TO THE MEMBERS OFAUTOLITE (INDIA) LIMITED
Report on theAudit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of AUTOLITE (INDIA)LIMITED ("the Company") which comprise the Standalone Balance Sheet as at31st March 2019and Standalone l Statements of Profit and Loss (including othercomprehensive income) Standalone Statement of Cash Flows and Standalone Statements ofChanges in Equity for the year then ended and Notes to the Standalone FinancialStatements Including a summary of the significant accounting policies and otherexplanatory information.
In our Opinion and to the best of our information and according to the explanationsgiven to us except for the effects and indeterminate effect of the matters described inthe basis for Qualified Opinion section below The aforesaid Standalone FinancialStatements give the information required by the Companies Act2013 ("the act")in the 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 March312019 and total comprehensive income (comprising profit and other comprehensive income)changes in equity and its cash flows for the year then ended
Basis for Qualified Opinion
(I) As detailed in Note No. 53 of Standalone Financial Statements in the absence ofinformation no impact has been taken in books for Deferred Tax Assets/Liabilities asrequired in Ind AS -12 (Income Taxes) except for Re-measurement required in Ind AS -101(First Time adoption of Ind AS). Accordingly we are unable to comment on the impact ofthe aforesaid
(ii) As detailed in Note No 54 of Standalone Financial Statements regardingNon-Recoverable/Unadjusted Advances and Trade Receivables for Rs. 293.54 Lakhs as requiredin Ind AS-37 (Provisions Contingent Liabilities and ContingentAssets)
(iii) As detailed in Note No 55 of Standalone Financial Statements no impact ofExpected Credit Loss has been taken As required in IndAS -109 (Financial Instruments).
(iv) As detailed in Note No. 56 of Standalone Financial Statements regarding claim forExport Incentive on estimated basis for Rs 226.54 Lakhs as required in Ind AS -115(Revenue from contract with customers)
(v) As detailed in Note No. 57 of Standalone Financial Statements revenue has not beenproperly recognized as required in Ind AS-115 (Revenue from contract with customers).Accordingly we are unable to comment on the impact of aforesaid.
(vi) As detailed in Note No. 58 of Standalone Financial Statements regarding nonprovision of interest of Rs 17.94 Lakhs as per MSME Act 2006 on dues to Micro and SmallEnterprises of Rs.
164.95 Lakhs which were outstanding for more than 45 days at the Balance Sheet date.
We further report that had the observation made by us in item (ii)
(iv) and (vi) above been considered the Total Comprehensive Income and Total Equitywould have been reduced by Rs 538.02 Lakhs. Other Non-Current Assets Other Current Assetsand Trade Receivables would have been reduced by Rs.345.77 Lakhs 94.64 Lakhs and Rs 79.67Lakhs respectively and Trade Payable would have been increased by Rs. 17.94 Lakhs.
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143 (10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the audit of the Standalone FinancialStatements section of our report. We are independent of the company in accordance with theCode of Ethics issued by the Institute of Chartered Accountant of India together with theethical requirements that are relevant to our audit of the Standalone Financial Statementsunder the provision of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.
Key audit matters
1. We draw attention to Annexure to the Auditor's Report Para No. vii (a) that thecompany is not regular in depositing its statutory dues with appropriate authorities. Ouropinion is not qualified in respect of this matter.
2. The Company is in process to prepare Return and reconciliation for goods and servicetax for the financial year 2018-19. In the absence of sufficient details and informationwe are unable to determine the correct liabilities of tax interest and penalty;accordingly we are unable to comment on the impact of related liability included in theseStandalone Financial Statements
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe Standalone Financial Statements and our Auditors Report thereon The Annual Report isexpected to be made available to us after the date of this Auditor's Report. Our opinionon the Standalone Financial Statements does not cover the other information and we willnot express any form of assurance conclusion thereon. In connection with our audit of thestandalone financial statements our responsibility is to read the other informationidentified above when it becomes available and in doing so consider whether the otherinformation is materially inconsistent with the Standalone Financial Statements or ourknowledge obtained in the audit or otherwise appear to be materially misstated. When weread the annual report if we conclude that there is material misstatement therein we arerequired to communicate the matter to those charged with governance and take appropriateaction as applicable under the relevant laws and regulations.
Responsibilities of Management and those charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the financialposition financial performance (including other comprehensive income) cash flows andChanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standard) Rules (as amended) under Section 133 of theAct. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 the cease operations or has norealistic alternative but to do so those Board of Directors are also responsible foroverseeing the company's financial reporting process.
