You are here » Home » Companies » Company Overview » Linde India Ltd

Linde India Ltd.

BSE: 523457 Sector: Industrials
NSE: LINDEINDIA ISIN Code: INE473A01011
BSE 00:00 | 15 Jun 1582.40 3.35
(0.21%)
OPEN

1586.25

HIGH

1593.70

LOW

1571.00

NSE 00:00 | 15 Jun 1581.10 -1.00
(-0.06%)
OPEN

1582.10

HIGH

1595.00

LOW

1570.00

OPEN 1586.25
PREVIOUS CLOSE 1579.05
VOLUME 4166
52-Week high 2078.60
52-Week low 514.65
P/E 74.82
Mkt Cap.(Rs cr) 13,495
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1586.25
CLOSE 1579.05
VOLUME 4166
52-Week high 2078.60
52-Week low 514.65
P/E 74.82
Mkt Cap.(Rs cr) 13,495
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Linde India Ltd. (LINDEINDIA) - Auditors Report

Company auditors report

To the Members of Linde India Limited

Report on the Audit of the Consolidated FinancialStatements

Opinion

We have audited the accompanying consolidated financial statements ofLinde India Limited (the "Parent") which includes the Parent's share of profitin its joint venture which comprise the Consolidated Balance Sheet as at 31 December2019 and the Consolidated Statement of Profit and Loss including Other ComprehensiveIncome the Consolidated Statement of Cash Flow and the Consolidated Statement of Changesin Equity for the year then ended and a summary of significant accounting policies andother explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid consolidated 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 principles generallyaccepted in India of the consolidated state of affairs of the Parent as at 31 December2019 and their consolidated profit their consolidated total comprehensive income theirconsolidated cash flows and their consolidated changes in equity for the year ended onthat date.

Basis for Opinion

We conducted our audit of the consolidated 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 the Auditor'sResponsibility for the Audit of the Consolidated Financial Statements section of ourreport. We are independent of the Parent in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalreguirements that are relevant to our audit of the consolidated financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these reguirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the consolidated financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the consolidated financial statements of thecurrent period. These matters were addressed in the context of our audit of theconsolidated financial statements as a whole and in forming our opinion thereon and wedo not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.

