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Foseco India Ltd.

BSE: 500150 Sector: Industrials
NSE: FOSECOIND ISIN Code: INE519A01011
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OPEN 1478.75
PREVIOUS CLOSE 1470.00
VOLUME 126
52-Week high 1790.00
52-Week low 1105.30
P/E 33.72
Mkt Cap.(Rs cr) 939
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1478.75
CLOSE 1470.00
VOLUME 126
52-Week high 1790.00
52-Week low 1105.30
P/E 33.72
Mkt Cap.(Rs cr) 939
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Foseco India Ltd. (FOSECOIND) - Auditors Report

Company auditors report

To the Members of

Foseco India Limited

Report on the audit of the financial statements

Opinion

1. We have audited the accompanying financial statements of FosecoIndia Limited ("the Company") which comprise the balance sheet as at December31 2020 and the statement of Profit and Loss (including Other Comprehensive Income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at December 31 2020 and totalcomprehensive income (comprising of profit and other comprehensive income) changes inequity and its cash flows for the year then ended.

Basis for opinion

3. 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 theFinancial 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 Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Emphasis of Matter

4. We draw your attention to Note 29 (d) to the Financial Statementswhich describes the remuneration amounting to Rs. 508.66 lakhs paid to the former ManagingDirector which exceeds the limits prescribed under section 197 read with Schedule V to theAct by Rs. 256.30 lakhs and accordingly is subject to the approval of the shareholders byway of a special resolution in the ensuing annual general meeting. Our opinion is notmodified in respect of this matter.

Key audit matters

5. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Key audit matter How our audit addressed the key audit matter
Revenue recognition
Refer Note 1 (d) and 17 to the Financial Statements. Our testing of revenue transactions was designed to cover certain customer contracts. Our audit procedures included the following:
The Company recognises revenue in accordance with Ind AS 115 "Revenue from Contracts with Customers". • Understanding evaluating the design and testing the operating effectiveness of controls over revenue recognition process including contract monitoring billings and approvals;
Revenue from the sale of products is recognized when control of products being sold is transferred to customer and there is no unfulfilled obligation and it is measured at fair value of the consideration received or receivable after deduction of any discounts and taxes or duties collected on behalf of the government such as goods and services tax etc.
• Evaluating the contract terms for assessment of the timing of transfer of control to the customer to assess whether revenue is recognised appropriately;
• Testing whether the revenue recognition is in line with the terms of customer contracts;
We have considered revenue recognition as a key audit matter since there is a risk of material misstatement; and additional disclosures are required to be made in accordance with the applicable accounting standards.
• Assessing whether fair value of consideration received or receivable has been determined appropriately in terms of the customer contract reviewing customer correspondence and verifying pre and post year end cut-off had been appropriately applied;
• Testing of journal entries for unusual/irregular revenue transactions; and
• Evaluating adequacy of the presentation and disclosures
Based on the above stated procedures no significant exceptions were noted in revenue recognition including those relating to presentation and disclosures.

Other Information

6. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Board ofDirectors report but does not include the financial statements and our auditor's reportthereon.

Our opinion on the financial statements does not cover the otherinformation and we will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of management and those charged with governance forthe financial statements

7. The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

8. In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

9. Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.

10. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

a) Identify and assess the risks of material misstatement of thefinancial 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.

b) Obtain an understanding of internal 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 with reference to financial statements inplace and the operating effectiveness of such controls.

c) Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

d) 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

e) Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

11. 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 ouraudit.

12. We also provide those charged with governance with a statement thatwe have 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.

13. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on other legal and regulatory requirements

14. As required by the Companies (Auditor's Report) Order 2016 issuedby the Central Government of India in terms of sub-section (11) of section 143 of the Act("the Order") we give in the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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

a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c. The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income) the Statement of Changes in Equity and Statement of Cash Flowsdealt with by this Report are in agreement with the books of account.

d. In our opinion the aforesaid Ind AS financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act.

e. On the basis of the written representations received from thedirectors as on December 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on December 31 2020 from being appointed as a director interms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in Annexure A.

g. With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our knowledge and belief and according to the informationand explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements. Refer Note 31 (a) to the financialstatements;

ii. The Company has long-term contracts as at December 31 2020 forwhich there were no material foreseeable losses. The Company did not have any derivativecontracts as at December 31 2020.

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

iv. The reporting on disclosures relating to Specified Bank Notes isnot applicable to the Company for the year ended December 31 2020.

16. As stated in the Note 29 (d) to the Financial Statements theexcess remuneration amounting to Rs. 256.30 lakhs paid to the former Managing Director issubject to the approval of the shareholders by way of a special resolution in the ensuingAnnual General Meeting. (Also refer Emphasis of Matter paragraph above).

