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VST Tillers Tractors Ltd.

BSE: 531266 Sector: Auto
NSE: VSTTILLERS ISIN Code: INE764D01017
BSE 00:00 | 25 Apr 1296.85 4.85
(0.38%)
OPEN

1300.00

HIGH

1300.00

LOW

1286.05

NSE 00:00 | 25 Apr 1289.75 -1.35
(-0.10%)
OPEN

1291.15

HIGH

1298.00

LOW

1285.15

OPEN 1300.00
PREVIOUS CLOSE 1292.00
VOLUME 89
52-Week high 3085.00
52-Week low 1285.00
P/E 16.63
Mkt Cap.(Rs cr) 1,120
Buy Price 1286.00
Buy Qty 2.00
Sell Price 1305.00
Sell Qty 2.00
OPEN 1300.00
CLOSE 1292.00
VOLUME 89
52-Week high 3085.00
52-Week low 1285.00
P/E 16.63
Mkt Cap.(Rs cr) 1,120
Buy Price 1286.00
Buy Qty 2.00
Sell Price 1305.00
Sell Qty 2.00

VST Tillers Tractors Ltd. (VSTTILLERS) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

V.S.T. TILLERS TRACTORS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of V.S.T. Tillers TractorsLimited ("the Company") which comprise the Balance sheet as at March 312018 and the Statement of Profit and Loss (including Other

Comprehensive Income) the Statement of Changes in Equity and the Statement of CashFlows for the year then ended and a summary of significant accounting policies and otherexplanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act2013 ("the Act") with respect to the preparation ofthese financial statements that give true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards)Rules2015 as amended 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 judgements 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 of the financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderissued under section 143(11) of the Act.

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether financial statements are free from material misstatement. An auditinvolves performing procedures to obtain audit evidence about the amounts and thedisclosures in the financial statements. The procedures selected depend on theauditor’s judgement including the assessment of the risks of material misstatementof the financials statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and reasonablenessof the accounting estimates made by the Company’s Directors as well as evaluatingthe overall presentation of the financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2018 and its profit total comprehensive income the change in equity and its cashflows for the year ended on that date.

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 Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with books of account.

d) in our opinion the aforesaid financial statements comply with the Indian accountingstandards prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended.

e) on the basis of the written representations received from the directors of theCompany as on March 31 2018 taken on record by the Board of Directors none of theDirectors is disqualified as on March 31 2018 from being appointed as a director in termsof Section 164(2) of the Act.

f) with respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate in "Annexure A". Our report expresses a Qualified Opinionon the adequacy and operating effectiveness of the Company’s internal financialcontrols with reference to financial statements

g) with respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information to the best of the explanation given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

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 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For K.S. Rao & Co.
Chartered Accountants
ICAI Firm’s Registration No. 003109S
Place : Bengaluru Hitesh Kumar P
Date : May 11 2018 Partner
Membership No. 233734

ANNEXURE "A"

TO THE INDEPENDENT AUDITORS’ REPORT.

(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements’ section of our report to the Members of V.S.T. Tillers Tractors Limitedof even date)

Report on the Internal Financial Controls with reference to Financial Statements underClause (i) of Sub- section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference to financial statementsof V.S.T. Tillers Tractors Limited ("the Company") as of March 31 2018 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management’s Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on internal financial controls 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(‘ICAI’). 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 the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Companies Act 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the internal financial controls withreference to financial statements of the Company based on our audit. We conducted ouraudit in accordance with Guidance Note on Audit of Internal Financial Control OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of the

Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherinternal financial controls over financial reporting was established and maintained and ifsuch controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofinternal 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 withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedure selected depend on the auditor’s judgementincluding the assessment of the risks material misstatement of the financial statementswhether due 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 controlswith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A company’s internal financial controls with reference to financial statements isa process 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 financialcontrols with reference to financial statements includes those policies and proceduresthat (1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparations offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditure of the company are being made only in accordance withauthorisations of management and directions of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company’s assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

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

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified in the operating effectiveness of theCompany’s Internal financial controls with reference to financial statements as atMarch 31 2018:

The Company has designed and established internal financial controls over accounting ofexpenditure and payment processing. However adequate "maker and checkercontrols"were not effective with respect to review of expenditure entries generationof EDI (Electronic Data Interchange) file for payments modifications to EDI file anduploading the EDI file onto the Bank’s website for payments as detailed in note no.45 to financial statements as at March 31 2018 which resulted in creation of fictitiousaccounting entries in the system and payments to unauthorised parties.

A ‘material weakness’ is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the Company’s annual or interim financialstatements will not be prevented or detected on a timely basis. In our opinion except forthe possible effects of the material weakness described above on the achievement of theobjectives of the control criteria the Company has maintained in all material respectsadequate internal financial controls with reference to financial statements and suchinternal financial controls with reference to financial statements were operatingeffectively as of March 31 2018 based on the internal financial controls with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the "Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting" issued by the Institute of CharteredAccountants of India.

