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Ashok Leyland

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« Mar 15
Auditor's Report (Ashok Leyland) Year End : Mar '16
1.  We have audited the accompanying standalone financial statements of
 Ashok Leyland Limited (the Company), which comprise the Balance Sheet
 as at March 31, 2016, the Statement of Profit and Loss and the Cash
 Flow Statement for the year then ended, andasummaryofthe 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 prescribed under Section 133 of the Act as
 applicable.
 
 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 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.  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 and the Order
 under Section 143(11) of the Act.
 
 4.  We conducted our audit of the standalone financial statements 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 financial statements are free from material
 misstatement.
 
 5.  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 control 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. 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.
 
 6.  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
 
 7.  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, 2016, and its profit and its
 cash flows for the year ended on that date.
 
 Report on Other Legal and Regulatory Requirements
 
 8.  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 Balance Sheet, the Statement of Profit and Loss, and the Cash
 Flow Statement 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 prescribed under Section 133 of the Act,
 as applicable.
 
 e) On the basis of the written representations received from the
 directors as on March 31, 2016 taken on record by the Board of
 Directors, none of the directors is disqualified as on March 31, 2016
 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
 financial reporting of the Company and the operating effectiveness of
 such controls, refer to our separate Report in Annexure A. Our report
 expresses an unmodified opinion on the adequacy and operating
 effectiveness of the Company''s internal financial controls over
 financial reporting.
 
 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, in accordance with the generally accepted
 accounting practice, disclosed the impact of pending litigations on its
 financial position in its financial statements - Also Refer Note 3.2.7
 to the financial statements.
 
 ii.  The Company did not have any long-term contracts
 
 including derivative contracts for which there were any material
 foreseeable losses under the applicable law or accounting standards.
 
 iii.  There has been no delay in transferring amounts, required to be
 transferred, to the Investor Education and Protection Fund by the
 Company.
 
 9.  As required by the Companies (Auditor''s Report) Order, 2016 (the
 Order) issued by the Central Government in terms
 of Section 143(11) of the Act, we give in Annexure B a statement on
 the matters specified in paragraphs 3 and 4 of the Order.
 
 (i) In respect of its fixed assets:
 
 a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 b) The fixed assets were physically verified during the year by the
 Management in accordance with a phased programme of verification,
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals having regard to the size of the
 Company, nature and value of its assets. According to the information
 and explanation given to us, no material discrepancies were noticed on
 such verification.
 
 c) According to the information and explanations given to us and the
 records examined by us and based on the examination of the registered
 sale deeds/transfer deeds/ conveyance deeds provided to us, we report
 that, the title deeds, comprising all the immovable properties of land
 and buildings, are held in the name of the Company as at the balance
 sheet date, except for certain portion of land at Bhandara unit of the
 Company admeasuring 25.16 acres in respect of which the title deed is
 not in the name of the Company - Also Refer Note 1.11 (2) to the
 Financial Statements. Immovable properties of land and buildings whose
 title deeds have been pledged as security for loans, guarantees, etc.,
 are held in the name of the Company based on the confirmations directly
 received by us from lenders. In respect of immovable properties of land
 and buildings that have been taken on lease and disclosed as fixed
 asset in the financial statements, the lease agreements are in the name
 of the Company, where the Company is the lessee in the agreement.
 
 (ii) As explained to us, the inventories, other than goods in transit
 and stock lying with third parties where certificates confirming
 physical inventory are received, were physically verified during the
 year by the Management at reasonable intervals and no material
 discrepancies were noticed on physical verification.
 
 (iii) According to the information and explanations given to us, the
 Company has granted unsecured loan to a company covered in the register
 maintained under Section 189 of the Companies Act, 2013, in respect of
 which:
 
 a.  The terms and conditions of the grant of such loan are, in our
 opinion, prima facie, not prejudicial to the Company''s interest.
 
 b.  The schedule of repayment of principal and payment of interest has
 been stipulated and repayments or receipts of principal amounts and
 interest have been regular as per stipulations.
 
 c.  There is no overdue amount remaining outstanding as at the
 year-end.
 
 (iv) In our opinion and accordingto the information and
 
 explanations given to us, the Company has complied with the provisions
 of Sections 185 and 186 of the Companies Act, 2013 in respect of grant
 of loans, making investments and providing guarantees and securities,
 as applicable.
 
 (v) According to information and explanations given to us, the Company
 has not accepted any deposit during the year.  There are no unclaimed
 deposits to which the provisions of Section 73 to 76 or any other
 relevant provisions of the Companies Act, 2013 are applicable.
 
