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Avro India Ltd.

BSE: 543512 Sector: Industrials
NSE: AVROIND ISIN Code: INE652Z01017
BSE 00:00 | 24 May 121.00 5.00
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NSE 00:00 | 24 May 119.00 -1.05
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OPEN 110.25
PREVIOUS CLOSE 116.00
VOLUME 1328
52-Week high 128.95
52-Week low 74.65
P/E 41.02
Mkt Cap.(Rs cr) 122
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 110.25
CLOSE 116.00
VOLUME 1328
52-Week high 128.95
52-Week low 74.65
P/E 41.02
Mkt Cap.(Rs cr) 122
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Avro India Ltd. (AVROIND) - Auditors Report

Company auditors report

TO THE MEMBERS OF AVRO INDIA LIMITED (Formerly known as Avon Moldplast Limited) Reporton the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of M/s. Avro IndiaLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2021the Statement of Profit and Loss and the Statement of Cash Flows for the year then endednotes to financial statements including a summary of significant accounting policies andother explanatory information.

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 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31st March 2021 and its profit and its cashflows 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 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 (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the ICAI'sCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report.

S.no. Key Audit Matters Auditor's Response
1. Related party transactions: Our audit procedures included the following:
We refer to the note no. 25(26) of the standalone financial statements. We carried out an assessment of the key controls to identify and disclose related party relationships and transactions in accordance with the relevant accounting standard.
The company has entered into several transactions with related parties during the year 2020-2021. We identified related party transactions as a key audit matter because of risks with respect to completeness of disclosures made in the financial statements; non- compliance with statutory regulations governing related party relationships such as the Companies Act 2013 and SEBI Regulations and the judgment involved in assessing whether transactions with related parties are undertaken at arm's length. We carried out an assessment of compliance with the listing regulations and the regulations under the Companies Act 2013 including checking of approvals/ scrutiny as specified in sections 177 and 188 of the Companies Act 2013 with respect to the related party transactions. In cases where the matter was subject to interpretation we exercised judgment to rely on opinions provided by management.
We considered the adequacy and appropriateness of the disclosures in the financial statements relating to the related party transactions.
For transactions with related parties we inspected relevant ledgers agreements and other information that may indicate the existence of related party relationships or transactions. We also tested completeness of related parties with reference to the various registers maintained by the company statutorily.
2. Appropriateness of recognition criteria and measurement bases on Provisions and contingent liabilities: We assessed the management's basis and the groundwork for the amount recognized as Provisions and contingent liabilities.
Company has legal regulatory and taxation matters where it requires the company to recognize measure present and disclose provisions and contingent liabilities. Performed substantive procedures on the underlying calculations supporting the provisions recorded. We ensured that Provisions were determined based on the best estimate required to settle the obligation at the reporting date.
High level of judgment is required in estimating the level of provisioning as well to classify it as provisions or contingent liabilities. Refer Note 25(14) of the Standalone Financial Statements. We examined the reasonableness and adequacy of the amounts provided for. Read Actuarial valuation report as per AS 15 obtained by the management.
3. Valuation of scrap: Our audit procedures included:
We have identified scarp as a key audit matter as manufacturing companies pays close attention to their scrap rate as this affects their profits. Whether the company plans to reuse the excess materials sell it recycle it all of these tasks require additional time labour and energy. Timely and regular disposal is very important for any organization as it saves the storage cost. We reviewed the internal control on scrap materials as regards its generations storage and disposal and see whether it was properly followed at every stage. Ensured that there exists a proper procedure to identify the scrap and made sure that good quality material is not mixed up with it.
Ascertained whether the organization is maintaining reasonable records for the sale and disposal of scarps.
Review the production for the determination of the extent of scarp materials that may arise in the given period.
Checked the rules for re-use of scarp and valuation process.

Emphasis of Matter

We draw your attention to Note no. 25 to the standalone financial results which statesthe following facts:

1. Insurance claim recoverable of Rs 27.42 lacs lying in the books are yet to bereceived by the company. The company has filed case against Insurance Company in consumercourt for wrongful deduction in the claim submitted under fire insurance. The matter ispending for final arguments. According to the management the stated amount will bereceived at the earliest.

