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TVS Srichakra Ltd.

BSE: 509243 Sector: Auto
NSE: TVSSRICHAK ISIN Code: INE421C01016
BSE 00:00 | 16 Jun 2027.05 0
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2055.00

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2090.35

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2014.00

NSE 00:00 | 16 Jun 2033.70 -19.95
(-0.97%)
OPEN

2065.00

HIGH

2090.00

LOW

2014.00

OPEN 2055.00
PREVIOUS CLOSE 2027.05
VOLUME 946
52-Week high 2272.85
52-Week low 1324.80
P/E 21.29
Mkt Cap.(Rs cr) 1,553
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2055.00
CLOSE 2027.05
VOLUME 946
52-Week high 2272.85
52-Week low 1324.80
P/E 21.29
Mkt Cap.(Rs cr) 1,553
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

TVS Srichakra Ltd. (TVSSRICHAK) - Auditors Report

Company auditors report

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 Srichakra Limited ("theCompany") which comprise the standalone Balance Sheet as at 31 March 2020 and thestandalone statement of Profit and Loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows for the year thenended and notes to the standalone financial statements including 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 standalone financial statements give the information requiredby the Companies Act 2013 (‘the Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 and profit other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

Emphasis of matter

We draw attention to Note 2(f)(v) to the standalone financial statements regarding themanagement's impairment assessment of property plant and equipment right of use assetsintangible assets investments trade receivables and inventory valuation as at 31 March2020 being considered as unimpaired based on the future operations plans and cash flowswherein projections are made based on the various judgments and estimates related toinflation discount rates and implications expected to arise from COVID-19 pandemicwherein actual results could vary.

Our opinion is not modified in respect of the above matter.

Key Audit Matters

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 standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

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

1. Revenue Recognition:

a. Description:

The Company recognizes revenue of sale of products on the following basis:

(i) OE Manufacturers:

Revenue is recognized only on delivery being made at the OE factory site

Price variance for the change in input costs is adjusted through debit/credit notes onthe same after being approved by the concerned OE

(ii) After Market:

Sales to dealers in the after-market segment is accounted on despatch being effectedfrom the depots.

Credit notes for schemes and discounts are estimated and accounted in the period whenthe sales revenue is recorded itself as a reduction from the revenue recognized. Actualcredit notes issued are adjusted against such provisions made on a periodical basis.

Considering:

• the magnitude and high volume of sales transactions carried out and

• estimation involved in price variance accounting as well as accruals fordiscounts and schemes; revenue recognition was included as a key audit matter in the audit

b. Our response:

Our audit procedures included verification of existence completeness accuracy andcut- off for the sales transactions.

Our tests included performance of an understanding and evaluation of the internalcontrols over the revenue recognition and a validation of relevant controls.

The tests further covered the proper recognition of revenue through testing of samplesof sales transactions obtaining appropriate supporting evidence with specific attentionto key contractual terms that regulate the various performance obligations.

Our audit procedures included analytical review of sales transactions and accounting ofrevenue.

It also 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 and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theDirectors' report Management Discussion and Analysis Report (MDA) Report on CorporateGovernance Financial Highlights and Business Responsibility Report (BRR) but does notinclude the standalone financial statements and our auditors' 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 standalone financial statements or our knowledgeobtained during the audit or otherwise appears to be materially misstated. If based onthe work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

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

The Company's management and Board of Directors are 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 financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) prescribed under section 133 of the Act. 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditors' Responsibilities for the Audit of the Standalone 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 auditors' 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 theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

I dentify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

Obtain an understanding of internal financial control relevant to the auditin order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to thestandalone financial statements in place and the operating effectiveness of such controls.

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 the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors' report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However future events or conditions maycause the Company to cease to continue as a going concern; and

Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or 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

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 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 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 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 standalone Balance Sheet the standalone Statement of Profit and Loss(including other comprehensive income) the standalone Statement of Changes in Equity andthe standalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164 (2) of the Act.

(f) At this juncture we are unable to comment whether the matter described in theEmphasis of Matter paragraph may have an adverse effect on the functioning of theCompany.

(g) With respect to the adequacy of the internal financial controls with reference tothe standalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(h) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 Match 2020 onits financial position in its standalone financial statements - Refer Note 41 to thestandalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31st March 2020.

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 March2020

3. With respect to the matter to be included in the Auditors' Report under section197(16) of the Act:

I n our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act.

For PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Registration No.003990S/S200018
T V Balasubramanian
Partner
Place : Chennai Membership No. 027251
Date : 26th June 2020 UDIN: 20027251AAAAED1603

Annexure A

Referred to in paragraph 1 on ‘Report on Other Legal and Regulatory Requirements'of our report of even date to the members of TVS Srichakra Limited ("theCompany") on the standalone financial statements as of and for the year ended 31March 2020.

(i) In respect of the Company's fixed assets:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified by the management during the year. In our opinion andaccording to the information and explanations given to us no material discrepancies werenoticed on such verification

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of the land and buildings whichare freehold are held in the name of the Company as at Balance Sheet date. In respect ofassets taken on lease and disclosed as right of use assets in the standalone financialstatements the lease agreements are in the name of the Company as at Balance Sheet date.

