Autoline Industries Ltd Auditors Report.
To the Members of Autoline Industries Limited
Report on the Audit of the Standalone Ind AS financial Statements
We have audited the standalone Ind AS financial Statements of Autoline Industries Limited which comprise the Balance Sheet as at March 31, 2019, the Statement of Pro t & Loss including Statement of Other Comprehensive Income, Cash Flow Statement and Statement of Changes in Equity for the year then ended and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us,
the aforesaid standalone Ind AS financial statements give the information required by the
Companies Act, 2013 ("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 state of affairs of
the Company as at March 31, 2019, and its loss, other comprehensive income, changes in equity and its cash ows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the 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 financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have ful lled 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 audit opinion on the Standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most signi cance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matter
|The key audit matter||How the matter was addressed in our audit|
|Going Concern||Our audit procedures included:|
|As of 31 March 2019, the Companys total liabilities did not exceed its total assets, however company is continuously incurring losses , Note No. 3.4 to the financial statements explain how the directors of the Company have formed a judgement that the going concern basis is appropriate in preparing the financial statements.||Walking through the business planning process and assessing the design, implementation and operating effectiveness of managements key internal controls over the assessment of going concern, including the preparation of cash flow forecasts.|
|The directors of the Company made their assessment of going concern by preparing a cash ow forecast in which some key assumptions were applied. These key assumptions included forecasts of sales volumes, average selling prices, raw material costs, sale of land available with subsidiary company and the availability of banking and other financing facilities as well as financial support from the promoters.||Evaluating the key assumptions in the cash flow forecasts (including future revenue, gross profit, operating expenses and capital expenditure) with reference to historical production information, current performance, internal investment and production plans, and market and other external available information.|
|We identified going concern as a key audit matter because a signi cant degree of management judgement is involved in making this assessment and in forecasting the future cash ows of the Company which are inherently uncertain and because the management judgement and inherent uncertainties could have significant impact on the basis of preparation of the financial statements and could be subject to management bias.||Considering the accuracy and reliability of cash flow forecasts made by management in prior years by comparing them with the current years results.|
|Assessing the availability of banking and other financing facilities and arrangements by inspecting underlying documentation, which included banking facility agreements signed before and after the reporting period end, and assessing the impact of any covenants and other restrictive terms therein|
|We also checked if any waivers were obtained from the financial institutions from which borrowings are made.|
|Based on our procedures we noted that the key assumptions used in the forecasts were within a reasonable range of our expectations.|
|Revenue Recognition||Our audit procedures to assess the recognition of revenue included the following :|
|The Companys revenue is derived from the sale of sheet metal stampings, welded assemblies and modes for the automotive industry. The Company recognizes revenue when the control is transferred to the customer.||evaluating the design, implementation and operating effectiveness of key internal controls over the existence, accuracy and timing of revenue recognition.|
|The terms set out in the Companys sales contracts relating to goods acceptance by customers are varied. Accordingly, the terms and conditions of sales contracts may affect the timing of recognition of sales to customers as each sales contract could have different terms relating to customer acceptance of the goods sold.||performed substantive test of details over revenue recognized throughout the period by selecting a sample of transactions to ensure that the samples selected meet the revenue recognition criteria and are appropriately recorded.|
|We identified the recognition of revenue as a key audit matter because revenue is one of the key performance indicators of the Company and is, therefore, subject to an inherent risk of misstatement to meet targets or expectations and because errors in the recognition of revenue could have a material impact on the Company.||Tested sample transactions around the period end to ensure that they were recorded in the correct period; and tested journal entries posted to revenue accounts focusing on unusual or irregular items, if any.|
|Evaluation of uncertain tax positions||Our audit procedures include the following substantive procedures:|
|The Company operates in multiple jurisdictions and is subject to periodic challenges by local tax authorities on a range of tax matters during the normal course of business including indirect tax matters. These involve significant management judgment to determine the possible outcome of the uncertain tax positions, consequently having an impact on related accounting and disclosures in the standalone financial statements. Refer Note 40 to the standalone financial statements.||Obtained understanding of key uncertain tax positions; and|
|O Read and analyzed select key correspondences, external legal opinions / consultations by management for key uncertain tax positions.|
|O Discussed with appropriate senior management and evaluated managements underlying key assumptions in estimating the tax provisions; and|
|O Assessed managements estimate of the possible outcome of the disputed cases.|
The Companys Board of Directors is responsible for the other information. The other
information comprises the Boards report including annexure to Boards report, but does not include the Standalone Ind AS financial Statements and our auditors report
Our opinion on the Standalone Ind AS 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 Standalone Ind AS financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Ind AS 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.
Managements Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance, including other comprehensive income, cash ows and changes in equity 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 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; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of or to cease accounting unless management either intends to liquidate the Company operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Companys financial reporting process.
