To the Members of ATUL AUTO LIMITED
Report on Audit of the Standalone Financial Statements
We have audited the accompanying Ind AS Standalone financial statements of ATUL AUTOLTD ("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss which also includes Other Comprehensive Income and Cash FlowStatement and the statement of changes in Equity for the year ended and notes tofinancial statements including summary of significant accounting policies and otherexplanatory information (hereinafter referred to as '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 as amended ('the Act') in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at 31 March 2019 its profit includingother comprehensive income its cash ows and the changes in equity for the year ended onthat date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified undersection 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility 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 theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have ful lled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis 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 mostsigni cance in our audit of the standalone financial statements for the financial yearended 31st March 2019. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed 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 ful lled the responsibilities described in the'Auditor's responsibilities for the audit of the standalone financial statements' sectionof our report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.
|Key Audit Matters ||How our audit addressed the key audit matter |
|Revenue Recognition || |
|Company's revenue is primarily derived from sale of three wheelers vehicles through dealership channels domestically and internationally. ||Our testing of revenue transactions focused on evidencing that the underlying transactions had occurred in the period. |
| ||Our procedure included: |
|We focused on existence and appropriate recognition of revenue as a key audit matters as it is key contributor to the determination of profit Refer Notes 1.2 of Significant accounting policies and Note 19 to Standalone Financial Statements || We developed an understanding of the systems controls and processes associated the recording of sales transactions. ? |
| || We analysed the Company accounting policies for revenue recognition including the criteria for revenue recognition and sales incentives classification. |
| || We analysed the terms of dealer agreements also covering rewards related to sales incentives. |
| || Test of detail to con rm the existence of revenue by agreeing the sample of revenue transaction to supporting documentation. |
| || Where delayed delivery was identified we considered whether the company had transferred the inventory risk to the customer before the date of audit report. |
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 ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report 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. However wehave nothing to report in this matter.
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 Companies Act 2013 ("the Act") with respect to preparation andpresentation of these standalone Ind AS financial statement to give a true and fair viewof the financial position financial performance which includes other comprehensiveincome statement of cash ows and changes in equity of the Company in accordance withaccounting principles generally accepted in India including Indian Accounting Standards(Ind AS) specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules2015 ("Ind AS") as amended. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding 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 control that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone Ind AS financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
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.
Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditors' Responsibility for 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from an error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to 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 reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit ndings including anysignificant de ciencies 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 signi cance in the audit of the standalone financial statementsof the current period and are therefore reported as key audit matters. We describe thesematters in our auditor's report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
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 sub-section (11) of Section 143 ofthe Act we considered appropriate and according to the information and explanations givento us we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. 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 bestof our knowledge and belief were necessary for the purpose 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. Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive income the Cash Flow Statement and the Statement of Changes in Equity dealtwith by this Report are in agreement with the relevant books of account.
d. In our opinion the aforesaid standalone Financial Statement comply with theAccounting Standards (Ind AS) specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;
e. On the basis of written representations received from the directors as on March 312019 taken on record by the Board of Directors none of the directors is disquali ed as onMarch 31 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 financialreporting of the company with reference to these standalone financial statements and theoperating effectiveness of such controls refer to our separate report in "AnnexureB".
g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and according to the information and explanations given to us themanagerial remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act read with Schedule V of the Act.The remuneration paid to any director is not in excess of the limit laid down underSection 197 of the Act. The Ministry of Corporate Affairs has not prescribed other detailsunder Section 197(16) which are required to be commented upon by us.
h. 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 explanation given to us;
I. The company has disclosed the impact if any of pending litigations on itsfinancial position in its standalone financial statements - Refer note 28 to thestandalone Ind AS financial statements.
ii. The company does not have any long-term contracts including derivative contractshence the question of any material foreseeable losses does not arise;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the company.
For Kamlesh Rathod & Associatess
Firm Registration No.117930W
Signed at Shapar (Dist. Rajkot) on 25th May 2019
[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditors' Report of even date to the members of ATUL AUTO LTD on thestandalone Ind AS financial statements for the year ended 31st March 2019]
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) The Company has a program of veri cation to cover all the items of xed assetswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. Pursuant to the program certain xed assets were physically veri edby the management during the year. According to the information and explanations given tous no material discrepancies were noticed on such veri cation.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties are inthe name of the company and the approach road to access the new factory site at BhaylaAhemedabad is privately owned and the expenditure is incurred by the company but title ofthat road is not in the name of the company.