Explanatory paragraph

We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the financial statements of the Company which comprise the Balance Sheet as at March31 2018 and the related Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information. This material weakness was considered in determining the naturetiming and extent of audit tests applied in our audit of the March 31 2018 financialstatements of the Company and this report does not affect our unqualified opinion on thesefinancial statements.

For K.S. Rao & Co.
Chartered Accountants
ICAI Firm’s Registration No. 003109S
Place : Bengaluru Hitesh Kumar P
Date : May 11 2018 Partner
Membership No. 233734

ANNEXURE "B" TO THE INDEPENDENT AUDITORS’ REPORT.

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report to the Members of V.S.T Tillers Tractors Limitedof even date) (i) In respect of the Company’s Fixed Assets: (a) As per theinformation and explanation provided to us the Company has maintained proper recordsshowing full particulars including quantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with the programme the management has conducted physical verification ofcertain fixed assets during the year and no material discrepancies were noticed on suchverification. In our opinion this periodicity of physical verification is reasonablehaving regard to size and nature of the Company and nature of its assets. (c) According toinformation and explanations given to us and on the basis of our examination of therecords of the Company the title deeds of immovable properties are held in the name ofthe Company.

(ii) The Company has conducted physical verification of Inventory at reasonableintervals and any material discrepancies noticed have been properly dealt in the books andaccounts.

(iii) According to the information and explanations given to us the Company hasgranted unsecured loan to the company covered in the Register maintained under Section 189of the Companies Act 2013 in respect of which (a) The terms and conditions of the grantof such loans are in our opinion prima facie not prejudicial to the Company’sinterest. (b) The schedule of repayment of principal and payment of interest has beenstipulated and repayments or receipts of principal amounts and interest have been regularas per stipulations.

(c) There is no amount overdue for more than 90 days as at the balance sheet date. (iv)In our opinion and according to the information and explanation given to us the Companyhas complied with the provisions of section 185 and 186 of the Act in respect of grant ofloans making investments and providing guarantees and securities as applicable.

(v) The Company has not accepted any deposits from the public. Accordingly clause 3(v)of paragraph of the Order is not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the products manufactured and are ofthe opinion that prima facie the specified accounts and records have been made andmaintained. Howeverwe have not made a detailed examination of the same.

(vii) According to the information and explanation given to us in respect of statutorydues: a. The Company is regular in depositing the undisputed statutory dues includingIncome Tax Goods and Service Tax Sales Tax Service Tax Custom Duty Excise Duty Cessand other statutory dues to the extent applicable to it. There are no arrears ofoutstanding statutory dues as at March 31 2018 for a period of more than six months fromthe date they became payable. b. According to the information and explanations given tous there are no dues in respect of Income Tax Goods and Service Tax Sales Tax ServiceTax Custom Duty Excise Duty and Cess which have not been deposited on account of disputeexcept the following:

Statute Nature of dues Forum where Dispute is pending Period to which the amount relates Amount involved (In Rupees)
The Income Tax Act 1961. Disallowance of expenditure incurred in connection with earning exempted income Income Tax Appellate Tribunal April 2010 - March 2011 341988
The Income Tax Act 1961. Disallowance of Marketing expenses Income Tax Appellate Tribunal. April 2011 - March 2012 34494802
The Income Tax Act Disallowance of expenditure incurred in connection with Commission of Income Tax April 2012 - March 2013 405486
1961. The Income Tax Act 1961. earning exempted income Disallowance of expenditure incurred in connection with earning exempted income (Appeals) Income Tax Appellate Tribunal April 2013 - March 2014 1645492
The Customs Act 1962 Disallowance of Concessional Custom Duty availed under Customs Notification No. 12/2012 for Reaper Combinder Appellate Tribunal April 2014 - March 2017 2336692

(viii) The Company has not taken any loan or borrowings from financial institution orbank and the Government or has not issued any debentures. Hence reporting under clause 3(viii) of the Order is not applicable to the Company.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans and hence reporting under clause3(ix) of the Order is not applicable.

(x) According to information and explanations given to us no fraud by the Company oron the Company by its officers or employees has been noticed or reported during the courseof the audit except a fraud committed by an employee of the Company on the Company to thetune of Rs.3789699 as explained in Note 45 of the financial statements. FurtherManagement has represented that the Company is evaluating to appoint an independent agencyto carry out a detailed investigation. In the absence of a detailed investigation andtaking into consideration the available evidence as on the date we are unable to commenton existence of fraud beyond the above reported amount.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company we report that managerial remuneration has beenpaid /provided in accordance with the provisions of Sec 197 read with Schedule V to theAct.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions 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 paid convertible debentures and hence reportingunder clause 3 (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanation given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For K.S. Rao & Co.
Chartered Accountants
ICAI Firm’s Registration No. 003109S
Place : Bengaluru Hitesh Kumar P
Date : May 11 2018 Partner
Membership No. 233734