Competent Automobiles Company Ltd.
|BSE: 531041||Sector: Others|
|NSE: N.A.||ISIN Code: INE823B01015|
|BSE 00:00 | 24 Sep||203.95||
|NSE 05:30 | 01 Jan||Competent Automobiles Company Ltd|
|Mkt Cap.(Rs cr)||125|
|Mkt Cap.(Rs cr)||125.43|
Competent Automobiles Company Ltd. (COMPETENTAUTO) - Auditors Report
Company auditors report
The Members of
COMPETENT AUTOMOBILES COMPANY LIMITED
We have audited the accompanying financial statements of COMPETENTAUTOMOBILES COMPANY LIMITED which comprise the Balance Sheet as at 31st March 2020the Statement of Profit & Loss Account (including other Comprehensive Income) theStatement of Changes of Equity and the Statement of Cash Flow Statement for the year endedand a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of thecompany as at March 31 2020 its Profit/Loss Total Comprehensive Income/Loss its cashflows and changes in the equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the 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 (ICAI) together with the independence requirements thatare relevant to our audit of the financial statements under the provisions of the Act andthe Rules made there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in the auditor'sprofessional judgment were of most significance in the audit of the financial statementsof the current period. These matters were addressed in the context of the audit of thefinancial statements as a whole and in forming the auditor's opinion thereon andthe auditor does not provide a separate opinion on these matters.
We have determined the matters described below to the key audit mattersto be communicated in our report.
1. Key Audit Matter
Adoption of Ind AS-116 Leases
The company has adopted Ind AS-116 Leases in the current year. Theapplication and transition to this accounting standard is complex and is an area of focusin out audit since the company has large number of leases with different contractualterms.
How auditor assessed the Key audit matter
Our audit procedures on adoption of Ind AS-116 include:
Evaluated the design and implementation of processes andinternal controls relating to implementation of the new lease standard.
Based on our evaluation of contractual agreements entered intoand our knowledge of the business excess the appropriateness of the leases identified bythe company.
Upon transition as at 1st April 2019:
Evaluated the method of transition and related adjustments ;
Tested completeness of lease data by reconciling theCompany's operating lease commitments to data used in computing ROU asset and thelease liabilities.
On a statistical sample we performed the following procedures:
assessed the key terms and conditions of each lease with theunderlying lease contracts; and
evaluated computation of lease liabilities and challenged thekey estimates such as discount rates and the lease term.
Assessed and tested the presentation and disclosures relating toInd AS 116 including disclosures relating to transition.
Information Other than the Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the financial statements and ourauditor's report thereon. Our opinion on the financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the 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 ourknowledge obtained during the course of our 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 Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error. In preparing the financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors areresponsible for overseeing the Company's financial reporting process.
Auditor's Responsibility for the Financial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken 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 financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and relateddisclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on theaudit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including thedisclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation. We communicate with those charged with governance regarding among othermatters 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 auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
I. 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 purpose of our audit;
b) In our opinion proper books of account as required by law have beenkept by the company so far as appears from our examination of those books;
c) The Balance Sheet Statement of Profit & Loss including OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with theapplicable Accounting Standards specified under Section 133 the Act;
e) On the basis of written representations received from the directorsas on March 31 2020 and taken on record by the Board of Directors none of the Directorsis disqualified as on March 31 2020 from being appointed as a director in terms ofSection 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure-II"; and
g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended: In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act
h) In our opinion and to the best of our information and according tothe explanations given to us we report as under with respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Auditand Auditor's) Rules 2014:
(i) The company has disclosed the impact of pending litigations on itsfinancial position in its Financial Statements Refer Note no. 33 to the FinancialStatements.
(iii) There has been no delay in transferring amounts required to betransferred to Investor Education and Protection Fund by the Company.
II. As required by the Companies (Auditor's Report) Order 2016("the order") issued by the Central Government of India in terms of sub section(11) of Section 143 of the Act we enclose in the "Annexure I" a statement onthe matters specified in Clause's 3 and 4 of the Order.
Annexure-I to the Independent Auditors' Report
The Annexure referred to in Independent Auditor's Report to themembers of the Company on the financial statements for the year ended 31st March 2020 wereport that:
1. In respect to its Property Plant and Equipment:
a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of its Property Plant and Equipment on thebasis of available information.
b) As explained to us the management during the year has physicallyverified the Property Plant and Equipment which in our opinion is reasonable havingregard to the size of the company and the nature of its fixed assets. We are informedthat no material discrepancy has been noticed by the management on such verification.
c) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
2. The inventories have been physically verified during the year by themanagement. In our opinion the frequency of verification is reasonable. The discrepanciesnoticed on verification between the physical stocks and the book records are not material.The discrepancies noted on such verification have been properly dealt with in the books ofaccounts.
3. As per information and explanation given to us and on the basis ofour examination of the records of the company the Company has not granted any loanssecured or unsecured to the companies firms limited liability partnerships or otherparties covered in the register under section 189 of the Companies Act 2013 (theAct') therefore clause 3 (iii) (a) (iii) (b) and (iii) (c) of the order are notapplicable to the company.
4. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of sections 185 and 186 of theAct with respect to the loans investments guarantees and security made.
5. As per information and explanation given to us the Company has notaccepted any deposits and accordingly directives issued by Reserve Bank of India and theprovisions of section 73 to 76 or any other relevant provision of Companies Act 2013 andthe rules framed there under would not apply and accordingly clause 3(v) of the order isnot applicable to the company.
6. The Central Government has not prescribed the maintenance of costrecords under section 148(1) of the Act and accordingly clause 3(vi) of the order is notapplicable.
7. a) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the company is regular indepositing undisputed statutory dues including provident fund employees state insuranceincome-tax sales tax value added tax duty of customs service tax Goods and ServiceAct cess and other statutory dues to appropriate authorities.
According to the information and explanations given to us noundisputed statutory dues payable in respect of provident fund income tax sales taxduty of customs value added tax service tax Goods and Service Act cess and othermaterial statutory dues were in arrears as at 31st March 2020 for a period of more thansix months from the date they became payable.
(b) According to the information and explanations given to us thereare no dues of income tax or sales tax or service tax or duty of customs or value addedtax or Goods and Services Tax which have not been deposited with the appropriate authorityon account of any disputes;
8. Based on our audit procedures and the information and explanationsgiven by the management we are of the opinion that the company has not defaulted inrepayment of dues to banks. The company did not have any outstanding debentures or anyoutstanding loans from government or from any financial institutions except vehicle loans.
9. The Company did not raise any money by way of initial public offeror further public offer (including debt instruments) and term loans during the year.Accordingly clause 3 (ix) of the order is not applicable.
10. According to the information and explanation given to us bymanagement we have neither come across any instances of fraud by the company or any fraudon the company by its officers or employees noticed or reported during the period norhave we been informed any such case by the company.
11. According to the information and explanation given to us and basedon our examination of the records of the Company the Company has paid/ provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.
12. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company. Accordingly clause 3(xii) of the orderis not applicable.
13. According to the information and explanations given to us and basedon our examination of the records of the Company transactions with the related partiesare in compliance with sections 177 and 188 of the Act where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards.
14. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly clause 3(xiv) of the order is not applicable.
15. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly clause3(xv) of the order is not applicable.
16. The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934.
Annexure II to the Independent Auditors' Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of COMPETENT AUTOMOBILES COMPANY LIMITED as of 31st March 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls 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'). 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 the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting 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 judgment 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 internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting isa process 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 controlover financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(ii) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and
(iii) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2020 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.