Mar 31, 2023
Rico Auto Industries Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of Rico Auto Industries Limited (the âCompanyâ) which comprise the standalone balance sheet as at 31 March 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter Revenue Recognition
See Note 22 to standalone financial statements
The key audit matter |
How the matter was addressed in our audit |
The Companyâs revenue is derived primarily from sale of goods which comprises automotive components. Revenue from sale of goods is recognised at a point in time when performance obligation is satisfied and is based on the transfer of control to the customer as per terms of the contract with them which may vary for each customer. The Company and its external stakeholders focus on revenue as a key performance metric. Revenue recognition has been identified as a key audit matter as there could be incentives or external pressures to meet expectations resulting in revenue being overstated and recognized before the control has been transferred. |
In view of the significance of the matter we applied the following audit procedures in this area, to obtain sufficient appropriate audit evidence. ⢠We assessed the Companyâs accounting policies for revenue recognition by comparing with applicable accounting standards. ⢠We evaluated the design and implementation of the key internal financial controls with respect to the timing of revenue recognition and tested the operating effectiveness of such controls on a sample basis. ⢠We performed substantive testing by selecting samples (using statistical sampling) of revenue transactions recorded during the year and after the financial year-end by testing the underlying documents which included sales invoices, shipping documents and proof of deliveries, to assess whether these are recognised in the appropriate period in which control of the goods is transferred to the customer. ⢠We scrutinized journal entries related to revenue recognised during the year based upon specified risk-based criteria, to identify unusual or irregular items; and ⢠Considered the adequacy of the disclosures in accordance with the relevant accounting standard. |
The Companyâs Management and Board of Directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and auditorâs report(s) thereon. The annual report is expected to be made available to us after the date of this auditorâs report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions as per applicable laws and regulations.
Managementâs and Board of Directorsâ Responsibilities for the Standalone Financial Statements
The Companyâs Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic 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 maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design 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 has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting
in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
a. The standalone financial statements of the Company for the year ended 31 March 2022 were audited by the predecessor auditor who had expressed an unmodified opinion on 30 May 2022.
b. The corresponding figures for the year ended 31 March 2022 of the three subsidiary companies (refer note 46) included in these financial statements in accordance with the scheme of amalgamation to give effect to the order of NCLT, have been audited by another firm of Chartered Accountants whose reports for the year ended 31 March 2022 expressed an unmodified opinion on the aforesaid financial statements.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2 A. 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 best of 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 the Company so far as it appears from our examination of those books.
c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on 31 March 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
B. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations as at 31 March 2023 on its financial position in its standalone financial statements - Refer Note 36 to the standalone financial statements.
b. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 20 to the standalone financial statements.
c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
d. i) The management has represented that, to the
best of its knowledge and belief, as disclosed in the Note 53 (x) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(ii) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 53 (xi) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.
e. The final dividend paid by the Company during the year, in respect of the same declared for the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.
As stated in Note 54 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
f. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from 1 April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.
C. With respect to the matter to be included in the Auditorâs Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
Chartered Accountants Firmâs Registration No.:101248W/W-100022
Partner
Place: Gurugram Membership No.: 095109
Date : May 29, 2023 ICAI UDIN:23095109BGZAEZ3820
Mar 31, 2018
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Rico Auto Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), Profit and Loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether these standalone financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide 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 explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2018, and its profit (financial performance including other comprehensive income), its cash 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 the year ended March 31, 2017 and March 31, 2016 in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) on which we issued auditorâs reports to the shareholders of the Company dated May 26, 2017 and May 19, 2016 respectively. These financial statements have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have also been audited by us. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
11. Further to our comments in Annexure A, 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 best of 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 the Company so far as it appears from our examination of those books;
c) the standalone financial statements dealt with by this report are in agreement with the books of account;
d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under Section 133 of the Act;
e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 the standalone financial statements of the Company for the year ended on that date and our report 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 Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. the Company, as detailed in Note 35 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position;
ii. t he Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from November 08, 2016 to December 30, 2016 which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.
Annexure A
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year, however, there is a regular program of verification once in every three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature 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 âProperty, plant and equipmentâ) are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. No material discrepancies were noticed on the aforesaid verification.
(iii) The Company has granted long term unsecured loans to companies covered in the register 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, prima facie, prejudicial to the companyâs interest.
(b) the schedule of repayment of principal and payment of interest has been stipulated and 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 and 186 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 of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). 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 pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Companyâs products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period 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 and service tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Statement of Disputed Dues
Name of the statute |
Nature of dues |
Amount (Rs. in Crores) |
Amount paid under Protest (Rs. 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, 2010-11, 2011-12 |
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 or financial institution or government during the year. The Company has no borrowings to the government 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 public offer (including debt instruments). In our opinion, the term loans were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) I n our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.
(xiv) During the year, the company has not made any preferential I allotment or private placement of shares or fully or partly convertible debentures.
(xv) Based on management representation, the company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure B
Independent Auditorâs Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. In conjunction with our audit of the standalone financial statements of Rico Auto Industries Limited (âthe Companyâ) as at and for the year ended March 31, 2018, we have audited the internal financial controls over financial reporting (âIFCoFRâ) of the Company as at that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Companyâs business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on the Companyâs IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (âICAIâ) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A companyâs IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs 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 of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at March 31, 2018, based on internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note issued by ICAI.
For Walker Chandiok & Co LLP
Chartered Accountants
Firmâs Registration No.: 001076N/N500013
Ashish Gupta
Place : Gurugram Partner
Date : May 25, 2018 Membership No.: 504662
Mar 31, 2017
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Rico Auto Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements, that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderââ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.
10. Further to our comments in annexure A, 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 best of our knowledge and belief were necessary for the purpose of our audit;
b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. the standalone financial statements dealt with by this report are in agreement with the books of account;
d. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);
e. on the basis of the written representations received from the directors as on March 31, 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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 of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated May 26, 2017 as per annexure B expressed unqualified opinion; and
g. with respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. as detailed in Note 33 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. the Company as detailed in Note 54 to the standalone financial statements, has made requisite disclosures in these standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on the audit procedures performed and taking into consideration the information and explanations given to us, in our opinion, these are in accordance with the books of the account maintained by the Company.
Annexure A
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. I n accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties (which are included under the head âfixed assetsâ) are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. No material discrepancies were noticed on the aforesaid verification.
