To The Members of Ashok Leyland Limited
Report on the Standalone Indian Accounting Standards (Ind AS)
1. We have audited the accompanying standalone Ind AS financial statements of AshokLeyland Limited ("the Company") which comprise the Balance Sheet as at March31 2018 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flow and the Statement of Changes in Equity for the year then ended anda summary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Ind AS Financial statements
2. T he Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act
2013 ("the Act") with respect to the preparation of these standalone Ind ASfinancial statements to give a true and fair view of the financial position financialperformance (including other comprehensive income) cash flows and changes in equity ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards specified in the Companies (Indian AccountingStandards) Rules 2015 (as amended) under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error-.
3. The responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder.
5. We conducted our audit of the standalone Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India. Those Standards and pronouncements require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.
6. In audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.
8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2018 and its total comprehensive income (comprising of profit andother comprehensive income) its cash flows and the changes in equity for the year endedon that date.
9. The standalone Ind AS financial statements of the Company for the year ended March31 2017 were audited jointly
by other firms of chartered accountants under the Companies Act 2013 who vide theirreport dated May 25 2017 expressed an unmodified opinion on those financial statements.Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10. Ts required by the Companies (Auditor's Report) Order
2016 issued by the Central Government of India in terms of sub-section (11) of Section143 of the Act ("the Order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the Annexure B a statement on the matters specifiedin paragraphs 3 and 4 of the Order.
11. Ts required by Section 143 (3) of the Act we report that:
(a) Te 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) T n 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) T he Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Cash Flow and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account.
Annual Report 2017 - 2018 69
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct.
(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure A.
(g) W ith respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:
i The Company has disclosed the impact if any of pending litigations as at March 312018 on its financial position in its standalone Ind AS financial statements - Refer Note3.9;
ii One Company has long-term contracts as at March 31 2018 for which there were nomaterial foreseeable losses. The Company did not have any long-term derivative contractsas at
March 31 2018.
iii Othere has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312018.
iv O he reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2018.
For Price Waterhouse & Co
LLP Firm Registration
Number : 100332
Date: May 18 2018
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
Referred to in paragraph 11(f) of the Independent Auditors' Report of even date to themembers of Ashok Leyland Limited on the standalone Ind AS financial statements as of andfor the year ended March 31 2018
Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls with reference to financialstatements of Ashok Leyland Limited ("the Company") as of March 31 2018 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. W he Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
3. W ur responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our audit
in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.
4. Where audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system with reference to financial statementsand their operating effectiveness. Our audit of internal financial controls with referenceto financial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.
5. 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 systemwith reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
6. We company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements 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 with authorisations of management anddirectors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to financialstatements
7. Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2018 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.
i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets (Property plant and equipment andIntangible assets).
(b) The Property plant and equipment are physically verified by the Managementaccording to a phased programme designed to cover all the items over
a period of three years which in our opinion is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the programme a portion of theProperty plant and equipment has been physically verified by the Management during theyear and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties as disclosed in Note 1.1 on Propertyplant and equipment to the standalone Ind AS financial statements are held in the name ofthe Company except for as stated in Sub Notes 2 3 and 9 to Note 1.1 to the standaloneInd AS financial statements.
ii. T he physical verification of inventory excluding stocks with third parties havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Thediscrepancies noticed on physical verification of inventory as compared to books andrecords were not material and have been appropriately dealt with in the books of accounts.
iii. The Company has granted unsecured loans to a subsidiary company and to a companycovered in the register maintained under Section 189 of the Act. The Company has notgranted any secured/unsecured loans to firms / LLPs/ other parties covered in the registermaintained under Section 189 of the Act.
(a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company's interest.
(b) In respect of the aforesaid loans the schedule of repayment of principal andpayment of interest has been stipulated and the parties are repaying the principalamounts as stipulated and are also regular in payment of interest as applicable.
(c) In respect of the aforesaid loans there is no amount which is overdue for morethan ninety days.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it.
v. T he Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.
vi. P ursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
vii. (a) T ccording to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of provident fund Income tax value added taxemployees' state insurance sales tax service tax duty of customs duty of excise cessgoods and service tax (with effect from July 1 2017) and other material statutory duesas applicable with the appropriate authorities.
(b) T ccording to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax and goods and service tax (witheffect from July 1 2017) which have not been deposited on account of any dispute. Theparticulars of dues of sales tax service tax duty of customs duty of excise and valueadded tax as at March 31 2018 which have not been deposited on account of a dispute areas follows:
|Name of Statute ||Nature of Dues ||Amount (in lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|State and Central Sales Tax ||Sales tax and Value added tax ||4411.44 ||Various periods from 1987 - 2013 ||Appellate Authority - Tribunal |
|Acts || ||108.92 ||Various periods from 2006 - 2012 ||High Court |
| || ||26383.02 ||Various periods from 1993 - 2017 ||Appellate Authority- up to Commissioner level |
|Central Excise Act 1944 ||Excise duty and cess ||1062.64 ||Various Periods from 2008-2009 ||Supreme Court |
| ||thereon ||1162.35 ||Various periods from 1993-2012 ||Appellate Authority - Tribunal |
| || ||3880.33 ||Various periods from 2009-2016 ||Appellate Authority- up to Commissioner level |
|Customs Act 1962 ||Customs Duty ||1.78 ||Various periods from 2006 - 2007 ||Appellate Authority - Tribunal |
|Service Tax - Finance Act 1994 ||Service tax and cess thereon ||3530.55 ||Various periods from 2011-2014 ||Appellate Authority - Tribunal |
viii. Tccording to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date.
ix. In our opinion and according to the information and explanations given to us themoneys raised by way of term loans have been applied for the purposes for which they wereobtained. The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments).
x. D uring the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
xii. Ds the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto 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 withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standards (Ind AS) 24 Related Party Disclosures specified under Section 133 ofthe Act.
xiv. Dhe Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. Dhe Company has not entered into any non-cash transactions with its directors orpersons connected with him.
Accordingly the provisions of Clause 3(xv) of the Order are not applicable to theCompany.
xvi. Dhe Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
For Price Waterhouse & Co
LLP Firm Registration
Membership Number : 100332
Date: May 18 2018