 (vi) The maintenance of cost records has been specified by the Central
 Government under Section 148(1) of the Companies Act, 2013 for certain
 products of the Company.  We have broadly reviewed the cost records
 maintained by the Company pursuant to the Companies (Cost Records and
 Audit) Rules, 2014, as amended prescribed by the Central Government
 under Sub-section (1) of Section 148 of the Companies Act, 2013, and
 are of the opinion that, prima facie, the prescribed cost records have
 been made and maintained. We have, however, not made a detailed
 examination of the cost records with a view to determine whether they
 are accurate or complete.
 
 (vii) According to the information and explanations given to us and the
 books of account examined by us, in respect of statutory dues:
 
 a) The Company has generally been regular in depositing undisputed
 statutory dues, including Provident Fund, Employees'' State Insurance,
 Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value
 Added Tax, Cess and other material statutory dues applicable to it with
 the appropriate authorities during the year.  There were no undisputed
 amounts payable in respect of the aforesaid statutory dues in arrears
 as at March 31, 2016 for a period of more than six months from the date
 they became payable.
 
 b) There are no dues of Customs Duty which have not been deposited on
 account of any dispute with the relevant authorities. Details of dues
 of Income-tax, Sales Tax, Service Tax, Excise Duty, Value Added Tax and
 Cess which have not been deposited as at March 31, 2016 on account of
 disputes are as stated below:
 
                                                    Rs. in Lakhs
 
 Nature of Dues   Disputed Dues   Period to    Forum Where    Amount
                                  which the    the dispute    stayed   
                                  amount       is pending     out of
                                  relate                      disputed
                                                              dues
 
 Income Tax         6,414.70      Assessment 
                                  years 2005- 
                                  06, 2006-07 
                                  and 2008- 09  Appellate
                                                authority –   6,414.70
                                                Income Tax
                                                Appellate 
                                                Tribunal 
 
                     279.37       Assessment
                                  year 2011- 12  Appellate 
                                                 authority – 
                                                 CIT 
                                                (Appeals)       279.37 
 Sales Tax and
 Value Added 
 Tax              13,274.81       Various 
                                  periods from 
                                  1993 – 2014    Appellate
                                                 authority – 
                                                 upto Commis
                                                 sioner level  9,963.29 
 
                     184.19       Various
                                  periods
                                  from 1987 
                                  – 2013         Appellate 
                                                 authority – 
                                                 Tribunal        175.37 
 
                     660.48       Various
                                  periods
                                  from 1986- 
                                  2001           Central 
                                                 Sales tax 
                                                 Appellate
                                                 authority       660.48
                     108.92       Various
                                  periods 
                                  from 1986
                                  – 2012         High Court      108.92
 
 (viii) In our opinion and accordingto the information and explanations
 given to us, the Company has not defaulted in the repayment of loans or
 borrowings to banks and government and dues to debenture holders. There
 are no loans or borrowings from the financial institutions.
 
 (ix) In our opinion and accordingto the information and explanation
 given to us, term loans have been applied by the Company during the
 year for the purpose for which they were raised. The Company has not
 raised moneys by way of initial public offer orfurther public offer
 (including debt instruments) during the year.
 
 (x) To the best of our knowledge and belief, and accordingto the
 information and explanations given to us, and considering the size and
 nature of the Company''s operations, no fraud by the Company and no
 fraud of material significance on the Company by its officers or
 employees has been noticed or reported during the year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has paid/ provided managerial remuneration in
 accordance with the requisite approvals mandated by the provisions of
 Section 197 read with Schedule V to the Companies Act, 2013.
 
 (xii) The Company is not a Nidhi Company and hence reporting under
 clause (xii) of the Order is not applicable.
 
 (xiii) In our opinion and according to the information and explanations
 given to us the Company is in compliance with Sections 177 and 188 of
 the Companies Act, 2013, where applicable, for all transactions with
 the related parties and the details of related party transactions 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 and hence reporting under clause (xiv) of the Order is not
 applicable to the Company.
 
 (xv) In our opinion and according to the information and explanations
 given to us, during the year the Company has not entered into any
 non-cash transactions with its directors or persons connected with him
 and hence provisions of Section 192 of the Companies Act, 2013 are not
 applicable.
 
 (xvi) The Company is not required to be registered under Section
 45-IAofthe Reserve Bank of India Act, 1934.
 
 For M. S. Krishnaswami & Rajan    For Deloitte Haskins & Sells LLP
 
 Chartered Accountants             Chartered Accountants
 
 Firm''s Registration No. 01554S    Firm''s Registration No. 
                                   117366W/W-100018
 
 M. S. Murali                      A. Siddharth
 
 Partner                           Partner
 
 Membership No. 26453              Membership No. 31467
 
 May 25, 2016 Mumbai
Source : Dion Global Solutions Limited
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