(iii) The Company has granted long term unsecured loans to companies covered in the register 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, prima facie, prejudicial to the Companyâs interest;
(b) the schedule of repayment of principal and interest has been stipulated, however the same is not due for repayment currently; and
(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 and 186 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 of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). 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 pursuant to the Rules made by the Central Government for the maintenance of cost records under subsection (1) of Section 148 of the Act in respect of the Companyâs products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. in crores) |
Amount Paid Under Protest (Rs. 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 |
0.02 |
Nil |
Assessment year 200910, 2010-11, 2011-12 |
Assessing Officer, Income Tax |
Haryana VAT Act, 2003 |
Disallowance of certain expenses |
0.04 |
Nil |
Financial year 2007-08 |
Haryana Sales Tax Tribunal |
Haryana VAT Act, 2003 |
Disallowance of input credit on purchase of furnace oil |
0.22 |
Nil |
Financial year 2007-08 |
Haryana Sales Tax Tribunal |
Central Excise Act, 1944 |
Demand on excise duty on removal of dies under rule 67/95 of Central Excise without payment of duty |
2.96 |
Nil |
Financial year 2002-03 to 2006-07 |
Custom Excise & Service Tax Appellate Tribunal |
Finance Act, 1994 |
Claim of cenvat on construction & other repair & maintenance service |
2.36 |
Nil |
Financial year 2005-06 to 2010-11 |
Custom Excise & Service Tax Appellate Tribunal |
Finance Act, 1994 |
Denial of credit taken on outward freight services |
0.27 |
Nil |
Financial year 2005-06 to 2006-07 |
Commissioner of Central Excise (Appeals) |
Central Excise Act, 1944 |
Deposit of inadmissible cenvat credit availed on the capital goods destroyed in fire |
1.69 |
Nil |
Financial year 2012-13 |
Commissioner of 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) |
Haryana Electricity Reforms Act, 1997 |
Demand for short assessment for sanction of extended load of electricity |
5.60 |
3.60 |
Financial year 2005-06 to 2011-12 |
Honâble High Court, Punjab and Haryana |
(viii) The Company has not defaulted in repayment of loans or borrowings to any bank or financial institution or government during the year. The Company did not have any outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the Company has applied the term loans for the purpose for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
(xiv) During the year ,the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
(xv) Based on management representation, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Walker Chandiok & Co LLP
Chartered Accountants
Firmâs Registration No.: 001076N/N500013
per Ashish Gupta
Place : Delhi Partner
Date : May 26, 2017 Membership No.: 504662
Mar 31, 2015
1. We have audited the accompanying standalone financial statements of
Rico Auto Industries Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary 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 Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these standalone financial statements,
that give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This
responsibility also includes maintenance of adequate accounting records
in accordance with the provisions of the Act; safeguarding the assets
of the Company; preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors' Responsibility
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit
4. We have taken into account the provisions of the Act, the
accounting and auditing standards and matters which are required to be
included in the audit report under the provisions of the Act and the
Rules made there under
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the standalone financial
statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial controls relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
Opinion
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2015, and its profit and its
cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of Section
143(11) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 3 and 4 of the Order.
10. 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 best of our knowledge and belief were necessary for the
purpose of our audit;
b. in our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
c. the standalone financial statements dealt with by this report are
in agreement with the books of account;
d. in our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as
amended);
e. on the basis of the written representations received from the
directors as on March 31, 2015 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164(2) of the
Act;
f. with respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i) as detailed in Note 32(l) to the standalone financial statements,
the Company has disclosed the impact of pending litigations on its
standalone financial position;
ii) the Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses; and
iii) there has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditor's Report of even date to the
members of Rico Auto Industries Limited, on the financial statements
for the year ended March 31, 2015 Based on the audit procedures
performed for the purpose of reporting a true and fair view on the
financial statements of the Company and taking into consideration the
information and explanations given to us and the books of account and
other records examined by us in the normal course of audit, we report
that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets. (b) All fixed assets have not been physically verified by the
management during the year, however, there is a regular program of
verification once in every three years, which. in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year, except for
goods-in-transit and stocks lying with third parties. For stocks lying
with third parties at the year-end, written confirmations have been
obtained by the management.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and material
discrepancies noticed on physical verification have been properly dealt
with in the books of account.
(iii) The Company has granted unsecured loans (short term
and long term) to companies covered in the register maintained under
Section 189 of the Act; and with respect to the same:
(a) in relation to short term unsecured loan, the principal amounts are
repayable on demand and since the repayment of such loans has not been
demanded, in our opinion, receipt of the principal amount is regular;
and; in relation to long term unsecured loan, the principal amount is
not due for repayment currently; and
(b) there is no overdue amount in respect of loans (short term and long
term) granted to such companies.
(iv) In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal control system in respect of
these areas.
(v) The Company has not accepted any deposits within the
meaning of Sections 73 to 76 of the Act and the Companies (Acceptance
of Deposits) Rules, 2014 (as amended). 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 pursuant to the Rules made by the Central Government for
the maintenance of cost records under sub-section (1) of Section 148 of
the Act in respect of Company's products/services and are of the
opinion that. prima facie, the prescribed accounts and records have
been made and maintained. However, we have not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
(vii)(a) Undisputed statutory dues including provident fund, employees'
state insurance, income-tax, sales-tax, wealth tax, service tax, duty
of custom, duty of excise, value added tax, cess and other material
statutory dues, as applicable, have not been regularly deposited with
the appropriate authorities and there have been significant delays in a
large number of cases. Further, no undisputed amounts payable in
respect thereof were outstanding at the year-end for a period of more
than six months from the date they become payable;
(b) The dues outstanding in respect of income-tax, sales-tax, wealth
tax, service tax, duty of custom, duty of excise, value added tax and
cess on account of any dispute, are as follows:
Name of the Nature of dues Amount Amount Paid
statute (Rs. in crores) Under Protest
(Rs. in crores)
Income Tax Errors and
mismatch of
challans in 0.18 Nil
Act, 1961 returns filed
to Income Tax
Department
Haryana VAT Disallowance of
certain expenses 0.04 Nil
Act, 2003
Haryana VAT Disallowance of
input credit on 0.22 Nil
Act, 2003 purchase of
furnace oil
Central Claim of cenvat
on roof 0.47 0.03
Excise Act, ventilator,
evaporating
1944 cooling machine
and others
Central Demand on excise
duty on removal 2.71 Nil
Excise Act, of dies under
1944 rule 67/95 of
Central Excise
without payment
of duty (refer
note below)
Finance Act, Claim of cenvat
on custom house 1.47 0.24
1994 agent and courier
export related
services
Finance Act, Claim of cenvat
on construction & 2.15 Nil
1994 other repair &
maintenance
service
Finance Act, Denial of credit
taken on services of 0.42 Nil
1994 insurance, catering,
tent house and cab
Finance Act, Denial of credit
taken on services of 1.30 Nil
1994 insurance, catering,
tent house and taxi
Finance Act, Denial of credit
taken on services of 0.19 Nil
1994 insurance, catering,
tent house and
cab and transit
insurance of goods
Finance Act, Denial of credit
taken on services 0.29 Nil
1994 of medic aim
insurance, all risk
insurance policy,
vehicle insurance,
catering, tent and
maxi cab services
Finance Act, Denial of credit
taken on services of 0.01 Nil
1994 insurance, catering,
tent house and cab
Finance Act, Denial of credit
taken on services of 0.73 Nil
1994 insurance, catering,
tent house and cab
Finance Act, Claim of cenvat on
outward freight 0.25 Nil
1994
Haryana Applicability of
local area 0.01 Nil
Local Area development tax
on items
Development purchased
Tax Act,
2000
Haryana Demand for short
assessment for 5.60 3.60
Electricity sanction of
extended load of
Reforms Act, electricity
1997
Name of the Statute Period to which Forum where
the amount relates dispute is pending
Income Tax Act,1961 Assessment year Assessing Officer,
2013-14 Income Tax Department
Haryana VAT Act,2003 Financial year Joint Commissioner
2007-08
Haryana VAT Act,2003 Financial year Deputy Excise and
2007-08 Taxation Commissioner
Central Excise
Act,1944 Financial year Custom Excise &
2005-06 Service Tax
Appellate Tribunal
Central Excise
Act,1944 Financial year Custom Excise &
2002-03 to 2006-07 Service Tax
Appellate Tribunal
Finance Act,1994 Financial year Custom Excise &
2004-05 to 2007-08 Service Tax
Appellate Tribunal
Finance Act,1994 Financial year Custom Excise &
2005-06 to 2010-11 Service Tax
Appellate Tribunal
Finance Act,1994 Financial year Custom Excise &
2010-11 Service Tax
Appellate Tribunal
Finance Act,1994 Financial year Commissioner of
2004-05 to 2007-08 Central Excise (Appeals)
Finance Act,1994 Financial year Commissioner of
2008-09 Central Excise (Appeals)
Finance Act,1994 Financial year Commissioner of
2008-09 to 2009-10 Central Excise (Appeals)
Finance Act,1994 Financial year Commissioner of
2010-11 to 2011-12 Central Excise (Appeals)
Finance Act,1994 Financial year Commissioner of
2011-12 to 2012-13 Central Excise (Appeals)
Finance Act,1994 Financial year Commissioner of
2005-06 to 2006-07 Central Excise (Appeals)
Haryana Local Area Financial year Joint Commissioner
Development Tax 2001-02 to 2003-04 (Appeal)
Act,2000
Haryana Electricity Financial year Hon'ble High Court,
Reforms Act,1997 2005-06 to 2011-12 Punjab and Haryana
Note: Company has furnished a bond and bank guarantee of Rs. 0.42 crore
and Rs. 0.004 crore respectively
(c) The Company has transferred the amount required to be transferred
to the investor education and protection fund in accordance with the
relevant provision of the Companies Act, 1956 (1 of 1956) and rules
made there under within the specified time.
