie the specifiedaccounts and records have been made and maintained. However no detailed examination ofthe same has been carried out by us.

7. a) According to the records of the company and also the information and explanationsgiven to us the company is generally regular in depositing with appropriate authoritiesall undisputed statutory dues including provident fund employees’ state insuranceincome the tax sales tax service tax Goods and Service tax duty of customs duty ofexcise value added tax cess and other material statutory dues applicable to it.

According to the information and explanations given to us there are no undisputedamounts payable in respect of provident fund employees’ state insurance income taxsales tax service tax duty of customs duty of excise value added tax cess and othermaterial statutory dues as at the year end for a period of more than six months from thedate they became payable.

b) According to the records of the Company the dues outstanding of income taxsales-tax wealth tax service tax Goods and Service tax duty of customs duty of exciseand cess on account of any dispute are as follows:

(Rs. in Lakhs)

S. No. Name of Statue Nature of Due Period to which it Pertains Amount Involved Amount Deposited Net Amount Forum where dispute is
(Rs in Lakhs) (Rs in Lakhs) (Rs in Lakhs) Pending
1 The Central Excise Act 1944 Custom Duty demand on sale of Moulds F.Y. 2007-08 57.87 14.47 43.40 CESTAT Chennai
2 Haryana Value Added Tax 2003 Sales tax Assessment Dues F.Y. 2010-11 23.75 3.75 20.00 High Court Punjab and Harayana
3 The Central Excise Act 1944 Penalty and interest on Excise duty demand FY April 2015 to March 2017 39.19 - 39.19 Commissioner Appeal – Gujarat
4 Tamil Nadu VAT act 2006 Sales tax demand on reversal of input tax credit pertaining to CST Sales F.Y. 2014-15 150.07 - 150.07 High court Chennai
5 Income Tax Act 1961 Disallowance of Loss on account of foreign exchange derivative contracts Assessment Years 2009-10 2010- 11 2011-12 2012-13 2013-14 827.27 See Note * 827.27 ITAT New Delhi
Total 1098.15 18.22 1079.93

Note:- No demand is outstanding as on the reporting date as the matter has been decidedin favour of the company by the CIT (Appeal). However the issue has been challenged inITAT by the income tax department.

8. In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of dues to a financial institution or banks.

9. In our opinion and according to the information and explanations given to us theterm loans have been applied for the purpose for which they were raised. Further thecompany has not raised any money by way of initial public offier or further public offier(including debt instruments) during the year.

10. According to the information and explanations given to us no material fraud on orby the company by its officers or employees has been noticed or reported during the courseof our audit.

11. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the provisions of section 197 read with Schedule V to theAct.

12. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act wherever applicable and details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable accounting standards.

14. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.

16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable tothe company.

for V. Sachdeva & Associates
Chartered Accountants
Firm Registration Number -004417N
Sd/-
(V. Sachdev)
Place: Rai Sonepat (HR.) Proprietor
Dated: 14/05/2019 Membership No.:-083435

Annexure-B to the Independent Auditors’ Report

ANNEXURE "B" TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF FIEM INDUSTRIES LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

1. We have audited the internal financial controls over financial reporting of FIEMINDUSTRIES LIMITED ("the Company") as of March 31 2019 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effiectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing to the extent applicable toan audit of internal financial controls both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effiectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffiectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effiectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor’s judgement including the assessment ofthe risks of material misstatement of the Ind AS financial statements whether due tofraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion on the Company’s internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of Ind AS 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 Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effiect on the Ind ASfinancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effiectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

for V. Sachdeva & Associates
Chartered Accountants
Firm Registration Number -004417N
Sd/-
(V. Sachdev)
Place: Rai Sonepat (HR.) Proprietor
Dated: 14/05/2019 Membership No.:-083435