To the Members of
AFFORDABLE ROBOTIC AND AUTOMATION LTD.
Gat No.1209 Village Wadki
Dist. Pune Pune 412308.
Report on the Audit of the Standalone Financial Statements
We have audited the Standalone Financial Statements of Affordable Robotic AndAutomation Ltd. ("the Company") which comprise the balance sheet as at 31stMarch 2021 and the Statement of Profit and Loss (Including Other Comprehensive Income)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as Standalone FinancialStatements).
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 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2021 and its profit total comprehensive incomechanges in equity 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 mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Sr. No. Key Audit Matter ||Auditor's Verification ||Reference in Notes to accounts |
|1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of AS 9 ||We have evaluated the process of recognition of revenue as per custom of the industry and internal control associated with it. Sales are accounted for on the basis of dispatch to customers which excludes Goods and Service Tax TCS and other income is recognized on accrual basis. ||Note no 34.06 |
|2 Inventory Valuation in view of AS 2 ||Inventory 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 Off ||There 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. 0.11 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 Pvt Ltd - It is good advance and no need to write off. Amount Rs 4.75 lacs. ||We 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. Amount Rs 0.55 Cr ||We have verified the related ledger and management explanation. ||Note no 13 (b) |
|6 Non Current Investment in a. Dheeyantra Research Labs Pvt Ltd 195 Equity Shares of Rs 10 each at premium of Rs. 20535.75 per share. b. The new subsidiary company Masterji.Ai Private Limited is formed with 65% holding for formal and informal education with Artificial Intelligence. The investment is good and no impairment loss need to be provided. ||We have verified the related ledgers and management explanation for the carrying value of investment. ||Note No. 11 and 11.01 |
|7 Service Tax Assessment Order for Rs. 1.23 Cr has been received during the earlier years and appeal has been preferred against the Order. The Order is under adjudication hence provision has not been done in books as final appellate order not received. ||We have verified the Order and Appeal and management explanation regarding expectation of NIL liability || |
|8 Gratuity Liability - provision not done but disclosure given in notes to accounts. As per the actuarial valuation report liability for gratuity comes to Rs. 0.88 Cr ||We 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 |
Emphasis of Matters
Service Tax Appeal for Rs. 1.23 Cr has been filed during the year and the matter isunder adjudication decision pending and final Appeal Order not yet received fromdepartment. Provision has not been done in books as final appellate 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. 0.88 Cr as on31/03/2021 which is less than liability upto previous year Rs 0.91 Cr which has not beenprovided.
As per ledger confirmation received from Raj Ratna Chit Fund Pvt Ltd the amountreceivable by the Company from them comes to Rs. 6 lacs however the same in books of theCompany is shown at Rs. 4.75 lacs the balance Rs. 1.25 lacs is dividend income which asper 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) 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 thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 Financial Statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the accounting Standards specified under section 133 of theAct. 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 accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements the Board of Directors 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 unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative 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 the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign 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 whetherthe company 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 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies 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.
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 A" a statement on the mattersspecified 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 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 the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.
d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
g) 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 does not have any pending litigations on its financial position in itsStandalone Financial Statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Vijay Moondra & Co.
CA Vinit Moondra
Partner M No. 119398
UDIN : 21119398AAAAJP1130
"Annexure A" to the Independent Auditor's Report of even date on theStandalone Financial Statements of AFFORDABLE ROBOTIC AND AUTOMATION LTD.
Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date to the financial statements of the Company for theyear ended March 31 2021:
1. (a) The Company has maintained adequate records showing full particulars includingquantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed asset has been physicallyverified by the management during the year and no material discrepancies between the booksrecords 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 atreasonable intervals.
(b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial.
3. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act except company formation cost and expenses are done on behalf ofsubsidiary company Masterji.AI Private Limited detailed below:
|Name of Borrower ||Amount INR ||Rate of Interest % |
|Masterji.AI Private Limited ||1141952.00 ||Nil |
4. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013in respect of loans investments guarantees and security.
5. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard 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 CentralGovernment under sub-section (1) of Section 148 of the Act and are maintained in respectof the activities carried on by the company.
7. (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess Goods & Service Tax and any other statutory dues with the appropriateauthorities. According to the information and explanations given to us undisputed amountspayable in respect of the above were in arrears as at March 31 2021 for a period of morethan six months from the date on when they become payable are as follows.
|Sr No ||Description ||Arrears as on 31-03-2021 for more than Six Months- INR |
|1 ||VAT ||4596760 |
|2 ||Income Tax for AY 2019-20 [FY 2018-19] ||4838960 |
|3 ||GST Liability as per GST Audit for FY 2017-18 ||4307554 |
|4 ||GST Liability as per GST Audit for FY 2018-19 ||3396059 |
(b) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added tax GSToutstanding on account of any dispute except as follows.
|Sr No ||AY/FY ||Demand Rs ||Nature of Demand and Status ||Forum where case is pending |
|1 ||AY - 2014-15 ||2656640 ||Income tax demand as per processing at CPC. Online reply has been filed claiming as no demand ||CPC Income Tax |
|2 ||AY - 2016-17 ||1038710 ||Income tax demand as per processing at CPC. Intimation u/s 143(1) not received request submitted online. ||CPC Income Tax |
|3 ||AY -2017-18 ||5831230 ||Income tax demand as per processing at CPC. Intimation u/s 143(1) not received request submitted online. ||CPC Income Tax |
|4 ||AY - 2018-19 ||4221250 ||Income tax demand as per processing at CPC. Intimation u/s 143(1) not received request submitted online. ||CPC Income Tax |
|5 ||F Y - 2014-15 to June 2017 ||12273019 ||Service Tax Assessment ||CESTAT |
| ||TOTAL ||26020849 || || |
8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks and financial institutions theLoan taken from PNB Housing Finance Limited a tri-party loan under subvention scheme inwhich the Builder is third party assuming responsibility to service interest on loan tillpossession/completion of the property however the Builder has defaulted in serviceinterest for three consecutive months therefore bank had classified the account as NPA.The Company has cleared all dues by 28/06/2021 and the account is now classified asStandard. The Company has not taken loan from the government and has not issued anydebentures. The period of default is 4 months and the amount of default is Rs.3471938/-as on 31/03/21.
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. Term Loans were applied for the purposesfor which those were raised. There was no default in repayment of term loan.
10. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year
11. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
12. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
13. In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
14. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview.
15. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe 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 ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.
For Vijay Moondra & Co.
CA Vinit Moondra
M No. 119398
"Annexure B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of AFFORDABLE ROBOTIC AND AUTOMATION LTD.
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 AFFORDABLEROBOTIC AND AUTOMATION LTD. ("the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear 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. 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 the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 2021 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.
For Vijay Moondra & Co.
CA Vinit Moondra
Partner M No. 119398