To the Members of Vaksons Automobiles Limited
Report on the Audit of the Standalone Financial Statements
We have audited the Standalone Financial Statementsof VAKSONS AUTOMOBILES LIMITED ("theCompany") which comprisetheBalanceSheetasat31March2019 and the Statement of Profitand Loss and Statement of Cash Flows for the year then ended and notes to the StandaloneFinancial Statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "the Standalone FinancialStatements").
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 accounting principles generally accepted in India ofthe state of affairs of the Company as at 31 March 2019 and its loss and its cash flowsfor the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the Standalone Financial Statementsunder the provisions of the Act and the Rules thereunder 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 opinion.
Key Audit Matters
Key audit matters are those matters that in our professiona l 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. Wefind that one key audit matters to communicate in our report is that automobilesdealership of the company has not been renewed by the principals and been discontinuedafter the Balance Sheet date.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the Standalone Financial Statements and our auditors'report thereon.
Our opinion on the Standalone Financial Statements does n ot cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the Standalone Financial Statements our responsibility is to read theother information and in doing so consider whether the other information is materiallyinconsistent with the Standalone Financial Statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133of the Act. This responsibility also include maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand 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 Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the StandaloneFinancial Statements management and Board of Directors are responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Board of Directors are also responsible for overseeing the Company's financialreporting process.
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 assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to in fluence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.As part of an audit in accordance with SAs we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
Identify and assess the risks 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to Standalone Financial Statements inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management. 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 auditor's report to the related disclosures in the Standalone FinancialStatements or if such disclosures are inadequate to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern. Evaluate the overall presentation structure and content ofthe Standalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
1. 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 "Annexure A" a statement on the matters specified in paragraphs 3 and4 of the 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 Standalone Balance Sheet the Standalone Statement of Profit and Loss and theStatement of Cash Flows dealt with by this Report are in agreement with the books ofaccount.
(d) In our opinion the aforesaid Standalone Financial Statements comply withAccounting Standard the specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure 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 2014as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company does not have any pending litigations which would impact its financialposition;
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses;
iii. There have been no amounts required to be transferred to the Investor Educationand Protection Fund by the Company; and
iv. The disclosures in the Standalone Financial Statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these Standalone Financial Statements since they do not pertainto the financial year ended 31 March 2019.
v. With respect to the matter to be included in the Auditors' Report undersection197(16):
In our opinion and according to the information and explanations given to us theremuneration paid/payable by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid/payable toany director is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.
For DNJ & Co.
Chartered Accountants FRN-009150N
Date: 30thMay 2019
Annexure A to the Independent Auditors' Report
The Annexurereferred to in our Independent Auditors' Report to the members of theCompany on the Standalone Financial Statements for the year ended 31March 2019 we reportthat:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management at reasonableintervals and no material discrepancies have been noticed on physical verification asconfirmed by the management. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature 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 are yetto be registered in the name of the company.
(ii) The Company has been regular in following the procedures of physical verificationof inventories which is reasonable and adequate in relation to the size of the company andthe nature of its business.No material discrepancies were noticed during physicalverification of inventories.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships and other parties mentioned in the register maintainedunder section 189 of the Companies Act 2013. Since the company has not granted anyloans provisions of clause (iii) (a) to (iii) (c) of the Order are not applicable totheCompany.
(iv) In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act2013.
(v) According to the information and explanations given to us the Company has notaccepted any deposit from the public. Thus paragraph 3(v) of the Order is not applicable.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for product of the Company.
(vii)(a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxGoods and Services Tax duty of customs cess and other material statutory dues have beendeposited after due date during the year by the Company . The details are as under :
|ESI deposited after due date of deposit ||Rs.68232.00 EPF |
|deposited after due date of deposit ||Rs.180928.00 |
|GST late fee due to late filing ||Rs.29200.00 |
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax Goods and Services Tax duty of customscess and other material statutory dues were in arrears as at 31 March 2019 for a period ofmore than six months from the date they became payable.
(b)According to the information and explanations given to us there are no materialdues of provident fund Income- Tax sales tax Goods and Services Tax duty of customsvalue added tax and cess which have not been deposited with the appropriate authorities onaccount of any dispute.
(viii) In our opinion and according to the information and explanations given to usthe company has not defaulted in the repayment of dues to a financial institution andbank.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). The Company has utilized term loans forthepurposes for which they were raised.
(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 thecourse of our audit.
(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid/provided for managerialremuneration in accordance with requisite approvals mandated by the provisions of Section197 read with Schedule V 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.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(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 with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For DNJ & Co.
Nipun Jain Partner
Date: 30th May 2019
Annexure B to the Independent Auditors' Report
(Referred to in paragraph 2(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date) Report on the Internal FinancialControls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls with reference to Standalone FinancialStatements of VAKSONS AUTOMOBILES LIMITED ("the Company") as of 31 March2019 in conjunction with our audit of the Standalone Financial Statements of the Companyfor 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 with reference to Standalone FinancialStatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Standalone Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingissued by ICAI and deemed to be prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls withreference to Standalone Financial Statements was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlsystem with reference to Standalone Financial Statements and their operatingeffectiveness. Our audit of internal financial controls with reference to StandaloneFinancial Statements included obtaining an understanding of internal financial controlswith reference to Standalone Financial Statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Company's internal financial controls system with reference to StandaloneFinancial Statements.
Meaning of Internal Financial Controls with reference to Standalone FinancialStatements
A company's internal financial control with reference to Standalone FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of Standalone Financial Statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial control with reference to Standalone Financial Statements includes thosepolicies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflec t the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Standalone Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the Standalone Financial Statements.
Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements
Because of the inherent limitations of internal financial controls with reference toStandalone Financial Statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to Standalone Financial Statements to future periods are subjectto the risk that the internal financial control with reference to Standalone FinancialStatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to Standalone Financial Statements and suchinternal financial controls with reference to Standalone Financial Statements wereoperating effectively as at 31 March 2019 based on the internal control with reference toStandalone Financial Statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by the ICAI.
For DNJ & Co.
Date: 30th May 2019