2. The Prayag Polytech Private Limited filed an application under Insolvency andBankruptcy Code for Rs 921287 along with interest against supplies of raw materials inyear 2017 at Allahabad bench of NCLT dated 16.08.2019. Avro India Limited (formerly knownas M/s Avon Moldplast Limited) made a counterclaim via letter dated 11.08.2017 for sendinginferior quality of raw materials which was duly authenticated by M/s Prayag PolytechPrivate Limited. The matter was listed for final arguments before Allahabad bench of NCLTon March 202020. However the matter was not taken up due to nationwide lockdown.Thereafter the matter has not been listed further due to resurgence of Covid- 19 cases inAllahabad.

3. Security deposit of Rs 2.25 lakhs held with Mr. Virju Lal & Sons for Patna depotas lying in the books of Company has not been refunded to the Company after thetermination of the agreement by Mr. Virju Lal & Sons. The Company issued a legalnotice to them for the recovery of said deposit. Thereafter the Company filed a Criminalcomplaint against Mr. Virju Lal & Sons on October 14 2020 for the recovery of thesaid deposit. The matter is pending for essay of the Complainant before JudicialMagistrate First Class Patna but the same has been adjourned due to resurgence ofCovid-19 Pandemic.

4. Company filed an application suo-motto via GNL-1 on 12/02/2019 under section 441 ofthe Companies Act 2013 with reference to non-compliance of certain provisions of Section96 of the Companies Act 2013 and Section 166 of Companies Act 1956 for conducting AnnualGeneral Meeting at the place outside the city town village in which the registeredoffice of the Company was situated from the financial year 2010 to 2017. However due totechnical reasons the form was rejected. The Company is in process to file theapplication again with the authority after keeping legal view of this issue.

5. The Company filed a Criminal Complaint against Mr. Subhash Chandra Jangirproprietor of Durga Enterprises on August 14 2019 for various offences punishable underSection 500 & 506 of Indian Penal Code 1860. The matter is still pending beforeDistrict Court Ghaziabad. The said case was listed on various dates however the samewas adjourned due to non-availability of Judge strikes and Covid-19 pandemic. The nextdate is 27.07.2021 and is fixed for pre summoning evidence.

6. Some of balances of trade payables and trade receivables appearing in the balancesheet are subject to balance confirmation/ reconciliation at the year end. The managementis in the process to get confirmation of balance from the parties; therefore thereconciliation of these balances is not updated. However the reconciliation of thesebalances is not expected to result in any material adjustments in the stated balances.Furtherance the management has sent legal notice to some of the trade receivables.

Our opinion is not modified in subject to these matters.

Information other than the Standalone Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprise the information included in the Board's Reportincluding Annexures to Board's Report and Shareholder's Information but does not includethe standalone financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot 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 during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibilities for the Standalone Financial 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 and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; 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 the 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 unlessthe management either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the 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 judgment 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 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 controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a 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.

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 mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

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.

2. As required by Section 143(3) of the Act based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper 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 Balance Sheet the Statement of Profitand Loss and the Statement of Cash Flow dealt with by this Report are in agreement withthe relevant books of account. d) In our opinion the aforesaid standalone financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014. e) On the basis of writtenrepresentations received from the directors as on March 31st 2021 taken on record by theBoard of Directors none of the directors is disqualified as on March 31st2021 from being appointed as a director in terms of Section 164(2) of the Act. f) Withrespect to the adequacy of the internal financial controls over financial reporting of theCompany and the operating effectiveness of such controls refer to our separate report in"Annexure B". Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting. g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our Opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act. h) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 as amended in our opinion and to the best of our information andaccording to the explanations given to us: i. Company has disclosed the impact of pendinglitigations as at 31st March 2021 on its financial position

in its standalone financial statement. ii. The company has made provisions as requiredunder the applicable law or accounting standards for material foreseeable losses if anyon long-term contracts including derivative contracts. iii. There were no amounts whichwere required to be transferred to the Investor Education and Protection Fund by theCompany.

For S A A R K AND CO
(Formerly known as Sushil Lal & Associates)
Chartered Accountants
FRN- 021758N
Sd/-
Rajib Kumar Karn
Partner
M.No.304483
UDIN: 21304483AAAAAC2127
Place of Signature: Ghaziabad
Date: 28th June 2021

"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 under the heading of 'Report on Other Legal and RegulatoryRequirements' of our report to the members of Avro India Limited of even date: In terms ofinformation and explanations given to us and the books and records examined by us wereport that: (i) (a) The Company's Fixed Asset Register requiring full particularsincluding quantitative details and situation of fixed assets remained pending forupdation.

