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Sharda Motor Industries Ltd.

BSE: 535602 Sector: Auto
NSE: SHARDAMOTR ISIN Code: INE597I01010
BSE 00:00 | 26 Oct 900.85 -11.05
(-1.21%)
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949.00

HIGH

949.80

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890.30

NSE 00:00 | 26 Oct 896.70 -19.60
(-2.14%)
OPEN

942.90

HIGH

945.00

LOW

885.80

OPEN 949.00
PREVIOUS CLOSE 911.90
VOLUME 516
52-Week high 1215.00
52-Week low 483.00
P/E 16.16
Mkt Cap.(Rs cr) 536
Buy Price 889.00
Buy Qty 1.00
Sell Price 900.85
Sell Qty 5.00
OPEN 949.00
CLOSE 911.90
VOLUME 516
52-Week high 1215.00
52-Week low 483.00
P/E 16.16
Mkt Cap.(Rs cr) 536
Buy Price 889.00
Buy Qty 1.00
Sell Price 900.85
Sell Qty 5.00

Sharda Motor Industries Ltd. (SHARDAMOTR) - Auditors Report

Company auditors report

To The Members of Sharda Motor Industries Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Sharda MotorIndustries Limited ("the Company") which comprise the Balance Sheet as at March31 2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "thestandalone 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 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 312019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matter described below to be thekey audit matters to be communicated in our report.

Sr. No. Key Audit Matter Auditor's Response
1 Completeness and measurement of Contingent Liabilities arising from uncertain tax positions and disputed matters Our audit procedure included the following:
In the standalone financial statements contingent liabilities arising from uncertain tax positions and disputed matters as reported under the Note No. 20.1.(a) to the financial statements for the year ended 31.03.2019. • We discussed with the management regarding the internal control system for identifying and estimating such contingent liabilities as well as the reporting of such contingent liabilities in the standalone financial statements.
• Obtained a detailedunderstanding and assumptions applied for considering these matters as contingent liabilities through discussion with the management of the Company.
From our point of view this matter was of particular importance for our audit because the recognition and measurement of this material item to a large extent based on the estimates and assumptions made by the Company's management. Assessed management's estimate of the possible outcome of the disputed cases.
• In addition we engaged our internal tax expert to assess the appropriateness of Company's assumption and explanations for these matters.
• In light of the above we reviewed and verified the adequacy of disclosures made for these matters in the standalone financial statements.

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 AnnualReport but does not include the standalone financial statements and our auditor's reportthereon. The annual report is expected to be made available to us after the date of thisauditors' report.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit orotherwise appears to be materially misstated. When we read the annual report if weconclude that there is a material misstatement therein we are required to communicate thematter to those charged with governance.

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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows 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 read with Companies (IndianAccounting Standard) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring 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.

In preparing the standalone financial statements the management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe management either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 risk of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 the Statement of Changes in Equity and the Statement of Cash Flow dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended.

e) On the basis of the written representations received from the directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 from being appointed as a director in terms of Section 164 (2) of theAct.

f) With respect to the adequacy of the internal financial controls with reference tothe financial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B" to this report.

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

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements- Refer Note 20.1 to the standalonefinancial 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.

For Gupta Vigg & Co. Chartered Accountants
Firm's Registration Number: 001393N
Place of Signature: New Delhi (CA. Deepak Pokhriyal) Partner
Date: May 27 2019 Membership Number: 524778

Annexure ‘A' To the Independent Auditors' Report

(Annexure ‘A' To the Independent Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended March 312019 we report that:

(i) In respect of fixed assets:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified at periodic intervals. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.

(c) On the basis of information and explanation provided by the management the titledeeds of immovable properties are held in the name of the Company. One title deed has beenmortgaged with banks for securing the short term borrowing detail of the same aredisclosed in Note No. 4 of the standalone Ind AS financial statements.

(ii) On the basis of information and explanation provided by the managementinventories have been physically verified by the management during the year except forstock-in-transit and stocks lying with third parties. In our opinion the frequency ofsuch verification is reasonable. According to the information and explanations given tous discrepancies noticed on such verification between physical stocks and the bookrecords were not material and these have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us the Company has notgranted any loan secured or unsecured to companies firms Limited LiabilityPartnerships (LLPs) or other parties covered in the register maintained under Section 189of the Act. Accordingly the provisions of paragraphs 3(iii)(a) 3(iii)(b) and 3(iii)(c)of the Order are not applicable.

(iv) According to the information and explanations given to us the Company has notentered into any transaction covered under Sections 185. The company has complied with theprovisions of Sections 186 of the Act in respect of investments made. The Company has notgranted any loans and has not provided any guarantees or securities to parties coveredunder Section 186 of the Act.