Auditors Responsibilities for the Au dit of the Standalone Ind AS financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit ndings, including any significant de ciencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India, in terms of section 143 (11) 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 the extent applicable.
As required by section 143 (3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books
c) The Balance Sheet, the Statement of Pro t & Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this report are in agreement with the books of account
d) In our opinion and to the best of our information and according to the explanation given to us, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended
e) On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disquali ed as on 31st March, 2019 from being appointed as a director in terms of Section 164(2) of the Act
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls,
refer to our separate Report in "Annexure B" to this report;
g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion 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 its financial position in its standalone Ind AS financial statements Refer Note 40 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses
iii. Dividend pertaining to financial Year 2011-12 was transferred to Investor Education and Protection Fund with a delay of 2 months and 22 days and to that extent the Company has not complied with the provisions of Section 124 (6) of the Companies Act, 2013 read with the Rules made there under.
3. In our opinion, the managerial remuneration for the year ended 31 March 2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act; The Ministry of Corporate Affairs has not prescribed other details under section 197 (16) which are required to be commented by us
|FOR A R SULAKHE & CO.|
|Firm Reg. No. 110540W|
|Date: May 30, 2019|
Annexure A referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date on the standalone Ind AS financial statements for the year ended March 31, 2019, we report that:
i. a) The company has maintained proper records showing full particulars, including quantitative details and situations of its xed assets.
b) According to the information and explanation given to us, the company has a regular programme of physical veri cation of its xed assets by which xed assets are veri ed in phased manner over a period of three years in accordance with this programme, certain xed assets were veri ed during the year. In our opinion, this periodicity of physical veri cation is reasonable having regards to the size of the Company and the nature of its business and no material discrepancies have been noticed on such physical veri cation.
c) According to the information and explanation given to us and on the basis of our examination of the records of the company, except for the following two cases, the title deeds were held in the name of the company
|(Rs. In lakhs)|
|Sr. Particulars No.||Whether Leasehold or Freehold||Gross Block as On Balance Sheet Date||Net Block as On Balance sheet Date||Remarks|
|1. Khasra no. 423, SIDCUL, Plot no.5 Uttarakhand||Leasehold||22.86||22.86||Lease Deed is held in the name of M/s Nirmiti Auto components Pvt. Ltd. which was amalgamated with the company.|
|2. Mhalunge 392/1/B & 613||Freehold||230.98||230.98||As per local authority records of 7/12 extracts name of M/s Autoline Industrial Parks Ltd. was appearing|
ii. a) The inventories have been physically veri ed by the management during the year except inventories lying with the third parties and goods in transit. In respect of inventories lying with the third parties, these have been substantially con rmed by them and with respect to goods in transit, subsequent goods receipts have been veri ed by management. In our opinion, frequency of reasonable in physical veri cation of inventory followed by the management was relation to the size of the company and the nature of its The business. discrepancies noticed on physical veri cation of the inventories have been
properly dealt with in the books of account;
iii. The company had granted loan to covered in the register two companies maintained under section 189 of the companies Act, 2013 amounting to Rs.
1,73,00,000/-a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the party listed in the register maintained under section 189 of the Act were not, prima facie, prejudicial to the interest of the company.
b) Since loan is repayable on demand clause (b) and (c) are not commented by us.
iv. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans, investment and guarantee made.
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
vi. As per information and explanation given to us, the Central Government has not prescribed maintenance of cost records as required under sub section (1) of Section 148 of the Companies Act, 2013. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.
vii. a) According to the records, the Company is regular in depositing undisputed statutory dues in respect of duty of customs, income-tax, however undisputed statutory dues including employees state insurance, provident fund, duty of excise, sales-tax, service tax, value added tax, Goods & service tax, cess, local body tax and other statutory dues have not been regularly deposited with the appropriate authorities and there have been delays in depositing the same.
According to the information and explanations given to us and according to the books and records as produced before us and examined by us, following undisputed statutory dues were in arrears as at 31 March 2019 for a period of more than six months from the date they became payable .
