the Members of
Autoline Industries Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone Financial Statements of Autoline Industries Limitedwhich comprise the Balance Sheet as at March 312021 the Statement of Profit & Lossincluding Statement of Other Comprehensive Income Cash Flow Statement and Statement ofChanges in Equity for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation.
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 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its Loss other comprehensiveexpenses changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities forthe Audit of the 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 financial statements under the provisions of the Companies Act 2013and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Standalone financial statements.
Emphasis of the Matter
We draw attention to Note No.50 to the standalone financial statements which describesthe management's evaluation of impact of uncertainties related to COVID-19 and itsconsequential effects on the carrying value of its assets as at March 31 2021 and theoperations of the Company. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
Description of Key Audit Matter
|The key audit matter ||How the matter was addressed in our audit |
|(a) Going Concern ||Our audit procedures included: |
|As of 31 March 2021 the Company's total liabilities did not exceed its total assets however company is continuously incurring losses Note 3.5 to the financial statements explain how the directors of the Company have formed a judgement that the going concern basis is appropriate in preparing the financial statements. || Walking through the business planning process and assessing the design implementation and operating effectiveness of management's key internal controls over the assessment of going concern including the preparation of cash flow forecasts. |
|The directors of the Company made their assessment of going concern by preparing a cash flow forecast in which some key assumptions were applied. These key assumptions included forecasts of sales volumes average selling prices raw material costs and the availability of banking and other financing facilities as well as financial support from the Promoters. || Evaluating the key assumptions in the cash flow forecasts (including future revenue gross profit operating expenses and capital expenditure) with reference to historical production information current performance internal investment and production plans and market and other external available information; |
|We identified going concern as a key audit matter because a significant degree of management judgement is involved in making this assessment and in forecasting the future cash flows of the Company which are inherently uncertain and because the management judgement and inherent uncertainties could have significant impact on the basis of preparation of the financial statements and could be subject to management bias. || Considering the accuracy and reliability of cash flow forecasts made by management in prior years by comparing them with the current year's results; |
| || Assessing the availability of banking and other financing facilities and arrangements by inspecting underlying documentation which included banking facility agreements signed before and after the reporting period end and assessing the impact of any covenants and other restrictive terms therein |
| || We also checked if any waivers were obtained from the financial institutions from which borrowings are made. |
| ||Based on our procedures we noted that the key assumptions used in the forecasts were within a reasonable range of our expectations. |
|(b) Revenue Recognition ||Our audit procedures to assess the recognition of revenue included the following: |
|The Company's revenue is derived from the sale of sheet metal stampings welded assemblies and moulds for the automotive industry. The Company recognizes revenue when the control is transferred to the customer. || evaluating the design implementation and operating effectiveness of key internal controls over the existence accuracy and timing of revenue recognition; |
|The terms set out in the Company's sales contracts relating to goods acceptance by customers are varied. Accordingly the terms and conditions of sales contracts may affect the timing of recognition of sales to customers as each sales contract could have different terms relating to customer acceptance of the goods sold. || performed substantive test of details over revenue recognized throughout the period by selecting a sample of transactions to ensure that the samples selected meet the revenue recognition criteria and are appropriately recorded; |
|We identified the recognition of revenue as a key audit matter because revenue is one of the key performance indicators of the Company and is therefore subject to an inherent risk of misstatement to meet targets or expectations and because errors in the recognition of revenue could have a material impact on the Company. || Tested sample transactions around the period end to ensure they were recorded in the correct period; and tested journal entries posted to revenue accounts focusing on unusual or irregular items if any. |
|(c) Contingent Liabilities (Note No.40) Evaluation of uncertain tax positions ||Our audit procedures include the following substantive procedures: |
|The Company operates in multiple jurisdictions and is subject to periodic challenges by local tax authorities on a range of tax matters during the normal course of business including transfer pricing and indirect tax matters. These involve significant management judgment to determine the possible outcome of the uncertain tax positions consequently having an impact on related accounting and disclosures in the standalone financial statements. || Obtained understanding of key uncertain tax positions; and |
|Refer Note 40 to the standalone financial statements. || We- |
| ||> Read and analyzed select key correspondences external legal opinions / consultations by management for key uncertain tax positions; |
| ||> Discussed with appropriate senior management and evaluated management's underlying key assumptions in estimating the tax provisions; and |
| ||> Assessed management's estimate ofthe possible outcome of the disputed cases. |
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Board's report including annexure to Board's report but doesnot include the Standalone Financial Statements and our auditor's report thereon.
