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Automotive Stampings & Assemblies Ltd.

BSE: 520119 Sector: Auto
NSE: ASAL ISIN Code: INE900C01027
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VOLUME 2434
52-Week high 43.50
52-Week low 11.80
P/E
Mkt Cap.(Rs cr) 33
Buy Price 20.55
Buy Qty 25.00
Sell Price 21.55
Sell Qty 200.00
OPEN 21.00
CLOSE 20.80
VOLUME 2434
52-Week high 43.50
52-Week low 11.80
P/E
Mkt Cap.(Rs cr) 33
Buy Price 20.55
Buy Qty 25.00
Sell Price 21.55
Sell Qty 200.00

Automotive Stampings & Assemblies Ltd. (ASAL) - Auditors Report

Company auditors report

TO THE MEMBERS OF AUTOMOTIVE STAMPINGS ANDASSEMBLIES LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Automotive Stampings andAssemblies Limited (“the Company”) which comprise the balance sheet as at 31March 2020 and the statement of profit and loss (including other comprehensive income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the financial statements including a summary of the significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 31 March 2020 and loss and other comprehensiveloss changes in equity and its cash flows for the year 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 arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the financial statements.

Material uncertainty related to going concern

We draw attention to note 4.4 to the financial statements whichindicates that the Company incurred a net loss of INR 1701.37 Lakhs during the year ended31 March 2020 and as of that date the Company's liabilities exceeded its total assets byINR 5883.33 Lakhs. The fallout of the COVID-19 pandemic is likely to have severerepercussions on the Indian economy. Any valuation / forecasting assessments performed inthis environment are exposed to a higher-than-usual degree of estimation uncertainty andjudgement. These events or conditions along with other matters as set forth in note 4.4indicates that a material uncertainty exists that may cast significant doubt on theCompany's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

Emphasis of Matter

We draw attention to note 47 to the financial statements which statesthat the comparative information presented in the Cash Flow Statement for the year ended31 March 2019 has been restated by the management in accordance with Ind AS 8: AccountingPolicies Changes in Accounting Estimates and Errors for correction of classification ofadvance received in the year 2018-19 for sale of leasehold land and building amounting toINR 858.94 Lakhs.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthis matter. In addition to the matter described in the Material uncertainty related togoing concern section we have determined the matter described below to be the key auditmatter to be communicated in our report.

Description of key audit matter How the matter was addressed in our audit
Impairment evaluation of Property Plant and Equipment ("PPE") Our audit procedures included:
- Obtaining an understanding of the Company's process and key controls over the impairment evaluation.
(refer note 2.4 and 5 to the financial statements)
Based on the guidance provided by Ind AS 36 'Impairment of assets' the following indicators that PPE may be impaired have been identified:
- Assessing and testing the design and operating effectiveness of such controls.
• As of 31 March 2020 the Company's total liabilities exceeded its total assets by INR 5883.33 lakhs. - Evaluating the Company's process with respect to impairment assessment and fair valuation Assessed the competence experience and objectivity of the expert engaged by the management.
• The Company has been consistently reporting losses for the past 8 years. For the year ended 31 March 2020 the Company has reported a net loss before exceptional items and tax amounting to INR 3789.37 lakhs.
- Involving our valuation specialists to assess and challenge the appropriateness of the valuation model and the underlying assumptions.
• The automobile sector is expected to face severe business and operational challenges in the near future due to the COVID-19 pandemic. This is likely to have an adverse impact on the economic performance and hence recoverable amount of the PPE.
- Assessing and testing the sensitivity analysis performed by the Company and evaluating whether any possible changes in assumptions could lead to a significant change in the recoverable value.
Therefore as required by Ind AS 36 the Company has estimated the recoverable amount of its PPE with the assistance of an external expert.
The fallout of the COVID-19 pandemic is likely to have severe repercussions on the Indian economy. Any valuation / forecasting assessments performed in this environment are exposed to a higher-than-usual degree of estimation uncertainty and judgement.
Accordingly this is a key audit matter.

Information Other than the Financial Statementsand Auditors' Report thereon

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and our auditors'report thereon.