|Sr. Name of statutory No dues .||Nature of dues||Amount (in Rs.)||Period to which it relates||Whether paid before balance sheet signing|
|1 Central Excise Act, 1944||Excise Duty||19,02,837/-||April 2017 and May 2017||No|
|2 Goods and Service Tax||Goods and Service Tax||17,55,1361/-||July 2018 and August 2018||No|
b) the basis of our According to the information and explanation given to us and on examination of books of accounts, there are no cases of dues of income tax, goods & service tax, sales tax, duty of customs, duty of excise, value added tax and cess as at 31st March 2019 which have not been deposited on account of disputes except for the following: -
|Name of the Statute||Nature of Dues||Forum where Dispute is pending||Period to which the amount relates||Tax Amount involved (Rs.)|
|The Maharashtra Value Added Tax Act, 2002 / Central Sales Tax Act, 1956||VAT/CST||Maharashtra||F.Y. 2006-07||48,24,518/-*|
|Sales Tax||F.Y. 2007-08||45,57,739/-*|
|The Maharashtra||The Joint||F.Y. 2000-01||24,44,440/-|
|Value Added Tax Act, 2002 / Central Sales Tax Act, 1956||VAT/CST||Commissioner of Sales Tax (Appeals)||F.Y. 2001-02||4,42,721/-|
|The Maharashtra||Dy.||F.Y. 2012-13||8,06,06,161/-|
|Value Added Tax Act, 2002 / Central Sales Tax Act, 1956||VAT/CST||Commissioner of Sales Tax||F.Y. 2012-13||60,71,136/-|
|The Maharashtra Value Added Tax Act, 2002||VAT||The Jt.||F.Y. 2013-14||3,34,44,323/- *|
|Commissioner of Commercial Taxes|
|Central Sales Tax Act, 1956||CST||The Jt.||F.Y. 2007-08||41,91,200/-|
|Commissioner of Commercial Taxes|
|Central Sales Tax||CST||The Jt.||F.Y. 2013-14||2,25,43,450/-*|
|Act, 1956||Commissioner of Commercial Taxes|
|The Maharashtra Value Added Tax Act, 2002||WCT||The Jt. Commissioner of Commercial Taxes||F.Y. 2013-14||87,33,143/- *|
|The Uttarakhand Value Added Tax Act 2005||VAT / CST||The Jt. Commissioner of Commercial Taxes||F.Y. 2013 14||46,59,711/- *|
* Amounts paid under protest have been reduced from the amount of demand in arriving at the aforesaid disclosure.
viii. According to the information and explanations given to us, and based on documents and records veri ed by us in our opinion, the company has defaulted in repayments of loans to Banks and financial Institutions. The details of default as on March 31, 2019 are as follows: -
|Rs. in Lakhs|
|Sr. Particulars No.||Amount of 31.03.2019||Default as on||Period of default|
|1 Axis Bank Ltd||-||10.31||Less than 3 months|
|2 The Catholic Syrian Bank Ltd||10.00||5.51||Less than 3 months|
|3 Bank of Baroda||-||33.29||Less than 3 months|
|1 J M financial A R C Pvt. Ltd.||105.63||99.01||Less than 3 months|
|J M financial A R C Pvt. Ltd.||940.83||514.19||More than 3 months|
|2 Tata Motors Finance Solution Ltd *||-||15.80||Less than 3 months|
|3 Tata Capital financial Services Ltd *||-||0.59||Less than 3 months|
* Amount of Interest payable is Net of tax deducted at source
ix. During the year, the company did not raise money by way of initial public offer or further public offer (including debt instrument). However, company raised money by way of term loans during the year which were applied for the purpose for which they were raised.
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the of cers and employees of the Company has been noticed or reported during the year.
xi. According to information and explanation given to us and based on our examination of the records, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act for the year under consideration.
xii. In our opinion and according to the information and explanations given to us, the company 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 our examinations of the records of the company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable Indian accounting standards.
xiv. According to the information and explanations given to us and based on our examinations of the records of the company, the company had made preferential allotment of shares during the year under review and the requirements of section 42 of the Companies Act, 2013 have been complied with and the amount raised has been used for the purposes for which the funds were raised.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them.
Accordingly, paragraph 3(xv) of the order is not applicable.
xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
|FOR A R SULAKHE & CO.|
|Firm Reg. No. 110540W|
|Date: May 30, 2019|
Annexure B referred to in p aragraph 2 (f) under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date on the standalone Ind AS financial statements
Report on the Internal financial Controls under Clause (i) of Sub -section 3 of
Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of AUTOLINE INDUSTRIES LIMITED("the Company") as of March 31, 2019 in conjunction with our audit of the standalone Ind AS 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 control over financial reporting criteria established by the Company, 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"(ICAI).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, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information, as required under the Companies Act, 2013.
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal financial Controls Over financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under section 143(10) of the Companies 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 and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and whether such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to 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 Companys internal financial controls system over financial reporting.
Meaning of Internal financial Controls over financial Repor ting
Companys Internal financial control over financial reporting 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 control over financial reporting 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal financial Controls over financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, however, company is required to strengthen its financial controls for obtaining balance con rmations from
trade receivables and payables based on "the internal control over financial reporting criteria established by the Company 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"(ICAI).
|FOR A R SULAKHE & CO.|
|Firm Reg. No. 110540W|
|M.No.: 33451||Date: May 30, 2019|