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Omax Autos Ltd.

BSE: 520021 Sector: Auto
NSE: OMAXAUTO ISIN Code: INE090B01011
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VOLUME 1589
52-Week high 74.00
52-Week low 39.35
P/E
Mkt Cap.(Rs cr) 107
Buy Price 50.25
Buy Qty 80.00
Sell Price 50.60
Sell Qty 155.00
OPEN 51.35
CLOSE 51.35
VOLUME 1589
52-Week high 74.00
52-Week low 39.35
P/E
Mkt Cap.(Rs cr) 107
Buy Price 50.25
Buy Qty 80.00
Sell Price 50.60
Sell Qty 155.00

Omax Autos Ltd. (OMAXAUTO) - Auditors Report

Company auditors report

To the Members of Omax Autos Limited Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Omax Autos Limited ("theCompany") which comprise the Balance Sheet as at March 31 2021 the Statement ofProfit and Loss (including Other Comprehensive Income) the statement of changes in equityand the Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation (herein referred to as ‘the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and accounting principles generally accepted in India of the stateof affairs of the Company as at March 31 2021 its loss and total the year ended on thatdate changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the

Act. Our responsibilities 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 ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matter Audit Response
Inventory Our audit procedure included among others:
The Company has large quantities of inventory at different plants. The Company produces large number of products for which variety of raw material is acquired and stored at different locations. The entity is in a customer specific industry and it may have slow moving/ damaged inventory due to model discontinuation or excess production accumulated at different We obtained copies of physical verification reports of inventory conducted:
Different product there is a possibility of gap in actual and recorded consumption of raw materials resulting in shortage/ excess of quantities of raw material inventory. For these reasons inventory has been considered as key audit matter. Selected a sample of inventory items and compared the quantities as per physical verification to the quantities recorded.
Made enquiries regarding obsolete inventory items and inspected the condition of items counted and proper provision has been made locations. wherever shave various variants due to which necessary.
Our audit procedures included testing of the inventory provisions made by the Company and also the basis of management assumptions with the understanding and challenging the key assumptions.
Evaluate the future usage of inventory in case of discontinued models based on past experience of movement of material and products used in other plants;
We have also evaluated a selection of controls over inventory existence across the Company.
Recognition of revenues Our audit procedure included among others:
The Company manufactures different kind of products for different customers at various plants. The delivery time of products to customers varies from 1 day to 20 days depending on location of customer. As per terms of underlying contract control is transferred upon delivery at agreed location. This requires proper cut- off procedures regarding recognition of revenue from sale of goods. Considering large number of locations and customers cut-off testing has been considered as a significant audit matter. We examined all key contracts and enquired with the entity for each of these contracts to understand the specific terms and risks which in turn allowed us to assess the recognition of revenue.
We evaluated and assessed the operating effectiveness of internal controls over the accuracy and timing of revenue recognized in the financial statements;
For the material contracts with a delivery schedule of greater than 2 days we performed the following procedures:
– Understood the process of performance and transfer of control to the other party.
– Assessed the actual position of transactions recorded including inventory in transit at the end of the reporting period by verifying their delivery dates;
– Assessed the Entity's accounting policies and the adequacy of its related disclosure in the financial statements
Valuation of Trade Receivables Our audit procedure included among others:
The nature of company's operations requires periodic revision in rates charged from customers as well as various claims in the normal course of business. We assessed the validity of material outstanding receivables by obtaining third-party confirmations and reconciliations of amounts to assure the completeness and recording of all claims filed by the customers.
Such price revisions and claims are affected both prospectively and retrospectively. Such claims are also recorded on provisional basis subject to confirmation by customers. Considering overall low operating margins in the industry such revisions and claims have a significant impact on company's profitability. Due to these reasons valuation of trade receivables has been considered a key audit matter. of receipts from trade We also considered payments received subsequent to year-end past payment history and unusual patterns to identify potentially unacknowledged/ unconfirmed balances
We assessed the appropriateness of the allowance of doubtful receivables considering various audit procedures across the plants including:
– Consideration and concurrence of the agreed payment terms;
– Verification receivables subsequent to year end;
Where there were indicators that trade receivables were unlikely to be collected we assessed the adequacy of the allowance for impairment of trade receivables. We assessed the ageing of trade receivables disputes with customers and the past payment history of the customer

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report 2020-21 but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financialstatements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

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.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company's Board of Directors and Management are responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these 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 Indian AccountingStandards (Ind' AS) specifiedunder section 133 of the Act read with relevant rules issuedthereunder. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the

Company and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements the management and Board of Directors areresponsible for assessing the

Company'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 is 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 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 this 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to statements in place and theoperating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure financialstatements including theand content of the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the annual financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating theresults effectof any identified misstatements in thefinancial ourwork;and(ii) evaluatethe statements.

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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships 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 financial statements of thecurrent period and are therefore the key audit matters.

We describe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 Act we givein "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.

