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VST Tillers Tractors Ltd.

BSE: 531266 Sector: Auto
NSE: VSTTILLERS ISIN Code: INE764D01017
BSE 00:00 | 17 Sep 2616.95 9.50
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NSE 00:00 | 17 Sep 2615.90 -5.90
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OPEN 2684.00
PREVIOUS CLOSE 2607.45
VOLUME 1219
52-Week high 2898.90
52-Week low 1504.30
P/E 23.14
Mkt Cap.(Rs cr) 2,261
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2684.00
CLOSE 2607.45
VOLUME 1219
52-Week high 2898.90
52-Week low 1504.30
P/E 23.14
Mkt Cap.(Rs cr) 2,261
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

VST Tillers Tractors Ltd. (VSTTILLERS) - Auditors Report

Company auditors report

To

The Members of

V.S.T. Tillers Tractors Limited.

Report on audit of the Financial Statements

Opinion

1. We have audited the accompanying financial statements of V.S.T. Tillers TractorsLimited (the "Company") which comprise the Balance Sheet as at March 31 2021the Statement of Profit and Loss (including Other Comprehensive Income) Statement ofChanges in Equity and the Statement of cashflows for the year then ended and notes to thefinancial statements including a summary of the significant accounting policies and otherexplanatory information. (herein after referred to as "Financial statements").

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements for the year ended March 31 2021 give theinformation required by the Companies Act 2013 as amended (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 March 31 2021and its profit changes in equity and its cash flows for the year ended on that date.

Basis for Opinion:

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor’s Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ("ICAI")together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Companies Act 2013 and the Rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion on the financial statements.

Key Audit Matters

4. Key Audit Matters are those matters that in our professional judgement were ofmost significance in our audit of the financial statements for the year. 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 described the matter described below to be the key audit matters to be communicatedin our report.

Key Audit Matters How the matter was addressed in our Audit
Appropriateness of capitalisation of costs as per Ind AS 16 Property Plant and Equipment: The company has incurred total cost H 53.99 crores on property plant and equipment (PPE - representing land plant & machinery roads & building) for future expansion of its manufacturing facilities and product development at Hosur unit. Our audit procedures to assess appropriate capitalization of such expenditure includes but were not limited to the following:
This cost needs to be capitalised and depreciated once the assets are ready for use as intended by the management. Inappropriate timing of capitalisation of the cost and/ or inappropriate classification of categories of items of PPE could result in material misstatement PPE with a consequent impact on depreciation charged. • Assessed the design and implementation and tested the operating effectiveness of key controls surrounding the capitalization of costs.
Owing to the above factors we have identified this as a key significance audit matter for current year audit due to the of the capital expenditure incurred during the year. • Reviewed management’s capitalization policy including application of the aforesaid policy to assess consistency with the requirements set out by Ind AS 16 Property Plant and Equipment.
• Compared the additions with the budgets and the orders given to the vendors.
• Tested the additions on a sample basis for their nature and purpose to ensure that the capitalization is as per company’s accounting policy.
• Assessed the appropriateness and adequacy of the related disclosures in the financial statements in accordance with the applicable Indian accounting standards.

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

5. The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the financial statements and our auditor’s report thereon. The Annual reportis expected to be made available to us after the date this auditor’s report.

Our opinion on the financial statements does not cover other information and we willnot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the Annual report if we conclude that there is a material misstatementtherein we are required to communicate the matters to those charged with governance.

Management’s Responsibility for the Financial Statements:

6. The Company’s Board of Directors is responsible for the matters stated inSection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of accounting records relevant to the preparationand presentation of the financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

7. 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.

8. The Board of Directors are also responsible for overseeing the Company’sfinancial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements:

9. 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 ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

(i) Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

(ii) Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

(iii) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

(iv) 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 auditor’s report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However future events or conditions may cause theCompany to cease to continue as a going concern.

(v) 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.

11. 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 audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financialstatements.

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

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that are of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor’s 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:

15. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub section (11) ofsection 143 of the Companies Act 2013 we give in "Annexure - A" a statement onthe matters specified in paragraphs 3 and 4 of the Order to the extend applicable.

16. 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 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 the books of account.

d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards specified under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended.

e) On the basis of written representations received from the directors as on March 312021 taken on record by the board of directors none of the directors are disqualified ason March 31 2021 from being appointed as directors in terms of 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 report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company’s internalfinancials controls with reference to financial statements.

g) With respect to the matter to be included in the Auditor’s Report as per therequirements of section 197(16):

In 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.

