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TVS Electronics Ltd.

BSE: 532513 Sector: Consumer
NSE: TVSELECT ISIN Code: INE236G01019
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OPEN 161.10
PREVIOUS CLOSE 163.75
VOLUME 3212
52-Week high 217.00
52-Week low 87.20
P/E 30.22
Mkt Cap.(Rs cr) 303
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 161.10
CLOSE 163.75
VOLUME 3212
52-Week high 217.00
52-Week low 87.20
P/E 30.22
Mkt Cap.(Rs cr) 303
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

TVS Electronics Ltd. (TVSELECT) - Auditors Report

Company auditors report

To The Members of TVS Electronics Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of TVS Electronics Limited("the Company") which comprise the Balance Sheet as at 31 March 2021 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a 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 financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and its profit total comprehensiveincomes its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibility for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.

Emphasis of Matter

We invite attention to Note 38 to the financial statements regarding outbreak ofCOVID-19 pandemic and the assessment made by the management on its business financialstatements inter alia recoverability of assets including valuation of intangible assets.This assessment and the outcome of the pandemic is as made by the management and is highlydependent on the circumstances as they evolve in the subsequent periods.

Our opinion is not modified in respect of this matter.

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 of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matter described below to be the key audit matter to be communicatedin our report.

Sr.No. Key Audit Matter Auditor's Response
1 Impairment assessment of indefinite useful life intangible assets Principal Audit Procedures
Intangible assets pertains to Business Right that have been recognized pursuant to the acquisition of business of Customer Support Services in the past. We assessed the company's impairment testing process of the Customer Support Services at the balance sheet date. Our audit approach consisted procedures for testing the design implementation and the operative effectiveness of the internal controls and substantive procedures as follows:
Management conducts annual impairment tests to assess the recoverability of the carrying value of the indefinite useful life asset. This is performed using discounted cash flow model. There are key unobservable inputs used in the model which include: • valuated the design and implementation of internal controls relating to management's impairment assessment testing of the Customer Support Services business.
• Tested the operative effectiveness of internal control relating to managements impairment assessment testing of the Customer Support Services business with a combination of procedures involving inquiry inspection and observation.
> Revenue growth • Performed substantive procedures to analyse the future projected cash flows used in the valuation model to determine whether they are reasonable and supportable given the current macroeconomic climate and expected future performance of the Cash Generating Unit.
> Operating margins
> Discount rate • Evaluated the reasonableness of customer wise revenue projections with reference to prospective business orders historical performance and macro-economic conditions.
> Terminal growth rate
Accordingly the impairment test of this business right is considered as a key audit matter. • Evaluated the reasonableness of the projected Earnings before interest tax depreciation and amortisation (EBITDA) considering the projections and comparing with historical performance and contribution margin projected for new business. We engaged our internal specialists to assist with:
Refer to Notes 1.b.7 and 4.1 to the financial statements
• Critically evaluating whether the model used by management to calculate the value in use of the Cash Generating Units complies with the requirements of Ind AS 36 Impairment of Assets.
• Validating the assumptions used to calculate the discount rates terminal growth rate and recalculating these rates based on industry specific risks and risk free return.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Directors Report along with the annexures Corporate SocialResponsibility Report and Corporate Governance Report (but does not include the financialstatements and our auditor's report thereon) which we obtained prior to the date of thisauditor's report and the Chairman's statement the Managing Directors Message theManagement Discussion and Analysis Report which is expected to be made available to usafter that date.

• Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon

• In connection with our audit of the financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

• If based on the work we have performed on the other information that weobtained prior to the date of this auditor's report we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

• When we read the Chairman's statement the Managing Directors Message theManagement Discussion and Analysis Report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance as required under SA 720 ‘The Auditor's responsibilities Relating to OtherInformation'.

Management's Responsibility for the 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 financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

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.

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

Auditor's Responsibility for the Audit of the Financial Statements

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 with SAswill always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain 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 financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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 charged 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 in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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

1. As required by Section 143(3) of the Act based on our audit 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 law have been kept by theCompany 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 Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account

d. In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(2) of the Act.

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 A". 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 opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe 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 litigations on its financialposition in its financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts;

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

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
Geetha Suryanarayanan
(Partner)
Place: Chennai (Membership No. 29519)
Date: 22 May 2021 (UDIN: 21029519AAAACN5335)

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of TVSElectronics Limited ("the Company") as of March 312021 in conjunction with ouraudit of the Ind AS 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies 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 andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively 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 judgement including the assessment of the risks ofmaterial misstatement of the financial 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 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 312021 based on "the criteria forinternal financial control over financial reporting 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 Institute of CharteredAccountants of India".

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No.008072S)
Geetha Suryanarayanan
Partner
Place: Chennai (Membership No. 29519)
Date: 22 May 2021 (UDIN: 21029519AAAACN5335)

(Referred to in paragraph (2) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(i) The Company has maintained proper records showing full particulars includingquantitative details and situation of the property plant and equipment.

(a) Some of the property plant and equipment were physically verified during the yearby the Management in accordance with a programme of verification which in our opinionprovides for physical verification of all the property plant and equipment at reasonableintervals. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.

(b) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed /conveyance deed (state any other relevant document which evidences title) provided to uswe report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate. In respect of immovable properties of land and building that have been taken onlease and disclosed as property plant and equipment assets in the financial statementsthe lease agreements are in the name of the Company

(ii) As explained to us the inventories were physically verified during the year bythe management at reasonable intervals and no material discrepancies were noticed on suchverification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year.

(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013 in respect of machinery and mechanicalappliances. We have broadly reviewed the cost records maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 as amended prescribed by theCentral Government under sub- section (1) of Section 148 of the Companies Act 2013 andare of the opinion that prima facie the prescribed cost records have beenmade and maintained. We have however not made a detailed examination of the cost recordswith a view to determine whether they are accurate and complete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income-tax Goods and Services Taxcess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund EmployeesState Insurance Income-tax Goods and Services Tax cess and other material statutorydues in arrears as at March 312021 for a period of more than six months from the datethey became payable.

(c) Details of dues of Income-tax Excise Duty and sales tax/value added tax which havenot been deposited as on March 31 2021 on account of disputes are given below.

Name of Statue Nature of Dues Forum where the dispute is pending Period to which amount relates Amount Unpaid ( Rs. in Lakhs)
Income Tax Act 1961 Income tax dues Income Tax Appellate Tribunal / CIT (Appeals) Income Tax officer Assessment year 2005-06 41
Central Sales Tax/Value added tax of various states Sales tax dues Appellate authorities of various states 2007-08 to 2015-16 4 (Net of Rs.9 deposited)

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans to banks. The Company has notissued any debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theorder is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding company or persons connected with them and henceprovisions of Section 192 of the Companies Act 2013 are not applicable.

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

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No.008072S)
Geetha Suryanarayanan
Partner
Place: Chennai (Membership No. 29519)
Date: 22 May 2021 (UDIN: 21029519AAAACN5335)

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