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Ashok Leyland Ltd.

BSE: 500477 Sector: Auto
NSE: ASHOKLEY ISIN Code: INE208A01029
BSE LIVE 15:57 | 15 Dec 112.95 0.55
(0.49%)
OPEN

113.70

HIGH

114.10

LOW

112.50

NSE 15:59 | 15 Dec 112.75 0.70
(0.62%)
OPEN

114.00

HIGH

114.40

LOW

112.30

OPEN 113.70
PREVIOUS CLOSE 112.40
VOLUME 516957
52-Week high 133.00
52-Week low 75.10
P/E 22.91
Mkt Cap.(Rs cr) 33,062
Buy Price 0.00
Buy Qty 0.00
Sell Price 112.95
Sell Qty 4813.00
OPEN 113.70
CLOSE 112.40
VOLUME 516957
52-Week high 133.00
52-Week low 75.10
P/E 22.91
Mkt Cap.(Rs cr) 33,062
Buy Price 0.00
Buy Qty 0.00
Sell Price 112.95
Sell Qty 4813.00

Ashok Leyland Ltd. (ASHOKLEY) - Auditors Report

Company auditors report

To The Members of Ashok Leyland Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of AshokLeyland Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2017 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Cash Flows and the Statement of Changes in Equity for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

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 the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the standalone financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone Ind AS financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained bythe other auditor of the amalgamating company in terms of their report referred to in theOther Matters paragraph below is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of report of the other auditor on thefinancial information of the amalgamating company referred to in the Other Mattersparagraph below 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 2017 and its profit total comprehensive income cash flows andthe changes in equity for the year ended on that date.

Other Matters

The standalone Ind AS financial statements include the financial information oferstwhile Hinduja Foundries Limited ("amalgamating company") for the periodOctober 1 2016 to March 31 2017 consequent to amalgamation into the Company which hasbeen effected on April 24 2017 with the appointed date of October 1 2016 (Refer Note3.21 to the standalone Ind AS financial statements). We did not audit the financialinformation of the amalgamating company for the period October 1 2016 to March 31 2017included in the standalone Ind AS financial statements of the Company whose financialinformation reflect total assets of Rs.85225.21 lakhs as at March 31 2017 and totalrevenues of Rs.36558.10 lakhs for the said period as considered in the standalone Ind ASfinancial statements. The said financial information of the amalgamating company has beenaudited by other auditor whose report has been furnished to us and our opinion in so faras it relates to the amounts and disclosures included in respect of the amalgamatingcompany and our report in terms of sub-sections (3) and (11) of Section 143 of the Act inso far as it relates to the amalgamating company is based solely on the report of theother auditor.

Our opinion on the standalone Ind AS financial statements and our report on Other Legaland Regulatory Requirements below is not modified in respect of this matter with respectto our reliance on the work done and the report of the other auditor.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit and on theconsideration of the report of the other auditor on the financial information of theamalgamating company referred to in the Other Matters paragraph above we report to theextent applicable that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and the report of theother auditor on the financial information of the amalgamating company referred in theOther Matters paragraph above.

c) The report on the financial information of the amalgamating company audited by theother auditor referred in the Other Matters paragraph above has been sent to us and hasbeen properly dealt with by us in preparing this report.

d) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account and the financial information ofthe amalgamating company audited by the other auditor referred in the Other Mattersparagraph above.

e) In our opinion and based on the consideration of the report of the other auditor onthe financial information of the amalgamating company referred in the Other Mattersparagraph above the aforesaid standalone financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act.

f) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164(2) of theAct.

g) With respect to the adequacy of the internal financial controls over financialreporting and the operating effectiveness of such controls refer to our report in"Annexure A" which is based on our audit and the consideration of the report ofthe other auditor on the financial information of the amalgamating company referred in theOther Matters paragraph above. Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's internal financial controls over financialreporting.