(viii) In our opinion, the Company has no accumulated losses at the end
of the financial year and it has not incurred cash losses in the
current and the immediately preceding financial year.
(ix) There are no dues payable to debenture-holders. The Company has
defaulted in repayment of dues to the following banks and financial
institutions:
Name of Bank Amount Due date Delay in days until
(Rs. in crores) March 31, 2015
Axis Bank -
Term Loan III 1.79 June 30, 2014 1
1.79 September
30, 2014 4
Axis Bank -
Term Loan II 2.14 May 27, 2014 9
State Bank of
Patiala - I 2.50 June 21, 2014 79
State Bank of
Patiala - II 3.09 April 7, 2014 25
1.08 April 7, 2014 28
State Bank of
Hyderabad - I 1.07 April 30, 2014 1
1.79 April 30, 2014 5
2.86 July 31, 2014 22
State Bank of
Hyderabad - II 2.14 June 15, 2014 1
1.40 September
15, 2014 14
0.74 September 15,
2014 16
Exim Bank
Term Loan 1.60 May 22, 2014 14
0.12 May 22, 2014 35
1.72 August 22, 2014 20
Exim Bank - USD 0.61 May 22, 2014 32
0.61 August 22, 2014 28
(x) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xi) In our opinion, the Company has applied the term loans for the
purpose for which the loans were obtained.
(xii) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm Regn. No.001076N/N500013
per Ashish Gupta
Place : Gurgaon Partner
Dated : 28th May, 2015 Membership No.504662
Mar 31, 2014
1. We have audited the accompanying financial statements of Rico Auto
Industries Limited, ("the Company"), which comprise the Balance
Sheet as at March 31,2014, and the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial
statements, that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 ("the
Act") read with the General Circular 15/2013 dated September 13, 2013
of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of Company''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements give
the information required by the Act in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
ii) in the case of Statement of Profit and Loss, of the profit for the
year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date
Emphasis of Matter
7. We draw attention to note 38 to the financial statements regarding
investments in subsidiaries aggregating to Rs.50.53 crores and trade
receivables and advances due from them aggregating to Rs.54.07 crores
as at March 31, 2014. The management, based on the factors discussed in
the said note, believes that the decline in the value of investments is
temporary in nature and balance of trade receivables and advances are
recoverable, and hence no provision in respect of aforesaid amounts has
been made in the accompanying statement. Our opinion is not qualified
in respect of this matter.
Report on Other Legal and Regulatory Requirements
8. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
9. As required by Section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the financial statements dealt with by this report are in agreement
with the books of account;
d. in our opinion, the financial statements comply with the Accounting
Standards notified under the Companies Act, 1956 read with the General
Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of section 133 of the Companies Act, 2013 ; and
e. on the basis of written representations received from the directors,
as on March 31,2014 and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2014 from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT OF EVEN DATE TO THE
MEMBERS OF RICO AUTO INDUSTRIES LIMITED, ON THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2014.
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year; however, there is a regular program of
verification once in every three years, which, in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(c) In our opinion, a substantial part of fixed assets has not been
disposed off during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year, except for
goods-in-transit and stocks lying with third parties. For stocks lying
with third parties at the year-end, written confirmations have been
obtained by the management.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and material
discrepancies noticed on physical verification have been properly dealt
with in the books of account.
(iii) (a) The Company has granted unsecured loans to one party covered
in the register maintained under Section 301 of the Act. The maximum
amount outstanding during the year is Rs.34.89 crores and the year-end
balance is Rs.34.89 crores.
(b) In respect of one interest free long term loan granted, the
principal amount is repayable after stipulated period, upon demand and
in case of interest free short term loan the principal amount is
repayable on demand, in our opinion, terms and conditions of such loan
are not, prima facie, prejudicial to the interest of the Company.
(c) In respect of interest free long term loan, the principal amount is
not due for repayment currently and in respect of interest free short
term loan given the principal amount is repayable on demand and since
the repayment of such loans has not been demanded, in our opinion,
receipt of the principal amount is regular.
(d) There is no overdue amount in respect of loans granted to such
company.
(e) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, the provisions of clauses
4(iii)(f) and 4(iii)(g) of the Order are not applicable.
(iv) In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal control system in respect of
these areas.
(v) (a) In our opinion, the particulars of all contracts or
arrangements that need to be entered into the register maintained under
Section 301 of the Act have been so entered.
(b) Owing to the unique and specialized nature of the items involved
and in the absence of any comparable prices, we are unable to comment
as to whether the transactions made in pursuance of such contracts or
arrangements have been made at the prevailing market prices at the
relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the Companies
(Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of
clause 4(vi) of the Order are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act in respect of Company''s products and are of the
opinion that, prima facie, the prescribed accounts and records have
been made and maintained. However, we have not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales-tax, wealth tax, service tax, custom duty, excise duty, cess and
other material statutory dues, as applicable, have not been regularly
deposited with the appropriate authorities and there have been delays
in number of cases. Further, no undisputed amounts payable in respect
thereof were outstanding at the year-end for a period of more than six
months from the date they become payable
(b) The dues outstanding in respect of income-tax, sales-tax, wealth
tax, service tax, custom duty, excise duty, cess on account of any
dispute, are as follows:
Name of the Nature of dues Amount Amount paid
Statute (Rs. in crores) under protest
(Rs. in crores)
Central Excise Claim of cenvat on
roof 0.44 0.03
Act, 1944 ventilator,
evaporating
cooling machine
and others
Central Excise Demand of excise
duty on 2.57 Nil
Act, 1944 removal
of dies under Rule
67/95 of Central
Excise without
payment of Duty
(Refer Note 1
below)
Finance Claim of cenvat on 2.04 Nil
Act, 1994 construction &
other repair
& maintenance
service
Finance Denial of input
credit for 0.96 Nil
Act, 1994 direct/indirect
services
Finance Claim of cenvat
on outward 0.24 Nil
Act, 1994 freight
Finance Claim of cenvat
on CHA 1.40 0.24
Act, 1994 and courier
export related
services
Finance Denial of cenvat
credit 0.05 Nil
Act, 1994 related to
services
Finance Denial of cenvat
credit 0.06 Nil
Act, 1994 on certain
material
and services
Haryana Applicability
of local area 0.01 Nil
Local Area development
tax on items
Development purchased.
