To the Members of Swaraj Automotives Limited
Report on the Financial Statements
We have audited the stand alone Indian Accounting Standards (Ind AS) financialstatements of SWARAJ AUTOMOTIVES LIMITED ("the company")which comprise theBalance Sheet as at 31 March 2019 and the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 (the 'Act') in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in Indiaincluding the Ind AS; a) of the state of affairs (financial position) of the Company as atMarch 31 2019; and b) its profit (financial performance including other comprehensiveincome) and c) its Cash Flows and the changes in equity for 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 Act. Our responsibilities under these Standards are above describedin the Auditors' Responsibilities section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our ethical responsibilities in accordance with these requirements and the Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for 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.
Information other than the Standalone Financial Statements and Auditors' 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 Annexures to Board's Report BusinessResponsibilities Report Corporate Governance and Shareholder's information but does notinclude the Standalone Financial Statements and our auditors' report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress 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 standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters in Section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesestand alone Ind AS financial statements that give a true and fair view of the state ofaffairs (financial position) profit (financial performance including other comprehensiveincome) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Ind AS specified under Section 133of the Act.
This responsibility also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding of the assets of the Company andfor preventing and detecting the frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Indo AS financial statements that give atrue and fair view and are free from material misstatement whether due 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's or to cease operations or has no realisticalternative to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process
A. Our objectives are to obtain reasonable assurance about whether the standaloneInd ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors' report that includes our opinion. Reasonable assuranceis a high level or assurance but is not a guarantee that an audit conducted in accordancewith Standard on Auditing will always detect a material misstatement when it exists.Misstatement can arise from fraud or error and are considered material if individually orin the aggregate they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these financial statements.
B. As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional scepticism throughout the audit. We also: i) Identify and assess therisks of material misstatement of the standalone financial statements whether due tofraud or error design and perform audit procedures responsive to those risks and obtainaudit evidence that is sufficient and appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control. ii) Obtain an understanding ofinternal financial controls relevant to the audit in order to design audit procedures thatare appropriate in the circumstances. Under Section 143(3)(i) of the Act we are alsoresponsible for expressing our opinion on whether the Company has adequate internalfinancial controls system in place and operating effectiveness of such controls. iii)Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management. iv) Conclude on theappropriateness of management's use of the going concern basis of accounting and based onthe audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a goingconcern If we conclude that a material uncertainty exists we are required to drawattention in our auditors' report to the related disclosures in the Standalone FinancialStatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.v) Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
C. Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Standalone Financial Statements.
D. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
E. We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonable be thought to bear on ourindependence and where applicable related safeguards.
F. From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonable be expected to outweigh the public interest benefits of suchcommunication.
6. Report on other Legal and Regulatory Requirements
i) As required by the Companies (Auditors' 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' statement on the matters specified in paragraphs 3 & 4 of theOrder.
ii) 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 appears from our examination of those books.
c) the Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.
d) in our opinion the aforesaid standalone Ind As financial statements comply with theAccounting Standards specified under Section 133 of the Act.
e) on the basis of written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure 'B'
g) with respect to the other matters to be included in the Auditors' 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 if any on itsfinancial positions in its IndAS financial statements.
ii. the Company did not have any long-term contracts including derivative contracts forwhich 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 during the year ended March 312019.
| ||For Mangla Associates |
| ||Chartered Accountants |
| ||(FRN 006796C) |
| ||A.P. Mangla FCA |
| ||Partner |
|Ghaziabad 24th May 2019 ||Membership No. 080173 |
ANNEXURE 'A' REFERRED TO IN OUR REPORT OF EVEN DATE
I. (a) The Company is maintaining proper records to show full particulars includingquantitative details and situation of fixed assets (property plant and equipment)
(b) As explained the company has a regular programme of physical verification of itsfixed assets (property plant and equipment) by which fixed assets (property plant andequipment) are verified in a phased manner. In accordance with the programme certainassets (property plant and equipment) were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion the periodicity ofphysical verification is reasonable having regard to the size of the company and thenature of its assets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
II. (a) According to the information and explanations give to us Physical verificationof inventory has been conducted during the year by the management. In our opinion thefrequency of such verification is reasonable.
(b) The procedures of physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the company and the nature of thebusiness.
(c) The company is maintaining proper records of inventory. No material discrepancieswere noticed on physical verification.
III. (a) According to the information and explanations given to us the Company duringthe year has not granted any loans secured or unsecured to any party covered in theregister maintained under Section 189 of the Act. (b) & (c) are not applicable
IV. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofloans investments guarantees and security.
