To the members of AUTOLINE INDUSTRIES LIMITED Report on the audit of the Standalone Financial StatementsOPINION
We have audited the accompanying Standalone Financial Statements of AUTOLINE INDUSTRIES LIMITED (hereinafter referred as "the Company"), which comprise the Balance sheet as at March 31, 2024, 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 Notes to the Standalone Financial Statements, including a summary of Material accounting policies and other explanatory information (hereinafter collectively referred as the "Standalone Financial Statements").
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 (hereinafter referred as "the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended (hereinafter referred as "Ind AS") and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31, 2024, its profit, other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
BASIS FOR OPINION
We conducted our audit in accordance with the Standards on Auditing (hereinafter referred as "SAs") specified Under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's 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 (hereinafter referred as "ICAI") 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 there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of the 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. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Sr. No. Key Audit Matter (KAM)
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Auditor's Response
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1 Revenue Recognition:
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Our audit procedures included the following:
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The Company's revenue is derived from the sale
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• assessed the design and operating effectiveness of
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of sheet metal stampings, welded assemblies, and
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the Company's controls around revenue recognition
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moulds for the automotive industry. The Company
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and measurement
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recognizes revenue when the control is transferred
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• assessed the appropriateness of the Company's
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to the customer.
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identification of performance obligations in its
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The terms set out in the Company's sales contracts
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contracts with customers, its determination of
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relating to goods acceptance by customers are
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transaction price, including allocation thereof to
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varied. Accordingly, the terms and conditions of sales
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performance obligations and accounting policies
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contracts may affect the timing of recognition of
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for revenue recognition in accordance with the
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sales to customers as each sales contract could have
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accounting principles laid down in Ind AS 115
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different terms relating to customer acceptance of
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• scrutinized sales ledgers to verify the accuracy and
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the goods sold.
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completeness of sales transactions
• on a sample basis, tested the revenue recognised including testing of cut off assertion as at the year end
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We identified the recognition of revenue as a key audit matter because revenue is one of the key performance indicators of the Company and is, therefore, subject to an inherent risk of misstatement to meet targets or expectations and because errors in the recognition of revenue could have a material impact on the Company.
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• assessed the revenue recognised with substantive analytical procedures including review of price, quantity and product mix variances and analysis of discounts at the customer level
• circularized balance confirmations to a sample of customers and evaluated the responses
• Assessed the disclosures made by the Company.
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2.
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Going Concern:
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Our audit procedures included the following:
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The Company had incurred losses in previous years,
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• Obtained an understanding & walking through
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however, it has returned to profitability since the
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the business planning process and assessing the
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financial year 2021-22. As of March 31, 2024, the
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design, implementation, and operating effectiveness
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Company's total liabilities did not exceed its total
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of management's key internal controls over the
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assets. Note 3.5 to the financial statements explains
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assessment of going concern, including the preparation
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how the directors of the Company have formed a
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of cash flow forecasts & liquidity assessment.
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judgement that the going concern basis is appropriate
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• We assessed the accuracy of management's cash
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in preparing the financial statements.
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flow forecasts by analyzing the key assumptions
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The directors of the Company made their assessment
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used, such as future revenue, gross profit, operating
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of going concern by preparing a cash flow forecast in
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expenses, and capital expenditure with reference
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which some key assumptions were applied.
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to historical production data, current performance, internal investment and production plans, as well as
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These key assumptions included forecasts of sales volumes, average selling prices, raw material costs and
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external market information.
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the availability of banking and other financing facilities
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• Considering the accuracy and reliability of cash flow
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as well as financial support from the Promoters.
We identified going concern as a key audit matter
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forecasts made by management in prior years by comparing them with the current year's results.
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due to the significant degree of management
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• We evaluated the availability of banking and financing
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judgement required in assessing and forecasting the
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facilities by examining relevant documentation,
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company's future cash flows, which are inherently
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including banking facility agreements signed before
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uncertain. Furthermore, management judgement and
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and after the reporting period. Additionally, We
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uncertainties could have a significant impact on the
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assessed the impact of any covenants and restrictive
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preparation of financial statements and may be subject
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terms contained within these agreements.
