Indian Card Clothing Company Auditors Report


To the Members of

The Indian Card Clothing Company Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone Financial Statements of The Indian Card Clothing Company Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the Financial Statements, including a summary of Significant Accounting Policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Financial Statements give the information required by the Companies Act, 2013 (‘the Act) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the standalone state of affairs of the Company as at March 31, 2023, and its standalone profit (including Other Comprehensive Income), standalone changes in equity and its standalone cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matters

i. We draw your attention to Note 44 to the standalone financial statements regarding management assessment with respect to impact of recent earthquakes in Turkey on business of Companys branch located therein. Based on the assessment performed, the management believes that no material adjustment is required to the standalone financial statements for the year ended March 31,2023. Our opinion is not modified in respect of this matter.

ii. We draw your attention to Note 45 to the standalone financial statements regarding impairment assessment performed by the Company with respect to its investment in subsidiary, ICC International Agencies Limited (ICCIAL). Based on the internal and external information available, confirmed orders at hand and future business projections of the subsidiary, the management believes that there is no requirement for impairment of investment made in ICCIAL and therefore no material adjustment is required to the standalone financial statements for the year March 31, 2023. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment and based on the consideration of reports of other auditors on separate financial statements of components audited by them, were of most significance 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 Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matters How our audit addressed the key audit matters
Trade Receivable Our audit procedures included, but not limited to, following: -
Total value of Trade Receivables (Gross) as on 31st March 2023 is Rs. 1,483.07 Lakh and loss allowance against the same is Rs. 57.86 Lakh. - We performed audit procedures on existence of trade receivables, which included reading and comparing balance confirmations with books, testing subsequent receipts and sales transactions for the samples selected.
Assessment of the recoverability of trade receivables is in herently subjective and requires significant management judgment. - We obtained and verified age wise analysis of trade receivables as at March 31, 2023.
Timing of collection of dues from the customers may differ from the actual credit period. Significant judgment is required by the management to estimate the amounts unlikely to be ultimately collected. - We have sought information and explanation from the management regarding status of receivables in respect of overdue receivables for the purpose of ensuring adequacy of provision.
- We have also tested subsequent collections made from the overdue receivables.
- We also considered historical reasonability of forecasting the loss allowance.
The recoverability of the Companys trade receivables and the valuation of the loss allowance is a key audit matter due to the significant judgement involved. Based on the above procedures performed, we did not note any material misstatements in the value of trade receivable disclosed in the financial statements.
Valuation of investments Our audit procedures included, but not limited to, following -
The company has total investments of Rs. 15648.19 Lakhs which constitutes 56% of total assets of the company. During the year fair valuation gain is Rs 520.65 Lakh disclosed for under Other Income in the Statement of Profit and loss. - For the purpose of existence and valuation, we have verified independent balance confirmation, wherever received and account statement provided by the management as at March 31,2023.
Considering the significance of total value of investments to total assets and management judgements involved in respect of classification and measurement, Investments are considered as Key Audit Matter. - We obtained term sheet or other contract documents to understand and evaluate classification and measurement criteria for various investments made by the Company.
- We also verified accuracy of realised and unrealised gain recognised in the statement of profit and loss account.
- In case of investment in subsidiaries, we obtained and evaluated management assessment supported with the valuation report if any to confirm whether any adjustment is required on account of impairment of investments.
Based on the above procedures performed, we did not note any material misstatements in the valuation of investment disclosed in the financial statements.

Other Information

The Companys Board of Directors is responsible for the other information. The other information comprises the Management Discussion and Analysis; Board of Directors Report along with its Annexures included in the Annual Report, but does not include the Financial Statements and our auditors report thereon. Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Financial Statements that give a true and fair view of the standalone financial position, standalone financial performance (including other comprehensive income), standalone changes in equity and standalone cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS)/ specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent;

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including Goods and Service Tax, employees state insurance, sales tax, income tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities. There are no arrears of statutory dues outstanding for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no statutory dues of Goods and Service Tax, employees state insurance, provident fund, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, which have not been deposited on account of any dispute. The particulars of other statutory dues referred to in sub-clause (a) as at March 31, 2023 which have not been deposited on account of a dispute, are as follows:

Name of the statute Nature of dues Amount (in Lakhs) Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 16.08 FY 2012-13 Commissioner of Income Tax
Maharashtra Tax on Entry of Goods in Local Areas Act, 2002 Entry tax 0.18 FY 1996-97 Octroi Department
Maharashtra Municipal Corporations Act, 1949 Local Body Tax 89.47 FY 2013-14, FY 2014-15, FY 2015-16 Assistant Commissioner of LBT Pimpri.

viii. In terms of the information and explanations given to us and the books of account and records examined by us, the Company has not surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. Hence reporting under clause 3(viii) of the order is not applicable.

ix. (a) According to the records of the Company examined by us and the information and explanations given to us, except for interest on external commercial borrowings as described below, the Company has not defaulted in repayment of loans or other borrowings or in payment of interest thereon to any lender as at the balance sheet date.

