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AIA Engineering Ltd.

BSE: 532683 Sector: Engineering
NSE: AIAENG ISIN Code: INE212H01026
BSE 00:00 | 04 Oct 2440.70 -14.95
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NSE 00:00 | 04 Oct 2442.95 -23.45
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OPEN 2524.95
PREVIOUS CLOSE 2455.65
VOLUME 3826
52-Week high 2821.70
52-Week low 1476.00
P/E 36.31
Mkt Cap.(Rs cr) 23,016
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2524.95
CLOSE 2455.65
VOLUME 3826
52-Week high 2821.70
52-Week low 1476.00
P/E 36.31
Mkt Cap.(Rs cr) 23,016
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 EngineeringLimited ("the Company") which comprise the Standalone Balance Sheet as at 31March 2021 and the Standalone Statement of Profit and Loss (including OtherComprehensive Income) Standalone Statement of Changes in Equity and Standalone Statementof Cash flows for the year then ended and Notes to the Standalone Financial Statementsincluding a summary of the 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 Financial Statements give theinformation required by the Companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2021and profit and other comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act.

Our responsibilities under those SAs are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the Standalone Financial Statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Key Audit Matter:

Revenue Recognition

Refer Note 3(j) and Note 32 to the Standalone Financial Statements

Description of key audit matter Our response and results
Revenue of the Company mainly comprises of sale of products (i.e. high chrome mill internals) to its customers. 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:
Significant from sale of products arises from transactions with related parties mainly a wholly owned overseas subsidiary of the Company. Assessing the Company's accounting policies for revenue recognition by comparing with the applicable accounting standards;
Revenue from sale of goods is recognized when control is transferred to the customer and there is no other unfulfilled obligation. This requires detailed analysis of each contract / customer purchase order regarding timing of revenue recognition. Testing the design implementation and operating effectiveness of key internal controls over timing of recognition of revenue from sale of goods;
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. Performed testing on selected statistical samples of customer contracts / customer purchase orders. Checked terms and conditions 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 delivery documents alongwith terms and conditions set out in customer contracts / customer purchase orders;
Accordingly timing of recognition of revenue is a key audit matter. Understanding the Company's process for identifying recording and disclosing related parties and related party transactions; and
Testing the underlying data for ascertaining arm's length pricing and sighting the approvals of the Audit Committee for related party transaction.

Other Information

The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and ourauditors' report thereon.

Our opinion on the Standalone Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

MANAGEMENT'S AND BOARD OF DIRECTORS' RESPONSIBILITY FOR THESTANDALONE FINANCIAL STATEMENTS

The Company's Management and Board of Directors are responsiblefor the matters stated in Section 134(5) of the Act with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the state ofaffairs profit/loss and other comprehensive income changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring accuracy and completeness of theaccounting records relevant to the preparation and presentation of the StandaloneFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the Standalone FinancialStatements the Management and Board of Directors are responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless the Boardof Directors either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors is also responsible for overseeing theCompany's financial reporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.As part of an audit in accordance with SAs we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures in the Standalone FinancialStatements made by the Management and Board of Directors.

Conclude on the appropriateness of the Management and Board ofDirectors use of the going concern basis of accounting and based on the audit evidenceobtained whether a material uncertainty exists related to events doubt on the orconditions that may cast significant Company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in our auditor's report to the related disclosures in the StandaloneFinancial Statements or if such disclosures are inadequate to modify our opinion. Ourconclusions 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 theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

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

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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) ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 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 and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Standalone Balance Sheet the Standalone Statement of Profit andLoss (including Other Comprehensive Income) the Standalone Statement of Changes in Equityand the Standalone Statement of Cash flows dealt with by this Report are in agreement withthe books of account.

d) In our opinion the aforesaid Standalone Financial Statementscomply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on 31 March 2021 taken on record by the Board of Directors none ofthe directors is disqualified as on 31 March 2021 from being appointed as a director interms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in theAuditors' 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 theexplanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31March 2021 on its financial position in its Standalone Financial Statements - Refer Note43(a) to the Standalone Financial Statements;