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 in our opinion and to the best of our information and according tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – (Refer Note 41 of the 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 were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For K.S. Rao & Co.
Chartered Accountants
Firm Registration No: 003109S
Hitesh Kumar P
Partner
Place: Bengaluru Membership No. 233734
Date: June 21 2021 UDIN: 21233734AAAAJO3006

Annexure - A to the Independent Auditor’s Report

The Annexure referred to in Independent Auditor’s Report to the members of theCompany on the financial statements for the year ended March 31 2021 we report that:

(i) In respect of the Company’s fixed assets

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(b) The Company has the program of physical verification of fixed assets to cover allthe items of Property Plant and Equipment of the Company in a phased manner over a periodof three years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and any material discrepancies noticed have been properly dealtin the books of account.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to any company firm Limited LiabilityPartnership or other parties listed in the register maintained under section 189 of theCompanies Act 2013 (‘the Act’). Accordingly clauses from (iii) (a) to (iii)(c) of paragraph 3 of the Order is not applicable to the Company.

(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 Act in respect ofgrants of loans making investment and providing guarantees and securities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted deposits within the meaning of Section 73 to 76 of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended). Accordingly the provisions of theclause 3 (v) of the Order are 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 Act in respect of the Company’s services and are of theopinion that prima facie the specified accounts and records have been made andmaintained. However we have not conducted a detailed examination of the same.

(vii) a) Undisputed statutory dues including provident fund employees’ stateinsurance income tax sales tax service tax value added tax goods and service taxcustoms duty excise duty cess and other material statutory dues applicable to it havegenerally been regularly deposited with the appropriate authorities.

b) According to the information and explanations given to us there were no undisputedstatutory dues in respect of provident fund employees’ state insurance income taxsales tax service tax value added tax goods and service tax customs duty excise dutycess and other material statutory dues which were outstanding as at March 31 2021 for aperiod of more than six months from the date they became payable.

c) According to the information and explanation given to us there are no dues inrespect of Sales Tax Income Tax Customs Duty Wealth Tax Wealth Tax Service TaxExcise Duty and Cess which have not been deposited on account of dispute except for thebelow:

Statute Nature of Dues Forum where dispute is pending Period to which amount relates to Amount involved in H
The Income Tax Act1961 Disallowance of expenditure incurred in connection with earning exempted income. Income Tax Appellate Tribunal 2010-11 341988
The Income Tax Act1961 Disallowance of Marketing Expenses Income Tax Appellate Tribunal 2011-12 34494802
The Income Tax Act1961 Disallowance of expenditure incurred in connection with earning exempted income. Commissioner of Income Tax (Appeals) 2011-12 19668882
The Income Tax Act1961 Disallowance of expenditure incurred in connection with earning exempted income. Income Tax Appellate Tribunal 2012-13 405486
The Income Tax Act1961 Disallowance of expenditure incurred in connection with earning exempted income. Income Tax Appellate Tribunal 2013-14 1645492
The Income Tax Act1961 Disallowance of expenditure incurred in connection with earning exempted income. Commissioner of Income Tax (Appeals) 2015-16 23290910
The Income Tax Act1961 Disallowance of expenditure incurred in connection with earning exempted income. Commissioner of Income Tax (Appeals) 2016-17 5920917
The Customs Act1962 Disallowance of Concessional Custom Duty availed under Customs Notification No.12/2012 for Reaper Combinder Appellate Tribunal 2014-2017 2568156

(viii) The Company has not taken any loan or borrowings from a financial institution orbank and the Government.

The Company has not issued any debentures during the year. Hence reporting under clause3 (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 during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

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

(xii) The Company is not a Nidhi company. Accordingly paragraph 3(xii) of the Order isnot 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) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares of fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

For K.S. Rao & Co.
Chartered Accountants
Firm Registration No: 003109S
Hitesh Kumar P
Partner
Place: Bengaluru Membership No. 233734
Date: June 21 2021 UDIN: 21233734AAAAJO3006

Annexure - B to the Independent Auditors’ Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof V.S.T. Tillers Tractors Limited ("the Company") as at March 31 2021 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 Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (‘ICAI’).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor’s 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 on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor’sjudgment including the assessment of the risks of material misstatement of the financialstatements 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 controlssystem with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements.

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) Pertain to the maintenance of records that inreasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

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

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls 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 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 an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2021 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the ICAI.

For K.S. Rao & Co.
Chartered Accountants
Firm Registration No: 003109S
Hitesh Kumar P
Partner
Place: Bengaluru Membership No. 233734
Date: June 21 2021 UDIN: 21233734AAAAJO3006

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