Indian Hume Pipe Company Ltd.
|BSE: 504741||Sector: Infrastructure|
|NSE: INDIANHUME||ISIN Code: INE323C01030|
|BSE 10:49 | 31 Jan||143.55||
|NSE 10:39 | 31 Jan||144.35||
|Mkt Cap.(Rs cr)||696|
|Mkt Cap.(Rs cr)||695.50|
Indian Hume Pipe Company Ltd. (INDIANHUME) - Auditors Report
Company auditors report
To The Members of
The Indian Hume Pipe Company Limited
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of The IndianHume Pipe Company Limited ("the Company") which comprise the Balance Sheet asat 31 March 2022 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Cash Flows and the Statement of Changes in Equity for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 affairs of the Company as at 31 March 2022 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence obtained by us is sufficient and appropriate to provide a basis for ouraudit opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the 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. We have determined the matter described below to be the key audit mattersto be communicated in our report.
Information Other than the Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Board ofDirectors report including Annexures to Board's report Business Responsibility ReportManagement Discussion and Analysis Report but does not include the financial statementsand our auditor's report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do 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 during the course of our audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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.
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 for overseeing theCompany's financial reporting process.
Auditor's Responsibility for the Audit of the Financial Statements
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.
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 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.
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 Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the 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 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.
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.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
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.
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 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
1. As required by Section 143(3) of the Act based on our audit wereport 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. I n our opinion proper books of account as required by law havebeen kept 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 Cash Flows and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account
d. In our opinion the aforesaid financial statements comply with theInd AS specified under Section 133 of the Act.
e. On the basis of the written representations received from thedirectors as on 31 March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2022 from being appointed as a director in termsof Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g. With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act.
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 financial statements;
ii. The Company has made provisions as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts. The Company does not have any derivative contracts;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that to the best of it'sknowledge and belief as disclosed in the notes to the financial statements no funds havebeen advanced or loaned or invested (either from borrowed funds or share premium or anyother sources or kind of funds) by the Company to or in any other persons or entitiesincluding foreign entities ("Intermediaries") with the understanding whetherrecorded in writing or otherwise that the Intermediary shall directly or indirectly lendor invest in other persons or entities identified in any manner whatsoever by or on behalfof the Company ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that to the best of it's knowledgeand belief as disclosed in the notes to financial statements no funds have been receivedby the Company from any persons or entities including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate 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 (i) and (ii) of Rule 11(e)as provided under (a) and (b) above contain any material mis-statement.
v. The final dividend proposed in the previous year declared andpaid by the Company during the year is in accordance with section 123 of the Act asapplicable. As stated in note b of statement of changes in equity to the financialstatements the Board of Directors of the Company have proposed final dividend for theyear which is subject to the approval of the members at the ensuing Annual GeneralMeeting. The amount of dividend proposed is in accordance with section 123 of the Act asapplicable.
2. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of The Indian Hume Pipe Company Limited ("the Company") as of 31 March2022 in conjunction with our audit of the Ind AS financial statements of the Company forthe year ended on that date.
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. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits 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.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. 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 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 judgement including the assessment of therisks of material 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.
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 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 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.
In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2022 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal andRegulatory
Requirements' section of our report of even date)
(i) Property Plant and Equipment:
a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment (capital work-in-progress Investment properties and relevant details ofright-of-use assets).
(B) The Company has maintained proper records showing full particularsof intangible assets.
b) Some of the property plant and equipment (capital work-inprogressinvestment properties and right-of-use assets) were physically verified during the year bythe Management in accordance with a programme of verification which in our opinionprovides for physical verification of all the property plant and equipment at reasonableintervals having regards to the size of the Company and the nature of its activities.According to the information and explanations given to us no material discrepancies werenoticed on such verification.
c) Based on the examination of the registered sale deed provided to uswe report that the title deeds of all the immovable properties of land and buildings(other than properties where the Company is the lessee and the lease agreements are dulyexecuted in favour of the Company) disclosed in the financial statements included inproperty plant and equipment and investment properties are held in the name of theCompany as at the balance sheet date. Immovable properties of land and buildings whosetitle deeds have been pledged as security for borrowings are held in the name of theCompany based on the confirmations directly received by us from the designated custodianof the lenders.
d) The Company has not revalued any of its property plant andequipment (including Right of Use assets) and intangible assets during the year.
e) No proceedings have been initiated during the year or are pendingagainst the Company as at 31st March 2022 for holding any benami property underthe Benami Transactions (Prohibition) Act 1988 (as amended in 2016) and rules madethereunder.
a) The inventories were physically verified during the year by theManagement at reasonable intervals. In our opinion and according to the information andexplanations given to us the coverage and procedure of such verification by theManagement is appropriate having regard to the size of the Company and the nature of itsoperations. No discrepancies of 10% or more in the aggregate for each class of inventorieswere noticed on such physical verification of inventories when compared with books ofaccount.
b) According to the information and explanations given to us theCompany has been sanctioned working capital limits in excess of Rs. 5 crores inaggregate at any point of time of the year from banks or financial institutions on thebasis of security of current assets. In our opinion and according to the information andexplanations given to us the quarterly returns or statements (comprising stock statementbook debt statements) filed by the Company with such bank are in agreement with unauditedbooks of account of the Company of the respective quarters.
(iii) Loans Investments etc:
The Company has not made any investment in provided any guarantee orsecurity and granted any loans or advances in the nature of loans secured or unsecuredto companies firms Limited Liability Partnerships or other parties during the year andhence reporting under clause (iii) of the Order is not applicable.
