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Hira Automobile Ltd.

BSE: 531743 Sector: Others
NSE: N.A. ISIN Code: INE258Z01013
BSE 05:30 | 01 Jan Hira Automobile Ltd
NSE 05:30 | 01 Jan Hira Automobile Ltd

Hira Automobile Ltd. (HIRAAUTOMOBILE) - Auditors Report

Company auditors report

To the Members of M/s. Hira Automobiles Limited

Report on the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Hira Automobiles Limited("the Company") which comprise the balance sheet as at 31st March 2020 and thestatement of Profit and Loss statement of changes in equity and statement of cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "the standalone financial statements")

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 in the manner so required and give a true and fair view inconformity with ( Indian Accounting Standards prescribed under section 133 of the Act readwith Companies ( Indian Accounting Standards) Rule 2015 as amended ( "nd AS")and other accounting principles generally accepted in India of the state of affairs ofthe Company as at March 31 2020 and profit/loss changes in equity and its cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards 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 with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

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 comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's report BusinessResponsibility Report Corporate Governance and Shareholder's information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not covered the otherinformation and we do not express any form of assurance conclusion thereupon.

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 concluded that there is a materialmisstatement of their information we are required to report that fact. We have nothing toreport in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the 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 changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS and other accounting policies generally accepted in India. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; 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 financialstatement 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 responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

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

Key Audit Matters

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

a) "The Company has sold substantial part of its operation and fixed assets belongto Rajpura branch which is contributing around ten percent sales to the company duringthe year covered by our report. According to the information and explanations given to usthe company has so far not made any plans to replace the substantial part of fixed assetsthat have been sold. However there is no doubt that the company will be able to continueas a going concern for the foreseeable future.

b) "There is substantial drop down of sale by almost twenty five percent in thecurrent financial year as compared to the previous year which effects the liquidityposition of the company. Further there was complete lockdown in India from 20th March2020 to 17th May 2020 due to Covid-19 pandemic the impact of the same may hurt financialstatement and liquidity position of the company."

c) "The Company is covered under Secretarial Audit and compliances under CompaniesAct 2013. Our opinion on financial statement of the company are subject to qualification/ non compliances (if any) reported/ covered under Secretarial Audit and Compliance reportby the practicing company secretary."

Report on Other Legal and Regulatory Requirements

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 ofthe Companies Act 2013 we give in the Annexure a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143 (3) of the Act we report that :

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books [and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus].

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A".

g) In our and to the best of our information and according to the explanations given tous the remuneration paid by the company to its directors during the year is in accordancewith the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 litigations on its financialposition in its financial statements. Further explained by the management there no suchmajor/ materialistic litigationsare pending which would impact its financial position.

ii. The Company has made provision as required under the applicable law or IndianAccounting Standards for material foreseeable losses if any on long-term contractsincluding derivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. However it is informed andexplained to us that there were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

Annexure A to the Independent Auditor's Report

Annexure referred to in paragraph 6(I) under "Report on other Legal and Regulatoryrequirements" of our report of even date to the members of the Company on thestandalone Ind AS financial statements 3 of our report of even date

1. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets at Corporate Office and in the processof maintaining at outlets.

We have been informed that the fixed assets of the company have been physicallyverified by the management at reasonable intervals and no material discrepancies werenoticed on such verification. However as informed Discrepancies noticed on suchverification which are not material have been properly dealt with in books of accounts.

According to information and explanation given to us the title deeds of immovableproperties are held in the name of the Company.

2. As informed to us physical verification of inventory of the company has beenconducted by the management at reasonable intervals during the year.

In our opinion and according to the explanations given to us the procedures ofPhysical verification of inventory followed by the management are reasonable and adequatein relation to the size of the company and the nature of its business.

In our opinion and according to the explanations given to us the Company ismaintaining proper records of inventory. We have been informed that no materialdiscrepancies have been noticed on physical verification as compared to records.

3. According to the information and explanation given to us the Company hasgranted/advanced inter corporate deposits amounting to Rs. Nil covered in the registermaintained under section 189 of the Companies Act 2013.

