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COSCO (India) Ltd.

BSE: 530545 Sector: Others
NSE: N.A. ISIN Code: INE949B01018
BSE 00:00 | 24 Apr 2020 COSCO (India) Ltd
NSE 05:30 | 01 Jan 1970 COSCO (India) Ltd

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OPEN 54.45
PREVIOUS CLOSE 56.05
VOLUME 136
52-Week high 166.95
52-Week low 50.75
P/E 10.24
Mkt Cap.(Rs cr) 23
Buy Price 52.35
Buy Qty 5.00
Sell Price 56.50
Sell Qty 5.00
OPEN 54.45
CLOSE 56.05
VOLUME 136
52-Week high 166.95
52-Week low 50.75
P/E 10.24
Mkt Cap.(Rs cr) 23
Buy Price 52.35
Buy Qty 5.00
Sell Price 56.50
Sell Qty 5.00

COSCO (India) Ltd. (COSCOINDIA) - Auditors Report


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Company auditors report

To the members of Cosco (India) Limited

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Cosco (India)Limited ("the Company") which comprise the Balance Sheet as at March 312019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone 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 ("IndAS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate

Emphasis of Matter

Attention is drawn to the Note no 4.3 regarding recoverable amount of landcompensation Note no 7.2& 7.4 regarding valuation of non-moving and slow movingstock Note no. 8.2 regarding provision for expected credit loss Note no. 16.1 regardingidentification of MSME suppliers Note no. 17.1 regarding unidentified receipt Note no.36.3 regarding value of investment in erstwhile subsidiary of company.

The internal audit system of the company needs to be strengthened in scope coverageand compliance.

Our opinion is not qualified in respect of these matters

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India(ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under 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 judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. For each matter below our description of how our auditaddressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

The Key Audit Matter

In the ordinary course of business carried out by the company there is alwayspossibility of generation of export surplus and in respect of trading goods of possibilityof defective products/slow moving/non moving goods. Management continues to keep watch onthe same and has designed a policy of valuation of these surplus/ defective products/slowmoving/non moving goods on the basis of actual realization from sale of these goods. Thepolicy is determined in note no. 2.12 of the significant Accounting Policy.

How to the matter was addressed in our audit

We have applied the relevant audit procedures and verified the sale of these itemsduring the course of the year to ascertain whether realized value is in accordance withthe policy laid by the company. We have also disclosed this issue vide emphasis of matterparagraph.

Information Other than the Standalone 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 Company'sAnnual Report but does not include the standalone financial statements and our auditor'sreport thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

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. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

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 standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone 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.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 standalone 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 standalone 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 in orderto 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 reasonableness ofaccounting estimates and related disclosures made by management.

* Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

* Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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

I. 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 Act we give in the "Annexure A" a statement on the matters specified inthe paragraph 3 and 4 of the order.

II With respect to matter to be included in the Auditor's report under section 197(16)of the Act:

In our opinion and according to the information and explanations given to us themanagerial remuneration for the year ended March 31 2019 has been paid/provided by theCompany to its directors in accordance with the provisions of section 197 read withSchedule V to the Act.

III. 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 including other comprehensiveincome statement of changes in equity and the statement of cash flow dealt with by thisReport are in agreement with the books of account;

(d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.

(e) on the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 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 report in "Annexure B"; and

(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 has disclosed the impact of pending litigations on its financialposition in its financial statements;

ii. the Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For V. P. Jain & Associates
Chartered Accountants
Firm's registration number: 015260N
Sarthak Madaan
Place: New Delhi Partner
Date: 30th May 2019 Membership number: 547131

Annexure - A to the Auditors' Report

Statement of the matters specified in paragraph 3 and 4 of the Companies (Auditor'sreport) Order 2016 ('the Order')

The Annexure referred to in Independent Auditors' Report to the members of the Cosco(India) Limited ("the company") on the standalone financial statements forthe year ended 31 March 2019 we report that:

(i) In respect of fixed assets:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to thesaid programme certain fixed assets were physically verified by the Management during theyear. According to the information and explanations given to us no material discrepancieswere noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company and certificate provided by the bank the titledeeds of immovable properties are held in the name of the Company. Original copy of titledeed has not been produced as the same is deposited as security with bank under loanagreement as confirmed by the management & Bank.

(ii) In respect of its inventories:

(a) As explained to us inventories have been physically verified during the year bythe Management at reasonable intervals other than stock lying with third parties wherecertificates confirming physical inventory have been received.

(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) In our opinion and according to the information and explanations given to us theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.

(iii) The Company has not granted loans to party covered in the register maintainedunder section 189 of the Companies Act 2013 ('the Act'). Thus paragraph 3(iii) of theOrder is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has not given any loans and made any investment within the meaning of section 185& 186 of the Act. Thus paragraph 3(iv) of the Order is not applicable to the Company.

(v) According to the information and explanation given to us the company has notaccepted any deposits during the year. Thus paragraph 3(v) of the Order is not applicableto the Company.

(vi) It is certified by the management that company is not required to maintain thecost records prescribed under section 148 (1) of the Companies Act 2013 since the samehas not been specified by the Central Government.

We have relied upon the assertions of the management.

(vii) In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the company has generally been regular indepositing undisputed statutory dues including provident Fund Employees State insuranceincome tax sales tax wealth tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues applicable to it with the appropriateauthorities. There were no undisputed amounts payable in respect of the aforesaidstatutory dues in arrears as at 31.03.2019 for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax wealth tax service tax duty of customs duty of excise valueadded tax cess which have not been deposited as at 31.03.2019 on account of any dispute.

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowing to a financial institution bank Governmentduring the year.

(ix) The company has not obtained any term loan during the year so this paragraph ofthe Order is not applicable.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided managerialremuneration within the meaning of section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company.

Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him.

Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IAof the ReserveBank of IndiaAct 1934.

For V. P. Jain & Associates
Chartered Accountants
Firm's registration number: 015260N
Sarthak Madaan
Place: New Delhi Partner
Date: 30th May 2019 Membership number: 547131

Annexure - B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of Cosco (India) Limited ("the Company") as of March 31 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company generally has in all material respects except certainareas as stated below an adequate internal financial controls system over financialreporting and such internal financial controls over financial reporting were operatingeffectively as at 31 March 2019 based on the internal control over financial reportingcriteria established by the Company 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 (the "GuidanceNote").

> Inventory Levels: needs to be monitored more effectively.

> Documentation and MIS : need improvement in respect of Annual procurement ofmaterials & Expense budget Procurement Budgeting & Planning of Traded GoodsObtainment of Quotation Management Negotiation & Selection.

> Dealers' selection and Appointment: needs improvement to prevent appointmentof non credit worthiness dealer.

> HR (attendance monitoring & performance review): needs improvement w.r.t.modification of attendance sheet to prevent excess payment of salary.

> Fixed Assets Physical verification: needs improvement to see all items offixed assets are physically verified in scale of Rs.3 years.

> Contract Labour Management: need improvement to prevent penal provision fornon compliance of statutory laws by contractor.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal financial controls with reference to standalonefinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditing asprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with the ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls with reference to standalone financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed 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 withreference to standalone financial statements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For V. P. Jain & Associates
Chartered Accountants
Firm's registration number: 015260N
Sarthak Madaan
Place: New Delhi Partner
Date: 30th May 2019 Membership number: 547131


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