Our opinion on the Standalone financial statements does not cover the other informationand 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 Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements management 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are 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 in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higherthan for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
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 Act we are also responsible forexpressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 standalonefinancial statements 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 audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
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 section 143 (11) of the CompaniesAct 2013 we give in the Annexure - A' a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2) As required by section 143 (3) of the Act based on our audit 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 & Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this report are in agreement with the books of account.
d) In our opinion and to the best of our information and according to the explanationgiven to us the aforesaid standalone financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as on year ended March 31 2021
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 with reference to these standalone financial statements and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB" to this report;
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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 40 to the standalonefinancial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses
iii. The company was required to transfer unpaid dividend to the tune of Rs.84 483/-for the financial year 2012 - 2013 to the Investor Education and Protection Fund howeverthe company has transferred unpaid dividend beyond stipulated time period. There has beendelay of 10 days in transferring amounts.
3. In our opinion the managerial remuneration for the year ended 31 March 2021 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act; The Ministry of Corporate Affairs has notprescribed other details under section 197 (16) which are required to be commented by us.
Annexure A referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date on the standalone financialstatements for the year ended March 31 2021 we report that:
i. a) The company has maintained proper records showing full particulars includingquantitative details and situations of its fixed assets.
b) According to the information and explanation given to us except for tools and dieskept with the third parties the company has a regular programme of physical verificationof its fixed assets by which fixed assets are verified in phased manner over a period ofthree years in accordance with this programme certain fixed assets were verified duringthe year In our opinion this periodicity of physical verification is reasonable havingregards to the size of the Company and the nature of its business and no materialdiscrepancies have been noticed on such physical verification.
c) According to the information and explanation given to us and on the basis of ourexamination of the records of the company except for the following case the title deedswere held in the name of the company.
|Sr. Particulars. ||Whether Leasehold Or Freehold ||Gross Block As On Balance Sheet Date ||Net Block As On Balance sheet Date ||Remarks |
|1. Khasra no. 423 SIDCUL Plot no. 5 Uttarakhand ||Leasehold ||22.86 ||22.86 ||Lease Deed is held in the name of M/s Nirmiti Auto components Pvt. Ltd. which was amalgamated with the company. |
ii. The inventories have been physically verified by the management during the yearexcept inventories lying with the third parties and goods in transit. In respect ofinventories lying with the third parties these have been substantially confirmed by themand with respect to goods in transit subsequent goods receipts have been verified bymanagement. In our opinion frequency of physical verification of inventory followed bythe management was reasonable in relation to the size of the company and the nature of itsbusiness. The discrepancies noticed on physical verification of the inventories have beenproperly dealt with in the books of account.
iii. The company had granted loan to two companies covered in the register maintainedunder section 189 of the companies Act 2013 amounting to Rs.61542787/-
a) In our opinion the rate of interest and other terms and conditions on which theloan had been granted to the parties listed in the register maintained under section 189of the Act were not prima facie prejudicial to the interest of the company.
b) Since loan is repayable on demand clause (b) and (c) are not commented by us.
iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans investment and guarantee made.
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.
vi. As per information and explanation given to us by the management the CentralGovernment has not prescribed maintenance of cost records as required under sub section(1) of Section 148 of the Companies Act 2013.
vii. According to the records the Company is regular in depositing undisputedstatutory dues in respect of duty of customs however undisputed statutory dues includingincome tax employees' state insurance provident fund Goods & service tax cess andother statutory dues have not been regularly deposited with the appropriate authoritiesand there have been delays in depositing the same.
a) According to the information and explanations given to us and according to the booksand records as produced before us and examined by us following undisputed statutory dueswere in arrears as at 31 March 2021 for a period of more than six months from the datethey became payable.