(b) According to the information and explanations given to us the fixed assets werephysically verified during the year by the management in accordance with the programme ofverification which in our opinion is reasonable having regard to the size of the companyand the nature of its assets. To the best of our knowledge no material discrepancies werenoticed on verification conducted during the year as compared with the book records.

(c) Based upon the audit procedures performed the title deeds of the immovableproperty were held in the name of the company M/s Avon Moldplast Pvt Ltd. During the yearthe company applied with UPSIDA for the change in name to "Avro India Limited"and received confirmation letter from UPSIDA subject to fulfillment of conditions.However the same is not updated on portal of Nivesh Mitra (UPSIDA Website).

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year. No material discrepancies were noticed on physical verificationcarried out at the end of the year.

(iii) As informed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Consequently the provisions ofclause iii (a) (b) and (c) of the order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

(v) The Company has not accepted deposits from the public during the year and hence thedirectives issued by the Reserve Bank of India and provisions of section 73 to 76 or anyother relevant provision of the Act with regard to the deposits accepted from the publicare not applicable.

(vi) As informed to us the maintenance of cost records has not been specified by theCentral Government under sub-section (1) of section 148 of the Act in respect of theactivities carried by the company. Therefore reporting under clause 3(vi) of the order isnot applicable to the company.

(vii) (a) According to the records of the Company it has generally been regular indepositing undisputed statutory dues with the appropriate authorities including ProvidentFund Income-Tax Goods and Services Tax Cess and any other statutory dues to the extentapplicable. There were no outstanding statutory dues as on 31st March 2021 fora period of more than six months from the date they became payable.

(b) According to the information and explanation given to us there is no amountpayable in respect of Income Tax Goods and Services Tax Cess and any other statutorydues on account of any dispute.

(viii) According to the information and explanations given to us we are of the opinionthat the Company has not defaulted in repayment of loans or borrowings to a financialinstitution bank government or dues to debenture holders as applicable to the Company.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) isnot applicable to the Company.

(x) To the best of our knowledge and according to the information and explanationsgiven to us we report that no fraud on the Company by its officers or employees or by theCompany has been noticed or reported during the year.

(xi) According to the information and explanation given to us we report thatmanagerial remuneration has been paid in accordance with the provisions laid down underSection 197 read with Schedule V of the Companies Act 2013 and the rules made there.

(xii) The Company is not a Nidhi Company. Therefore the provisions of clause (xii) ofthe Order is not applicable to the Company. (xiii) In our opinion all transactions withthe related parties are in compliance with section 177 and 188 of the Companies Act 2013where applicable and the details have been disclosed in the Financial Statements asrequired by applicable Accounting Standards.

(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeprovisions of clause (xiv) of the order is not applicable to the company.

(xv) The Company has not entered into any non-cash transactions with directors orpersons connected with them. Accordingly the provisions of clause (xv) of the order isnot applicable to the Company.

(xvi) The company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934.

For S A A R K AND CO
(Formerly known as Sushil Lal & Associates)
Chartered Accountants
FRN- 021758N
Sd/-
Rajib Kumar Karn
Partner
M.No.304483
UDIN: 21304483AAAAAC2127
Place of Signature: Ghaziabad
Date: 28th June 2021

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of section143 of the Companies Act 2013 ("Act")

We have audited the internal financial controls over financial reporting of Avro IndiaLimited ("the company") as of 31st March 2021 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

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 control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing to the extent applicable toan audit of internal financial controls both issued by the Institute of CharteredAccountants of India. 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 over financial reporting was established andmaintained and if such 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

A company's internal financial controls over financial reporting is a process designedto provide 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 financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations 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 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 years are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate

Opinion

In our Opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlsystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal financialcontrol over financial reporting criteria established by the company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S A A R K AND CO
(Formerly known as Sushil Lal & Associates)
Chartered Accountants
FRN- 021758N
Sd/-
Rajib Kumar Karn
Partner
M.No.304483
UDIN: 21304483AAAAAC2127
Place of Signature: Ghaziabad
Date: 28th June 2021

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