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Amit Borkar
Partner
Place: Pune Membership Number: 109846
Date: February 10 2021 UDIN: 21109846AAAABF7248

Annexure A to Independent Auditors' Report

Referred to in paragraph 15(f) of the Independent Auditors' Report ofeven date to the members of Foseco India Limited on the financial statements for the yearended December 31 2020

Report on the Internal Financial Controls with reference to financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference tofinancial statements of Foseco India Limited ("the Company") as of December 312020 in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

2. 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 Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing deemed to be prescribed under section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financialstatements

6. A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements

7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects anadequate internal financial controls system with reference to financial statements andsuch internal financial controls with reference to financial statements were operatingeffectively as at December 31 2020 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.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Amit Borkar
Partner
Place: Pune Membership Number: 109486
Date: February 10 2021 UDIN: 21109846AAAABF7248

Annexure B to Independent Auditors' Report

Referred to in paragraph 14 of the Independent Auditors' Report of evendate to the members of Foseco India Limited on the financial statements as of and for theyear ended December 31 2020

i. (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The fixed assets of the Company have been physically verified bythe Management during the year and no material discrepancies have been noticed on suchverification. In our opinion the frequency of verification is reasonable.

(c) The title deeds of immovable properties as disclosed in Note 3(a)- Property plant and equipment to the financial statements are held in the name of theCompany.

ii. The physical verification of inventory excluding stocks with thirdparties have been conducted at reasonable intervals by the Management during the year. Inrespect of inventory lying with third parties these have substantially been confirmed bythem. The discrepancies noticed on physical verification of inventory as compared to bookrecords were not material and have been appropriately dealt with in the books of accounts.

iii. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments orprovided any guarantees or security to the parties covered under Section 185 and 186.Therefore the provisions of Clause 3(iv) of the said Order are not applicable to theCompany.

v. The Company has not accepted any deposits from the public within themeaning of Sections 73 74 75 and 76 of the Act and the Rules framed there under to theextent notified.

vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.

vii. (a) According to the information and explanations given to us andthe records of the Company examined by us in our opinion the Company is regular indepositing the undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax service tax duty of customs duty of excise valueadded tax cess goods and service tax and other material statutory dues as applicablewith the appropriate authorities.

Further for the month of March and April 2020 the Company has paidGoods and Service Tax and filed return in Form GSTR 3B and Form GSTR 1 after the due datebut within the timelines allowed by Central Board of Indirect Taxes and Customs under theNotification No. 35/2020 - CT dated April 03 2020 on fulfilment of conditions specifiedtherein.

(b) According to the information and explanations given to us and therecords of the Company examined by us the particulars of dues of sales tax and valueadded tax as at December 31 2020 which have not been deposited on account of a disputeare as follows:

Name of the statute Nature of dues Amount (Rs. in lakhs) Period to which the amount relates Forum where the dispute is pending
Value Added Tax Act Value Added Tax 6.34 2015-16 Joint Commissioner of Sales Tax
The Central Sales Tax Act Sales Tax 3.28 2015-16 Joint Commissioner of Sales Tax

viii. As the Company does not have any loans or borrowings from anyfinancial institution or bank or Government nor has it issued any debentures as at thebalance sheet date the provisions of Clause 3(viii) of the Order are not applicable tothe Company.

ix. The Company has not raised any moneys by way of initial publicoffer further public offer (including debt instruments) and term loans. Accordingly theprovisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.

xi. Except for managerial remuneration amounting to Rs. 256.30 lakhspaid to the former managing director the managerial remuneration paid by the Company isin accordance with the requisite approvals as mandated by the provisions of Section 197read with Schedule V to the Act. The Company proposes to obtain approval of theshareholders by way of a special resolution in the ensuing Annual General Meeting inrespect of the excess remuneration paid. (Also refer to paragraph 4 and 16 in the mainaudit report).

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014are not applicable to it the provisions of Clause 3(xii) of the Order are not applicableto the Company.

xiii. The Company has entered into transactions with related parties incompliance with the provisions of Sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the financial statements as requiredunder Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specified underSection 133 of the Act.

xiv. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable tothe Company.

xv. The Company has not entered into any non cash transactions with itsdirectors or persons connected with him. Accordingly the provisions of Clause 3(xv) ofthe Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) ofthe Order are not applicable to the Company.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Amit Borkar
Partner
Place: Pune Membership Number: 109846
Date: February 10 2021 UDIN: 21109846AAAABF7248

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