Sr. KeyAuditMatter No. Auditor's Response
1 Revenue Recognition - Estimation of cost in PED Business Principal audit procedures:
Revenue from the contracts entered by the Project Engineering Division (PED) is recognized over a period of time in accordance with the reguirements of Ind AS 115 Revenue from Contracts with Customers. Our audit approach was a combination of test of internal controls and substantive procedures including:
• Obtained an understanding of the management's evaluation process to recognize revenue over a period of time the status of completion for projects and total cost estimates;
Due to the nature of the contracts revenue recognition involves usage of percentage of completion method which is determined based on proportion of contract costs incurred to date compared to estimated total contract costs which involves significantjudgments identification of contractual obligations and the Company's rights to receive payments for performance completed till date changes in scope and conseguential revised contract price. • Identified and tested the controls related to revenue recognition focusing on the determination of percentage of completion recording of costs incurred and estimation of costs to complete the remaining contract obligations through inspection of evidence of performance of these controls;
• Tested selected contracts on sample basis for appropriateness revenue recognition including budgeted cost as well as the percentage of completion for construction works as it requires management's estimates on the basis of progress of the projects;
Accuracy of revenues and profits / losses may deviate significantly on account of change in judgements and estimates. For this reason we identified revenue recognition from contracts as a key audit matter • Evaluated management's estimates of the impact to revenue and budgeted costs arising from scope changes made to the original contracts claims disputes and liquidation damages with reference to supporting documents including variation orders and correspondence between the Company and the customers;
Refer to the Accounting Policy para 2(f) Notes 24 and 39 to the Consolidated Financial Statements. • Tested the actual costs incurred on construction works during the reporting period for selected contracts on sample basis;
• Evaluated the adeguacy of the related disclosures in the consolidated Ind AS financial statements as required by the relevant accounting standard.
Sr. KeyAuditMatter No. Auditor's Response
2 Asset Held for Sale: Accounting and disclosure on divestment of business Principal audit procedures:
In connection with the combination between Linde AG and Praxair Inc the Competition Commission of India ('CCI') has issued an order for divestment of Southern Region Business of the Company. Our audit approach was a combination of test of internal controls and substantive procedures including:
• Identified and tested the controls related to divestment of Southern Regional Business on slump sale basis and recognition of the profit on sale of disposal;
On December 16 2019 the Company has completed the divestment of Southern Region Business as per the CCI's order. The transfer have been done as per business transfer agreement on slump sale basis. On completion of the transaction the Company has received a consideration of Rs. 13800 million which is financially significant to the Company. • Tested the accuracy and completeness of related assets and liabilities identified as part of the Southern Regional Business on date of disposal of the control alongwith evaluation of the estimates and judgements
• Tested the reasonableness of the computation of the profit on disposal of Southern Regional Business by reconciling the consideration to the Business Transfer Agreement (BTA) bank accounts and by verifying the underlying accounting records for the identified assets and liabilities;
The matter has been considered as Key Audit Matter for the reasons stated below:
• Tested the appropriateness of the transaction by verifying the BTA entered for disposal of business and ensured that the same have been approved by the appropriate level of authority as per the Company authority matrix;
i. TheCompanyhavetodivestits southernregionbusiness necessarily as per CCI order for the successful execution of Global merger
• Tested the reasonableness of the tax computation on disposal of Southern Regional Business related expenses and profit recognised on the same and involved our internal tax specialist to ensure that appropriateness of the tax computation and relevant tax adjustments;
ii. Identification of related assets and liabilities of the Southern Region Business on date of disposal of control
iii. Inaccurate computation of profit / loss on disposal of Southern Region Business
• Evaluated the adeguacy of the related disclosures in the consolidated Ind AS financial statements as required by the relevant accounting standard
iv. Accounting done without appropriate approvals in place
v. Complextaxadjustments
vi. Presentations and disclosures of the divestment transaction in the financial statements in conformity with the applicable accounting standards.
Refer to the Accounting Policy para 2(w) and Notes 14 to the Consolidated Financial Statements.

Information Other than the Financial Statementsand Auditor's Report

Thereon

• The Parent's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report Management Discussion and Analysis Reportand Business Responsibility Report but does not include the consolidated financialstatements standalone financial statements and our auditor's report thereon.

• Our opinion on the consolidated financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

• In connection with our audit of the consolidated financialstatements our responsibility is to read the other information compare with thefinancial statements of the joint venture audited by the other auditors to the extent itrelates to these entities and in doing so place reliance on the work of the otherauditors and consider whether the other information is materially inconsistent with theconsolidated financial statements or our knowledge obtained during the course of our auditor otherwise appears to be materially misstated. Other information so far as it relates tothe joint venture is traced from their financial statements audited by the other auditors.

• 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 ConsolidatedFinancial Statements

The Parent's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these consolidatedfinancial statements that give a true and fair view of the consolidated financialposition consolidated financial performance including other comprehensive incomeconsolidated cash flows and consolidated changes in equity of the Parent including itsjoint venture in accordance with the Ind AS and other accounting principles generallyaccepted in India. The respective Board of Directors of the Parent and of its jointventure are responsible for maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Parent and its joint ventureand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe consolidated financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error which have been used for the purposeof preparation of the consolidated financial statements by the Directors of the Parent asaforesaid.

In preparing the consolidated financial statements the respectiveBoard of Directors of the Parent and of its joint venture are responsible for assessingthe ability of the Parent and of its joint venture to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the management either intends to liquidate or cease operationsor has no realistic alternative but to do so.

The respective Board of Directors of the Parent and of its jointventure are also responsible for overseeing the financial reporting process of the Parentand of its joint venture.

