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Talbros Automotive Components Ltd.

BSE: 505160 Sector: Auto
NSE: TALBROAUTO ISIN Code: INE187D01011
BSE 00:00 | 14 Feb 129.95 5.10
(4.08%)
OPEN

119.25

HIGH

138.00

LOW

116.30

NSE 00:00 | 14 Feb 122.00 0.05
(0.04%)
OPEN

121.95

HIGH

128.70

LOW

120.10

OPEN 119.25
PREVIOUS CLOSE 124.85
VOLUME 275
52-Week high 242.95
52-Week low 97.05
P/E 13.51
Mkt Cap.(Rs cr) 160
Buy Price 117.25
Buy Qty 10.00
Sell Price 129.95
Sell Qty 401.00
OPEN 119.25
CLOSE 124.85
VOLUME 275
52-Week high 242.95
52-Week low 97.05
P/E 13.51
Mkt Cap.(Rs cr) 160
Buy Price 117.25
Buy Qty 10.00
Sell Price 129.95
Sell Qty 401.00

Talbros Automotive Components Ltd. (TALBROAUTO) - Auditors Report

Company auditors report

To the Members of Talbros Automotive Components Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying Standalone financial statements of TalbrosAutomotive Components Limited ("the Company") which comprise the BalanceSheet as at March 31 2019 the Statement of Profit and Loss (including othercomprehensive income) the Statement for Cash Flow and the Statement of Changes in Equityfor the year ended on that date and notes to the financial statement including summary ofsignificant accounting policies and other explanatory information.

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 a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principle generally accepted in Indiaof the state of the affairs of the Company as at March 31 2019 the profit and totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

We conducted our audit of standalone financial statements in accordance with theStandards on Auditing (SAs) 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) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context

Sr. No. Key Audit Matters Auditor's Response
1 Valuation Of complex instruments involving high estimation uncertainty Principal Audit Procedures
The Company has material long term investments in group companies which are un-quoted. We have verified the group shareholding in the investment in equity instruments which are fair valued by the company.
We haveverified the reasonableness of assumptions used and the valuation technique used to determine the fair value.
2 Evaluation of uncertain tax positions Principal Audit Procedures
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Obtained details of completed tax assessments and demands for the year ended March 31 2019 from management. We involved our internal experts to challenge the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions as at April 1 2018 to evaluate whether any change was required to management's position on these uncertainties.
Refer Notes 39 to the Standalone Financial Statements

of our audit of the standalone financial statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters. We havedetermined the matters described below to be the key audit matters to be communicated inour report.

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

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Corporate Information but does not include the standalone financialstatements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do 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 and in doing so consider whether the other informationis materially inconsistent with the financial statements or our knowledge obtained duringthe course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement in this other information we are required to report that fact. We havenothing to report in this regard.

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 Act with respect to the preparation of these Standalone financial thefinancial comprehensive income cash flows and changes in equity of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors is responsible for overseeing the company's financial reportingprocess.

Auditor'sResponsibilitiesfortheAuditofStandalone Financial Statements

Our Objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in aggregatethey could reasonably be expected to economic decision of users taken on the basis ofthese standalone financial statements.

As part of thatgive antrueand fairviewof audit in accordance with SAs Weexercise position professionalfinancial judgment and maintainperformance professionaltotal skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and to obtain audit evidence that is sufficient and appropriate to providea basis 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusion are based on the audit evidences obtained up to the date of ourauditor's report. However future events or conditions may cause the company to cease tocontinue as a going concern.

- Evaluate the overall presentation Structure and content of the standalone financialincluding the disclosures and whether the standalone financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statementthat individually or in aggregate makes it probable that the economic decision of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factor in (i) planning the scope of our auditwork; and (ii) to evaluate the effect of any identified misstatement in the financialstatements.

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

We also provide those charge with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance Ind AS financial statements for the financial yearended March 31 2019 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 such communication.

Report on Other Legal and Regulatory Requirements

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 "Annexure I" a statement on the matters specified in paragraphs 3 and4 of the Order.

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 our opinion proper books of account as required by the law have been kept bythe Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome the Statement of Cash Flows and the Statement of Changes in Equity dealt with bythis Report are in agreement with the relevant books of account.

(d) In our opinion the aforesaid standalone financial statements comply with Ind ASspecified 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 March31 2019 taken on record by the Board of Directors none of the director is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure II". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g) With respect to the other matters to be included in the Auditor's report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to best of our information and according to the explanations givento us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

(h) 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 has disclosed the impact of pending litigation on its financialposition in its Ind AS financial statements- Refer Note 39 to the Standalone Ind ASfinancial statements.

(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There was no delay in transferring amounts required to be transferred toInvestor Education and Protection Fund by the Company.

For J. C. Bhalla & Co.
Chartered Accountants
Firm Regn. No. 001111N
(Akhil Bhalla)
Place : New Delhi Partner
Dated: May 29 2019 Membership No. 505002

ANNEXURE I

TO INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section of report of even date on the Standalone financial statementsfor the year ended on March 31 2019 of Talbros Automotive Components Limited:

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property plant & equipment.

(b) The company has a regular program of physical verification of its Property Plantand equipment under which Property plant and equipment are verified in a phased mannerover a period of three years which in our opinion is reasonable having regard to the sizeof the Company and nature of its fixed assets. In accordance with this program certainProperty plant and equipment were verified during the year and according to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanation given to us and on the basis ofexamination of title deeds other relevant records provided to us evidencing the titleconfirmation from the lenders with whom title deeds have been deposited as security forbanking facilities we report that the title deeds of the immovable properties are held inthe name of the Company as at the balance sheet date.