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

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

iv. The disclosures in the Standalone Financial Statements regardingholdings as well as dealings in specified bank notes during the period from 8 November2016 to

30 December 2016 have not been made in these financial statementssince they do not pertain to the financial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors'Report under Section 197(16): In our opinion and according to the information andexplanations given to us the remuneration paid by the company to its directors during thecurrent year is in accordance with the provisions of Section 197 of the Act. Theremuneration paid to any director is not in excess of the limit laid down under Section197 of the Act. The Ministry of Corporate Affairs has not prescribed other details underSection 197(16) which are required to be commented upon by us.

ANNEXURE "A"

TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE FINANCIALSTATEMENTS OF AIA ENGINEERING LIMITED FOR THE YEAR ENDED 31 MARCH 2021

(Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

With reference to the "Annexure A" referred to in theIndependent Auditor's Report to the members of the Company on the StandaloneFinancial Statements for the year ended 31 March 2021 we report the following:

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of by which all physicalverification fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity having regard of physical verification to the size of theCompany and the nature of its assets. In accordance with this programme certain fixedassets were the management during the year. According to the information and explanationsgiven to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and therecords examined by us including registered title deeds we report that the title deedsof all of immovable properties of land and buildings which are freehold are held in thename of the Company. In respect of immovable properties of land and buildings that havebeen taken on lease and disclosed as Right of use assets in the Standalone FinancialStatements the lease agreements are in the name of the Company where the Company islessee in the agreement.

(ii) The inventory except goods-in-transit and stocks lying at thirdparty locations have been physically verified by the management during the year. In ouropinion

. For the frequency of such verification stocks lying with thirdparties at the year end written confirmations have been obtained. The discrepanciesstocks and noticed on verification the book records were not material and have been dealtwith in books of account.

(iii) In our opinion and according to the information and explanationsgiven to us the Company has not granted any loans secured or unsecured to companiesfirms limited liability partnerships or other parties covered in the register maintainedunder Section 189 of the Companies Act 2013 (‘the Act'). Accordingly paragraph3(iii) (a) (b) and (c) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has not granted any loans or provided any security to partiescovered under Section 185 and Section 186 of the Act. The Company has complied with theprovisions of Section 185 and 186 of the Act in respect of guarantees given andinvestments made as applicable.

(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposit from public as per 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 rules framed thereunder. Accordingly paragraph 3(v) of the Order is not applicable to the verified Company. by

(vi) We have broadly reviewed the cost records maintained by theCompany pursuant to the rules prescribed by the Central Government for the maintenance ofcost records under Section 148(1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted / accruedin the books of account in respect of undisputed statutory dues including Provident fundEmployees' State Insurance Income-tax Goods and services tax Duty of customs Cessand other material statutory dues have been generally regularly deposited during the yearby the Company with the appropriate authorities. Statutory dues with respect toSales-tax Service Tax Duty of Excise and Value Added Tax were not applicable to theCompany during the year. According to the information and explanations given to us noundisputed amounts payable in respect of Provident fund Employees' State InsuranceIncome-tax Goods and services tax Duty of customs Cess and other material statutorydues were in arrears as at 31 March 2021 for a period of more than six months fromthe date they became payable. Pending further clarity in the matter basis judgementof the Hon'ble Supreme Court of India vide its order dated 28 February 2019 theCompany is currently unable to determine the extent of arrears of such provident fundprior to date of aforesaid order outstanding as at 31 March 2021 for a period ofmore than six months from the date they become payable.

(b) According to the information and explanations given to us thereare no dues of Income-tax Goods and Service tax Duty of customs Duty of excise SalesTax Service Tax and Value Added Tax as at 31 March 2021 which have not been depositedwith the appropriate authorities on account of any dispute other than those mentioned inthe Enclosure - I to this report.

