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Rico Auto Industries Ltd.

BSE: 520008 Sector: Auto
NSE: RICOAUTO ISIN Code: INE209B01025
BSE 00:00 | 23 May 63.75 -1.95
(-2.97%)
OPEN

68.40

HIGH

68.40

LOW

63.45

NSE 00:00 | 23 May 63.60 -1.90
(-2.90%)
OPEN

65.00

HIGH

67.00

LOW

63.25

OPEN 68.40
PREVIOUS CLOSE 65.70
VOLUME 49250
52-Week high 87.25
52-Week low 55.95
P/E 13.31
Mkt Cap.(Rs cr) 863
Buy Price 63.75
Buy Qty 1217.00
Sell Price 64.50
Sell Qty 600.00
OPEN 68.40
CLOSE 65.70
VOLUME 49250
52-Week high 87.25
52-Week low 55.95
P/E 13.31
Mkt Cap.(Rs cr) 863
Buy Price 63.75
Buy Qty 1217.00
Sell Price 64.50
Sell Qty 600.00

Rico Auto Industries Ltd. (RICOAUTO) - Auditors Report

Company auditors report

To the Members of

Rico Auto Industries Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Rico AutoIndustries Limited (‘the Company') which comprise the Balance Sheet as at March312018 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial

Statements

2. 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 state ofaffairs (financial position) Profit and Loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (‘Ind AS') specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring 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.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthese standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial controls relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on these standalone financial statements.

Opinion

8. 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Ind AS specified under Section133 of the Act of the state of affairs (financial position) of the Company as at March312018 and its profit (financial performance including other comprehensive income) itscash flows and the changes in equity for the year ended on that date.

Other Matter

9. The Company had prepared separate sets of statutory financial statements for theyear ended March 312017 and March 31 2016 in accordance with Accounting Standardsprescribed under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 (as amended) on which we issued auditor's reports to the shareholders of theCompany dated May 26 2017 and May 19 2016 respectively. These financial statements havebeen adjusted for the differences in the accounting principles adopted by the Company ontransition to Ind AS which have also been audited by us. Our opinion is not modified inrespect of this matter.

Report on Other Legal and Regulatory Requirements

10. 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 the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.

11. Further to our comments in Annexure A as required by Section 143(3) of the Act wereport that:

a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b) i n 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 standalone financial statements dealt with by this report are in agreement withthe books of account;

d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under Section 133 of the Act;

e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on March312018 from being appointed as a director in terms of Section 164(2) of the Act;

f) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on March 31 2018 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 25 May 2018 as per Annexure B expressed an unqualified opinion; and

g) 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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. the Company as detailed in Note 35 to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position;

ii. t he Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from November 08 2016 to December 30 2016which are not relevant to these standalone financial statements. Hence reporting underthis clause is not applicable.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Ashish Gupta
Place : Gurugram Partner
Date : May 25 2018 Membership No.: 504662

Annexure A

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during theyear however there is a regular program of verification once in every three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties (which are included under the head‘Property plant and equipment') are held in the name of the Company.

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year except for goods-in-transit and stocks lying withthird parties. For stocks lying with third parties at the year-end written confirmationshave been obtained by the management. No material discrepancies were noticed on theaforesaid verification.

(iii) The Company has granted long term unsecured loans to companies covered in theregister maintained under Section 189 of the Act; and with respect to the same:

(a) in our opinion the terms and conditions of grant of such loans are not primafacie prejudicial to the company's interest.

(b) the schedule of repayment of principal and payment of interest has been stipulatedand the principal amount is not due for repayment currently;

(c) there is no overdue amount in respect of loans granted to such companies.

(iv) In our opinion the Company has complied with the provisions of Sections 185 and186 of the Act in respect of loans investments guarantees and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax goods and service tax duty of customsduty of excise value added tax cess and other material statutory dues as applicablehave generally been regularly deposited to the appropriate authorities. Further noundisputed amounts payable in respect thereof were outstanding at the year-end for aperiod of more than six months from the date they became payable.

(b) The dues outstanding in respect of income-tax sales-tax service-tax goods andservice tax duty of customs duty of excise and value added tax on account of anydispute are as follows:

Statement of Disputed Dues

Name of the statute Nature of dues Amount (' in Crores) Amount paid under Protest (' in Crores) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Errors and Mismatch of challans in returns filed to Income Tax Department 0.005 Nil Assessment year 2009-10 2010-112011-12 Assessing Officer Income Tax Department.
Haryana VAT Act 2003 Disallowance of certain expenses 0.04 Nil Financial year 2007-08 Joint Commissioner
Haryana VAT Act 2003 Disallowance of input credit on purchase of furnace oil 0.22 Nil Financial year 2007-08 Remanded back by Tribunal to Assessing Officer
Gujarat VAT 2003 Disallowance of input on rejected goods 0.04 0.009 Financial year 2017-18 Gujarat Sales Tax Tribunal
Finance Act 1994 Claim of cenvat on construction & other repair & maintenance service 2.46 Nil Financial year 2005-06 to 2010-11 Custom Excise & Service Tax Appellate Tribunal
Finance Act 1994 Denial of credit taken on services of insurance catering tent house and taxi 1.49 Nil Financial year 2004-05 to 2007-08 Custom Excise & Service Tax Appellate Tribunal
Finance Act 1994 Denial of credit taken on services of insurance catering tent house and taxi 0.34 Nil Financial year 2008-09 to 2009-10 Custom Excise & Service Tax Appellate Tribunal
Finance Act 1994 Denial of credit taken on services of insurance catering tent house and cab. 0.87 Nil Financial year 2011-12 to 2012-13 Custom Excise & Service Tax Appellate Tribunal
Finance Act 1994 Deposit of inadmissible cenvat credit availed on the capital goods destroyed in fire 1.75 Nil Financial year 2012-13 Commissioner Central Excise (Appeals)
Finance Act 1994 Denial of credit taken on outward freight 0.28 Nil Financial year 2012-13 Commissioner Central Excise (Appeals)
Haryana Local Area Development Tax Act 2000 Applicability of local area development tax on items purchased 0.01 Nil Financial year 2001-02 to 2003-04 Joint Commissioner (Appeal)

(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution or government during the year. The Company has no borrowings to thegovernment and did not have any outstanding debentures during the year.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.

(x) No fraud by the Company or on the company by its officers or employees has beennoticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid and provided by the company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.

(xiii) I n our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

(xiv) During the year the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

(xv) Based on management representation the company has not entered into any non-cashtransactions with the directors or persons connected with them covered under Section 192of the Act.

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

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Ashish Gupta
Place : Gurugram Partner
Date : May 25 2018 Membership No.: 504662

Annexure B

Independent Auditor's Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (‘the Act')

1. In conjunction with our audit of the standalone financial statements of Rico AutoIndustries Limited (‘the Company') as at and for the year ended March 312018 wehave audited the internal financial controls over financial reporting (‘IFCoFR') ofthe Company as at that date.

Management's Responsibility for Internal Financial Controls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof 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 the Company's business including adherenceto the Company'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 Act.

Auditor's Responsibility

3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (‘ICAI') and deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of IFCoFR and theGuidance Note issued by the ICAI. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate IFCoFR were established and maintained and if suchcontrols operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR include 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 have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that the IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such controls were operating effectivelyas at March 31 2018 based on internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note issued by ICAI.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Ashish Gupta
Place : Gurugram Partner
Date : May 25 2018 Membership No.: 504662