(2) 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.

c. The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) and the statement of changes in equity and the Statement of Cash Flows dealt withby this report are in agreement with the books of account.

d. In our opinion the aforesaid financial statements read with notes Standardsspecified under section 133 of the Act read with relevant rules issued thereunder;

e. On the basis of the written representations received from the directors as on March31 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2021 from being appointed as a director in terms of section164(2) of the Act;

f. l controls overWithrespecttotheadequacyoftheinternal financial reporting ofthe Company and the operating effectiveness of such controls we give our separate reportin "Annexure 2".

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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with 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 Refer Note 38 (a) (b) & (c) on ContingentLiabilities.

(ii) The Company did not have any material foreseeable losses on long-term contractsduring the year March 31 2021.

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's

Report of even date to the members of Omax Autos Limited on the financial statementsfor the year ended March

31 2021.

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner over a period of 3 years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programcertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanations given to us and based on the audit proceduresconducted by us no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties recorded in the books of account of theCompany are held in the name of the Company except for the details given below:

Land/ Building Total number of cases Leasehold/ Freehold Gross Block as on March 31 2021 (Amount in Lacs) Net Block as on March 31 2021 (Amount in Lacs)
Building 1 Freehold 982.16 982.07

(ii) The inventory except goods in transit has been physically verified by themanagement during the year. In our opinion the frequency of verification is reasonable.Discrepancies noticed on physical verification carried out during the year have beenproperly dealt with in the books of accounts

(iii) The Company has in earlier years granted unsecured loans to companies covered inthe register maintained under Section 189 of the Act.

(a) According to the information and explanations given to us and based on the auditprocedures conducted by us there was no loan granted or renewed during the year to theparties covered in register maintained under section 189 of the Act.

(b) The schedule of repayment of principal and payment of interest in respect of suchloans has been stipulated and the repayments or receipts are regular

(c) In respect of the aforesaid loans there is no overdue amount of loans granted tocompanies firms

Limited Liability Partnerships or other parties listed in the register maintainedunder Section 189 of the Act.

(iv) In our opinion and according to the information and explanation given to us inrespect of loans investments guarantees and securities the Company has complied withthe provisions of Section 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where the maintenance of cost records has been specified by the CentralGovernment under sub- section (1) of Section 148 of the Act and the rules framed thereunder and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the recordswith a view to determine whether they are accurate or complete.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax goods and services tax customs duty and any other material statutory dues applicableto it.

According to the information and explanations given to us and based on the auditprocedures conducted by us no undisputed amounts payable in respect of provident fundemployees' state insurance income tax goods and services tax customs duty and any othermaterial statutory dues applicable to it were outstanding at the year end for a periodof more than six months from the date they became payable.

(b) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax goods and services tax service tax value added taxcustoms duty excise duty on account of any dispute are as follows:

Name of the statute Nature of dues Amount Disputed (Rs. in lacs) Amount paid under protest Period to which the amount relates Forum where dispute is pending
Central Excise Act 1944 Disallowance of CENVAT credit 327.27 57.28 2004-05 Onwards CESTAT
Central Excise Act 1944 Disallowance of CENVAT credit 192.89 - 2004-05 Onwards Commissioner/ Dy. Commissioner/ Asst.
2008-09 Commissioner
VAT Sales Tax Department 68.15 - 2009-10 & 2012-13 Joint Commissioner (Appeal)
VAT CST & VAT 8.87 - 2010-11 Tribunal

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to financialinstitutions bank(s) government(s). There are no debenture holders.

(ix) In our opinion and according to the information and explanations given to us theCompany has utilized the money raised by way of the term loans during the year for thepurposes for which they were raised. The

Company has not raised any money by way of public issue offer.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the

Company and no material fraud on the Company by its officers or employees has beennoticed or reported during the year.

(xi) In our opinion and to the best of our information and according to theexplanations given to us managerial remuneration has been paid / provided in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) In our opinion and according to the information and explanation given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of the relatedparty transactions have been disclosed in the Financial Statements etc. as required bythe 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.Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company during the year the Company hasnot entered into any non-cash transactions with directors or persons connected with him.Accordingly paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' in the Independent

Auditor's Report of even date to the members of Omax Autos Limited on the financialstatements for the year ended

March 31 2021

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Omax AutosLimited ("the Company") as of March 31 2021 in conjunction with our audit ofthe 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 ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

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 Guidance Note on Audit of Internal Financial Controls

Over Financial Reporting (the "Guidance Note") and the Standards on Auditingspecified under section 143(10) of the Act to the extent applicable tofinancial controlsboth issued by the ICAI. Those Standards auditofinternal and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk.The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient opinion on theCompany's internal financial controlsfinancialreporting . systemover

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 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could haveamaterialeffecton the financialstatements.

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 periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over over financial reporting were operating effectivelyas at March reportingandsuchinternalfinancial 31 2021 based on the internal controloverfinancialreporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the ICAI.

For BGJC & Associates LLP

Chartered Accountants

ICAI Firm Registration No. 003304N/N500056

Pranav Jain

Partner

Membership No. 098308

UDIN: 21098308AAAAEF9975

Date: June 22 2021

Place: New Delhi

.