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Affordable Robotic & Automation Ltd.

BSE: 541402 Sector: Engineering
NSE: N.A. ISIN Code: INE692Z01013
BSE 00:00 | 07 May 101.90 0.75
(0.74%)
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102.70

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102.70

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99.00

NSE 05:30 | 01 Jan Affordable Robotic & Automation Ltd
OPEN 102.70
PREVIOUS CLOSE 101.15
VOLUME 16000
52-Week high 117.60
52-Week low 19.55
P/E 36.26
Mkt Cap.(Rs cr) 104
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 102.70
CLOSE 101.15
VOLUME 16000
52-Week high 117.60
52-Week low 19.55
P/E 36.26
Mkt Cap.(Rs cr) 104
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Affordable Robotic & Automation Ltd. (AFFORDABLEROBO) - Auditors Report

Company auditors report

To the Members of

AFFORDABLE ROBOTIC AND AUTOMATION LTD.

Gat No.1209 Village Wadki Taluka Haveli Dist. Pune Pune 412308.

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the Standalone Financial Statements of Affordable Robotic And Automation Ltd. (the Company) which comprise the balance sheet as at 31st March 2019 and the Statement of Profit and Loss and Statement of Cash Flows for the year then ended and notes to the financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as Standalone Financial Statements).

In our opinion and to the best of our information and according to the explanations given to us the aforesaid Standalone Financial Statements give the information required by the Companies Act 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31 2019 and its profit and its cash flows for the year ended on that date.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit MatterAuditor's VerificationReference in Notes to accounts
1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of AS 9We have evalued the process of recognition of revenue as per custom of the industry and internal control associated with it.Note no 34.06
Sales are accounted for on the basis of dispatch to customers which excludes excise duty and value added tax and other income is recognized on accrual basis.
2 Inventory Valuation in view of AS 2Inventory consists of Raw Material Stores Spares and Work in Progress for Automation and Car Parking Solutions verified and valued by the management at Net realisable value or cost whichever is lower. We have verified the related valuation statements and management explanation.Note no 34.07
3 Sundry Balances Written OffThere are old outstanding balances of receivables as well as payables which were written off during the year transferring to Sundry Balances Written off ledger and net balance of Rs 0.04 Cr transferred to Profit and Loss Account. We have verified the related ledgers and management explanation.Note no 25 (b)
4 Advance Recoverable from Raj Ratna Chit Fund - It is good advance and no need to write off. Amount Rs 0.475 CrWe have verified the related ledger and management explanation.Note no 13 (a)
5 Land Advance to Raj Rane - It is good advance and no need to write off as per management [Carrying Value Rs. 0.55 cr]We have verified the related ledger and management explanation.Note no 13 (b)
6 Non Current Investment in wholy owned subsidiary ARAPL Intelligent Equiment Shanghai Co. Ltd [China]. For the year 2018-19 there were no operations in the company. Management is of the opinion that they shall be able to revivehence impairment loss is not booked. Total carrying amt is Rs.0.89 Cr shown under investments.We have verified the related ledgers and management explanation for non- provision of impairment lossNote No. 11 and 11.01
7 Service Tax Show Cause Notice for Rs. 2.64 Cr has been received during the year and replied duly decision pending and final Order in Original not yet received from department. Provision has not been done in books as final order not received.We have verified the Show cause notice and reply to the same and management explanation regarding expectation of NIL liability-
8 Gratutity liability - provision not done but disclosure given in notes to accounts. As per the actuarial valuation report liability for gratuity comes to Rs. 0.73 CrWe have verified the actuarial valuation report and management explanation that the provision is not done due to consistent accounting policy and verified the disclosure in notes to accounts.Note No. 34.09
9 During the year the company has got its shares listed on BSE SME exchange and raised Rs. 22.79 Cr via IPO which includes capital of Rs. 2.68 Cr and premium of Rs.20.11 Cr and done Private Placement of Rs.7.5 Cr includes capital of Rs. 1.00 Cr and premium Rs.6.5 Cr. All expenses related to IPO aggregating to Rs.2.99 Cr are debited in initially in IPO Expenses Ledger and then charged to securities premium reserve.We have verified the issue related documents and relevant entries in books of accounts for money raised and expenditure incurredNote No.1 (b) and 2(b)
10 Purchase of 3 offices at Mumbai worth Rs 13.53 crore paid till date of Balance sheet Rs. 11.26 Cr in which own funds invested Rs. 2.14 Cr and Term Loan taken Rs. 9.12 Cr - Capitalisation of original cost all related expenses borrowing cost & disclosure in Capital WIP.We have verified the related documents like registered agreement to sale ledgers of the asset and developer loan statement and related records. Schedule 6

Emphasis of Matters

Service Tax Show Cause Notice for Rs. 2.64 Cr has been received during the year and replied duly decision pending and final Order in Original not yet received from department. Provision has not been done in books as final order not received.

Gratuity liability provision not done but disclosure given in note 34.09 to accounts. As per the Actuarial Valuation report liability for gratuity comes to Rs. 0.73 Cr as on 31/03/2019. The provision for FY 2018-19 as per acturial valuation report comes to Rs. 0.14 Cr.

Non Current Investment in wholy owned subsidiary ARAPL Intelligent Equiment Shanghai Co. Ltd [China]. For the year 2018-19 there were no operations in the company. Management is of the opinion that they shall be able to revivehence impairment loss is not booked. Total carrying amt is Rs.0.89 Cr shown under investments.