(ii) The inventory (excluding stocks with third parties and work in progress) has beenphysically veri ed by the management during the year. In respect of inventory lying withthird parties these have substantially been con rmed by them. In our opinion thefrequency of veri cation is reasonable. Discrepancies noticed during physical veri cationwere not material and the same has been dealt with in the books of account.
(iii) According to the information and explanation given to us the company has notgranted any loans secured or unsecured to companies rms Limited liability partnershipsor other parties covered in the register maintained under section 189 of the Actaccordingly the provisions stated in paragraph 3 (iii)(a) 3(iii)(b) and 3(iii)(c) of theOrder are not applicable and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usthere are no loans guarantees and securities given in respect of which provisions ofsection 185 of the Act are applicable and hence not commented upon. In our opinion andaccording to the information and explanations given to us provision of section 186 of theact with respect to guarantee and investments made have been complied with by company.
(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from the public within the provisions of section 73to 76 of the Act and rules framed there under. Accordingly the provision of clause 3(v)of the order are not applicable to the company and hence not commented upon.
(vi) The Central Government of India has not prescribed the maintenance of cost recordsfor any of the products of the company under sub-section (1) of section 148 of the Act andrules framed there under.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees' StateInsurance Income-tax Goods and Services tax duty of Customs Cess and other materialstatutory dues have generally been regularly deposited during the year by the Company withthe appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Income-tax Goods andServices tax duty of Customs Cess and other material statutory dues were in arrears asat 31st March 2019 for a period of more than six months from the date they becamepayable.
(b) According to the records of the Company the dues outstanding of income-taxsales-tax wealth-tax service tax customs duty excise duty and cess on account of anydispute are as follows:
| || || || || ||(Rs. in Lacs) |
|Name of the statute ||Nature of dues ||Amount ||Period to which the amount relates ||Forum where dispute is pending ||Dispute by Company/ Department |
|The Income Tax Act 1961 ||Income Tax ||41.82 ||2008-09 ||Income Tax ||Department |
| || ||48.76 ||2012-13 ||Appellate ||Department |
| || ||8.63 ||2012-13 ||Tribunal ||Company |
| || ||37.44 ||2013-14 || ||Department |
| || ||5.06 ||2012-13 ||Commissioner Appeals ||Company |
| || ||16.40 ||2014-15 ||Commissioner Appeals ||Company |
|The Gujarat VAT Act 2006 ||VAT ||13.55 ||2006-07 ||VAT Tribunal ||Company |
| ||Sales Tax ||11.84 ||2001-02 & 2002-03 ||Supreme Court ||Department |
|The Central Sales Tax 1956 ||CST ||2.02 ||2001-02 & 2002-03 ||Supreme Court ||Department |
(Show-cause notices received from various Government Agencies pending formal demandnotices have not been reported being not adjudicated.)
(viii) The Company has not obtained any loan from financial institutions or banksduring the year.
(ix) The Company has not raised money by way of public issue or term loan during theyear.
(x) During 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 fraud on or by the company noticed or reported during the year nor have webeen informed of such case by the management.
(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 for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi company. Accordingly the provisionsof clause (xii) of the order are not applicable to the Company.
(xiii) According to information and explanation given to us and on the basis of booksof accounts and other relevant records of the company all transactions with the relatedparties are in compliance with section 177 and 188 of Companies Act 2013 where applicableand the details have been disclosed in the notes to standalone Financial Statements asrequired by applicable accounting standards.
(xiv) Company has not made any private placement or preferential allotment during theyear.
(xv) According to information and explanation given to us the Company has not enteredinto any non-cash transactions with directors or persons connected with him as referred toin section 192 of the Act.
(xvi) According to the information and explanations given by the Management theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.
For Kamlesh Rathod & Associatess
Firm Registration No.117930W
Signed at Shapar (Dist. Rajkot) on 25th May 2019
Report on the Internal Financial Controls for financial reporting under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 ('the act')
We have audited the internal financial control over financial reporting of ATUL AUTOLTD ('the company') as of 31st March 2019 in conjunction with our audit of the standaloneInd AS financial statement of the company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors 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"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors and accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.
Our responsibility is to express an opinion on the company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the 'Guidance Note') and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
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 systemover financial reporting.
Meaning of Internal Financial Control over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purpose in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company;(2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorization of themanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatement due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion the company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2019 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.
However looking to the expansion of the company in terms of volume & capitalexpenditure either separate audit division or an appointment of external auditprofessional is suggested. Our opinion is not modified for this matter.
For Kamlesh Rathod & Associatess
Firm Registration No.117930W
Signed at Shapar (Dist. Rajkot) on 25th May 2019