|Name of Statute ||Nature of Dues ||Amount (in Rs) ||Period to which it relates ||Whether paid before balance sheet signing |
|1 Goods and Service Tax Act ||Goods and Service Tax ||26406107/- ||May 2019 ||No |
|2 Goods and Service Tax Act ||Interest on delayed payment of goods and service tax ||58564303/- ||July 2017 to August 2020 ||No |
|3 Property Tax ||Grampanchayat Tax ||2598842/- ||FY 2016-17 to FY 2020-21 ||No |
|4 Income Tax Act 1961 ||Tax deducted at source ||2671164/- ||June 20 July 20 Aug 20 ||Yes |
b) According to the information and explanations given to us and on the basis of ourexamination of books of accounts there are no cases of dues of income tax goods &service tax sales tax duty of customs duty of excise value added tax and cess as at 31stMarch 2021 which have not been deposited on account of disputes except for the following:-
|Name of the Statute ||Nature of Dues ||Forum where Dispute is pending ||Period to which the amount relates ||Tax Amount involved (Rs.) |
|The Maharashtra Value Added Tax Act 2002 ||VAT ||Maharashtra state Tribunal ||F.Y 2013-14 ||26421482/- * |
|The Maharashtra Value Added Tax Act 2002 ||WCT ||Maharashtra state Tribunal ||F.Y 2013-14 ||8733143/- * |
|The Maharashtra Value Added Tax Act 2002 ||VAT ||The Jt. Commissioner of States Taxes (Appeal) ||F.Y 2014-15 ||9186070/- |
|The Maharashtra Value Added Tax Act 2002 ||VAT ||Application for Rectification filed with Dy. Commissioner of State Tax ||F.Y 2015-16 ||48745127/- |
|Central Sales Tax Act 1956 ||CST ||Application for Rectification filed with Dy. Commissioner of States Tax ||F.Y 2015-16 ||3466415/- |
|The Uttarakhand Value Added Tax Act 2005 ||VAT / CST ||The Jt. Commissioner of States Tax ||F.Y 2013 - 14 ||4659711/- * |
|Central Sales Tax Act 1956 ||CST ||Application for Rectification filed with Dy. Commissioner of state tax ||F.Y. 2016-17 ||260832/- |
|The Maharashtra Value Added Tax Act 2002 ||VAT ||Application for Rectification filed with Dy. Commissioner of state tax ||F.Y. 2016-17 ||9649595/- |
* Amounts paid under protest have been reduced from the amount of demand in arriving atthe aforesaid disclosure.
viii. According to the information and explanations given to us and based on documentsand records verified by us in our opinion company has defaulted in repayments of loans toBanks and Financial Institutions. The details of default as on March 31 2021 are asfollows: -
Rs In Lakhs
|Sr. No. Particulars ||Amount of Default as on 31.03.2021 ||Period of default |
|A Banks ||Principle ||Interest || |
|1 Axis Bank Ltd ||12.99 ||22.89 ||March 2021 |
|2 The Catholic Syrian Bank Ltd ||35.11 ||5.86 ||Feb & March 2021 |
|B Financial Institutions || || || |
|1 J M Financial A R C Pvt. Ltd. ||- ||111.17 ||March 2021 |
ix. In our opinion and according to the information and explanations given to us theCompany has utilized the money raised by way of term loans during the year for thepurposes for which they were raised. During the year Company has not raised money by wayof initial public offer/ further public offer (including debt instruments)
viii. Based upon the audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information andexplanations given by the management we report that no fraud by the Company or nomaterial fraud on the Company by the officers and employees of the Company has beennoticed or reported to us during the year.
ix. According to the information and explanations given to us and based on ourexamination of the records the Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act for the year under consideration.
x. In our opinion and according to the information and explanations given to us thecompany is not a nidhi company. Accordingly paragraph 3(xii) of the order is notapplicable.
xi. According to the information and explanations given to us and based on ourexaminations of the records of the company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian accounting standards.
xii. According to the information and explanations given to us and based on ourexaminations of the records of the company the company has made preferential allotment ofthe shares during the year and has made compliance of provisions of sec 42 of thecompanies act 2013 and amount raised has been used for the purposes for which the fundwere raised.
xiii. 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 non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the order is not applicable.
xiv. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure B referred to in paragraph 2 (f) under the heading "Report on Other Legaland Regulatory Requirements" of our report of even date on the standalone financialstatements
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 AUTOLINEINDUSTRIES LIMITED ("the Company") as of March 312021 in conjunction with ouraudit of the standalone financial statements of the company for the year ended on thatdate.
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 controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the "Institute of Chartered Accountants ofIndia"(ICAI).These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies safeguarding of its assets prevention and detection of frauds anderrors accuracy and completeness of the accounting records and timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and whethersuch 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
Company's Internal financial control over financial reporting is a process designed toprovide 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 financial reporting includes those policiesand 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 however companyis required to strengthen its financial controls for obtaining balance confirmations fromtrade receivables and payables based on "the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India"(ICAI).