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to management bias.
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• We also verified whether any waivers were obtained from the financial institutions from which borrowings were made.
• Assessed the disclosures made by the Company in this regard.
Based on our procedures we noted that the key assumptions used in the forecasts were within a reasonable range of our expectations.
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Contingent Liabilities:
Evaluation of uncertain tax positions
(Refer to Note 40 to the standalone financial statements)
The company is currently involved in assessment proceedings and related litigations with direct and indirect tax authorities, as well as certain other parties. Estimating the probable outflow of economic resources and determining the appropriate level of provisioning and/or disclosures required involves a high level of management judgement. The management's judgement is supported by advice from independent tax and legal consultants, as deemed necessary. Any unexpected adverse outcomes could have a significant impact on the company's reported profit and financial position.
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Our audit procedures included the following:
• We gained an understanding of how to identify claims, litigations, and contingent liabilities. We identified key controls in the process and performed tests on selected controls.
• We obtained a summary of the company's legal and tax cases and assessed management's position by discussing the probability of success in significant cases and the potential magnitude of any loss with the Legal Counsel, Head of Tax, and operational management.
• The current status of direct and indirect tax assessments/litigations was reviewed.
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• Recent orders and communication received from tax authorities and certain other parties were read, along with management responses to such communication.
• When relevant, we read the most recent independent
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We identified this area as a key audit matter due to the uncertainty of the final result and the significant management judgment in assessment.
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tax/legal advice obtained by management and
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evaluated the grounds presented therein.
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• The adequacy of disclosure in the standalone financial statements was assessed.
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Based on the above procedures, we did not identify any material exceptions relating to management's assessment of provisions and contingent liabilities.
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INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON (HEREINAFTER REFERRED AS "OTHER INFORMATION")
The Company's Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the Board's report and management discussion and analysis included in the annual report but does not include the Standalone Financial Statements and our report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance and/or conclusions 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. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
BOARD OF DIRECTORS' RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS
The Company's 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 and fair view of the financial position, financial performance, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS. 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.
In preparing the Standalone Financial Statements, the Company's Management and Board of Directors are responsible for assessing the Company's ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Company's financial reporting process.
AUDITOR'S 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 auditor's 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 scepticism throughout the audit. We are also:
a) 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.
b) 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 an adequate internal financial controls system in place and the operating effectiveness of such controls.
c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management and the Board of directors.
d) Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's 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 auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
e) 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.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in the aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work, and (ii) evaluating the effect of any identified misstatements in the Standalone Financial Statements.
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 auditor's 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.
REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order"), issued by the Central Government in terms of Section 143 (11) of the Act, we give in "Annexure A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143 (3) of the Act and based on our audit 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 Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows statement dealt with by this report agree 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 March 31,2024, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024, 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 over the financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting; and
g) 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. The Company has disclosed the impact of pending litigations as of March 31, 2024, on its financial position in its Standalone Financial Statements - Refer to note 40 to the Standalone Financial Statements.
ii. The Company did not have any long-term contracts including derivatives contracts for which there were foreseeable losses;
iii. There were no amounts that were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that,
to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) 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 or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures 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 (a) and (b) above, contain any material misstatement; and
v. During the year Company has not declared/ paid any dividend hence reporting under rule 11 (f) is not applicable to that extent.
vi. Based on our examination which included test checks, the company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility. The same has not been operated throughout the year at application level & database level, for all relevant transactions recorded in the software. Consequently, we are unable to comment on whether the audit trail feature has been tampered with at any point during the year.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on the preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31,2024
h) With respect to the other matters to be included in the auditor's report in accordance with the requirements of section 197(16) of the Act, as amended, we report that in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. The remuneration paid to directors 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) which are required to be commented upon by us.
SHARP & TANNAN ASSOCIATES
Chartered Accountants Firm's Registration No: 0109983W by the hand of
CA ARNOB CHOUDHURI
Partner
Membership No: (F) 156378 Pune, May 25, 2024. UDIN: 24156378BKHHFP8468
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