(ii) The inventory except stocks lying with third parties has been physicallyverified by the management at reasonable intervals during the year. In our opinion thefrequency of such verification is reasonable. For stocks lying with third parties at theyear-end written confirmations have been obtained. The discrepancies noticed onverification between the physical stocks and the book records were not material and havebeen dealt with in the books of account.

(iii) Based on our audit procedures & according to the information and explanationgiven to us the Company has not granted any loans secured or unsecured to partiescovered in the register maintained under Section 189 of the Act and hence 3(iii) of theOrder is not applicable to the Company.

(iv) In our opinion and according to the information and explanation given to us theCompany has complied with provisions of Section 185 and 186 of the Act in respect ofmaking investments. The Company has not provided any guarantees or securities and notgranted any loans under Section 185.

(v) Based on our audit procedures & according to the information and explanationgiven to us the Company has not accepted any deposits from the public within the meaningof the Act and the Rules made there under and hence clause 3(v) of the Order is notapplicable.

(vi) We have broadly reviewed the books of account maintained by the Company asspecified under Section 148(1) of the Act for maintenance of cost records in respect ofthe products manufactured by the Company and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not madea detailed examination of cost records with a view to determine whether they are accurateor complete.

(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us the Company has generally been regular in depositingundisputed statutory dues including Provident Fund Employees' State InsuranceIncome-Tax Duty of Customs Goods and Services Tax (GST) Cess and any other statutorydues as applicable with the appropriate authorities.

According to the information and explanation given to us and the records of the Companyexamined by us no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-Tax Duty of Customs Goods and Services Tax (GST) Cess and anyother statutory dues were in arrears as at 31 March 2020 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanations given to us and based on ourexamination of the records of the Company there are no dues of Income-tax Sales TaxService tax Goods and Services Tax (GST) Duty of customs Excise duty and Value AddedTax as at 31 March 2020 which have not been deposited with the appropriate authorities onaccount of any dispute except as stated below:

Name of the Statute Nature of the dues Period to which amounts relates Forum where dispute is pending Amount (Rs in crores) *
Various periods Dy. Commissioner 0.04
Central Excise Tax/Customs Act Excise Duty Various periods Jt. Commissioner 0.20
2012-13 High Court 8.95
2017- 18 & 2018- 19 Asst. Commissioner 2.51
Goods and Service Tax Act GST 2018-19 Jt. Commissioner 0.09
2018- 19 & 2019- 20 State Tax Officer 0.11
Various periods Asst. Commissioner 11.02
Various periods Dy. Commissioner 0.08
Various periods Jt. Commissioner 0.03
Central Sales Tax Act; Tamil Nadu Value Added Tax Act Sales Tax VAT CST Various periods Dy. Commissioner (Appeals) 0.03
Various periods Jt. Commissioner (Appeals) 0.51
2010-2016 The Appellate Dy Commissioner (CT) 0.90

* net of amounts paid under protest.

(viii) Based on our audit procedures and as per the information and explanations givenby the management the Company has not defaulted in repayment of loans or borrowings tofinancial institutions banks Government or dues to debenture holders.

(ix) According to the information and explanations given to us the Company did notraise money by way of initial public offer or further public offer (including debtinstruments). Amount raised by way of Term Loans during the year have been used for thepurposes for which the funds have been raised.

(x) To the best of our knowledge and belief and according to the information andexplanations given to us we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year nor have we beeninformed of such case by the management.

(xi) According to the information and explanations given to us the managerialremuneration has been paid/provided in accordance with the requisite approvals mandated bythe provisions of Section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi company in accordance with Nidhi Rules 2014.Accordingly the provisions of clause (xii) of the Order are not applicable.

(xiii) Based on our audit procedures and according to the information and explanationsgiven to us all the transactions entered into with the related parties during the yearare in compliance with Section 177 and Section 188 of the Act where applicable and thedetails have been disclosed in the standalone financial statements as required by theapplicable Indian Accounting Standards.

(xiv) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not made any preferential allotment of shares or privateplacement of shares or fully or partly paid convertible debentures during the year underreview. Accordingly the provisions of clause (xiv) of the Order are not applicable.

(xv) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with Directors orpersons connected with them.

(xvi) Based on our audit procedures and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of ReserveBank of India Act 1934. Accordingly the provisions of clause (xvi) of the Order is notapplicable.

For PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Registration No.003990S/S200018
T V Balasubramanian
Partner
Place : Chennai Membership No. 027251
Date : 26th June 2020 UDIN: 20027251AAAAED1603

Annexure B

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

Report on the Internal Financial Controls with reference to the aforesaid StandaloneFinancial Statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

We have audited the internal financial controls with reference to standalone financialstatements of TVS Srichakra Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal control with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the Institute ofChartered Accountants of India. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand 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").

Auditors' Responsibility

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 Guidance Note and the Standards on Auditing prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. 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 proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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 standalone financialstatements

A Company's internal financial control 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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements

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 control 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

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2020 based on the internal control with reference tofinancial statements 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 PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Registration No.003990S/S200018
T V Balasubramanian
Partner
Place : Chennai Membership No. 027251
Date : 26th June 2020 UDIN: 20027251AAAAED1603