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Escorts Ltd.

BSE: 500495 Sector: Auto
NSE: ESCORTS ISIN Code: INE042A01014
BSE 00:00 | 30 Nov 1845.65 -13.30
(-0.72%)
OPEN

1869.00

HIGH

1880.00

LOW

1837.55

NSE 00:00 | 30 Nov 1846.30 -12.55
(-0.68%)
OPEN

1856.00

HIGH

1880.00

LOW

1836.85

OPEN 1869.00
PREVIOUS CLOSE 1858.95
VOLUME 55611
52-Week high 1888.80
52-Week low 1100.10
P/E 27.23
Mkt Cap.(Rs cr) 24,885
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1869.00
CLOSE 1858.95
VOLUME 55611
52-Week high 1888.80
52-Week low 1100.10
P/E 27.23
Mkt Cap.(Rs cr) 24,885
Buy Price 0.00
Buy Qty 0.00
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 Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of Escorts Limited(‘the Company') which comprise the Balance Sheet as at 31 March 2021 the Statementof Profit and Loss (including Other Comprehensive Income) the Cash Flow Statement and theStatement of Changes in Equity for the year then ended and a summary of the significantaccounting policies and other explanatory information.

2. 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 Companies Act 2013 (‘the Act') in the manner so required and give true andfair view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (‘Ind AS') specified under section 133 of theAct of the state of affairs of the Company as at 31 March 2021 and its profit (includingother comprehensive income) its cash flows and the changes in equity for the year endedon that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (‘ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key Audit Matter

4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

5. We have determined the matter described below to be the key audit matters to becommunicated in our report.

Key audit matter How our audit addressed the key audit matter
Revenue recognition Our audit procedures related to revenue recognition included but were not limited to the following:
We refer to the Company's significant accounting policies in note 2.2(a) and the revenue related disclosures in note 48 of the standalone financial statements. Owing to the multiplicity of the Company's products volume of sales transactions size of distribution network and varied terms of contracts with customers in line with the requirements of the Standards on Auditing revenue is determined to be an area involving significant risk and hence requiring significant auditor attention. a) assessed the design and operating effectiveness of Company's controls
(including the automated controls) around revenue recognition and measurement (including rebates / discounts);
b) assessed the appropriateness of Company's identification of performance obligations in its contracts with customers its determination of transaction
price including allocation thereof to performance obligations and accounting policies for revenue recognition in accordance with the accounting principles laid down in Ind AS 115;
Further Ind AS 115 "Revenue from Contracts with Customers" requires management to make certain key judgements such as identification of distinct performance obligations in contracts with Customers" requires management to make certain key judgements such as identification of distinct performance obligations in contracts with customers (such as after sales maintenance services and product warranties) determination of transaction price for the contract factoring in the consideration payable to customers (such as rebates and discounts) and selection of a method to allocate the transaction price to the performance obligations. This matter is considered to be of most significance given the extent of industry knowledge and skills needed to apply audit procedures to address the matter and evaluate the results of those procedures. c) scrutinized sales ledgers to verify accuracy and completeness of sales transactions;
d) on a sample basis tested the revenue recognised including testing of cut off assertion as at the year end;
e) tested the appropriateness of accruals for various rebates and discounts as at the year-end. Our testing included tracing the information to agreements price lists invoices proof of dispatches/deliveries (as the case may be) and approved incentives / discounts schemes;
f) assessed the revenue recognised with substantive analytical procedures including review of price quantity and product mix variances and analysis of discounts at customer level;
g) circularised balance confirmations to a sample of customers and evaluated the responses; and
h) tested the related disclosures made in notes to the standalone financial statements in respect of the revenue from operations.

Information other than the Financial Statements and Auditor's Report thereon

6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon. The Annual Report isexpected to be made available to us after the date of this auditor's report.

Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

7. The accompanying standalone financial statements have been approved by the Company'sBoard of Directors. The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS specified under section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; 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.

8. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

9. Those Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control;

• Obtain an understanding of internal control relevant to the audit in order todesign 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 theCompany has adequate internal financial controls with reference to financial statements inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern;

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation;

12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

15. As required by section 197(16) of the Act based on our audit we report that theCompany has paid/provided remuneration to its directors during the year in accordance withthe provisions of and limits laid down under section 197 read with Schedule V to the Act.

16. 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 givein the Annexure I a statement on the matters specified in paragraphs 3 and 4 of theOrder.

17. Further to our comments in Annexure I as required by section 143(3) of the Actbased on our audit we report to the extent applicable that:

a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit of theaccompanying standalone financial statements;

b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c) the standalone financial statements dealt with by this report are in agreement withthe books of account;

d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act;

e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2021 from being appointed as a director in terms of section 164(2) of the Act;

f) we have also audited the internal financial controls with reference to financialstatements of the Company as on 31 March 2021 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 14 May 2021 as per Annexure II expressed unmodified opinion; and

g) With respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. the Company as detailed in note 22(ii) 34 and 42 to the standalone financialstatements has disclosed the impact of pending litigations on its financial position asat 31 March 2021

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2021.