Nature of borrowing Name of lender Amount not paid on due date (Rs. In Lakh) Whether principal or interest Number Remarks, if any of days delay
External Commercial Borrowing Holding Company 14.32 Interest 6 Interest due is subsequently paid during the year.
External Commercial Borrowing Holding Company 15.35 Interest 5 Interest due is subsequently paid during the year.

(b) According to the information and explanations given to us and on the basis of our audit procedures, we report that the company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(c) According to the information and explanations given to us and on the basis of our audit procedures, the Company has not availed any term loan during the year. The term loan outstanding as at year end has been utilized in the previous years. Accordingly, the provisions of Clause 3(ix)(c) of the Order are not applicable to the Company.

(d) According to the information and explanations given to us and on the basis of our audit procedures, the Company has not raised any funds on short term basis.

(e) According to the information and explanations given to us and on an overall examination of the financial statements of the company, we report that the company has taken funds in previous years from following entities and persons on account of or to meet the obligations of its subsidiary as per details below:

Nature of fund taken Name of Party Amount involved (In Rs. Lakh) Name of the subsidiary Relation Nature of Transaction for which funds utilized Remarks, if any
Preferential Allotment of equity shares Multi-Act Industrial Enterprises Limited - Holding Company 30.00 ICC International Agencies Limited Subsidiary To meet working capital requirements

(f) According to the information and explanations given to us and procedures performed by us, we report that the company has not raised loans during the year on the pledge of securities held in its subsidiaries.

x.(a) The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) during the year. Accordingly, the provisions of Clause 3(x)(a) of the Order are not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of shares or fully or partly or optionally convertible debentures during the year. The funds raised in the previous years by way of preferential allotment have been used in current year for the purpose for which such funds were raised.

xi. (a) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the Company or on the Company noticed or reported during the year, nor have we been informed of any such case by the Management.

(b) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, report in the form ADT-4 as specified under sub-section (12) of section 143 of the Companies Act has not been filed. Accordingly reporting under clause 3(xi)(b) of the order is not applicable.

(c) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us and as represented to us by the management, there are no whistle blower complaints received by the company during the year.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of related party transactions have been disclosed in the financial statements as required under Ind AS 24, Related Party Disclosures specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

xiv. (a) In our opinion and based on our examination, the company has an internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports of the company issued till date, for the period under audit.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi)(a) of the Order are not applicable to the Company.

(b) According to the information and explanations given to us and procedures performed by us, we report that the Company has not conducted any Non-Banking Financial or Housing Finance activities during the year. Therefore reporting under clause 3(xvi)(b) of the order is not applicable.

(c) According to the information and explanations given to us and procedures performed by us, the Company is not Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India, hence reporting under clause 3(xvi)(c) of the order is not applicable.

(d) Based on information and explanation given to us and as represented by the management, the Group does not have any Core Investment Company (CIC) as part of the Group.

xvii. The Company has not incurred cash losses during current financial year and immediately preceding financial year.

xviii. There has been no resignation by statutory auditors during the year hence reporting under clause 3(xviii) of the order is not applicable.

xix. According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date.

We, however, state that this is not an assurance as to the future viability of the company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due.

xx. As per Section 135 of the Act, the company is not required to spend any amount on Corporate Social Responsibility (CSR). Accordingly, reporting under clause 3(xx)(a) and (b) of the Order are not applicable.

For P G BHAGWAT LLP
Chartered Accountants
Firm Registration Number: 101118W/W100682
Abhijit Shetye
Partner
Pune Membership Number: 151638
May 29, 2023 UDIN: 23151638BGQGEW9253

Annexure B to the Independent Auditors Report

Referred to in paragraph 2(g) under the heading, "Report on Other legal and Regulatory Requirements" of our report on even date:

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

We were engaged to audit the internal financial controls with reference to the Standalone Financial Statements of The Indian Card Clothing Company Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal controls over financial reporting criteria established by the Company considering the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit conducted in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India.

Because of the matter described in the Disclaimer of Opinion paragraph below, we were not able to obtain sufficient and appropriate audit evidence to provide a basis of audit opinion on an internal financial controls with reference to standalone financial statements of the Company.

Meaning of Internal Financial controls with reference to the Standalone Financial Statements

A companys internal financial controls with reference to the Financial Statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Financial Statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to the Financial Statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the Financial Statements.

Disclaimer of Opinion

According to the information and explanation given to us, during current year the Company is in the process of restructuring its finance and accounts function, including at its branch at Turkey, and some of its other support functions and thereby re-establishing internal financial controls with reference to standalone financial statements on criteria based on or considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Because of this reason, we were unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion on whether the Company has internal financial controls with reference to the standalone financial statements and whether such internal financial controls were operating effectively as at March 31,2023.

We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended March 31, 2023, and the disclaimer does not affect our opinion on the standalone financial statements of the Company.

For P G BHAGWAT LLP
Chartered Accountants
Firm Registration Number: 101118W/W100682
Abhijit Shetye
Partner
Pune Membership Number: 151638
May 29, 2023 UDIN: 23151638BGQGEW9253s