You are here » Home » Companies » Company Overview » AIA Engineering Ltd

AIA Engineering Ltd.

BSE: 532683 Sector: Engineering
NSE: AIAENG ISIN Code: INE212H01026
BSE 00:00 | 22 Jun 2030.40 12.15
(0.60%)
OPEN

2029.50

HIGH

2040.00

LOW

1989.40

NSE 00:00 | 22 Jun 2028.35 11.40
(0.57%)
OPEN

2040.00

HIGH

2042.00

LOW

1991.15

OPEN 2029.50
PREVIOUS CLOSE 2018.25
VOLUME 2069
52-Week high 2224.40
52-Week low 1570.05
P/E 39.49
Mkt Cap.(Rs cr) 19,147
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2029.50
CLOSE 2018.25
VOLUME 2069
52-Week high 2224.40
52-Week low 1570.05
P/E 39.49
Mkt Cap.(Rs cr) 19,147
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

AIA Engineering Ltd. (AIAENG) - Auditors Report

Company auditors report

TO THE MEMBERS OF AIA ENGINEERING LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS OPINION

We have audited the standalone financial statements of AIA Engineering Limited(“the Company”) which comprise the standalone balance sheet as at 31 March2020 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial Companies Act 2013 (“Act”) inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2020 and profit and other comprehensive income changes in equity and its cashflows for the year ended on that date.

Key Audit Matter : revenue recognition

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified Ourresponsibilities under those SAs are further described in the Auditor's Responsibilitiesfor the Audit of the Standalone Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the standalone financialstatements under the provisions of the Act and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe accounting policies that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion on the Standalone financial statements.

Key Audit Matters statements give the information required by the Key audit mattersare those matters that in our professional judgment were of most significance in ouraudit of the standalone financial statements of the current period. These matters wereaddressed in the context of our audit of the standalone financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters.

Refer Note 3(j) and Note 32 to the standalone financial statements

Description of key audit matter Our response and results
Revenue recognition
Revenue of the Company mainly comprises of sale of high chrome mill internals to its customers and to its overseas subsidiaries. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Revenue from sale of goods is recognised when control is transferred to the customers and when there are no other unfulfilled obligations. This requires detailed analysis of each contract /customer purchase order regarding timing of revenue recognition. Assessing the Company's accounting policies for revenue recognition by comparing with the applicable accounting standards;
Inappropriate assessment could lead to a risk of revenue being recognized on sale of goods before the control in the goods is transferred to the customer. Testing the design implementation and operating effectiveness of key internal controls over timing of recognition of revenue from sale of goods;
Accordingly timing of recognition of revenue is a key audit matter. Performing testing on selected statistical samples of customer contracts. Checked terms and condition related to acceptance of goods acknowledged delivery receipts and tested the transit time to deliver the goods and its revenue recognition. Our tests of details focused on cut-off samples to verify only revenue pertaining to current year is recognized based on terms and conditions set out in sales contracts and delivery documents.

other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon. Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of directors' responsibility for the standalone financialstatements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error. Inpreparing the standalone financial statements the Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's responsibilities for the Audit of the standalone financial statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the company hasadequate internal financialcontrols with reference to financial statements in place andthe operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures in the standalone financial statements madeby the Management and Board of Directors.

Conclude on the appropriateness of the Management and Board of Directors use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the standalonefinancialstatements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant any significant 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.

From the matters communicated with those charged with governance we determine thosematters that were of most statements of the current period and are therefore the key auditmatters. We describe these matters in our auditors' report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefitsof such communication.

report on other Legal and regulatory requirements

1. As required by the Companies (Auditors' Report) Order 2016 (“the Order”)issued by the Central Government in terms of section 143 (11) of the Act we give in the“Annexure A” a statement on the matters specified in doubtonthe paragraphs 3 and4 of the Order to the extent applicable.

2. (A) As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books.

c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account. findingsincluding audit deficiencies in internal control that weidentify

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecifiedunder section 133 of the Act. e) On the basis of the written representationsreceived from the directors as on 31 March 2020 taken on record by the Board of Directorsnone of the directors is disqualified as on 31 March 2020 from being appointed as adirector in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal in the audit of the standalonefinancial financial controls with reference statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in “Annexure B”.