Tax Act, 2000
Income Tax Errors and
mismatch of 0.15 Nil
Act,1961 challans in
returns filed to
Income Tax
Department
Haryana VAT Disallowance of
input tax 0.43 0.43
Act, 2003 on purchase of
furnace oil
Haryana VAT Disallowance of 0.04 Nil
Act, 2003 certain expenses
Haryana Demand for short 5.60 3.60
Electricity assessment for
sanction
Reforms of extended load
Act, 1997 of electricity
Finance Denial of
cenvat credit of 0.11 Nil
Act, 1994 service tax on
audit fees
Finance Denial of
credit taken on 1.23 Nil
Act, 1994 services of
insurance,
catering, tent
house and cab
Name of the Statute Period to which Forum where
the amount dispute is
relates pending
Central Excise
Act, 1944 Financial year Custom Excise
2005-06 & Service Tax
Appellate Tribunal
Central Excise
Act, 1944 Financial year Custom Excise
2002-03 to & Service Tax
2006-07 Appellate Tribunal
Finance Act, 1994 Financial year Custom Excise
2005-06 to & Service Tax
2010-11 Appellate Tribunal
Finance Act, 1994 Financial year Custom Excise
2004-05 to & Service Taxe
2010-11 Appellate Tribunal
Finance Act, 1994 Financial year Commissioner of
2005-06 to Central Excise
2006-07 (Appeals)
Finance Act, 1994 Financial year Custom Excise &
2004-05 to Service Tax
2007-08 Appellate Tribunal
Finance Act, 1994 Financial year Commissioner of
2008-09 to Central Excise
2010-11 (Appeals)
Finance Act, 1994 Financial year Custom Excise &
2007-08 Service Tax
Appellate Tribunal
Haryana
Local Area
Development
Tax Act, 2000 Financial year Joint Commissioner
2001-02 to (Appeal)
2003-04
Income Tax Act,1961 Assessment year Assessing Officer,
2013-14 Income Tax
Department
Haryana VAT Act, 2003 Financial year Commissioner
2006-07 (Appeal)
Haryana VAT Act, 2003 Financial year Deputy Excise
2007-08 and Taxation
Commissioner
Haryana Electricity
Reforms Act, 1997 Financial year Hon''ble High Court,
2005-06 to Punjab and Haryana
2011-12
Finance Act, 1994 Financial year Commissioner of
2013-14 Central Excise
(Appeal)
Finance Act, 1994 Financial year Commissioner of
2008-09 Central Excise
(Appeal)
Name of the Nature of dues Amount Amount paid
Statute (Rs. in crores) under protest
(Rs. in crores)
Finance Denial of credit
taken on 0.18 Nil
Act, 1994 services of insurance,
catering, tent house
and cab and transit
insurance of goods
Finance Denial of credit
taken on 0.27 Nil
Act, 1994 services of mediclaim
insurance, all risk
insurance, policy,
vehicle insurace,
catering, tent
and maxi cab
services
Finance Denial of credit
taken on 0.40 Nil
Act, 1994 services of
insurance, catering,
tent house and cab
Finance Denial of credit
taken on 0.01 Nil
Act, 1994 services of
insurance,
catering, tent house
and cab
Finance Denial of credit
taken on 0.68 Nil
Act, 1994 services of
insurance,
catering, tent
house and cab
Name of the Statute Period to which Forum where
the amount dispute is
relates pending
Finance Act, 1994 Financial year Commissioner of
2008-09 Central Excise
(Appeal)
Finance Act, 1994 Financial year Commissioner of
2009-10 Central Excise
(Appeal)
Finance Act, 1994 Financial year Customer Excise
2010-11 & Service Tax
Appellate Tribunal
Finance Act, 1994 Financial year Commissioner of
2011-12 Central Excise
(Appeal)
Finance Act, 1994 Financial year Commissioner of
2012-13 Central Excise
(Appeal)
Note 1: Company has furnished a bond and bank guarantee of Rs.0.42
crore and Rs.0.004 crore respectively.
(x) In our opinion, the Company has no accumulated losses at the end of
the financial year and it has not incurred cash losses in the current
and the immediately preceding financial year.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities. Accordingly, the provisions of clause 4(xii) of the Order
are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Accordingly, provisions of clause 4(xiii)
of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xvi) In our opinion, the Company has applied the term loans for the
purpose for which these loans were obtained.
(xvii) In our opinion, the Company has used funds raised on short-term
basis for long-term investment. During the year the Company has raised
funds from short term borrowings amounting to Rs.48.08 crores which
would fall due for repayment within one year from the date of the
receipt and such funds have been used for making long term investments,
for acquiring fixed assets and repayment of long term loans.
(xviii) During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under Section 301 of the Act. Accordingly, the provisions
of clause 4(xviii) of the Order are not applicable.
(xix) The Company has neither issued nor had any outstanding debentures
during the year. Accordingly, the provisions of clause 4(xix) of the
Order are not applicable.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable.
(xxi) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For Walker Chandiok & Co LLP
(Formerly Walker, Chandiok & Co)
Chartered Accountants
Firm Regn. No. 001076N
per Ashish Gupta
Place : Gurgaon Partner
Dated : 28th May, 2014 Membership No.504662
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying financial statements of Rico Auto
Industries Limited, ("the Company"), which comprise the Balance Sheet
as at March 31, 2013, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial
statements, that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
ii) in the case of Statement of Profit and Loss, of the profit for the
year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on other Legal and Regulatory Requirements
7. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
8. As required by Section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. the financial statements dealt with by this report are in agreement
with the books of account;
d. in our opinion, the financial statements comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the Act;
and
e. on the basis of written representations received from the
directors, as on March 31, 2013 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2013
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
Other Matter
The audit of the financial statements for the previous year ended March
31, 2012, included in the financial statements was carried out and
reported by Gupta Vigg & Co. vide their unqualified audit report dated
May 30, 2012, whose audit report has been furnished to us and which
have been relied upon by us for the purpose of our audit of the
financial statements. Our audit report is not qualified in respect of
this matter.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT OF EVEN DATE TO THE
MEMBERS OF RICO AUTO INDUSTRIES LIMITED, ON THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2013
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, we report that:
i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year; however, there is a regular program of
verification once in every three years, which, in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on such
verification.