(v) In our opinion and according to the information and explanation given to us theCompany has not accepted any deposits from the public in accordance with the provisions ofSections 73 to 76 of the Act and the rules framed there under. Accordingly paragraph 3(v)of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records undersub-section (I) of Section 148 of the Act in respect of product covered 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 records.

(vii) (a) The Company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax duty of customs goodsand service tax cess and other applicable statutory dues with appropriate authorities.Further there were no undisputed outstanding statutory dues as on the last day of thefinancial year concerned for a period of more than six months from the date they becamepayable except duty of custom of Rs.6.59 lakhs.

(b) According to the information and explanations given to us there are no dues ofduty of customs which have not been deposited with the appropriate authorities on accountof any dispute. Further according to the information and explanations given to us exceptas stated below there are no dues of income-tax sales tax value added tax service taxand duty of excise which have not been deposited by the Company on account of anydisputes:

S. No. Nature of statute Nature of dues Amount (Rs. in lakhs)* Period to which amount relates Forum where dispute is pending
1 U.P. Entry Tax Act Entry tax 0.90 F.Y. 2001-02 Appellate Authority UP Trade Tax
2 Maharashtra Sales Tax VAT 23.69 F.Y. 2010-11 Sales Tax Tribunal Nashik
Act 9.39 F.Y 2011-12 Joint Commissioner Nashik
3 Tamil Nadu Sales Tax Act VAT 29.72 F.Y 2005-06 & 2006-07 High Court Madras
4 Service Tax under Finance Act 1994 Service Tax 34.02 F.Y 2011-12 2012-13 2013- 14 & 2014-15 CESTAT Chennai
8.16 F.Y 2010-112011-12 2012-13 2013-14 & 201415 CESTAT Ahmedabad
4.30 F.Y 2011-12 2012-13 2013- 14 & 2014-15 CESTAT Mumbai
5 Central Excise Act Cenvat Credit 2.24 F.Y. 2007-08 Commissioner Central Excise & Service Tax (Appeals) LTU New Delhi
440.00 F.Y. 2008-09 & 2009-10 Hon'ble Supreme Court of India
0.83 F.Y 2015-16 & 2016-17 Asst. Comm. Central excise & Service tax LTU New Delhi
1.39 F.Y 2014-15 & 2015-16 CESTAT Chennai
7.35 F.Y 2010-11 & 2011-12 CESTAT Mumbai
6 Income Tax Act Income Tax 41.55 A.Y 2012-13 ITAT New Delhi
7 Income Tax Act Income Tax 1.03 A.Y 2013-14 CIT (Appeal) New Delhi

* Net of protest money paid.

(viii) The Company has not taken any loans or borrowings from financial institutionsbanks and government and has not issued any debentures. Accordingly the provisions ofparagraph 3(viii) of the Companies (Auditor's Report) Order 2016 are not applicable tothe Company.

(ix) The Company has not raised any money by way of Initial public offer or futurepublic offer (including debt instruments) and term loans during the year. Accordingly theprovisions of paragraph 3(ix) of the Companies (Auditor's Report) Order 2016 are notapplicable to the Company.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) The Company has paid or provided for managerial remuneration in accordance withthe requisite approvals mandated by the provisions of Section 197 read with Schedule V tothe Act.

(xii) In our opinion the Company is not a Nidhi Company hence the provisions ofparagraph 3(xii) of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany.

(xiii) Based on our examination of the books of account and records of the Company alltransactions entered with the related parties are in compliance with sections 177 and 188of Companies Act 2013 where applicable and the details have been disclosed in thestandalone financial statements as required by the applicable Indian accountingstandards.

(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 the provisions of paragraph 3(xiv) of the Order are not applicable to theCompany.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected to its directors. Accordingly theprovisions of paragraph 3(xv) of the Order are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of paragraph 3(xvi) of the Order arenot applicable to the Company.

For Gupta Vigg & Co. Chartered Accountants
Firm's Registration Number: 001393N
Place of Signature: New Delhi (CA. Deepak Pokhriyal) Partner
Date: May 27 2019 Membership Number: 524778

Annexure ‘B' To the Independent Auditors' Report

Annexure ‘B' To the Independent Auditors' Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to the Members of Sharda Motor IndustriesLimited)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof Sharda Motor Industries Limited ("the Company") as of March 31 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (‘ICAl'). 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 with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of 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 financial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 31 2019 basedon the internal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Gupta Vigg & Co. Chartered Accountants
Firm's Registration Number: 001393N
Place of Signature: New Delhi (CA. Deepak Pokhriyal) Partner
Date: May 27 2019 Membership Number: 524778

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