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2021.

iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Ashish Gupta

Partner

Membership No.: 504662

UDIN: 21504662AAAADN8081

Place: New Delhi

Date: 14 May 2021

Annexure I

To the Independent Auditor's Report of even date to the members of Escorts Limited onthe standalone financial statements for the year ended 31 March 2021

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

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

(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. In accordance with this program certain fixed assets were verifiedduring the year and no material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties (which are included under the head(‘Property plant and equipment' and ‘Investment property') are held in the nameof the Company.

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and discrepancies noticed on physical verificationhave been properly dealt with in the books of account. For the stocks lying with thirdparties at the year end written confirmations have been obtained by the management.

(iii) The Company has granted unsecured loan to a company covered in the registermaintained under Section 189 of the Act; and with respect to the same:

(a) in our opinion the terms and conditions of grant of such loans are not primafacie prejudicial to the Company's interest.

(b) The schedule of repayment of principal has been stipulated wherein the principalamounts are repayable on demand and since the repayment of such loans has not beendemanded in our opinion repayment of the principal amount is regular. Further thereceipts of the interest are regular.

(c) there is no overdue amount in respect of loans granted to such company.

(iv) In our opinion the Company has complied with the provisions of Sections 185 and186 of the Act in respect of loans investments guarantees and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products/services andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained. However we have not made a detailed examination of the cost records witha view to determine whether they are accurate or complete.

(vii)(a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax duty of customs goods andservices tax cess and other material statutory dues as applicable to the appropriateauthorities. Further no undisputed amounts payable in respect thereof were outstanding atthe year-end for a period of more than six months from the date they become payable.

(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:

Name of the statute Nature of dues Amount (Rs. in crores) Amount paid under Protest (' in crores) Period to which the amount relates Forum where dispute is pending
Haryana Local Area Development Tax 2000 Local Area Development Tax 52.80 39.90 2000-2008 Hon'ble High Court of Punjab and Haryana
Value Added Tax Acts Sales Tax 2.05 1.69 1988-2012 Hon'ble High Court of Andhra Pradesh
Value Added Tax Acts Sales Tax 11.30 0.40 1992-2017 Appellate Tribunal
Value Added Tax Acts Sales Tax 52.76 5.99 1997-2018 Appellate authority till Commissioner level
Central Excise Act 1944 Excise Duty 465.06 50.68 2004-2016 Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Excise Duty 1.43 0.57 1992-2016 Appellate authority till Commissioner level
Finance Act 1994 Service Tax 1.69 0.01 2005-2012 Customs Excise and Service Tax Appellate Tribunal
Finance Act 1994 Service Tax 0.74 1.13 2007-2013 Appellate authority till Commissioner level
Income Tax Act 1961 Income Tax 23.28 3.93 2002-2017 Commissioner of Income Tax Appeals
Income Tax Act 1961 Income Tax 1.40 - 2008-2016 Income Tax Appellate Tribunal
The Customs Act 1962 Custom Duty 6.97 6.97 2007-2008 Customs Excise and Service Tax Appellate Tribunal

(viii) The Company has not defaulted in repayment of loans or borrowings to anyfinancial institution or bank during the year. The Company has no loans or borrowingspayable to government and no dues payable to debenture-holders during the year.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments) and did not have any term loans outstanding during theyear. Accordingly the provisions of clause 3(ix) of the Order are not applicable.

(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid/provided by the Company in accordance withthe requisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act.

(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

(xiv) During the year the Company has made preferential allotment of shares. Inrespect of the same in our opinion the Company has complied with the requirement ofSection 42 of the Act and the Rules framed thereunder. Further in our opinion theamounts so raised were applied for the purposes for which these securities were issuedthough idle/surplus funds which were not required for immediate utilisation have beeninvested in liquid investments receivable upon demand.

(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.

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

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Ashish Gupta

Partner

Membership No.: 504662

UDIN: 21504662AAAADN8081

Place: New Delhi

Date: 14 May 2021

Annexure II

Independent Auditor's Report on the internal financial controls with reference to thestandalone financial statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 (‘the Act')

1. In conjunction with our audit of the standalone financial statements of EscortsLimited (‘the Company') as at and for the year ended 31 March 2021 we have auditedthe internal financial controls with reference to financial statements of the Company asat that date.

Responsibilities of Management and Those Charged with Governance for Internal FinancialControls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (‘the Guidance Note') issued by the Institute of Chartered Accountants ofIndia (‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the Company's business including adherenceto the Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India (‘ICAI') prescribed under Section 143(10) of the Act to theextent applicable to an audit of internal financial controls with reference to financialstatements and the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (‘the Guidance Note') 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 withreference to financial statements were established and maintained and if such controlsoperated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such controls were operatingeffectively as at 31 March 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Ashish Gupta

Partner

Membership No.: 504662

UDIN: 21504662AAAADN8081

Place: New Delhi

Date: 14 May 2021.

.