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
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
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.
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
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,
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
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
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
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
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
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
(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,
(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
Income Tax 6,414.70 Assessment
and 2008- 09 Appellate
authority – 6,414.70
year 2011- 12 Appellate
Sales Tax and
Tax 13,274.81 Various
1993 – 2014 Appellate
sioner level 9,963.29
– 2013 Appellate
– 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
(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.
M. S. Murali A. Siddharth
Membership No. 26453 Membership No. 31467
May 25, 2016 Mumbai