Auditors point out discrepancies in renting of warehouses by Scooters India

Independent auditors of state-owned Scooters India Ltd (SIL) have pointed out discrepancies in renting of warehouses by the three-wheeler maker, according to a regulatory filing by the company.

Asija & Associates LLP, the independent auditors of the company, also pointed out delayed IGST payment of Rs 1,68,928 since September 2019, which as per provisions of IGST Act 2017, should have been paid by October 20, 2019.

In their report to the board of directors of the company, the auditors pointed out that "during the course of audit, certain discrepancies related to the rent has been observed by us".

These related to the warehouses taken by SIL in five regions -- Pune, Chennai, Hyderabad, Kolkata and Patna.

"Lease/Rent Agreement of only one region, Chennai has been provided to us and the payment of rent for all the remaining warehouses are made on the approval basis," the report said.

It further said, "However, we are of the opinion that there must exist a lease/rent agreement between the parties for the adequate information about the lease such as -- timely renewal of rent agreement in case of expiry of periodicity of the lease, to determine the accurate lease rent of the premises and to serve as a legal evidence in the court of law in case of future disputes."
They also said, "While further scrutinising, it has been observed by us that the payment of rent for warehouses located in different regions made by the company on irregular basis."
On scrutinising payment of rent, the auditors said, "We observed that the accounting treatment of the same has been done once the payment is actually being made by the company, i.e., on the cash basis as a result organisation is not following the significant accounting policies."
On delayed IGST payment, Asija & Associates in its report to the company's board said, "During the course of audit it has been observed that the IGST payable amounting to Rs 2,77,576.11 out of which amount of Rs 1,68,928.11 is standing since September 2019. However, as per provisions of IGST Act, 2017 the same should be paid by the 20th of the subsequent month, i.e. October 2019..."