AIA ENGINEERING Auditors Report

To


The Members of AIA Engineering Limited


Report on the Standalone Ind AS Financial Statements


We have audited the accompanying standalone Ind AS financial statements of AIA Engineering Limited (''''the Company''''), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as "standalone Ind AS financial statements").


Management''''s Responsibility for the Standalone Financial Statements


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 Ind AS financial statements that give a true and fair view of the financial position, 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 (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued there under.


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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Auditor''''s Responsibility


Our responsibility is to express an opinion on these standalone Ind AS 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.


We conducted our audit of standalone Ind AS financial statement 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 Ind AS financial statements are free from material misstatement.


An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS financial statements.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.


Opinion


In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 the Ind AS, of the financial position of the Company as at 31st March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.


Report on Other Legal and Regulatory Requirements


1. As required by the Companies (Auditor’s Report) Order, 2016 ("the Order") 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 the paragraph 3 and 4 of the order, to the extent applicable.


2. As required by Section 143(3) of the Act, we report that:


(a) we have sought and obtained all the information and explanations which to the 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, the Statement of Cash Flows and the Statement of changes in Equity dealt with by this Report are in agreement with the books of account;


(d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant Rules issued there under;


(e) on the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 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 B"; 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 read with Companies (Audit and Auditors) Amendment Rules, 2017, 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 on its financial position in its standalone Ind AS financial statements - Refer Note 40(1)(a) to the standalone Ind AS financial statements;


ii. 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 41 to the standalone Ind AS financial statements;


iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and


iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of account maintained by the Company. Refer Note 15 to the standalone Ind AS financial statements.


(i) In respect of its fixed assets:


(a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;


(b) As explained to us, majority of the fixed assets have been physically verified by the management during the year and there is a regular programme of verification 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) Based on our audit procedures and on the basis of information and explanations given to us by the management, the title deeds of immovable properties are held in the name of the Company.


(ii) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.


(iii) During the year, the Company has not given any loans, secured or unsecured to the companies, firms, LLP or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Hence, Clause (iii) (a), (b) and (c) are not applicable to the Company.


(iv) Based on our audit procedures and on the basis of information and explanations given to us by the management, provisions of Section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security have been complied with.


(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit and hence the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the Companies (Acceptance of Deposits) Rules, 2014, with regard to the deposits accepted are not applicable to the Company. Therefore, the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the company. According to the information and explanations given to us, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.


(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been so made and maintained. We have, however, not made a detailed examination of the cost records with the view to determine whether they are accurate or complete.


(vii) In respect of statutory dues:


(a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'''' State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were in arrears as at 31st March, 2017 for a period of more than six months from the date they became payable.


(viii) Based on our audit procedures and on the basis of information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in repayment of dues to the Financial Institutions, Banks, Government or Debenture Holders.


(b) The disputed statutory dues aggregating to Rs, 13,947.26 lacs, that have not been deposited on account of disputed statutory matters pending before appropriate authorities are as under:


(Rs, in lacs)



























































































































































name of the statute



nature of dues



Amt. under dispute not yet deposited as on 31st March, 2017



periods to which the amount relates(F.Y.)



Forum where the dispute is pending



Central Excise



Excise Duty including interest and penalty as applicable



5.43



Prior to 2006



Gujarat High Court



2.34



2006-07 to 2008-09



Asst. Commissioner (Nagpur)



31.39



2006-07 to 2007-08



CESTAT (Ahmedabad)



1,434.24



2009-10 to 2012-13



DGCEI (Ahmedabad)



16.08



2011-12 to 2015-16



Deputy Commissioner (Ahmedabad)



Service Tax



Service Tax including interest and penalty as applicable



91.90



2007-08 to 2011-12



CESTAT (Ahmedabad)



8.55



2009-10



Joint Commissioner (Ahmedabad)



5.69



2010-11 to 2016-17



Joint Commissioner (Ahmedabad)



98.18



2010-11 to 2016-17



Commissioner (Appeals) (Ahmedabad)



153.92



2010-11 to 2016-17



CESTAT (Ahmadabad)



411.19



2016-17



Principal Commissioner (Ahmadabad)



Sales Tax



Sales Tax including interest and penalty as applicable



19.76



2001-02



Sales Tax- Tribunal (Nagpur)



VAT



VAT including interest and penalty as applicable



9.31



2009-10



Tribunal (Ahmadabad)



8.57



2010-11



Joint Commissioner (Ahmadabad)



0.64



2011-12



Joint Commissioner (Ahmadabad)



9.79



2013-14



Tribunal (Trichy)



Income Tax



Income Tax



407.44



2005-06



Gujarat High Court



64.45



2005-06



ITAT (Ahmadabad)



1,100.66



2006-07



Gujarat High Court



893.05



2007-08



ITAT (Ahmadabad)



1,832.35



2008-09



ITAT (Ahmadabad)



1,828.30



2009-10



ITAT (Ahmadabad)



1,729.92



2010-11



ITAT (Ahmadabad)



1,610.63



2011-12



CIT (Appeals) (Ahmadabad)



2,173.48



2012-13



CIT (Appeals) (Ahmadabad)



total



13,947.26




(ix) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year under audit. According to the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.


(x) Based on the audit procedures performed and representation obtained from management we report that, no case of material fraud by the Company or on the Company by its officer or employee has been noticed or reported for the year under audit.


(xi) Based on our audit procedures and on the basis of information and explanations given to us by the management, managerial remuneration has been paid or provided 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. Therefore; the provisions of Clause (xii) of paragraph 3 of the Order are not applicable to the Company.


(xiii) Based on our audit procedures and on the basis of information and explanations given to us by the management, all transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 wherever applicable and the details of such related party transactions have been disclosed in the Standalone Ind AS Financial Statements etc., as required by the applicable accounting standards;


(xiv) Based on our audit procedures and on the basis of information and explanations given to us by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.


Therefore, the provisions of Clause (xiv) of paragraph 3 of the Order are not applicable to the Company.


(xv) Based on our audit procedures and on the basis of information and explanations given to us by the management, the Company has not entered into any noncash transactions with directors or persons connected with him.


(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.


report on the internal financial controls under


CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 ("THE ACT")


We have audited the internal financial controls over financial reporting of AIA Engineering Limited ("the Company") as of 31st March, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.


MANAGEMENT''''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS


The Company''''s management 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 "Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). 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 its business, including adherence to Company''''s 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 Companies Act, 2013.


AUDITORS'''' RESPONSIBILITY


Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on audit of internal financial controls over financial reporting and the Standards on Auditing, both issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditor''''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.


MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING


A Company’s internal financial control over financial reporting 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 Company’s internal financial control over financial reporting includes 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 authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company''''s assets that could have a material effect on the financial statements.


INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING


Because of the inherent limitations of internal financial controls over financial reporting, 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 internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


OPINION


In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, 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 issued by the Institute of Chartered Accountants of India.


For Talati & Talati


Chartered Accountants


(Firm Regn No: 110758W)


Anand Sharma


Place : Ahmedabad (Partner)


Date: 25th May, 2017 Mem No: 129033

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