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Escorts Ltd.

BSE: 500495 Sector: Auto
NSE: ESCORTS ISIN Code: INE042A01014
BSE LIVE 15:49 | 17 Nov 694.05 0.85
(0.12%)
OPEN

699.00

HIGH

709.00

LOW

692.00

NSE 15:58 | 17 Nov 693.80 0
(0.00%)
OPEN

700.00

HIGH

710.05

LOW

691.10

OPEN 699.00
PREVIOUS CLOSE 693.20
VOLUME 64341
52-Week high 788.00
52-Week low 270.00
P/E 39.12
Mkt Cap.(Rs cr) 8,508
Buy Price 694.05
Buy Qty 441.00
Sell Price 0.00
Sell Qty 0.00
OPEN 699.00
CLOSE 693.20
VOLUME 64341
52-Week high 788.00
52-Week low 270.00
P/E 39.12
Mkt Cap.(Rs cr) 8,508
Buy Price 694.05
Buy Qty 441.00
Sell Price 0.00
Sell Qty 0.00

Escorts Ltd. (ESCORTS) - Auditors Report

Company auditors report

To The Members of Escorts Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Escorts Limited(‘the Company’) which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities selection and application of appropriate accounting policies makingjudgments and estimates that are reasonable and prudent and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditor’s judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating the overall presentation of the financial statements. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas 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

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure A a statement on the matters specified inthe paragraph 3 and 4 of the order.

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 bestof our knowledge and belief were necessary for the purposes of our audit. (b) In ouropinion proper books of account as required by law have been kept by the Company so far asit appears from our examination of those books; (c) The Balance Sheet the Statement ofProfit and Loss and the Cash Flow Statement dealt with by this Report are in agreementwith the books of account; (d) In our opinion the aforesaid standalone financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014; (e) On the basis of the writtenrepresentations received from the directors as on March 31 2016 and taken on record bythe Board of Directors none of the directors is disqualified as on March 31 2016 frombeing appointed as a director in terms of Section 164 (2) of the Act; (f) With respect tothe adequacy of the internal financial controls over financial reporting of the Companyand 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 theAuditor’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 theexplanations given to us: i. The Company has disclosed the impact of pending litigationson its financial position in its financial statements Refer Note-32 to the financialstatements; ii. The Company has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts Refer Note-31 to the financial statements; iii. There hasbeen no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company.

For S. N. Dhawan & Co.
Chartered Accountants
(Firm Registration No. 000050N)
(Vijay Dhawan)
Partner
M.No.:012565
Place: New Delhi
Dated: May 25 2016

Annexure - A to the Independent Auditor’s Report

Referred to in Paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section of our report of even date

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets. (c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company. (ii) In our opinion and according to theinformation and explanations given to us the inventories have been physically verified bythe management at reasonable intervals during the year except for materials lying withthird parties for which certificates confirming stocks held by them have been obtained inmost of the cases.

Discrepancies noticed on physical verification of inventories as compared to bookrecords were not material and have been properly dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly paragraph 3(iii) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us theCompany in respect of loans investments guarantees and security has complied with theprovisions of Section 185 and 186 of the Act. (v) In our opinion and according to theinformation and explanations given to us the Company has not accepted any deposits fromthe public within the meaning of Sections 73 to 76 of the Act and the Rules made theirunder. (vi) We have broadly reviewed the books of account maintained by the Companypursuant to the Rules made by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act in respect of the products manufactured by the Company andare of the opinion that prima-facie the prescribed accounts have been made and maintained.We have however not made a detailed examination of the records with a view to determinewhether they are accurate and complete. (vii) (a) According to the information andexplanations given to us and on the basis of our examination of the records the Companyis generally regular in depositing with appropriate authorities undisputed statutory duesincluding provident fund employees’ state insurance income-tax sales-tax wealthtax service tax duty of customs duty of excise value added tax cess and any otherstatutory dues applicable to it. According to the information and explanations given tous no undisputed amounts payable in respect of provident fund employees’ stateinsurance income-tax sales-tax wealth tax service tax duty of customs duty ofexcise value added tax cess were in arrears as at March 31 2016 for a period of morethan six months from the date they became payable. (b) According to the information andexplanations given to us the details of income tax or sales tax or service tax or duty ofcustoms or duty of excise or value added tax which have not been deposited on account ofany dispute are given below:

Name of the Statute Nature of Dues Amount* (Rs. Crores) Period to which the amount relates Forum where dispute is pending
Sales Tax Acts Sales Tax 49.76 1992-2015 Adjudicating Authority/ Appellate Authority/High Court
1.55 2006-2013 Supreme court
Central Excise Act Excise Duty 3.63 1992-2012 Adjudicating Authority/ Appellate Authority
Central Excise Act 1944 Excise Duty 100.98 2000-2007 CESTAT
Finance Act 1994 Service Tax 2.14 2005-2011 CESTAT
Income Tax Act 1961 Income Tax 0.53 2007-08 (A.Y. 2008-09) ITAT
Haryana Local Area Development Tax Act 2000 Local Area Development Tax 12.90 2006-2008 Supreme Court

* net of deposits

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to a financialinstitution bank and government. The Company does not have any debenture holders duringthe year.

(ix) In our opinion and according to the information and explanations given to us theCompany did not raise any monies by way of initial public offer or further public offer(including debt instruments) during the year and the term loans availed by the Companywere applied for the purposes for which they were raised. (x) According to the informationand explanations given to us no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the course of our audit. (xi)According to the information and explanations give to us and based on our examination ofthe records of the Company the Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act. (xii) In our opinion and according to the information andexplanations given to us the Company is not a nidhi company. Accordingly paragraph3(xii) of the Order is not applicable. (xiii) According to the information andexplanations given to us and based on our examination of the records of the Companytransactions with the related parties are in compliance with Sections 177 and 188 of theAct where applicable and details of such transactions have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable. (xvi) The Company is not required to be registered underSection 45-IA of the Reserve Bank of India Act 1934.

For S. N. Dhawan & Co.
Chartered Accountants
(Firm Registration No. 000050N)
(Vijay Dhawan)
Place: New Delhi Partner
Dated: May 25 2016 M.No.:012565

Annexure - B to the Independent Auditor’s Report

Referred to in Paragraph 2(f) under "Report on Other Legal and RegulatoryRequirements" section of our report of even date

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of EscortsLimited ("the Company") as of March 31 2016 in conjunction with our audit ofthe 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company’s internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company’s internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For S. N. Dhawan & Co.
Chartered Accountants
(Firm Registration No. 000050N)
(Vijay Dhawan)
Place: New Delhi Partner
Dated: May 25 2016 M.No.:012565