(B) With respect to the other matters to be included in the Auditors' 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. TheCompany has disclosed the impact of pending litigations as at 31 March 2020 on itsfinancial position in its standalone financial statements - Refer Note 43 and Note 44 tothe standalone financial statements; ii. The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses; iii.There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company; and

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified period from 8 November 2016 to 30 December 2016 have not beenmade in these financial statements since they do not pertain to the financial year ended31 March 2020. (C) With respect to the matter to be included in the Auditors' Report undersection 197(16): In our opinion and according to the information and explanations given tous the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

For B s r & co. LLp
Chartered Accountants
Firm Registration Number: 101248W/W-100022
nIrAv pAteL
Partner
Membership No.: 113327
ICAI UDIN: 20113327AAAAAU6747
Place : Mumbai
Date : 22 June 2020

ANNEXURE “A” TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE FINANCIALSTATEMENTS OF AIA ENGINEERING LIMITED FOR THE YEAR ENDED 31 MARCH 2020

(REFERRED TO IN PARAGRAPH 1 UNDER ‘REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS' SECTION OF OUR REPORT OF EVEN DATE)

With reference to the “Annexure A” referred to in the Independent Auditor'sReport to the members of the Company on the standalone financial statements for the yearended 31 March 2020 we report the following: (i) (a) The Company has maintained properrecords showing full particulars including quantitative details and situation of (b) TheCompany has a regular programme of physical verification of its fixed assets by which allfixed assets are verified in a phased manner over a period of three years. In our opinionthis periodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. In accordance with this programme certain fixedassets were physically verified by the management during the year. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification. (c) According to the information and explanations given to us and therecords examined by us including registered titled deeds we report that the title deedscomprising of all of immovable properties of land and buildings which are freehold areheld in the name of the Company. In respect of immovable properties of land and buildingsthat have been taken on lease and disclosed as property plant and equipment in thestandalone financial statements the lease agreements are in the name of the Companywhere the Company is lessee in the agreement.

(ii) The inventory except goods-in-transit and stocks lying at third party locationshave been physically verified by the management during the year. In our opinion thefrequency of such verification is reasonable. For stocks lying with third parties at theyear end written confirmations have been obtained. The discrepancies noticed onverification between the physical stocks and the book records were not material and havebeen dealt with in books of account.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Companies Act 2013 (‘the Act'). Accordingly paragraph 3(iii) (a) (b)and (c) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any security to parties covered underSection 185 and Section 186 of the Act. The Company has complied with the provisions ofSection 185 and 186 of the Act in respect of guarantees given and investments made asapplicable. assets.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from public as per the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder. Accordingly paragraph 3 (v) of theOrder is not applicable to the Company. (vi) We have broadly reviewed the cost recordsmaintained by the Company pursuant to the rules prescribed by the Central Government forthe maintenance of cost records under Section 148(1) of the Act and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.However we have not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete. (vii) (a) According to the informationand explanations given to us and on the basis of our examination of the records of theCompany amounts deducted / accrued in the books of account in respect of undisputedstatutory dues including Provident fund Employees' State Insurance Income-tax Goods andservice tax Duty of customs Cess and other material statutory dues have been generallyregularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Income-tax Goods andservice tax Duty of customs Cess and other material statutory dues were in arrears as at31 March 2020 for a period of more than six months from the date they became payable.Pending clarity on the matter as explained in Note 43(iv) to the standalone financialstatements the Company is currently unable to determine the extent of arrears of suchprovident fund as at 31 March 2020 outstanding for a period of more than six months fromthe date they become payable.

(referred to in paragraph 1 under ‘report on other Legal and regulatoryrequirements' section of our report of even date)

(b) According to the information and explanations given to us there are no dues ofIncome-tax Goods and Service tax Duty of customs Duty of excise and Cess as at 31 March2020 which have not been deposited with the appropriate authorities on account of anydispute other than those mentioned in the Enclosure - I to this report. (viii) In ouropinion and according to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institutions banks andgovernment. Further the Company does not have any debentures issued / outstanding at anytime during the year.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any money by way ofinitial public offer or further public offer (including debt instruments) during the year.In our opinion and accordingly to the information and explanations given to us the termloan taken by the Company is applied for the purpose for which it was raised.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company as prescribed under Section 406 of the Act. Accordinglyparagraph 3 (xii) of the Order is not applicable to the Company. (xiii) According to theinformation and explanations given to us and based on our examination of the records ofthe Company transactions with the related parties are in compliance with Section 177 andSection 188 of the Act where applicable. The details of such related party transactionshave been disclosed in the standalone financial statements as required by the applicableIndian Accounting Standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3 (xv)of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B s r & co. LLp
Chartered Accountants
Firm Registration Number: 101248W/W-100022
NIRAV PATEL
Partner
Membership No.: 113327
ICAI UDIN: 20113327AAAAAU6747
Place : Mumbai
Date : 22 June 2020