Auditor's Responsibility for the Audit of theConsolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether theconsolidated 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 consolidated 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 theconsolidated financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• 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 Parent has adequate internal financial controls system in placeand 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 the ability of theParent and its joint venture to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the consolidated financial statements or if such disclosuresare inadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Parent and its joint venture to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theconsolidated financial statements including the disclosures and whether the consolidatedfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding thefinancial information of the business activities within the Parent and its joint ventureto express an opinion on the consolidated financial statements. We are responsible for thedirection supervision

and performance of the audit of the financial statements of suchbusiness activities included in the consolidated financial statements of which we are theindependent auditors.

Materiality is the magnitude of misstatements in the consolidatedfinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the consolidated 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 consolidated financialstatements.

We communicate with those charged with governance of the Parent andsuch other entities included in the consolidated financial statements of which we are theindependent auditors regarding among other matters the planned scope and timing of theaudit and significant audit findings including any significant deficiencies in internalcontrol that we identify during our audit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical reguirements 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 consolidatedfinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse conseguences of doingso would 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 our auditof the aforesaid consolidated financial statements.

b) In our opinion proper books of account as required by law relatingto preparation of the aforesaid consolidated financial statements have been kept so far asit appears from our examination of those books.

c) The Consolidated Balance Sheet the Consolidated Statement of Profitand Loss (including Other Comprehensive Income) the Consolidated Statement of Cash Flowand the Consolidated Statement of Changes in Equity dealt with by this Report are inagreement with the relevant books of account maintained for the purpose of preparation ofthe consolidated financial statements.

d) In our opinion the aforesaid consolidated financial statementscomply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from thedirectors of the Parent as on 31 December 2019 taken on record by the Board of Directorsof the Company and the reports of the statutory auditors of its joint venture companyincorporated in India none of the directors of the Parent company and its jointventure company incorporated in India is disqualified as on 31 December 2019 frombeing appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A" which is based on the auditors' reports of theParent and joint venture Company incorporated in India. Our report expresses anunmodified opinion on the adequacy and operating effectiveness of internal financialcontrols over financial reporting of those companies.

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 Parent 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 consolidated financial statements disclose the impact of pendinglitigations on the consolidated financial position of the Parent and its joint venture.

ii) Provision has been made in the consolidated financial statementsas required under the applicable law or accounting standards for material foreseeablelosses if any on long-term contracts including derivative contracts.

iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Parent and its jointventure company incorporated in India.

for DELOITTE HASKINS & SELLS LLP Kolkata
ChorteredAccountonts 24 February 2020
Firm Registration No. 117366W/W-100018
ABHIJIT BANDYOPADHYAY Fortner
Membership No.: 054785
UDIN: 20054785AAAAAR4633

Annexure A to the independent auditor's report.

(Referred to in paragraph (f) under 'Report on Other Legal andRegulatory Reguirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

In conjunction with our audit of the consolidated financial statementsof the Company as of and for the year ended 31 December 2019 we have audited theinternal financial controls over financial reporting of Linde India Limited (hereinafterreferred to as "Parent") and its joint venture which are companies incorporatedin India as of that date.

Management's Responsibility for InternalFinancial Controls

The respective Board of Directors of the Parent and its joint venturewhich are companies incorporated in India are responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the respective Companies considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (ICAI).These responsibilities include the design implementation and maintenance ofadeguate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the respectivecompany'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.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Parent and its joint venture which are companiesincorporated in India based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India andthe Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical reguirements and plan and perform theaudit to obtain reasonable assurance about whether adeguate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adeguacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financialreporting included obtaining an understanding of internal financial controls overfinancial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement 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 appropriateto provide a basis for our audit opinion on the internal financial controls systemover financial reporting of the Parent and its joint venture which are companiesincorporated in India.

Meaning of Internal Financial Controls OverFinancial Reporting

A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 FinancialControls 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 over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Parent and its joint venture which are

companies incorporated in India have in all material respects anadequate internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as at 31 December2019 based on the criteria for internal financial control over financial reportingestablished by the respective companies considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

for DELOITTE HASKINS & SELLS LLP Kolkata
ChorteredAccountonts 24 February 2020
Firm Registration No. 117366W/W-100018
ABHIJIT BANDYOPADHYAY Fortner
Membership No.: 054785
UDIN: 20054785AAAAAR4633