(c) In our opinion, a substantial part of fixed assets has not been
disposed off during the year.
ii) (a) The management has conducted physical verification of inventory
at reasonable intervals during the year, except for goods-in-transit
and stocks lying with third parties. For stocks lying with third
parties at the year- end, written confirmations have been obtained by
the management.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and material
discrepancies noticed on physical verification have been properly dealt
with in the books of account.
iii) (a) The Company has granted unsecured loans to five parties
covered in the register maintained under Section 301 of the Act. The
maximum amount outstanding during the year is Rs.78.43 crores and the
year-end balance is Rs.49.49 crores.
(b) In respect of the loans granted, the principal and interest amounts
are repayable after stipulated period, upon demand, in our opinion,
terms and conditions of such loans are not, prima facie, prejudicial to
the interest of the Company.
(c) In respect of loans granted, the principal and interest amounts are
repayable after stipulated period, upon demand, in our opinion, receipt
of the principal and interest amount is regular.
(d) There is no overdue amount in respect of loans granted to such
companies.
(e) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, the provisions of clauses
4(iii) (f) and 4(iii) (g) of the Order are not applicable.
iv) In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the internal control system in respect of
these areas.
v) (a) In our opinion, the particulars of all contracts or arrangements
that need to be entered into the register maintained under Section 301
of the Act have been so entered. (b) Owing to the unique and
specialized nature of the items involved and in the absence of any
comparable prices, we are unable to comment as to whether the
transactions made in pursuance of such contracts or arrangements have
been made at the prevailing market prices at the relevant time.
vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the Companies
(Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of
clause 4(vi) of the Order are not applicable.
vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act in respect of Company''s products and are of the
opinion that, prima facie, the prescribed accounts and records have
been made and maintained. However, we have not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales-tax, wealth tax, service tax, custom duty, excise duty, cess and
other material statutory dues, as applicable, have generally been
regularly deposited with the appropriate authorities, though there has
been a slight delay in a few cases. Further, no undisputed amounts
payable in respect thereof were outstanding at the year-end for a
period of more than six months from the date they became payable. (b)
The dues outstanding in respect of income-tax, sales- tax, wealth tax,
service tax, custom duty, excise duty, cess on account of any dispute,
are as follows:
Name of the Nature of dues Amount Amount paid
Statute (Rs. in
crores) under protest
(Rs. in crores)
Central
Excise Claim of cenvat
on roof 0.42 0.03
Act, 1944 ventilator and
evaporating
cooling machine.
Central Excise Disallowance of 1.91 Nil
Act, 1944 cenvat credit
Name Period to which Forum where
the amount dispute is
relates pending
Central
Excise Financial year Custom Excise
2005-06 & Service Tax
Appellate Tribunal
Central
Excise Financial year Custom Excise
1998-99 to & Service Tax
2002-03 Appellate Tribunal
Name of the Nature of dues Amount Amount paid
Statute (Rs. in
crores) under protest
(Rs. in crores)
Central Excise Demand on excise duty on 2.36 Nil
Act, 1944 removal of dies under
Rule 67/95 without
payment of Duty (Refer
Note 1 below)
Central Excise Denial of cenvat on account 0.15 Nil
Act, 1944 of wrong description of
material and tariff number
on invoice
Finance Claim of cenvat on 1.92 Nil
Act, 1994 construction & other repair
& maintenance service
Finance Denial of input credit for 0.88 Nil
Act, 1994 direct/indirect services
Finance Claim of cenvat on outward 0.22 Nil
Act, 1994 freight
Finance Claim of cenvat on CHA & 1.33 0.24
Act, 1994 courier and export related
services
Finance Denial of cenvat credit on 0.06 Nil
Act, 1994 certain material and
services
Haryana Applicability of local area 0.01 Nil
Local Area development tax on items
Development purchased. Tax Act, 2000
Income Tax Errors and mismatch of 0.12 Nil
Act,1961 challans in returns filed to
Income Tax Department
Income Tax Disallowance of certain 0.04 Nil
Act, 1961 expenses
Haryana VAT Disallowance of
input tax on 0.45 Nil
Act, 2003 purchase of furnace oil
Haryana VAT Input Credit for
purchase of 0.04 Nil
Act, 2003 furnace oil
Haryana Demand for Short 5.60 3.19
Electricity Assessment for sanction
Reforms of extended load
Act, 1997 of electricity
Finance Service tax demand for not 0.24 Nil
Act, 1994 levying service tax on
job work charges of die
modification.
Finance Denial of cenvat credit 0.04 Nil
Act, 1994 related to service tax
Central Excise Differential duty
charged for 1.89 NIL
Act, 1944 supplying identical
parts at different rates
Name Period to which Forum where
the amount dispute is
relates pending
Central Excise Financial year Custom Excise
2002-03 to & Service Tax
2006-07 Appellate Tribunal
Central Excise Financial year Custom Excise
1998-99 to & Service Tax
2003-04 Appellate Tribunal
Central Excise Financial year Custom Excise
2005-06 to & Service Tax
2010-11 Appellate Tribunal
Central Excise Financial year Commissioner of
2004-05 to Central Excise
2010-11 (Appeals)
Central Excise Financial year Commissioner of
2005-06 and Central Excise
2006-07
Central Excise Financial year Custom Excise &
2004-05 to Service Tax
2007-08 Appellate Tribunal
Central Excise Financial year
2007-08 Central Excise (Appeals)
Central Excise Financial year Joint Commissioner
2001-02 to (Appeal)
2003-04
Central Excise Assessment year Assessing Officer,
2008-09 to Income Tax
2010-11 and Department 2012-13
Central Excise Assessment year Income Tax Appellate
2005-06 Tribunal
Central Excise Financial year Commissioner
2005-06 (Appeal)
Central Excise Financial year Haryana Sales Tax
2007-08 Tribunal
Central Excise Financial year Hon''ble High Court,
2005-06 to Punjab and Haryana
2011-12
Central Excise Financial year Additional
2005-06 to Commissioner of
2009-10 Central Excise
Central Excise Financial year Commissioner of
2008-09 to Central Excise
2010-11 (Appeal)
Central Excise Financial year Additional
2002-03 to Commissioner of
2012-13 Central Excise
Note: Company has furnished a bond and bank guarantee of Rs.0.42 crore
and Rs.0.004 crore respectively.
(x) In our opinion, the Company has no accumulated losses at the end of
the financial year and it has not incurred cash losses in the current
and the immediately preceding financial year.
(xi) In our opinion, the Company has not defaulted in repayment of dues
to any bank. There are no dues to debenture-holders. The Company has
delayed in repayment of an instalment of Rs.0.92 crore to one financial
institution for 37 days by March 31, 2013. The delay was made good
subsequent to the year end on April 12, 2013.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities. Accordingly, the provisions of clause 4(xii) of the Order
are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Accordingly, provisions of clause 4(xiii)
of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xvi) In our opinion, the Company has applied the term loans for the
purpose for which these loans were obtained.
(xvii) In our opinion, the Company has used funds raised on short-term
basis for long-term investment. During the year, the Company has raised
funds from short term borrowings amounting to Rs.33.25 crores, which
would fall due for repayment within one year from the date of their
receipt and such funds have been invested for acquiring long term
investments and fixed assets.
(xviii) During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under Section 301 of the Act. Accordingly, the provisions
of clause 4(xviii) of the Order are not applicable.