Our opinion on the 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 financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or our

knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's and Board of Directors'Responsibility for the Financial Statements

The Company's Management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesefinancial statements that give a true and fair view of the state of affairs profit/lossand other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act. 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 accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the financial statements the Management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of theFinancial Statements

Our objectives are to obtain reasonable assurance about whether thefinancial 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 financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial 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 higher than 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 theaudit in order 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 financial statementsmade 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 or conditions that maycast significant doubt on the Company's ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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 financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditors' report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould 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 balance sheet the statement of profit and loss (including othercomprehensive income) the statement of changes in equity and the statement of cash flowsdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with theInd AS specified under section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on 31 March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2020 from being appointed as a director in termsof 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 the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 as at 31March 2020 on its financial position in its financial statements - Refer Note 36 to thefinancial 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 financial statements regarding holdings aswell as dealings in specified bank notes during the period from 8 November 2016 to 30December 2016 have not been made in these financial statements since they do not pertainto the financial year ended 31 March 2020.

(C) With respect to the matter to be included in the Auditors' Reportunder section 197(16):

We draw attention to note 45 to the financial statements for the yearended 31 March 2020 according to which the managerial remuneration paid / accrued to theChief Executive Officer of the Company (amounting to INR 29.17 Lakhs) exceeds theprescribed limits under section 197 read with Schedule V of the Companies Act 2013 by INR1.67 Lakhs. As per the provisions of the Act the excess remuneration is subject toapproval of the shareholders which the Company proposes to obtain in the forthcomingAnnual General Meeting.

The Ministry of Corporate Affairs has not prescribed other detailsunder Section 197(16) which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/W-100022
Abhishek
Partner
Place: Pune Membership No.: 062343
Date: 8 July 2020 UDIN : 20062343AAAACE5171

Annexure A to the Independent Auditors' Report onthe financial statements of Automotive Stampings and Assemblies Limited for the yearended 31 March 2020

With reference to paragraph 1 in Report on Other Legal and RegulatoryRequirements of the Independent

Auditors' Report of even date to the members of the Company on thefinancial statements for the year ended 31 March 2020 we report that:

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

(b) The Company has regular program of physical verification of itsfixed assets by which all the fixed assets are verified once every year. In accordancewith this program all fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is reasonable having regard to size of the Company and the nature ofits assets.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

ii. In our opinion and according to information and explanation givento us and on the basis of our examination of records of the Company the inventory exceptinventories goods-in-transit have been physically verified by management during the year.The discrepancies noticed on verification between the physical stocks and book recordswere not material and have been properly dealt with in the books of accounts. In respectof stock lying with third parties at the year end written confirmation from major partieshave been obtained and in respect of goods-in-transit subsequent goods receipt has beenverified by the management. In our opinion the frequency of such verification isreasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

iii. 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 (“Act”). Accordingly paragraph 3(iii) (a) (b)and (c) of the Order are not applicable.

iv. According to the information and explanations given to us theCompany has not granted any loans made investments or provided any guarantees orsecurities to which provisions of section 185 and 186 of the Act apply. Accordinglyparagraph 3(iv) of the Order is not applicable.

v. The Company has not accepted any deposits from the public in termsof directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76of the Act and the rules made there under.

vi. The Central Government has not prescribed the maintenance of costrecords under Section 148(1) of the Act read with the Companies (Cost Records and Audit)Rules 2014 for the goods sold and services rendered by the Company.

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/accrued in the books ofaccounts in respect of undisputed statutory dues including Provident fund Employees'state insurance Income-tax Duty of customs Goods and service tax and other materialstatutory dues have generally been regularly deposited during the year by the Company withthe appropriate authorities except for provident fund dues referred to in note 36(b) tothe financial statements. As explained to us the Company did not have any dues on accountof Sales tax Service tax Duty of excise Value added tax and Cess.

According to the information and explanations given to us noundisputed amounts payable in respect of Provident fund Employees' state insuranceIncome-tax Duty of customs Goods and Service Tax and other material statutory dues werein arrears as at 31 March 2020 for a period of more than six months from the date theybecame payable. We draw attention to note 36(b) to the financial statements which morefully explains the matter regarding non-payment of provident fund contribution pursuant toSupreme Court judgment dated 28 February 2019.