As per ledger confirmation received from Raj Ratna Chit Fund Pvt Ltd the amount receivable by the Company from them comes to Rs. 6 lacs however the same in books of the Company is shown at Rs. 4.75 lacs the balance Rs. 1.25 lacs is dividend income which as per management shall be booked as income in subsequent years on actual realisation.

Our opinion is not qualified in respect of above matters.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act 2013 and the

Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position financial performance including cash flows of the Company in accordance with the accounting principles generally accepted in India including the accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the financial statements the Board of Directors is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards.

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 of the Companies Act 2013 we give in the Annexure A a statement on the matters specified in paragraphs 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 best of 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 the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31st March 2019 taken on record by the Board of Directors none of the directors is disqualified as on 31st March 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 financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure B.

g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations on its financial position in its Standalone Financial Statements other than those reported in Companies (Auditor's Report) Order 2016.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For Vijay Moondra & Co. Chartered Accountants

(FRN: 112308W)

CA Vinit Moondra

Partner M No. 119398

Place: Ahemdabad Date: 11/07/2019

UDIN: 19119398AAAAHL9695

Annexure A to the Independent Auditor's Report of even date on the Standalone Financial Statements of AFFORDABLE ROBOTIC AND AUTOMATION LTD.

Referred to in paragraph 1 under the heading `Report on Other Legal & Regulatory Requirement' of our report of even date to the financial statements of the Company for the year ended March 31 2019:

1. (a) The Company has maintained adequate records showing full particulars including quantitative details and situation of fixed assets;

(b) The Fixed Assets have been physically verified by the management in a phased manner designed to cover all the items over a period of three years which in our opinion is reasonable having regard to the size of the company and nature of its business. Pursuant to the program a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the books records and the physical fixed assets have been noticed.

(c) The title deeds of immovable properties are held in the name of the company.

2. (a) The management has conducted the physical verification of inventory at reasonable intervals.

(b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.

3. The Company has not granted any loans secured or unsecured to companies firms Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (c) of the Order are not applicable to the Company and hence not commented upon.

4. In our opinion and according to the information and explanations given to us the company has complied with the provisions of section 185 and I86 of the Companies Act 2013 in respect of loans investments guarantees and security.

5. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 with regard to the deposits accepted from the public are not applicable.

6. As informed to us the maintenance of Cost Records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and are maintained in respect of the activities carried on by the company.

7. (a) According to information and explanations given to us and on the basis of our examination of the books of account and records the Company has been generally regular in depositing undisputed statutory dues including Provident Fund Employees State Insurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Value added Tax Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us undisputed amounts payable in respect of the above were in arrears as at March 31 2019 for a period of more than six months from the date on when they become payable are as follows.

Sr NoDescriptionArrears as on 31-03-2019 for more than Six Months- INR
1VAT4596760

(b) According to the information and explanation given to us there are no dues of income tax sales tax service tax duty of customs duty of excise value added tax outstanding on account of any dispute except as follows.

Sr NoAYDemand RsNature of Demand and StatusForum where case is pending
1 2012-13 497000Income tax demand as per processing at CPC. Online reply has been filed claiming as no demandCPC Income Tax
2 2014-15 2656640Income tax demand as per processing at CPC. Online reply has been filed claiming as no demandCPC Income Tax
3 2016-17 3655530Income tax demand as per processing at CPC. Intimation u/s 143(1) not received request submitted online.CPC Income Tax
42017-185831230Income tax demand as per processing at CPC. Intimation u/s 143(1) not received request submitted online.CPC Income Tax
TOTAL12640400

8. In our opinion and according to the information and explanations given to us the Company has not defaulted in the repayment of dues to banks. The Company has taken loan either from financial institutions or Banks and not from the government and has not issued any debentures.

9. Based upon the audit procedures performed and the information and explanations given by the management moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those were raised. There were no default in repayment of term loan.

10. Based upon the audit procedures performed and the information and explanations given by the management we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

11. Based upon the audit procedures performed and the information and explanations given by the management the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;

12. In our opinion the Company is not a Nidhi Company. Therefore the provisions of clause 4 (xii) of the Order are not applicable to the Company.

13. In our opinion all transactions with the related parties are in compliance with section 177 and 188 of Companies Act 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

14. Based upon the audit procedures performed and the information and explanations given by the management the company has made preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review as follows and the requirement of Section 42 of Companies Act 2013 have been complied with.

SourceAmount INRPurposeUsed for
1 Private Placement10000000Working CapitalWorking Capital

15. Based upon the audit procedures performed and the information and explanations given by the management the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

16. In our opinion the company is not required to be registered under section 45 IA of the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.

For Vijay Moondra & Co. Chartered Accountants

(FRN: 112308W)

CA Vinit Moondra

Partner M No. 119398

Place: Ahemdabad ]

Date: 11/07/2019

Annexure B to the Independent Auditor's Report of even date on the Standalone Financial Statements of AFFORDABLE ROBOTIC AND AUTOMATION LTD.

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

We have audited the internal financial controls over financial reporting of AFFORDABLE ROBOTIC AND AUTOMATION LTD. (the Company) as of March 31 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with 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 be prescribed under section 143(10) of the Companies Act 2013 to the extent applicable to an audit of internal financial controls both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company'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 financial reporting including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and not be detected. Also projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31 2019 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Vijay Moondra & Co. Chartered Accountants

(FRN: 112308W)

CA Vinit Moondra

Partner M No. 119398

Place: Ahmedabad

Date: 11/07/2019

   

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