In respect of leasehold immovable properties (which are included under the head‘Property plant and equipment) the lease agreements are in the name of the Companywhere the Company is the lessee in the agreement.

2. According to the information and explanations given to us inventories have beenphysically verified by the management at reasonable intervals during the year except forinventories lying with third parties for which certificates confirming inventories held bythem have been obtained in most of the cases. The discrepancies noticed on physicalverification of inventories as compared to book records were not material and same havebeen properly dealt within books of account.

3. According to the information and explanations given to us and in our opinion 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 Companies Act 2013. Accordingly clauses (iii)(a) (iii)(b) & (iii)(c) ofparagraph 3 of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany for the current year.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

5. In our opinion and according to the information and explanations given to us theCompany has complied with the directives issued by the Reserve Bank of India theprovisions of Sections 73 to 76 and other relevant provisions of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended) as applicable with regard to thedeposits accepted. According to the information and explanations given to us no order hasbeen passed by the Company Law Board or National Company Law Tribunal or Reserve Bank ofIndia or any Court or any other Tribunal in this regard.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe 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 and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

7. (a) According to the information and explanation given to us the Company is regularin depositing to the appropriate authorities undisputed statutory dues including ProvidentFund Income tax Goods & service tax employee's state insurance Custom duty and anyother statutory dues to the extent applicable to it. According to the information andexplanations given to us no undisputed amounts in respect of statutory dues were inarrears as at March 31 2019 for a period of more than six months from the date theybecame payable.

(b) According to the information and explanations given to us the dues outstanding inrespect of income-tax cenvat credit service tax duty of customs duty of excise andvalue added tax which have not been deposited on account of any dispute are as follows:

Name of the statute Nature of dues Amount Amount paid under protest Period to which the amounts relates Forum where dispute is pending
(Rs. In Lakhs) (Rs. In Lakhs)
Maharashtra VAT Act 2005 Demand of VAT 0.55 2005-06 & 2008-09 Office of the joint Commissioner of Sales Tax Pune-3 3rd Floor GST Bhavan Pune-411016
Income tax Act 1961 Income Tax demand 4.48 2004-05 CIT-Appeal
Income tax Act 1961 Income Tax demand 13.98 2011-12 CIT-Appeal
Income tax Act 1961 Income Tax demand 21.09 2012-13 CIT-Appeal
Finance Act 1994 Cenvat-Credit disallowed 8.85 2007-08 to 2010- 11 Assistant commissioner Faridabad
Finance Act 1994 Cenvat-Credit disallowed 2.68 August 2011 to October 2013 Superintendent Range IVB Chennai
Haryana Value added Tax Act 2003 Input tax disallowed 2.74 2006-07 Deputy Commissioner Gurgaon
Central Excise Act 1944 Demand of excise duty 440.90 83.75 FY 2010-11 to 2015-16 Commissioner of Customs Central Excise and Service Tax Harpur
Custom Act 1962 Demand of custom Duty 28.12 FY 2012-13 2014-15 2015-16 The Customs Excise and Service tax Appellate Tribunal
Custom Act 1962 Demand of custom Duty 7.97 2013-14 Deputy Commissioner of customs Delhi

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings to any bank or financialinstitution or government during the year. The Company did not have any outstandingdebentures during the year.

9. The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion and according to the information andexplanations given to us the term loans were applied for the purpose for which the loanswere obtained.

10. To the best of our knowledge and according to the information and explanation givento us no fraud by the company or no material fraud on the company by its officer oremployees has been noticed or reported during the year.

11. In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid by the Company in accordance with the requisiteapprovals mandated by the provisions of Section 197 of the Act read with Schedule V to theAct.

12. In our opinion and according to the information and explanations given to usthe Company is not a nidhi company. Accordingly clause (xii) of paragraph 3 of theCompanies (Auditors Report) Order 2016 is not applicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financialstatements as required by the applicableaccounting standards.

14. 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 provisions of clause 3 (xiv) of the order are not applicable.

15. 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 clause (xv) ofparagraph 3 of the Companies (Auditors Report) Order 2016 is not applicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For J. C. Bhalla & Co.
Chartered Accountants
Firm Regn. No. 001111N
(Akhil Bhalla)
Place : New Delhi Partner
Dated: May 29 2019 Membership No. 505002

ANNEXURE II

TO INDEPENDENT AUDITORS' REPORT

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 TalbrosAutomotive Components Limited ("the Company") as of March 31 2019 inconjunction with our audit of the standalone for the year financial 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.

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information 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 The Institute ofChartered Accountants of India and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent controlsapplicable to an audit of internal financialboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controlsoverfinancialreporting 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 over financial reporting and their operating effectiveness.

Our audit of internalfinancialcontrols over financial reporting included obtaining anunderstanding of internal over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error.

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 reporting.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 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 of records that in reasonable detail accurately andfairly reflectthe transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and those receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 subject to the risk that the internal financialcontrol overfinancialreporting may become inadequate because of changes in conditions or that thedegree 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 operating effectively as at 31 March 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For J. C. Bhalla & Co.
Chartered Accountants
Firm Regn. No. 001111N
(Akhil Bhalla)
Place : New Delhi Partner
Dated: May 29 2019 Membership No. 505002