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Inflame Appliances Ltd.

BSE: 541083 Sector: Consumer
NSE: N.A. ISIN Code: INE464Z01017
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NSE 05:30 | 01 Jan Inflame Appliances Ltd
OPEN 259.95
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VOLUME 3000
52-Week high 298.40
52-Week low 68.25
P/E
Mkt Cap.(Rs cr) 151
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 259.95
CLOSE 252.00
VOLUME 3000
52-Week high 298.40
52-Week low 68.25
P/E
Mkt Cap.(Rs cr) 151
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Inflame Appliances Ltd. (INFLAMEAPPLIAN) - Auditors Report

Company auditors report

To the Members of Inflame Appliances Limited Report on the Audit of the FinancialStatements Opinion

We have audited the financial statements of Inflame Appliances Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2020 and the Statementof Profit and Loss 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 financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and its loss and its cash flows forthe year ended on that date. .

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities 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(iCAl) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and theRules there under and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on the financialstatements.

Emphasis of matter

We draw attention to Para R in Note No. 28 of the financial statements regarding theimpact of COVID-19 pandemic on the Company. Management is of the view that there are noreasons to believe that the pandemic will have any significant impact on the ability ofthe company to continue as a going concern. Nevertheless the impact in sight ofevolvement of pandemic in future period is uncertain and could impact the working capitalcycle and liquidity in future period.

Our opinion is not modified in respect of the matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were mostsignificant in our audit of the financial statement of the current period. Keeping in viewthe materiality there is no key matter to be reported separately.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report Management Discussion and Analysis BusinessResponsibility Report and Report on Corporate Governance but does not include thefinancial statements and our auditors' report thereon. The above-referred information isexpected to be made available to us after the date of this audit report.

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 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. 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.

When we read the other information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and take appropriate actions necessitated by the circumstances and theapplicable laws and regulations.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIALSTATEMENTS

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 financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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 statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements board of director is responsible for assessingthe Company'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 a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud 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 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 financial controls 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 operatingeffectiveness of such 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.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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

1) As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure "A" statement on the mattersspecified in paragraphs 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 it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Repor t in "Annexure B".

(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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition.

ii. The Company did not have any long - term contracts including derivative contractsfor which there were any material foreseeable losses;

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

ANNEXURE ‘A' TO THE INDEPENDENT AUDITOR'S REPORT ON THE AUDIT OF THE FINANCIALSTATEMENT

(Referred to in paragraph 1 under heading ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to the Members of Inflame AppliancesLimited on the financial statement of year ended 31st March 2020).

1) In respect of the Company's fixed assets:

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

(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the copy of conveyance deeds / registered sale deedprovided to us we report that the title deeds comprising all the immovable propertiesof land and buildings which are freehold are held in the name of the Company as at thebalance sheet date. However we could not verify the original title deeds of the same asthey are with the banks being mortgaged against bank borrowings.

2) In our opinion the inventories have been physically verified during the year by themanagement at reasonable intervals and as explained to us no material discrepancies werenoticed on physical verification.

3) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the company has not granted any loan to anycompany firm or other parties covered in the register required to be maintained undersection 189 of the Companies Act 2013. Accordingly the provisions of clause 3 (iii)

(a) to (c) of the order are not applicable to the company and hence not commented upon.

4) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not provided any loansinvestment guarantee and security which may be covered under section 185 and 186 of theCompanies Act 2013.

5) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not accepted any deposits frompublic during the year within the meaning of sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and rules frame there under.

6) We have broadly reviewed the books of account and records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 prescribed by the CentralGovernment under section 148 of the Companies Act 2013 and are of the opinion that primafacie the company is in process of maintaining the prescribed accounts and records. Wehave however not made a detailed examination of the cost records with a view todetermine whether they will be accurate & complete.

7) (a) According to information fit explanations given to us and on the basis of ourexamination of the records of the Company is regular in depositing the undisputedstatutory dues including Income Tax EPFESI Custom duty Labour welfare fund GoodsfitService Tax and other material statutory dues as applicable to it with the appropriateauthorities except some delay in depositing in EPF ESI. Further there is no undisputedamount payable in respect of aforesaid dues outstanding for a period of more than sixmonths as on 31st March 2020 as per the accounts of the company except thedues relating to the Employees State Insurance and Labour Welfare Fund. However Employee

State Insurance for the month of June 19 to December 2019 which was outstanding as on31.03.2020 has been paid on in the month of MaySt June 2020.

(b) According to the information and explanations given to us there is no due inrespect of income tax service tax sales tax goods and service tax customs duty andexcise duty value added tax which have not been deposited on account of any disputes.

8) According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans from bankexcept some irregularity in working capital limits with the bank. There is no borrowing bythe company from financial institution government or dues to debenture holders.

9) The company did not raise any money by way of initial public offer or further publicoffer (including debt instruments). The company has raised term loan from the bank duringthe year and has utilized for the purpose for which it has raised.

10) In our opinion and according to the information and explanation given to us nomaterial fraud by the company or on the company by its officers & employees has beennoticed or reported during the year.

11) In our opinion and according to information & explanation given to us thecompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provision of Section 197 read with Schedule V of the Act.

12) In our opinion and according to information Etexplanation given to us the Companyis not a Nidhi Company. Therefore the provisions of clause 3 (xii) of the Order are notapplicable on the Company.

13) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

14) Based upon the audit procedures performed and the information and explanationsgiven by the management 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

15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company.

16) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company.

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT ON THE AUDIT OF THEFINANCIAL STATEMENT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to the Members of Inflame AppliancesLimited on the financial statement of year ended 31st March 2020)

Report on the Internal Financial Controls with reference to Financial Statements underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference to financial statementof INFLAME APPLIANCES LIMITED ("the Company") as of March 31 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the institute of Chartered Accountants of India {‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls with reference to financial statements that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI prescribed under Sub-section 10 of Section 143 of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether internal financial controls with reference tofinancial statements were established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls system with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

A company's internal financial control with reference to financial statements 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 withreference to financial statements includes those policies and procedures that (1) pertainto the

II. Fixed assets

(i) Property Plant & Equipment

Property plant & equipment are stated at cost of acquisition less accumulateddepreciation and impairment loss if any. Cost of acquisition is inclusive of inwardfreight insurance duties levies and taxes and incidental expenses related toacquisition of such assets; Subsidy received against a specific asset has been reducedfrom the cost of the said asset

III. Intangible Assets:

- Intangible Assets are capitalized at cost if: -

(a) It is probable that the future economic benefits that are attributable to the assetwill flow to the company &

(b) The company will have control over the assets &

(c) The cost of these assets can be measured reliably fit is more than Rs. 10000/-.Intangible assets are amortized over their estimated useful life not exceeding 3 years onstraight line pro-rata monthly basis.

IV. Depreciation:

Depreciation on tangible fixed assets has been provided on the basis of "WrittenDown Value Method" at the rates specified in Schedule II of the Companies Act 2013.The deprecation amount of an asset is the cost of asset less residual value. The residualvalue has been taken at 5% of the original cost.

Depreciation on addition to/deductions from tangible assets during the year is chargedon pro-rata basis from/up to the date on which asset is available for use/disposal.

Assets valuing Rs. 5000/- or less are fully depreciated during the year in which assetis made available for use

V. Investments: -

Investments are stated at cost. Income from Investments is recognized in the year inwhich it is accrued.

VI. Inventories:

The basis of valuation of various categories of inventories are as

Raw Material : At cost of purchases (Indigenous/lmported)
Consumables & Spares : At cost of purchase
Stock in Process : At material cost & cost of conversion
Finished goods : Cost or net realizable value whichever is less

VII. Revenue recognition:

Revenue is recognized to the extent that it can be reliably measured and is probablethat the economics benefit will flow to the company. Revenue from sale of goods isrecognized when the significant risks 6t rewards of ownership of the goods are transferredto the customers.

VIII. Events occurring after the date of balance sheet: -

Events occurring after the date of Balance Sheet are considered up to the date offinalization of accounts wherever material.

IX. Foreign Exchange Transactions:

Foreign currency transactions are recorded in the books by applying the exchange rateas on the date of transaction. Exchange differences arising due to the differences in theexchange rate between the transaction date and the date of settlement of any monetaryitems are taken to the Profit and Loss Account.

Remaining monetary assets and liabilities related to foreign currency transactionsremaining unsettled at the end of the year are translated at the year-end exchange rateand the exchange losses/gains arises there from are adjusted to the Profit & LossAccount.

X. BORROWING COST

Borrowing costs that are directly attributable to the acquisition of a qualifying assetis capitalized as part of the cost of the asset.

XI. Taxes on Income:*

Taxes on income for the current period are determined on the basis of taxable incomeunder The Income Tax Act 1961.

Deferred tax is recognized subject to the consideration of prudence on timingdifferences between the accounting income and taxable income for the year and quantifiedusing the tax rates and law enacted or substantively enacted on balance sheet date.

XII. Employee benefit expenses:

(i) The employees of the Company are entitled to receive benefits with respect toProvident Fund a defined contribution plan in which both the Company and the employeecontribute monthly at a determined rate.

(ii) Gratuity a defined benefit plan is accounted for on the basis of an actuarialvaluation as at the Balance Sheet date.

(iii) Leave encashment benefits payable to employees are non-accumulating and areaccounted on the basis of estimates as per company's policy.

XIII. Provisions and contingent liabilities:

The Company creates a provision when there is present obligation as a result of a pastevent that probably requires an outflow of resources and a reliable estimate can be madeof the amount of the obligation. A disclosure for a contingent liability is made whenthere is a possible obligation or a present obligation that may but probably will notrequire an outflow of resources. When there is a possible obligation or a presentobligation in respect of which the likelihood of outflow of resources is remote noprovision or disclosure is made.

XIV Government Subsidy:

Government subsidy related to specific fixed assets is reduced from the Gross value ofthe said asset. Capital Investment subsidy from Government is shown as Capital Reserve

XV Earning per share:

The basic and diluted earnings per share is computed by dividing the net profitattributable to equity shareholders for the year by the weighted average number of equityshares outstanding during the year.

XIV. Cash and Cash Equivalent:

The company recognizes the following items as a part of its Cash and Cash equivalent inaccordance with Accounting Standard 3 "Cash Flow Statement"

i. Cash in Hand

ii. Balances with Bank

iii. Highly liquid securities/Deposits having maturity less than 3 months

.