(referred to in paragraph 1 under ‘report on other Legal and regulatoryrequirements' section of our report of even date) encLosure – I

Name of statute Nature of dues Forum where dispute is pending Period to which the amount related Amount involved (rs in lakhs) Amount unpaid (rs in lakhs)
Income tax Act 1961 IT matters under dispute Hon'ble High Court of Gujarat A.Y. 2006-07 471.89 471.89
A.Y. 2007-08 1100.66 1100.66
ITAT Ahmedabad A.Y. 2008-09 893.05 893.05
A.Y. 2009-10 1728.35 1728.35
A.Y. 2010-11 1830.28 1830.28
A.Y. 2011-12 1734.24 1734.24
A.Y. 2012-13 1610.63 1610.63
A.Y. 2013-14 2173.48 2173.48
Commissioner of Income- A.Y. 2014-15 3657.95 2729.59
tax Ahmedabad A.Y. 2016-17 1554.18 1554.18
Service tax (Finance Act 1994) Service tax Dy. Commissioner Ahmedabad. F.Y. 2013-14 to 2017-18 [upto June 2017] 41.99 41.99
Central Excise Act 1944 Duty of Excise including interest and penalty (as applicable) CESTAT Ahmedabad F.Y. 2006-07 to 2007-08 31.39 31.39
States' Value Added Value Added Tax VAT Tribunal Madurai F.Y. 2013-14 9.16 9.16
Tax Act Commissioner (Appeals) GST Nagpur F.Y. 2015-16 54.86 54.86

ANNEXURE “B” ”TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONEFINANCIAL STATEMENTS OF AIA ENGINEERING LIMITED FOR THE YEAR ENDED 31 MARCH 2020

(REFERRED TO IN PARAGRAPH 2(A)(F) UNDER ‘REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS' SECTION OF OUR REPORT OF EVEN DATE) REPORT ON THE INTERNAL FINANCIALCONTROLS WITH REFERENCE TO THE AFORESAID STANDALONE FINANCIAL STATEMENTS UNDER CLAUSE (I)OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013

OPINION

We have audited the internal financial controls with reference to financial statementsof AIA Engineering Limited (the ‘Company') as of 31 March 2020 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2020 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the ‘Guidance Note').

Management's responsibility for Internalfinancial controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and its business including adherenceto company's policies the safeguarding of its assets the prevention and detection of

(referred to in paragraph 1 under ‘report on other Legal and regulatoryrequirements' section of our report of even date) frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliablefinancialinformation as required under the Companies Act 2013 (hereinafter referred toas the ‘Act').

Auditor's responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrolswith reference to financial statements based on our audit. We conducted our audit inaccordance with the Guidance Note and the Standards on Auditing (the ‘Standards')prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to financial statements. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain statements in accordance with reasonable assurance about whetheradequate internal financial controls with reference to standalone financial statementswere established and maintained and whether such controls operated effectively in allmaterial respects. Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to financial statements andtheir operating effectiveness. Our audit of internal financial reference to financial controlswith understanding of such internal financial the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the Auditor'sjudgement including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Company's internal financial reference to financial statements.

Meaning of internal financial controls with reference to financial statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrols with reference to financial statements include 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) providereasonable assurance that transactions are recorded as necessary to permit preparation ofstandalone financial 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 standalone financial statements.controls with statements included obtaining an

Inherent limitations of internal financial controls assessing reference tofinancial statements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in controls with conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

For B s r & co. LLp
Chartered Accountants
Firm Registration Number: 101248W/W-100022
nIrAv pAteL
Partner
Membership No.: 113327
ICAI UDIN: 20113327AAAAAU6747
Place : Mumbai
Date : 22 June 2020