V. The company has not accepted any deposits from the Public.
VI. We have broadly reviewed the books of accounts maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records underSection 148(1) of the Act in respect of the products manufactured by the Company and areof the opinion that prima facie the prescribed accounts have been made and maintained. Wehave however not made a detailed examination of the records with a view to determinewhether they are accurate and complete.
VII. (a) According to the information and explanations given to us the Company isregular in depositing with appropriate authorities undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Wealth Tax ServiceTax Custom Duty Excise Duty Value added tax/GST Cess and any other material statutorydues where applicable. According to the information and explanations given to us thereare no arrears of undisputed outstanding dues of above as at the last day of the financialyear for a period of more than six months from the date they became payable.
(b) The disputed statutory dues that have not been deposited on account of matterspending before appropriate authorities are reported below. According to the informationand explanation given to us and the records examined by us the following dues of ExciseDuty/Service Tax have not been deposited by the Company on account of disputes as on 31stMarch 2019.
|S.No. ||Name of the Statute ||Nature of the dues ||Amount of Tax Liability ||Period to which the amount relates ||Forum where dispute is Pending |
| || || ||(Rs. in Lacs) || || |
|1. ||Central Excise ||Excise Duty ||9.78 ||2005-06 to April 2008 ||Appellate Tribunal |
|2. ||Central Excise ||Excise Duty ||13.26 ||March 2009 to Dec. 2011 ||Commissioner (Appeals) |
|3. ||Central Excise ||Excise Duty ||1.28 ||August 2009 to March 2010 ||Deputy Commissioner |
|4. ||Service Tax ||Service Tax ||10.49 ||September 2015 to April 2017 ||Assistant Commissioner |
|5. ||Central Excise ||Excise Duty ||0.98 ||February 2016 to April 2017 ||Commissioner (Appeals) |
|6. ||Service Tax ||Service Tax ||0.93 ||May 2017 to June 2017 ||Assistant Commissioner |
VIII. According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institutions banks orGovernment. The Company has not issued any debentures. Accordingly the Paragraph 3(viii)of the Order is not applicable to the Company.
IX. According to the information and explanations given to us the Company has notraised monies by way of initial public offer or further public offer (including debtinstruments) and the term loans availed by the Company were applied for the purposes forwhich they were raised.
X. In our opinion and as per information and explanations given and during the courseof our examination of the books and records of the Company carried out in accordance withgenerally accepted auditing practices in India we have neither come across any fraud bythe Company or any fraud on the Company by its officers or employees noticed or reportedduring the year.
XI. In our opinion and according to the information and explanations given to us andbased on our examinations of the records of the Company the managerial remuneration hasbeen paid and provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.
XII. According to the information and explanation given to us the Company is not aNidhi Company. Thus Para 3(xii) of the Order is not applicable to the Company.
XIII. According to the information and explanations given to us all the transactionswith the related parties are in compliance with Sections 177 and 188 of the Act and therelevant details have been disclosed in the IndAS Financial Statements as required by theapplicable accounting standards.
XIV. According to the information and explanations given to us the Company had notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year.
Accordingly the Para 3(xiv) of the Order is not applicable to the Company.
XV. According to the information and explanations given to us the Company had notentered into any non-cash transactions with directors or persons connected with him duringthe year. Accordingly paragraph 3(xv) of the Order is not applicable to the Company.
XVI. According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
| ||For Mangla Associates |
| ||Chartered Accountants |
| ||(FRN 006796C) |
| ||A.P. Mangla |
| ||Partner |
|Gaziabad 24th May 2019 ||Membership No. 080173 |
ANNEXURE 'B' REFERRED TO IN OUR REPORT OF EVEN DATE
Report on the Internal Financial Control under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SWARAJAUTOMOTIVES LIMITED (the 'Company') as of 31st March 2019 in conjunction with our auditof the standalone IndAS financial statements of the Company for the year ended on thatdate.
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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the " Guidance Note") and the Standards on Auditing deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating Effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgement including the assessment of the risks ofmaterial misstatement of the standalone IndAS financial statements whether due to fraudor error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our 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 thepreparations 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 standalone IndAS financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 standalone IndAS 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. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal 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.
| ||For Mangla Associates |
| ||Chartered Accountants |
| ||(FRN 006796C) |
| ||A.P. Mangla |
| ||Partner |
|Ghaziabad 24th May 2019 ||Membership No. 080173 |