(xix) The Company has neither issued nor had any outstanding debentures
during the year. Accordingly, the provisions of clause 4(xix) of the
Order are not applicable.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable.
(xxi) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For Walker, Chandiok & Co
Chartered Accountants
Firm Regn. No. 001076N
per Ashish Gupta
Place : Gurgaon Partner
Dated : 30th May, 2013 Membership No.504662
Mar 31, 2012
1. We have audited the attached Balance Sheet of Rico Auto Industries
Limited as at 31st March, 2012 and also the Profit & Loss Account and
the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 [as
amended by the Companies (Auditors' Report) Amendment Order, 2004],
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company, so far as appears from our examination of
those books.
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub- section (3C) of section 211 of the
Companies Act, 1956.
v) On the basis of the written representations received from the
Directors, as on 31st March, 2012 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2012 from being appointed as a Director in terms of
requirement under section 274(1)(g) of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Significant Accounting policies and notes appearing thereon as
contained in Note No.1 to 47 give the information as required by the
Companies Act, 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012.
(b) In the case of the Profit and Loss Account, of the profit for the
year ended on that date.
(c) In the case of Cash Flow Statement, of the cash flow for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH '3' OF THE AUDITORS' REPORT ON THE
ACCOUNTS OF RICO AUTO INDUSTRIES LIMITED FOR THE YEAR ENDED 31st MARCH,
2012
i) (a) The Company has maintained proper records to show full
particulars, including quantitative details and situation of all fixed
assets.
(b) Fixed Assets have not been physically verified by the management
during the year but there is a regular programme of verification except
for furniture and fixtures and office equipments which, in our opinion,
is reasonable having regard to the size of the Company and nature of
its assets. No material discrepancies were noticed on such
verification.
(c) No substantial part of fixed asset has been disposed off during the
year.
ii) (a) The Inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and its nature of business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) (a) The Company has granted loans secured or unsecured to the
following Companies, Firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956.
(Rs. in Crores)
Maximum
amount
outstanding
at any point
Sl. Name of Relationship Year end during the
No. Party with Party Balance year
a) Rico Jinfei 92.5% Joint 38.33 39.15
Wheels Venture &
Limited Subsidiary
Company
b) Rasa Autocom 100% Subsidiary 12.12 23.98
Limited Company
c) Uttarakhand 100% Subsidiary 20.62 20.62
Automotives Company
Limited
d) RAA Autocom 100% Subsidiary 1.60 5.43
Limited Company
e) AAN Engineering 100% Subsidiary 0.14 0.14
Industries
Limited Company
(b) In our opinion the rate of interest wherever applicable and other
terms and conditions on which the loans have been granted to Companies,
Firms or other parties listed in the register maintained under section
301 of the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the Company.
(c) In respect of loans given by the Company, which are repayable on
demand, the question of overdue amount does not arise hence Clause 4
(iii) (d) is not applicable.
(d) The Company has not taken any loans, secured or unsecured from
Companies, Firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956. Hence Clause 4 (iii)(f)
and Clause 4 (iii)(g) is not applicable.
iv) In our opinion and according to the information and explanation
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and for
sale of goods and services. During the course of audit, we have not
observed any continuing failure to correct major weakness in internal
controls.
v) (a) Based on our audit procedure and according to information and
explanation given to us by the management, we are of the opinion that
the transactions that need to be entered in the register maintained
under section 301 of the Companies Act, 1956 have been so entered.
(b) Based on our audit procedure and according to information and
explanation given to us by the management, we are of the opinion that
the transaction made in pursuance of contracts and arrangements entered
in the register maintained under section 301 in respect of any party
during the year have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
vi) According to the information and explanation given to us, the
Company has not accepted any deposits from the public under section 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975.
vii) In our opinion and according to the information and explanations
given to us, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not carried out detailed examination of the same.
ix) (a) According to the records, undisputed statutory dues including
Provident Fund, Investor Education & Protection Fund, Employees State
Insurance, Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise
Duty, Education Cess and Service Tax have been deposited with the
appropriate authorities, though there has been delay in some cases in
deducting and depositing of Provident Fund and Service Tax. According
to the information and explanation given to us, there are no undisputed
amounts payable in respect of Provident Fund, Investor Education &
Protection Fund, Employees State Insurance, Income Tax, Wealth Tax,
Sales Tax, Customs Duty, Excise Duty, Education Cess and Service Tax
which were outstanding, as at 31st March, 2012 for a period of more
than six months, from the date they became payable.
(b) According to the information and explanations given to us, no dues
of Provident Fund, Investor Education & Protection Fund, Employees
State Insurance, Income Tax, Wealth Tax, Sales Tax, Customs Duty,
Excise Duty, Education Cess and Service Tax which have not been
deposited on account of any dispute except the following:
(Rs. in Crores)
Forum where
Sl. Name of Nature of Amount dispute is
No. Statute dues (Rs.) pending
a) Local Area LADT 0.01 Joint
Development Commissioner
Tax (Appeal),
Faridabad
b) Income Tax TDS 4.54 Assessing
Act officer, Income
Tax, Gurgaon
c) Income Tax Income Tax 0.19 C.I.T. (Appeal)
Act Ludhiana
d) H.G.S.T. Act & Sales Tax 0.43 Joint Excise
Central Sales & Taxation
Tax Act Commissioner
(Appeal),
Faridabad
e) Central Excise Duty 4.71 Customs,
Excise & Excise &
Service Service Tax
Tax Act Appellate
Tribunal,
New Delhi
f) Central Service 4.50 Customs,
Excise & Tax Service
Service Service Tax
Tax Act Deptt. (Appeal
to be filed
in Appellate
Tribunal,
New Delhi)
g) DHBVN Demand 5.60 Ombudsman
for Short at Panchkula
Assessment
x) The Company has no accumulated losses and has not incurred any cash
losses during the financial year covered by our audit or in the
immediately preceding financial year.
xi) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to any financial
institution and banks.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities,
during the year under audit.
xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of Clause 4(xiii) of
this order are not applicable to the Company.
xiv) According to the information and explanations provided to us, we
are of the opinion that the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly the
provisions of Clause 4(xiv) of this order are not applicable to the
Company.
xv) The Company has given Guarantees to the bankers of two of its
Subsidiaries (a) Rasa Autocom Limited (wholly owned) for Rs.43.00
Crores (Previous year Rs.Nil) (b) Rico Jinfei Wheels Limited (92.5%
owned) for Rs.10.00 Crores during the year (Previous year Rs.Nil).
According to the information and explanations given to us, the terms
and conditions of those banks are not prejudicial to the interests of
the Company.
xvi) According to information and explanations given to us, the term
loans were applied for the purpose for which loans were obtained.
xvii) According to the information and explanation given to us and on
an overall examination of the Balance Sheet of the Company, we report
that Rs.1.06 Crores raised on short term basis have been used for
long-term purposes.
xviii)The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained u/s 301of the
Companies Act, 1956.
xix) During the period covered by our audit report, the Company has not
issued any debentures.
xx) The Company has not raised any money by way of public issue.
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For GUPTA VIGG & CO.
