AAR Commercial Company Ltd.
|BSE: 539632||Sector: Others|
|NSE: N.A.||ISIN Code: INE184K01013|
|BSE 00:00 | 31 Aug||AAR Commercial Company Ltd|
|NSE 05:30 | 01 Jan||AAR Commercial Company Ltd|
|BSE: 539632||Sector: Others|
|NSE: N.A.||ISIN Code: INE184K01013|
|BSE 00:00 | 31 Aug||AAR Commercial Company Ltd|
|NSE 05:30 | 01 Jan||AAR Commercial Company Ltd|
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AAR COMMERCIAL COMPANY LIMITED
Report on the Standalone Ind AS Financial Statements Opinion
We have audited the accompanying standalone Ind AS financial statements of AARCommercial Company Limited ("the Company") which comprises the Balance Sheet asat March 31 2019 the Statement of Profit and Loss (including Other Comprehensive Income)and the Statement of Changes in Equity for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the Ind AS and accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and profit/loss total comprehensiveincome the changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone Ind AS financial statements under the provisions of the Companies Act 2013 andthe Rules there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Key Audit Matters
Key Audit Matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole andinforming our opinion thereon and we do not provide a separate opinion on these matters.
Responsibilities of Management and those charged with governance for the standalone IndAS financial statement
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 changesin equity and cash flows of the Company in accordance with accounting principles generallyaccepted in India including Indian Accounting Standards (Ind AS) prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Ind AS financial statement that give a trueand fair view and are free from material misstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of Standalone Ind AS financial statement
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial 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 Ind AS financial statements.
A further description of the auditor's responsibilities for the audit of the standaloneInd AS financial statements is included in Annexure A. This description forms part of ourauditor's report.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure B 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 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 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.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome and the Statement of Changes in Equity dealt with by this Report are in agreementwith the books of account.
d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act. e) On the basis of thewritten representations received from the directors as on 31st March 2019 taken on recordby the Board of Directors none of the directors is disqualified as on 31st March 2019from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the Internal Financial Control over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure C".
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 opinionand to the best of our information and according to the explanations given to us theremuneration paid/provided by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
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 explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements if any.
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 were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
Responsibilities for Audit of Financial Statement
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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.
3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
4. Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
5. Evaluate the overall presentation structure and content of the Standalone Ind ASfinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit 3ndings including anysignificant de3ciencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 significance in the audit of the Standalone Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
(Referred to in paragraph 1 of the Report on other legal and regulatory requirements ofthe Independent Auditor's Report to the Members of the Company of even date):
1) The Company does not have any fixed or Immovable Assets. Consequently the provisionof clause 3(i)(b) to 3(i)(c) of the order are not applicable to the company and hence notcommented upon.
2) The Company does not have any inventory of any kind of goods or raw material andhence no reporting on this account is required.
3) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnership and other parties listed in the Register maintained underSection 189 of the Companies Act 2013 and therefore provisions on clauses 3(iii) of theOrder are not applicable to the Company.
4) In our opinion and according to the information and explanations given to us theCompany has neither given any loans nor has any investments and therefore provisions ofclause (iv) of the Order are not applicable to the Company.
5) In our opinion and according to information and explanation given to us during theyear the Company has not accepted any deposits from the public as defined under sections73 or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder and therefore provisions on clauses 3(v) of the Order are not applicable to theCompany.
6) The Company has maintained the cost records as prescribed by the Central Governmentunder sub section (1) of section 148 of the Act.
7) (a) According to the records of the Company the Company is regular in depositingundisputed statutory dues including Provident Fund Employees State Insurance Income TaxSales Tax Service Tax Custom Duty Excise Duty Value Added Tax Cess and any otherstatutory dues applicable to it except for few cases where there was delay in depositingof Provident Fund and Employees State Insurance Contribution with the appropriateauthorities. According to information and explanations given to us there are noundisputed amounts payable in respect of aforesaid dues which were outstanding as at 31stMarch 2018 for a period of more than six months from the date they became payable.
b) The disputed statutory dues aggregating Rs. 88144040/- that have not beendeposited on account of matters pending before appropriate authorities are as under:
8) The Company has not defaulted in payment Loan borrowed from financial institutionsor bank or government or by way of issue of debentures.
9) Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented uponIn our opinion and according to information and explanations given to usduring the year no material fraud by the Company or any fraud on the company by itsofficers or employees has been noticed or reported during the course of our audit.
10) According to information and explanations given to us and based on our examinationof records of the Company the Company has paid/provided for Managerial Remuneration inaccordance with requisite approval mandated by provisions of section 197 read withschedule V of the Act.
11) The Company is not a Nidhi Company and therefore provisions of clause 3(xii) of theorder are not applicable to the Company. 12) There were no transactions with the relatedparties during the year as defined under provision of section 177 and 188 of the CompaniesAct 2013. Hence no disclosure under AS-18 and section 133 of the said Act read withrule-7 of the Companies (Accounts) Rules 2014 is required.
13) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and therefore provisions ofclause 3(xiv) of the order are not applicable to the Company.
14) According to information and explanation given to us and based on our examinationof the records of the Company the Company has not entered into any non-cash transactionswith directors or persons connected with him during the year and therefore provisions ofclause 3(xv) of the order are not applicable to the Company.
15) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of AARCommercial Company Limited ("the Company") as of March 31 2019 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
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 (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and effcientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit 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 authorizations ofmanagement 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 misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 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.