TVS Srichakra Ltd.
|BSE: 509243||Sector: Auto|
|NSE: TVSSRICHAK||ISIN Code: INE421C01016|
|BSE 00:00 | 16 Aug||2174.30||
|NSE 00:00 | 16 Aug||2162.10||
|Mkt Cap.(Rs cr)||1,666|
|Mkt Cap.(Rs cr)||1665.51|
TVS Srichakra Ltd. (TVSSRICHAK) - Auditors Report
Company auditors report
AUDITOR'S REPORT TO THE SHAREHOLDERS
To the Members of TVS Srichakra Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of TVS SrichakraLimited ("the Company") which comprise the standalone balance sheet as at 31March 2021 and the standalone statement of Profit and Loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the Act') in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2021and profit other comprehensive income changes in equity and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial 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 thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matter described below to bethe key audit matter to be communicated in our report.
1. Revenue Recognition:
The Company recognizes revenue of sale of products on the followingbasis:
(i) OE Manufacturers: Revenue is recognized only on delivery being madeat the OE factory site. Price variance for the change in input costs is adjusted throughdebit / credit notes on the same after being approved by the concerned OE
(ii) After Market: Sales to dealers in the after-market segment isaccounted on dispatch being effected from the depots. Credit notes for schemes anddiscounts are estimated and accounted in the period when the sales revenue is recordeditself as a reduction from the revenue recognized. Actual credit notes issued are adjustedagainst such provisions made on a periodical basis.
the magnitude and high volume of sales transactions carried outand
estimation involved in price variance accounting as well asaccruals for discounts and schemes; revenue recognition represented a key audit matter inthe audit.
b. Our response:
Our audit procedures included verification of existence completenessaccuracy and cutoff for the sales transactions.
Our tests included performance of an understanding and evaluation ofthe internal controls over the revenue recognition and a validation of relevant controls.The tests further covered the proper recognition of revenue through testing of samples ofsales transactions obtaining appropriate supporting evidence with specific attention tokey contractual terms that regulate the various performance obligations. Our auditprocedures included analytical review of sales transactions and accounting of revenue. Italso extended to performing confirmation procedures over trade receivables with theobjective of validating trade receivable balances testing samples of credit notes andyear-end accruals.
Information Other than the Standalone Financial Statements andAuditors' Report Thereon
The Company's management and Board of Directors are responsiblefor the preparation of the other information. The other information comprises theinformation included in the Directors' report Management Discussion and AnalysisReport (MDA) Report on Corporate Governance Financial Highlights and BusinessResponsibility Report (BRR) but does not include the standalone financial statements andour auditors' report thereon. These reports are expected to be made available to usafter the date of this auditor's report.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon. Inconnection with our audit of the standalone financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring the audit or otherwise appears to be materially misstated. When we read theaforesaid reports if we conclude that there is a material misstatement therein we arerequired to communicate the matter to those charged with governance and take appropriateactions if required.
Responsibilities of the Management and Those Charged with Governancefor Standalone Financial Statements
The Company's management and Board of Directors are responsiblefor the matters stated in Section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) prescribed under Section 133 ofthe Act. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing 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 and Boardof Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.
Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditors' Responsibilities for the Audit of the StandaloneFinancial Statements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditors' report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. 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 standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under Section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the company has adequate internal financial controls with referenceto the standalone financial statements in place and the operating effectiveness of suchcontrols.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditors'report to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditors' report. However future events orconditions may cause the Company to cease to continue as a going concern; and
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditors' report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.
(c) The standalone Balance Sheet the standalone Statement of Profitand Loss (including other comprehensive income) the standalone Statement of Changes inEquity and the standalone statement of cash flows dealt with by this Report are inagreement with the books of account.
(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of theAct.
(e) On the basis of the written representations received from thedirectors as on 31 March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2021 from being appointed as a director in termsof Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controlswith reference to the standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".
(g) With respect to the other matters to be included in theAuditors' 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 litigations as at 31March 2021 on its financial position in its standalone financial statements - Refer Note41 to the standalone financial statements.
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses as at 31st March2021.
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company during the yearended 31 March 2021
3. With respect to the matter to be included in the Auditors'Report under Section 197(16) of the Act: In our opinion and according to the informationand explanations given to us the remuneration paid by the Company to its directors duringthe current year is in accordance with the provisions of Section 197 of the Act. Theremuneration paid to any director is not in excess of the limit laid down under Section197 of the Act.
Referred to in paragraph 1 on Report on Other Legal andRegulatory k Requirements' of our report of even date to the members of TVS MSrichakra Limited ("the Company") on the standalone financial ¦statements as of and for the year ended 31 March 2021. 1
(i) In respect of the Company's fixed assets:
(b) The Company has a regular programme of physical verification of itsfixed assets by which all fixed assets are verified in a phased manner over a period ofthree years. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogramme certain fixed assets were physically verified by the management during theyear. In our opinion and according to the information and explanations given to us nomaterial discrepancies were noticed on such verification
(c) According to the information and explanations given to us therecords examined by us and based on the examination of the conveyance deeds provided tous we report that the title deeds comprising all the immovable properties of the landand buildings which are freehold are held in the name of the Company as at Balance Sheetdate. In respect of assets taken on lease and disclosed as right of use assets in thestandalone financial statements the lease agreements are in the name of the Company as atBalance Sheet date.