(b) According to the information and explanations given to us thereare no dues of Income-tax Sales tax Service tax Duty of customs Duty of excise Valueadded tax and Goods and service tax which have not been deposited on account of anydispute except for the following:

Name of the statute Nature of the dues Amount (? in Lakhs) (Gross Demand) Amount (Rs in Lakhs) (Paid under Protest) Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Duty 31.00 - 2007-2009 Custom Excise and Service Tax Appellate Tribunal
Duty 123.96 - 2008-2009 Custom Excise and Service Tax Appellate Tribunal
Penalty 83.82 69.83 2006-2011 Bombay High Court
Duty 357.37 - 2002-2005 Custom Excise and Service Tax Appellate Tribunal
Bombay Sales Tax Act 1959 Sale Tax 2.92 - 2002-03 Joint Commissioner (Appeals)
Maharashtra Value Added Tax Act 2002 Sale Tax 186.45 17.34 2013-14 Joint Commissioner (Appeals)
Income Tax Act 1961 Income Tax 30.08 - 2002-03 Commissioner of Income Tax (Appeals)
Income Tax 7.65 - 2008-09 Commissioner of Income Tax (Appeals)
Income Tax 10.69 - 2009-10 Commissioner of Income Tax (Appeals)
Income Tax 17.78 - 2005-06 Commissioner of Income Tax (Appeals)
Income Tax 6.94 - 2011-12 Commissioner of Income Tax (Appeals)

viii. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings to anyfinancial institution or banks or Government or due to debentures holders as at thebalance sheet date.

ix. In our opinion and according to the information and explanationsgiven to us the Company has not raised any money by way of initial public offer furtherpublic offer (including debt instruments) or by way of term loans during the year.Accordingly paragraph 3(ix) of the order is not applicable.

x. According to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees has been noticed or reportedduring the year.

xi. In our opinion and according to the information and explanationgiven to us managerial remuneration paid / accrued to the Chief Executive Officer of theCompany (amounting to INR 29.17 Lakhs) exceeds the prescribed limits under section 197read with Schedule V of the Companies Act 2013 by INR 1.67 Lakhs. As per the provisionsof the Act the excess remuneration is subject to approval of the shareholders which theCompany proposes to obtain in the forthcoming Annual General Meeting. (Refer note 45 tothe financial statements).

xii. According to the information and explanations given to us theCompany is not a Nidhi Company as per the Act. Accordingly paragraph 3(xii) of the Orderis not applicable to the Company.

xiii. In our opinion and according to the information and explanationsgiven to us all transactions with related parties are in compliance with section 177 and188 of the Act and the details as required by the applicable accounting standards havebeen disclosed in the financial statements.

xiv. According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartially convertible debentures during the year.

xv. According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith them during the year.

xvi. In our opinion and according to the information and explanationsgiven to us the Company is not required to register under section 45-IA of the ReserveBank of India 1934.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/W-100022
Abhishek
Partner
Place: Pune Membership No.: 062343
Date: 8 July 2020 UDIN : 20062343AAAACE5171

Annexure B to the Independent Auditors' Report onthe Financial Statements of Automotive Stampings and Assemblies Limited for the periodended 31 March 2020

Report on the internal financial controls withreference to the aforesaid financial statements under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013

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

Opinion

We have audited the internal financial controls with reference tofinancial statements of Automotive Stampings and Assemblies Limited (“theCompany”) as of 31 March 2020 in conjunction with our audit of the financialstatements of the Company for 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 2020 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”).

Emphasis of Matter

We draw attention to note 47 to the financial statements which statesthat the comparative information presented in the Cash Flow Statement for the year ended31 March 2019 has been restated by the management in accordance with Ind AS 8: AccountingPolicies Changes in Accounting Estimates and Errors for correction of classification ofadvance received in the year 2018-19 for sale of leasehold land and building amounting toINR 858.94. Our opinion is not modified in respect of this matter.

Management's Responsibility for InternalFinancial Controls

The Company's management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as “the Act”).

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls with reference to financial statements. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements were established and maintained and whether suchcontrols operated effectively in 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 of therisks of material misstatement of the financial statements whether due to fraud 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 internal financialcontrols with reference to financial statements.

Meaning of Internal Financial controls withReference to Financial Statements

A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements include those policies andprocedures 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 as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal FinancialControls with reference to Financial 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 Registration No: 101248W/W-100022
Abhishek
Partner
Place: Pune Membership No.: 062343
Date: 8 July 2020 UDIN : 20062343AAAACE5171

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