h) With respect to the other matter to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous and to the other auditor in terms of the report of the other auditor in respect of theamalgamating company referred in the Other Matters paragraph above:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and

iv. The Company has provided requisite disclosures in the standalone financialstatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated the November 8 2016 of the Ministry of Finance duringthe period from November 8 2016 to December 30 2016. Based on audit procedures performedby us and the representations provided to us by the Management and on the consideration ofthe report of the other auditor on the financial information of the amalgamating companyreferred in the Other Matters paragraph above we report that the disclosures are inaccordance with the books of account maintained by the Company and produced to us and toother auditor.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For M.S. Krishnaswami & Rajan For Deloitte Haskins & Sells LLP
Chartered Accountants Chartered Accountants
Firm's Registration No. 01554S Firm's Registration No. 117366W/W-100018
M S Murali A Siddharth
Partner Partner
Membership No. 26453 Membership No. 31467
May 25 2017
Chennai

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1(g) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of AshokLeyland Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors of the accounting records and the timely preparationof reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing deemed to be prescribed under Section 143(10) of theCompanies 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 andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was 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 auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence obtained by us and the audit evidence obtained bythe other auditor of the amalgamating company in terms of their report referred to in theOther Matters paragraph below is sufficient and appropriate to provide a basis for ouraudit opinion on the Company's internal financial controls system over financialreporting.

Meaning of Internal Financial Controls 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 purposes 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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

The accuracy and completeness Because of the inherent limitations of internal financialcontrols over financial reporting including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols over financial reporting to future periods are subject to the risk that theinternal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us and based on the consideration of report of the other auditor on the financialinformation of the amalgamating company referred to in the Other Matters paragraph belowthe Company has in all material respects an adequate internal financial controls systemover financial reporting and such internal financial controls over financial reportingwere operating effectively as at March 31 2017 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the Institute ofChartered Accountants of India.

Other Matters

The standalone Ind AS financial statements include the financial information oferstwhile Hinduja Foundries Limited ("amalgamating company") for the periodOctober 1 2016 to March 31 2017 consequent to amalgamation into the Company which hasbeen effected on April 24 2017 with the appointed date of October 1 2016 (Refer Note3.21 to the standalone Ind AS financial statements). The said financial information of theamalgamating company has been audited by other auditor whose report has been furnished tous and our aforesaid report under Section 143(3)(i) of the Act on the adequacy andoperating effectiveness of the internal financial controls over financial reporting in sofar as it relates to the amalgamating company is based on the report of the otherauditor.

For M.S. Krishnaswami & Rajan For Deloitte Haskins & Sells LLP
Chartered Accountants Chartered Accountants
Firm's Registration No. 01554S Firm's Registration No. 117366W/W-100018
M S Murali A Siddharth
Partner Partner
Membership No. 26453 Membership No. 31467
May 25 2017
Chennai

Our reporting on the Order includes erstwhile Hinduja Foundries Limited ("theamalgamating company") for the period October 1 2016 to March 31 2017 consequentto amalgamation into the Company which has been audited by other auditor in terms oftheir report referred in the Other Matters paragraph of our report of even date and ourreport in respect of the amalgamating company is based solely on the report of the otherauditor to the extent considered applicable for reporting under the Order in the case ofthe standalone Ind AS financial statements.

(i) In respect of its fixed assets:

a) The Company/ the amalgamating company has maintained proper records showing fullparticulars including quantitative details and situation of the fixed assets.

b) The fixed assets were physically verified during the year by the Management inaccordance with a phased programme of verification which in our opinion and the opinionof the other auditor provides for physical verification of all the fixed assets atreasonable intervals having regard to the size of the Company nature and value of itsassets. According to the information and explanation given to us and the other auditor nomaterial discrepancies were noticed on such verification.

c) According to the information and explanations given to us and the other auditor andthe records examined by us and the other auditor and based on the examination of theregistered sale deeds/ transfer deeds/ conveyance deeds provided to us and the otherauditor we report that the title deeds comprising all the immovable properties of landand buildings are held in the name of the Company/ the amalgamating company as at thebalance sheet date except for certain portion of land at Bhandara unit of the Companyadmeasuring 25.16 acres in respect of which the title deed is not in the name of theCompany Also Refer Note 1.1(2) to the Financial Statements. Immovable properties of landand buildings whose title deeds have been pledged as security for loans guarantees etc.are held in the name of the Company/ the amalgamating company based on the confirmationsdirectly received by us and the other auditor from lenders. In respect of immovableproperties of land and buildings that have been taken on lease and disclosed under othernon-current and other current assets in the financial statements the lease agreements arein the name of the Company/ the amalgamating company where the Company/ the amalgamatingcompany is the lessee in the agreement.