Chartered Accountants
Firm Regn.No.001393N
CA. KAWAL JAIN
Place : Gurgaon PARTNER
Dated : 30th May, 2012 Membership No.089214
Mar 31, 2011
1. We have audited the attached Balance Sheet of Rico Auto Industries
Limited as at 31st March, 2011 and also the Profit & Loss Account and
the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 [as
amended by the Companies (Auditors' Report) Amendment Order, 2004],
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company, so far as appears from our examination of
those books.
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub- section (3C) of section 211 of the
Companies Act, 1956;
v) On the basis of the written representations received from the
Directors, as on 31st March, 2011 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2011 from being appointed as a Director in terms of
requirement under section 274(1)(g) of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Significant Accounting policies and notes appearing thereon as
contained in Schedule 15 give the information as required by the
Companies Act, 1956, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011.
(b) In the case of the Profit and Loss Account, of the profit for the
year ended on that date.
(c) In the case of Cash Flow Statement, of the cash flow for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH Ã3' OF THE AUDITORS' REPORT ON THE
ACCOUNTS OF RICO AUTO INDUSTRIES LIMITED FOR THE YEAR ENDED 31st MARCH,
2011
i) (a) The Company has maintained proper records to show full
particulars, including quantitative details and situation of all fixed
assets.
(b) Fixed Assets have not been physically verified by the management
during the year but there is a regular programme of verification except
for furniture and fixtures and office equipments which, in our opinion,
is reasonable having regard to the size of the Company and nature of
its assets. No material discrepancies were noticed on such
verification.
(c) No substantial part of fixed asset has been disposed off during the
year.
ii) (a) The Inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and its nature of business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) (a) The Company has granted loans secured or unsecured to the
following Companies, Firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956.
(Rs. in Crores)
Maximum
amount
outstanding
at any point
Sl. Name of Relationship Year end during the
No. Party with Party Balance year
a) Rico Jinfei 92.5% Joint 25.25 26.22
Wheels Venture &
Limited Subsidiary
Company
b) Rasa Autocom 100% Subsidiary 14.03 14.03
Limited Company
c) Uttarakhand 100% Subsidiary 18.29 18.29
Automotives Company
Limited
d) RAA Autocom 100% Subsidiary 4.60 4.60
Limited Company
(b) In our opinion the rate of interest wherever applicable and other
terms and conditions on which the loans have been granted to Companies,
Firms or other parties listed in the register maintained under section
301 of the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the Company.
(c) In respect of loans given by the Company, which are repayable on
demand, the question of overdue amount does not arise hence Clause 4
(iii) (d) is not applicable.
(d) The Company has not taken any loans, secured or unsecured from
Companies, Firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956. Hence Clause 4 (iii)(f)
and Clause 4 (iii)(g) is not applicable.
iv) In our opinion and according to the information and explanation
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and for
sale of goods and services. During the course of audit, we have not
observed any continuing failure to correct major weakness in internal
controls.
v) (a) Based on our audit procedure and according to information and
explanation given to us by the management, we are of the opinion that
the transactions that need to be entered in the register maintained
under section 301 of the Companies Act, 1956 have been so entered.
(b) Based on our audit procedure and according to information and
explanation given to us by the management, we are of the opinion that
the transaction made in pursuance of contracts and arrangements entered
in the register maintained under section 301 in respect of any party
during the year have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
vi) According to the information and explanation given to us, the
Company has not accepted any deposits from the public under section 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975.
vii) In our opinion and according to the information and explanations
given to us, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not carried out detailed examination of the same.
ix) (a) According to the records, undisputed statutory dues including
Provident Fund, Investor Education & Protection Fund, Employees State
Insurance, Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise
Duty, Education Cess and Service Tax have been deposited with the
appropriate authorities, though there has been delay in some cases in
deducting and depositing of Provident Fund and Service Tax. According
to the information and explanation given to us, there are no undisputed
amounts payable in respect of Provident Fund, Investor Education &
Protection Fund, Employees State Insurance, Income Tax, Wealth Tax,
Sales Tax, Customs Duty, Excise Duty, Education Cess and Service Tax
which were outstanding, as at 31st March, 2011 for a period of more
than six months, from the date they became payable.
(b) According to the information and explanations given to us, no dues
of Provident Fund, Investor Education & Protection Fund, Employees
State Insurance, Income Tax, Wealth Tax, Sales Tax, Customs Duty,
Excise Duty, Education Cess and Service Tax which have not been
deposited on account of any dispute except the following:
Forum where
Sl. Name of Nature of Amount dispute is
No. Statute dues (Rs.) pending
a) H.G.S.T. Act & Sales Tax 6,54,47,898 Joint Excise
Central Sales & Taxation
Tax Act Commissioner
(Appeal),
Faridabad
b) Local Area LADT 92,691 Joint
Development Commissioner
Tax (Appeal),
Faridabad
c) Income Tax TDS 11,15,13,080 Assessing
Act officer, Income
Tax, Gurgaon
d) Central Excise Duty 5,79,18,563 Customs,
Excise & & Service Excise &
Service Tax Service Tax
Tax Act Appellate
Tribunal,
New Delhi
x) The Company has no accumulated losses and has not incurred any cash
losses during the financial year covered by our audit or in the
immediately preceding financial year.
xi) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to any financial
institution and banks.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities,
during the year under audit.
xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
this order are not applicable to the Company.
xiv) According to the information and explanations provided to us, we
are of the opinion that the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly the
provisions of clause 4(xiv) of this order are not applicable to the
Company.
xv) According to the information and explanations given to us, the
Company has let its Wholly Owned Subsidiary Rasa Autocom Limited
utilise its non funded letter of credit limits from Yes Bank Limited to
the extent of Rs.5.00 Crores only and actual utilization thereof as on
31st March, 2011 was Rs.3.84 Crores. There are no specifically
stipulated terms and conditions between the Companies.
xvi) According to information and explanations given to us, the Company
has raised Term Loans amounting to Rs.133.00 Crores during the year for
various purposes like re-imbursement of capital expenditure, re-payment
of short debts, shoring up of working capital limits, general corporate
purposes, etc. On the basis of overall examination of the
Balance Sheet and as per confirmation given by the Management, Rs.83.33
Crores have been incurred for capital expenditure purposes, Rs.20.82
Crores for shoring up of net working capital limits and balance
Rs.28.85 Crores towards re-payment of other short term debts.
xvii) According to the information and explanation given to us and on
an overall examination of the Balance Sheet of the Company, we report
that funds raised on short term basis have not been used for long-term
investment.
xviii)During the period covered by our audit report, the Company has
converted 64,30,000 warrants into equity shares of Re.1/- each at a
premium of Rs.16.50 per share on preferential basis to parties and
companies covered in the register maintained u/s 301 of the Companies
Act, 1956.
xix) During the period covered by our audit report, the Company has not
issued any debentures.
xx) The Company has not raised any money by way of public issue.
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For GUPTA VIGG & CO.
Firm Regn.No.001393N
Chartered Accountants
CA. KAWAL JAIN
Place : Gurgaon PARTNER
Dated : 21st May, 2011 Membership No.089214
Mar 31, 2010
1. We have audited the attached Balance Sheet of Rico Auto Industries
Limited as at 31st March, 2010 and also the Profit & Loss Account and
the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
CompanyÃs Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditorsà Report) Order, 2003 [as
amended by the Companies (Auditorsà Report) Amendment Order, 2004],
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 & 5 of the said
Order.