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings tofinancial institutions and banks. Further the Company does not have any outstanding duesto government and debentures issued / outstanding at any time during the year.

(ix) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not raised anymoney by way of initial public offer or further public offer (including debt instruments)during the year. In our opinion and accordingly to the information and explanations givento us the term loan taken by the Company was applied for the purpose for which it wasraised.

(x) During the course of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the management.

(xi) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act. (xii) In our opinion andaccording to the information and explanations given to us the Company is not a Nidhicompany as prescribed under Section 406 of the Act. Accordingly paragraph 3 (xii) of theOrder is not applicable to the Company. (xiii) According to the information andexplanations given to us and based on our examination of the records of the Companytransactions with the related parties are in compliance with Section 177 and Section 188of the Act where applicable. The details of such related party transactions have beendisclosed in the Standalone Financial Statements as required by the applicable IndianAccounting Standards.

(xiv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3 (xiv) of the Order is not applicableto the Company.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intoany non-cash transactions within the meaning of Section 192 of the Act with directors orpersons connected with them. Accordingly paragraph 3 (xv) of the Order is not applicableto the Company.

(xvi) In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is notapplicable to the Company.

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 in Lakhs)
Income tax Act 1961 Income tax Hon'ble High Court of Gujarat A.Y. 2006-07 471.89 471.89
A.Y. 2007-08 1100.66 1100.66
Commissioner of Income-tax Ahmedabad A.Y. 2014-15 3657.95 1909.49
A.Y. 2016-17 1554.18 1554.18
Central Excise Act 1944 Duty of Excise CESTAT Ahmedabad F.Y. 2006-07 to 2007-08 31.39 31.39
Tamil Nadu Value Added Tax Act 2006 Value Added Tax Appellate Tribunal Madurai F.Y. 2013-14 18.63 9.47
Maharashtra Value Added Tax Act 2002 Value Added Tax Joint Commissioner of State Tax-Nagpur F.Y. 2015-16 10.70 5.13
Central Sales tax Act 1956 Central Sales Tax Joint Commissioner of State Tax-Nagpur F.Y. 2015-16 44.16 21.19
Gujarat Value Added Tax 2003 Value Added Tax Dy. Sales Tax Commissioner Gujarat F.Y. 2015-16 30.76 30.76
Uttar Pradesh Value Added Tax Act 2008 Value Added Tax Assistant Commissioner of Commercial Tax - Saharanpur U.P. F.Y. 2017-18 1.63 1.63

ANNEXURE "B"

TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONE FINANCIALSTATEMENTS OF AIA ENGINEERING LIMITED FOR THE YEAR ENDED 31 MARCH 2021

(Referred to in paragraph 2(A)(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEAFORESAID STANDALONE FINANCIAL STATEMENTS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143OF THE COMPANIES ACT 2013 Opinion

We have audited the internal financial controls with reference tofinancial statements of AIA Engineering Limited (the ‘Company') as of 31 March2021 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to financial statements and such internalfinancial controls were operating effectively as at 31 March 2021 based on the internalfinancial controls with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the ‘Guidance Note').

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note. These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as the ‘Act').

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on

Auditing (the ‘Standards') specified under Section 143(10)of the Act to the extent applicable to an audit of internal

financial controls with reference to financial statements.

Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to Standalone FinancialStatements were established and maintained and whether such controls operated effectivelyin all material 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 controls with reference tofinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the Auditor's judgement including the assessment ofthe risks of material misstatement of the Standalone Financial Statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to financial statements.

Meaning of internal financial controls with reference to financialstatements

A company's internal financial controls with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of Standalone Financial Statementsfor external purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to financial statements includethose policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Standalone Financial Statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management and directorsof the company; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the Standalone Financial Statements.

Inherent limitations of internal financial controls with reference tofinancial statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-100022
Rupen Shah

Partner

Mumbai Membership No: 116240
25 May 2021 ICAI UDIN: 21116240AAAABK4800

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