International Combustion (India) Ltd.
|BSE: 505737||Sector: Engineering|
|NSE: N.A.||ISIN Code: INE403C01014|
|BSE 00:00 | 24 Sep||196.25||
|NSE 05:30 | 01 Jan||International Combustion (India) Ltd|
International Combustion (India) Ltd. (INTLCOMBUSTION) - Auditors Report
Company auditors report
To the Members of International Combustion (India) Limited
Report on Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of InternationalCombustion (India) Limited ("the Company") which comprise the Balance Sheetas at March 31 2020 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearended on that date and a summary of the 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 theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020the loss and total comprehensive income changes in equity and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key Audit Matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements for the yearended March 31 2020. These matters were addressed in the context of our audit of theStandalone Financial Statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matter describedbelow to be the Key Audit Matter to be communicated in our report:
Independent Auditors' Report (Contd.)
Emphasis of Matter
We draw attention to Note No. 43 of the Standalone Financial Statementsregarding impact of COVID-19 pandemic. The situation continues to be uncertain and theManagement is evaluating the situation on an ongoing basis with respect to the challengesfaced. Our opinion is not modified in respect of this matter.
Information Other than the Financial Statements and Auditors'Report Thereon
The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the draftDirectors' Report including annexures to Directors' Report which we obtainedprior to the date of this auditors' report and other reports included in the Annualreport which are expected to be made available to us after that date but does notinclude the standalone financial statements and our auditors' report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not and will not express any form of assurance conclusionthereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above and in doing soconsider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated.
If based on the work we have performed on the other information thatwe obtained prior to the date of this auditors' report we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
When we read the full Annual report which is expected to be madeavailable to us after the date of this auditors' report if we conclude that there isa material misstatement therein we are required to communicate the matter to thosecharged with governance.
Responsibilities of the Management and Those Charged with Governancefor the Standalone Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone financial statements that give a true and fair view ofthe financial position financial performance including other comprehensive incomechanges in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the accounting Standards specified undersection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also: Identify andassess the risks of material misstatement of the standalone financial statements whetherdue to fraud or error design and perform audit procedures responsive to those risks andobtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error as fraud may involve collusion forgery intentionalomissions misrepresentations or the override of internal control. Obtain anunderstanding of internal financial control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances. Under section 143(3)(i) of the Actwe are also responsible for expressing our opinion on whether the Company has adequateinternal financial controls system in place and the operating effectiveness of suchcontrols.
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 auditors' 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 auditors' 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 thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
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 standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 of the Companies Act 2013 we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order to theextent applicable.
2) 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 our auditread with matters as reported in "Emphasis of matter" paragraph above.
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.
d) In our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act read withrelevant rules issued thereunder.
e) On the basis of the written representations received from thedirectors as on March 31 2020 taken on record by the Board of Directors none of thedirectors are disqualified as on March 31 2020 from being appointed as a director interms of Section 164 (2) of the Act.
f) With respect to the other matters to be included in theAuditor's Report according to the information and explanations given to usmanagerial remuneration has been paid by the Company to its director during the year inaccordance with the requirements of section 197(16) of the Act as amended and the rulesframed thereunder.
g) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controlsplease refer to our separate Report in "Annexure B".
h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 read with the Companies (Audit & Auditors) Amendment Rules 2017 in ouropinion and 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 itsfinancial position in its financial statements Refer 37(4)(a) to the standalonefinancial statements;
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring the amounts required to betransferred to the Investor Education and Protection Fund by the Company as on the date ofthis report.
Annexure A to the Independent Auditor's Report
(Referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' section of our report to the Members of InternationalCombustion (India) Limited of even date) i. In respect of the Company's fixed assets;
a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets;
b) According to the information and explanation given to us most ofthe fixed assets have been physically verified by the Management during the year and nomaterial discrepancies were noted on such verification. In our opinion the frequency ofsuch verification is reasonable having regard to the size of the Company and the nature ofits assets.
c) The title deeds of immovable properties are held in the name of theCompany.
ii. As explained to us and on the basis of certificate given to us theinventory of the Company has been maintained and has been physically verified by themanagement during the year barring a few locations where physical verification ofinventories by the management on the reporting date or on a date near to the reportingdate was not feasible due to lockdown restrictions imposed by the Central Government forthe COVID-19 pandemic. Alternative audit procedures were adopted to verify inventorybalances for such locations and no material discrepancies were noted.
iii. According to the information and explanation given to us theCompany has not granted any loans to companies firms or other parties as listed in theregister maintained under section 189 of the Companies Act 2013.
Accordingly provisions of Clause 3 (iii) (b) & (c) of the Orderare not applicable to the Company. iv. According to the information and explanation givento us the Company has not given any loan to directors as mentioned in Section 185 and hasnot made any investments or given any guarantees and security as mentioned in Section 186.Accordingly provisions of Clause 3 (iv) of the Order are not applicable to the Company.
v. The Company has not accepted any deposits during the year and so thedirectives issued by the Reserve Bank of India and the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act 2013 are not applicable.
vi. According to the information and explanations given to us CostAudit has been carried out by the Company as required under section 148(1) of theCompanies Act 2013 in respect of the products of the Company.
vii. a. According to the information and explanations given to us theCompany is generally regular in depositing undisputed statutory dues including providentfund employees' state insurance income-tax Goods and Service tax sales-taxservice tax duty of customs duty of excise value added tax cess and any otherstatutory dues to the appropriate authorities.
According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax Goods and Service tax sales-tax service tax duty of customs duty ofexcise value added tax or cess were outstanding as at 31st March 2020 for a period ofmore than six months from the date they became payable.
b. According to the information and explanations given to us there areno dues of income-tax Goods and Service tax sales-tax value added tax duty of customsduty of excise or service tax which have not been deposited as at 31st March 2020 onaccount of any dispute.
viii. The Company has not defaulted in repayment of loans or borrowingto a financial institution bank Government or dues to debenture holders;
ix. The Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments) and term loans were applied for thepurposes for which those are raised;
x. No fraud on or by the Company has been noticed or reported duringthe year;
xi. The Company has complied with the requrements of Section197 of theCompanies Act 2013 reed with Shedule V thereunder.
xii. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company. Accordingly provisions of this clauseare not applicable to the Company.
xiii. All transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 and where applicable details have beendisclosed in the Financial Statements etc. as required by the applicable accountingstandards;
xiv. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview;
xv. The Company has not entered into any non-cash transactions withdirectors or persons connected with him; xvi. The Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.
Annexure B 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 INTERNATIONAL COMBUSTION (INDIA) LIMITED ("the Company") asof March 31 2020 in conjunction with our audit of the financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishingand maintaining 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 respective 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 Companies Act 2013.
Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 ofthe risks of material misstatement of the financial statements whether due to fraud orerror. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting isa process 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 controlover financial 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.
Limitations of Internal Financial Controls Over Financial Reporting
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 control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 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.
However further improvement is required in the process of recordingreporting and documenting of scrap generated from operations including parameters of itsrisk assessment process and related risk mitigation measures towards strengthening of themonitoring mechanism in this respect aimed at providing for a complete and integratedinformation system consistent with financial reporting objectives. Our opinion is notqualified in respect of this matter.