4. Further to our comments in the Annexure "A" referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
ii) In our opinion, proper books of accounts as required by law have
been kept by the Company, so far as appears from our examination of
those books.
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub- section (3C) of section 211 of the
Companies Act, 1956.
v) On the basis of the written representations received from the
Directors, as on 31st March, 2010 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2010 from being appointed as a Director in terms of
requirement under section 274(1)(g) of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Significant Accounting
policies and notes appearing thereon as contained in Schedule 17 give
the information as required by the Companies Act, 1956, in the manner
so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010.
(b) In the case of the Profit and Loss Account, of the profit for the
year ended on that date.
(c) In the case of Cash Flow Statement, of the cash flow for the year
ended on that date.
ANNEXURE "A" REFERRED TO IN PARAGRAPH Ã3Ã OF THE AUDITORSÃ REPORT ON
THE ACCOUNTS OF RICO AUTO INDUSTRIES LIMITED FOR THE YEAR ENDED 31st
MARCH, 2010
i) (a) The Company has maintained proper records to show full
particulars, including quantitative details and situation of all fixed
assets.
(b) Fixed Assets have not been physically verified by the management
during the year but there is a regular programme of verification except
for furniture & fixtures and office equipments which, in our opinion,
is reasonable having regard to the size of the Company and nature of
its assets. No material discrepancies were noticed on such
verification.
(c) No substantial part of fixed asset has been disposed off during the
year.
ii) (a) The Inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management, are reasonable and adequate in relation to the size of
the Company and its nature of business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) (a) The Company has granted loans secured or unsecured to the
following Companies, Firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956.
(Rs. in Crores)
Maximum
amount
outsta
nding
at any
point
Sl. Name of Relationship Year end during the
No. Party with Party Balance year
a) Rico Jinfei 92.5% Joint 7.93 9.46
Wheels Venture &
Limited Subsidiary
Company
b) Rasa Autocom 100% Subsidiary 6.72 6.72
Limited Company
c) Uttarakhand 100% Subsidiary 16.23 16.89
Automotives Company
Limited
d) RAA Autocom 100% Subsidiary 3.74 5.65
Limited Company
(b) In our opinion the rate of interest wherever applicable and other
terms and conditions on which the loan have been granted to Companies,
Firms or other parties listed in the register maintained under section
301 of the Companies Act, 1956 are not, prima facie, prejudicial to the
interest of the Company.
(c) In respect of loans given by the Company, which are repayable on
demand, the question of overdue amount does not arise hence Clause 4
(iii)(d) is not applicable.
(d) The Company has not taken any loans, secured or unsecured from
Companies, Firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956. Hence Clause 4 (iii)(f)
and Clause 4 (iii)(g) is not applicable.
iv) In our opinion and according to the information and explanation
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and for
sale of goods and services. During the course of audit, we have not
observed any continuing failure to correct major weakness in internal
controls.
v) (a) Based on our audit procedure and according to information and
explanation given to us by the management, we are of the opinion that
the transactions that need to be entered in the register maintained
under section 301 of the Companies Act, 1956 have been so entered.
(b) Based on our audit procedure and according to information and
explanation given to us by the management, we are of the opinion that
the transaction made in pursuance of contracts and arrangements entered
in the register maintained under section 301 in respect of any party
during the year have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
vi) According to the information and explanation given to us, the
Company has not accepted any deposits from the public under section 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975.
vii) In our opinion and according to the information and explanations
given to us, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of accounts relating to
materials, labour and other items of cost maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the records with a view to determine
whether they are accurate or complete.
ix) (a) According to the records, undisputed statutory dues including
Provident Fund, Investor Education & Protection Fund, Employees State
Insurance, Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise
Duty, Education Cess and Service Tax have been deposited with the
appropriate authorities though there has been slight delay in few cases
in deducting and depositing of Tax Deducted at Sources. According to
the information and explanation given to us, there are no undisputed
amounts payable in respect of Provident Fund, Investor Education &
Protection Fund, Employees State Insurance, Income Tax, Wealth Tax,
Sales Tax, Customs Duty, Excise Duty, Education Cess and Service Tax
which were outstanding, as at 31st March, 2010 for a period of more
than six months, from the date they became payable.
(b) According to the information and explanations given to us, no dues
of Provident Fund, Investor Education & Protection Fund, Employees
State Insurance, Income Tax, Wealth Tax, Sales Tax, Customs Duty,
Excise Duty, Education Cess and Service Tax which have not been
deposited on account of any dispute except the following:
Forum where
Sl. Name of Nature of Amount dispute is
No. Statute dues (Rs.) pending
a) H.G.S.T. Act & Sales Tax 79544734 Joint Excise
Central Sales & Taxation
Tax Act Commissioner
(Appeal),
Faridabad
b) Local Area LADT 92691 Joint
Development Commissioner
Tax (Appeal),
Faridabad
c) Income Tax Income Tax 17805834 Commissioner
Act (Appeal) & I
TAT,
Chandigarh
d) Central Excise Duty 43508967 Customs,
Excise & & Service Excise &
Service Tax Service Tax
Tax Act Appellate
Tribunal,
New Delhi
x) The Company has no accumulated losses and has not incurred any cash
losses during the financial year covered by our audit or in the
immediately preceding financial year.
xi) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to any financial
institutions and banks.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities,
during the year under audit.
xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
this order are not applicable to the Company.
xiv) According to the information and explanation provided to us, we
are of the opinion that the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly the
provisions of clause 4(xiv) of this order are not applicable to the
Company.
xv) According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
xvi) According to the information and explanation given to us, the
Company has raised the following Term Loans and applied the same as
follows:
(Rs. in Crores)
Name of Term
the Banks Loan Purpose Application
State Bank 35.00 Capital For reimbursement
of Patiala Expenditure of Capital
(Fund Based) Expenditure
State Bank 15.00 Capital For reimbursement
of Patiala Expenditure of Capital
(Non Fund
Based) Expenditure
State Bank 40.00 Capital For reimbursement
of Hyderabad Expenditure of Capital
Expenditure
Kotak Mahindra 30.00 General Expansion and
Bank Limited Corporate modernization of
purpose & manufacturing
repayment facilities including
of Short substitution of
Term Loan Short Term Loans
raised for the same
purposes
Axis Bank 27.00 Capital For reimbursement
Limited Expenditure of Capital
Expenditure
xvii) According to the information and explanation given to us and on
an overall examination of the Balance Sheet of the Company, we report
that funds raised on short term basis have not been used for long-term
investment.
xviii)During the period covered by our audit report, the Company has
converted 32,70,000 warrants into equity shares of Re.1/- each at a
premium of Rs.16.50 per share on preferential basis to parties and
companies covered in the register maintained u/s 301 of the Companies
Act, 1956.
xix) During the period covered by our audit report, the Company has not
issued any debentures.
xx) The Company has not raised any money by way of public issue.
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For GUPTA VIGG & CO.
Firm Regn.No.001393N
Chartered Accountants
CA. KAWAL JAIN
Place : Gurgaon PARTNER
Dated : 28th May, 2010 Membership No.089214
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