(iv) Section 185 and 186:
The Company has not granted any loans made investments or providedguarantees and hence reporting under clause (iv) of the Order is not applicable.
(v) Public Deposits:
The Company has not accepted any deposit or amounts which are deemed tobe deposits. Hence reporting under clause (v) of the Order is not applicable.
(vi) Cost Records:
The maintenance of cost records has been specified by the CentralGovernment under section 148(1) of the Companies Act 2013 for manufacture of steelproducts. We have broadly reviewed the books of account maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 as amended prescribed by theCentral Government for maintenance of cost record under Section 148(1) of the CompaniesAct 2013 and are of the opinion that prima facie the prescribed cost records have beenmade and maintained by the Company. We have however not made a detailed examination ofthe cost records with a view to determine whether they are accurate or complete.
(vii) Statutory Dues:
According to the information and explanations given to us in respectof statutory dues:
(a) Undisputed statutory dues including Goods and Services taxProvident Fund Employees' State Insurance Income- tax cess and other materialstatutory dues applicable to the Company have generally been regularly deposited by itwith the appropriate authorities during the year.
There were no undisputed amounts payable in respect of Goods andService tax Provident Fund Employees' State Insurance Income-tax cess and othermaterial statutory dues in arrears as at 31st March 2022 for a period of morethan six months from the date they became payable.
(b) Details of dues of Sales Tax Service Tax Excise Duty and ValueAdded Tax which have not been deposited as on March 312022 on account of disputes aregiven below:
(viii) Undisclosed Income:
There were no transactions relating to previously unrecorded incomethat were surrendered or disclosed as income in the tax assessments under the Income TaxAct 1961 (43 of 1961) during the year.
a) In our opinion the Company has not defaulted in the repayment ofloans or other borrowings or in the payment of interest to any lender during the year.
b) The Company has not been declared wilful defaulter by any bank orfinancial institution or government or any government authority.
c) To the best of our knowledge and belief in our opinion term loansavailed by the Company were applied by the Company during the year for the purpose forwhich the loans were obtained.
d) On an overall examination of the financial statements of theCompany funds raised on short-term basis have prima facie not been used during the yearfor long-term purposes by the Company.
e) The Company did not have any subsidiary or associate or jointventure during the year and hence reporting under clause (ix) (e) of the Order is notapplicable.
f) The Company did not have any subsidiary or associate or jointventure during the year and hence reporting under clause (ix) (f) of the Order is notapplicable.
(x) Issue of Securities:
a) The Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments) during the year and hence reportingunder clause (x)(a) of the Order is not applicable.
b) During the year the Company has not made any preferential allotmentor private placement of shares or convertible debentures (fully or partly or optionally)and hence reporting under clause (x)(b) of the Order is not applicable to the Company.
a) To the best of our knowledge no fraud by the Company and nomaterial fraud on the Company has been noticed or reported during the year.
b) To the best of our knowledge no report under sub-section (12) ofsection 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13of Companies (Audit and Auditors) Rules 2014 with the Central Government during the yearand up to the date of this report.
c) As represented to us no whistle blower complaints have beenreceived by the Company during the year.
(xii) Nidhi Company:
The Company is not a Nidhi Company and hence reporting under clause(xii) of the Order is not applicable.
(xiii) Related Parties:
In our opinion the Company is in compliance with Section 177 and 188of the Companies Act where applicable for all transactions with the related parties andthe details of related party transactions have been disclosed in the financial statements.as required by the applicable accounting standards.
(xiv) Internal Audit:
a) I n our opinion the Company has an adequate internal audit systemcommensurate with the size and the nature of its business.
b) We have considered the internal audit reports issued to the Companyduring the year and covering the period up to March 2022 for the period under audit.
(xv) Non-Cash Transactions:
In our opinion during the year the Company has not entered into anynon-cash transactions with any of its directors or directors of its holding company orpersons connected with such directors and hence provisions of section 192 of the CompaniesAct 2013 are not applicable to the Company.
a) The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934. Hence reporting under clause (xvi)(a) (b) and (c)of the Order is not applicable.
b) The Group does not have any Core Investment Company as part of thegroup and accordingly reporting under clause (xvi) (d) of the Order is not applicable.
(xvii) Cash Loss:
The Company has not incurred cash losses during the financial yearcovered by our audit and the immediately preceding financial year.
(xvii) Resignation of Statutory Auditors:
There has been no resignation of the statutory auditors of the Companyduring the year.
(xix) Ability to pay Liabilities:
On the basis of the financial ratios ageing and expected dates ofrealization of financial assets and payment of financial liabilities (Asset LiabilityMaturity (ALM) pattern) other information accompanying the financial statements and ourknowledge of the Board of Directors and Management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit reportindicating that Company is not capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of one year from the balance sheetdate. We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit 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) CSR unspent amount:
According to the information and explanation given to us the Companyhas transferred unspent Corporate Social Responsibility (CSR) amount as at the end of theprevious financial year to a Fund specified in Schedule VII to the Companies Act 2013within a period of six months of the expiry of the said financial year in compliance withsecond proviso to subsection (5) of section 135 of the said Act.
The Company has not transferred the unspent Corporate SocialResponsibility (CSR) amount as at the Balance Sheet date out of the amounts that wasrequired to be spent during the year to a Fund specified in Schedule VII to the CompaniesAct 2013 till the date of our report. However the time period for such transfer i.e. sixmonths from the expiry of the financial year as permitted under the second proviso tosection 135(5) of the Act has not elapsed till the date of our report.