Auditor's Responsibilities for Audit of the Standalone Financial Statements
Our objective is to obtain reasonable assurance about whether the Standalone FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion reasonable assurance is a highlevel of assurance but is not a guarantee that audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Standalone Financial Statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain skepticism throw-out the audit. We also;
Identify and asses the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risk and obtained audit evidence that is sufficient and appropriate toprovide basis for our opinion. The risk of not deducting a material misstatement resultingfrom fraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain and understanding of internal controls 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 responsible for expressing our opinion whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and reasonableness ofaccounting 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 to require to draw attention in our auditors report to the related disclosures inthe Standalone Financial Statements or if such disclosure are inadequate to modify ouropinion. Our conclusion are based on the audit evidence obtained upto the date of ourauditors report. However future events or conditions may cause the company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and contents 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 theplaned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit
We also provide those charged with governance with a statement the we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationship and other matters that may reasonably be thought to bear on ourindependence and where applicable related safe guards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these matter inour auditors report unless law or regulations precludes public disclosures about thematters or when in extremely rare circumstances we determine that a matter should note becommunicated in our report because the adverse consequence of doing so would reasonably beexpected to outweigh the public interest benefits of such communications
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of Section 143 of the Act ("TheOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanation given to us wegive in the Annexure B' statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.
As required by Section 143(3) of theAct we report that:
(a) we have sought and except for the matter describe in the basis for qualifiedopinion paragraph and emphasis of matter paragraph above obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposeof our audit;
(b) in our opinion except for the effects and indeterminate effects of the matterdescribe in the basis for qualified opinion paragraph and key audit matter paragraph aboveproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books;
(c) The Standalone Balance Sheet the Standalone Statement of Profit and Loss(including other Comprehensive Income) the Standalone Statement of Cash Flows and theStandalone Statement of Changes in Equity dealt with by this Report are in agreement withthe books of account;
(d) Except for the effects and indeterminate effects of the matter described in thebasis for qualified opinion paragraph above in our opinion the aforesaid standalone IndAS financial statements comply with the Indian Accounting Standards specified underSection 133 of Act except for Ind AS-12 (Income Taxes) IndAS-37 (Provisions ContingentLiabilities and Contingent Assets) Ind AS -109 (Financial instruments) and Ind AS-115(Revenue from contracts with customers) as detailed in Note No. 53 54 55 56 and 57 ofBalance Sheet
(e) on the basis of written representation received from Directors as on 31st March2019 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2019 from being appointed as a director in terms of Section 164(2) oftheAct.;
(f) with respect to the maintenance ofAccounts and other matter connected therewithreferences are made to our comments in (b) above;
(g) with respect to the adequacy of the internal financial control with reference tofinancial statements of the company and the operating effectiveness of such controlsrefer to our separate report inAnnexure'A';
(h) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us ;
(I) The Company has disclosed the impact of pending litigation as on 31.03.2019 on itsfinancial position in its standalone Ind AS Financial statements refer Note No.44(A1) to the financial statements;
(ii) The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses as at March 31 2019
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company and
(iv) The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2019.
(I) with respect to the matter to be included in the Auditors' Report under Section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
| ||For MADHUKAR GARG & COMPANY |
| ||CharteredAccountants |
| ||FRN - 000866C |
|Place : Jaipur ||Sd/- |
|Dated : 31-05-2019 || |
| ||(SUNIL SHUKLA) |
| ||PARTNER |
| ||M.No.071179 |
Annexure A to Independent Auditor's Report
Referred to in paragraph (g) of the independent Audit Report of even date to themembers of Autolite (India) Limited on the standalone Ind AS Financial Statements for theyear ended March 31 2019.
Report on the Internal Financial Controls with reference to financial statements underClause (i) of Sub-section 3 of Section 143 of theAct
1. We have audited the internal financial controls with reference to Financialstatements of Autolite (India) Limited ("the company") as of March 31 2019 inconjunction with our audit of the standalone Ind AS Financial Statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under theAct.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalfinancial control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risk of material misstatement of thefinancial statements whether due to fraud or error.
5. 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 systemwith reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
6. A Company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 financial statements.
Inherent Limitations of Internal Financial Controls with reference to financialstatements
7. 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 control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the polices orprocedures may deteriorate.
8. In our opinion the company has maintained in all material respects an adequateinternal financial controls systems with reference to financial statements and suchinternal financial controls with reference to financial statements were operatingeffectively as at March 31 2019 based on the internal control over financial criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over financial reportingissued by the Institute of Chartered Accountants of India.
| ||For MADHUKAR GARG & COMPANY |
| ||CharteredAccountants |
| ||FRN - 000866C |
|Place : Jaipur || |
| ||Sd/- |
|Dated : 31-05-2019 || |
| ||(SUNIL SHUKLA) |
| ||PARTNER |