(ii) As explained to us and the other auditor the inventories other than goods intransit and stock lying with third parties (where certificates confirming physicalinventory are received) were physically verified during the year by the Management atreasonable intervals and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us and the other auditorthe Company has granted unsecured loan to a company covered in the register maintainedunder Section 189 of the Companies Act 2013 in respect of which:

a. The terms and conditions of the grant of such loan are in our opinion prima facienot prejudicial to the Company's interest.

b. The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

c. There is no overdue amount remaining outstanding as at the year-end.

(iv) In our opinion and the opinion of the other auditor and according to theinformation and explanations given to us and the other auditor the Company has compliedwith the provisions of Sections 185 and 186 of the Companies Act 2013 in respect of grantof loans making investments and providing guarantees and securities as applicable.

(v) According to information and explanations given to us and the other auditor theCompany has not accepted any deposit during the year and there are no unclaimed depositsto which the provisions of Section 73 to 76 or any other relevant provisions of theCompanies Act 2013 are applicable.

(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013 for certain products of the Company. We and theother auditor have broadly reviewed the cost records maintained by the Company/ theamalgamating company pursuant to the Companies (Cost Records and Audit) Rules 2014 asamended and prescribed by the Central Government under Sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. We and the other auditor have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) According to the information and explanations given to us and the other auditorand the books of account examined by us and the other auditor in respect of statutorydues:

a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax Cess and other material statutory duesapplicable to it with the appropriate authorities during the year.

There were no undisputed amounts payable in respect of the aforesaid statutory dues inarrears as at March 31 2017 for a period of more than six months from the date theybecame payable.

b) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise DutyValue Added Tax and Cess which have not been deposited as at March 31 2017 on account ofdisputes are as stated below:

( Rs. Lakhs)

Nature of Dues Disputed Dues* Period to which the amount relates Forum where the dispute is pending Amount stayed out of disputed dues
Income Tax 1826.79 Various periods from 2007 – 2013 Appellate authority – Tribunal -
200.71 Various periods from 2006 – 2010 High Court -
Sales Tax and Value 22261.21 Various periods from 1993 Appellate authority – upto 20535.06
Added Tax 2016 Commissioner level
2767.35 Various periods from 1987 – 2013 Appellate authority – Tribunal 2767.35
660.48 Various periods from 1986 – 2001 Central Sales tax Appellate authority 660.48
108.92 Various periods from 2006 – 2012 High Court 108.92
Excise Duty and cess thereon 196.24 Various periods from 2008 2016 Appellate authority – upto Commissioner level 152.70
2372.23 Various periods from 2008 2016 Appellate authority – Tribunal 2312.11
Customs Duty 1.78 Various periods from 2006 – 2007 Appellate authority – Tribunal -
Service Tax and cess thereon 3214.28 Various periods from 2009 2014 Appellate authority – upto Commissioner level 3214.28
335.07 Various periods from 2009 – 2011 Appellate authority – Tribunal 335.07

* Net of payments

(viii) In our opinion and the opinion of other auditor and according to the informationand explanations given to us and the other auditor the Company has not defaulted in therepayment of loans or borrowings to banks and government and dues to debenture holders.There are no loans or borrowings from the financial institutions.

(ix) In our opinion and the opinion of other auditor and according to the informationand explanation given to us and the other auditor term loans have been applied by theCompany during the year for the purpose for which they were raised. The Company has notraised moneys by way of initial public offer or further public offer (including debtinstruments) during the year.

(x) To the best of our and the other auditor's knowledge and belief and according tothe information and explanations given to us and the other auditor and considering thesize and nature of the Company's operations no fraud by the Company and no fraud ofmaterial significance on the Company by its officers or employees has been noticed orreported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) ofthe Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Sections 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and the opinion of the other auditor and according to theinformation and explanations given to us and the other auditor during the year theCompany has not entered into any non-cash transactions with its directors or personsconnected with him and hence provisions of Section 192 of the Companies Act 2013 are notapplicable.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For M.S. Krishnaswami & Rajan For Deloitte Haskins & Sells LLP
Chartered Accountants Chartered Accountants
Firm's Registration No. 01554S Firm's Registration No. 117366W/W-100018
M S Murali A Siddharth
Partner Partner
Membership No. 26453 Membership No. 31467
May 25 2017
Chennai