(ii) The inventory except stocks lying with third parties has beenphysically verified by the management at reasonable intervals during the year. In ouropinion the frequency of such verification is reasonable. For stocks lying with thirdparties at the year-end written confirmations have been obtained. The discrepanciesnoticed on verification between the physical stocks and the book records were not materialand have been dealt with in the books of account.
(iii) Based on our audit procedures & according to the informationand explanation given to us the Company has not granted any loans secured or unsecuredto parties covered in the register maintained under Section 189 of the Act and hence3(iii) of the Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanationgiven to us the Company has complied with provisions of Section 185 and 186 of the Act inrespect of making investments. The Company has not provided any guarantees or securitiesand not granted any loans under Section 185.
(v) Based on our audit procedures & according to the informationand explanation given to us the Company has not accepted any deposits from the publicwithin the meaning of the Act and the rules made there under and hence clause 3(v) of theOrder is not applicable.
(vi) We have broadly reviewed the books of account maintained by theCompany as specified under Section 148(1) of the Act for maintenance of cost records inrespect of the products manufactured by the Company and are of the opinion that primafacie the prescribed accounts and records have been made and maintained.
However we have not made a detailed examination of cost records witha view to determine whether they are accurate or complete.
(a) According to the information and explanations given to us and therecords of the Company examined by us the Company has generally been regular indepositing undisputed statutory dues including Provident Fund Employees' StateInsurance Income-Tax Duty of Customs Goods and Services Tax (GST) cess and any otherstatutory dues as applicable with the appropriate authorities.
According to the information and explanation given to us and therecords of the Company examined by us no undisputed amounts payable in respect ofProvident Fund Employees' State Insurance Income-Tax Duty of Customs Goods andServices Tax (GST) cess and any other statutory dues were in arrears as at 31 March 2021for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and basedon our examination of the records of the Company there are no dues of Income-tax SalesTax Service tax Goods and Services Tax (GST) Duty of customs Excise duty and ValueAdded Tax as at 31 March 2021 which have not been deposited with the appropriateauthorities on account of any dispute except as stated below:
* net of amounts paid under protest.
(viii) Based on our audit procedures and as per the information andexplanations given by the management the Company has not defaulted in repayment of loansor borrowings to financial institutions banks Government or dues to debenture holders.
(ix) According to the information and explanations given to us theCompany did not raise money by way of initial public offer or further public offer(including debt instruments) during the year. Term loans raised have been applied for thepurpose for which they were raised.
(x) To the best of our knowledge and belief and according to theinformation and explanations given to us we report that no fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the year nor havewe been informed of such case by the management.
(xi) According to the information and explanations given to us themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi company in accordance with Nidhi Rules2014. Accordingly the provisions of clause (xii) of the Order are not applicable.
(xiii) Based on our audit procedures and according to the informationand explanations given to us all the transactions entered into with the related partiesduring the year are in compliance with Section 177 and Section 188 of the Act whereapplicable and the details have been disclosed in the standalone financial statements asrequired by the applicable Indian Accounting Standards.
(xiv) Based on our audit procedures and according to the informationand explanations given to us the Company has not made any preferential allotment ofshares or private placement of shares or fully or partly paid convertible debenturesduring the year under review. Accordingly the provisions of clause (xiv) of the Order arenot applicable.
(xv) Based on our audit procedures and according to the information andexplanations given to us the Company has not entered into any non-cash transactions withdirectors or persons connected with them.
(xvi) Based on our audit procedures and according to the informationand explanations given to us the Company is not required to be registered under Section45-IA of Reserve Bank of India Act 1934. Accordingly the provisions of clause (xvi) ofthe Order is not applicable.
Referred to in paragraph 2(g) on Report on Other Legal andRegulatory Requirements' of our report of even date.
Report on the Internal Financial Controls with reference to theaforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013
We have audited the internal financial controls with reference tostandalone financial statements of TVS Srichakra Limited ("the Company") as of31 March 2021 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote issued by the Institute of Chartered Accountants of India.
These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany'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 Companies Act 2013(hereinafter referred to as "the Act").
Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls with reference to financial statements.
Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wereestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to financial statements andtheir operating effectiveness.
Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls assessingthe risk that a material weakness exists and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk.
The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to financial statements.
Meaning of Internal Financial Controls with reference to standalonefinancial statements
A Company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to financial statements includes those policies andprocedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of management and directors of theCompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference tostandalone financial statements
Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
In our opinion the Company has in all material respects adequateinternal financial controls with reference to financial statements and such internalfinancial controls were operating effectively as at 31 March 2021 based on the internalcontrol with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.