4. 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 Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities.

5. According to the information and explanation given to us the Company has notaccepted deposits from public. Advances from customers for sale of vehicles and againstsale promotion schemes run by the Company to promote its sale are received and paid in theordinary course of business.

6. The maintenance of cost records under section 148 (1) of the Companies Act 2013 hasnot been prescribed by the Central government for the Company since it is notmanufacturing Company.

7. According to the information and explanations given to us the undisputed statutorydues including provident fund investor education and protection fund employees stateinsurance income tax sales tax wealth tax custom duty excise duty cess and any otherstatutory due as applicable have generally been regularly deposited during the year by thecompany with appropriate authority though there has been delay in certain cases. Asexplained to us the company did not have any due on account of excise duty.

The disputed amount various statutory dues which have not been deposited are as under:-

Name of the Statute Nature of the Dues Rs. in lakhs Period to which the amount relate Forum where dispute is pending Date of Payment
Vat ACT 2005 Vat Interest & Penalty 9.80 2007-08 Sales Tax PTA Unpaid
Vat ACT 2005 Vat Interest & Penalty 12.37 2006-07 Sales Tax PTA Unpaid

8. According to information and explanations given to us no amount was lying with thecompany which was required to be transferred to investor education and protection fund inaccordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and rulesmade there under.

9. According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to financial institutions banks and governments though there has been delay incertain cases from their due dates.

10. The company has no accumulated losses at the end of the financial year and it hasnot incurred cash losses in current and immediately preceding financial year.

11. In our opinion and according to information and explanation given to us theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments).

12. During the course of our examination of books and records of the company carriedout in accordance with generally accepted audit practice in India and according to theinformation and explanation given to us we have neither come across any instance ofmaterial fraud by the company or on the Company by its officers or employees noticed orreported during the year nor have been informed any such case by the Management.

13. According to the records of the Company examined by us and information andexplanations given to us the Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V to the act.

14. In our opinion and according to the information and explanation given to us theCompany is not a NIdhi company and the Nidhi Rules 2014 are not applicable to it.

15. According to the information and explanation given to us and based upon ourexamination of the records of the Company transaction with the related parties are incompliance with section 177 and 188 of the Act and details of the such transactions havebeen disclosed in the standalone Ind AS financial statements are required by theapplicable Indian Accounting Standards. Further refer to Notes 34.

16. According to the records of the Company examined by us and information andexplanations given to us the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debenture during the year.

17. According to the records of the Company examined by us and information andexplanations given to us the Company has not entered into non cash transactions withdirectors or persons connected with him.

18. The Company is not required to be registered under section 45-IA of Reserve Bank ofIndiaAct 1934.

19. Basedontheauditproceduresperformedforthepurposeofreportingthetrueandfairviewof thestandalone Ind AS financial statements and as per the information and explanation given bythe management were port that no fraud by the company has been noticed or reported duringthe course of our audit.

Annexure A to the Independent Auditor's Report

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

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ('the Act')

We have audited the internal financial controls over financial reporting of HiraAutomobiles Limited incorporated in India as at March 31 2020 in conjunction with ouraudit of the standalone Ind AS financial statements of the company for the year ended andas on that date.

Management's Responsibility for Internal Financial Controls

The respective Board of Directors of the Company incorporated in India are responsiblefor establishing and maintaining internal financial controls based on the respectiveinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the 'Guidance Note'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to the respective company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' 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 Standards on Auditing prescribed under Section143(10) of the Act and the GuidanceNote to the extent applicable to an audit of internal financial controls over financialreporting. Those Standards and the Guidance Note require that we comply with the ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over reporting was established and maintained and ifsuch controls operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained bythe other auditor (if any) of the company incorporated in India in terms of their reportsreferred to in the other Matter paragraph below is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control 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 corn pang; (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 unauthorized 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 control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance 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 incorporated in India have in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2020 basedon the internal control over financial reporting criteria established by the Company inIndia considering the essential components of internal control stated in the Guidance Noteissued by the ICAI.

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