Mar 31, 2023
To the Members of 3M India Limited Basis for Opinion
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of 3M India Limited (the âCompanyâ) which comprise the standalone balance sheet as at March 31, 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
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 are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue Recognition See Note 3(h) and 19 to standalone financial statements |
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The key audit matter |
How the matter was addressed in our audit |
|
The products of the Company are mainly sold through |
To obtain sufficient and appropriate audit evidence our |
|
distributors, modern trade and direct sale channels amongst |
principal audit procedures included, amongst others: |
|
others. Revenue from sale of goods is recognised when control of the product is transferred to the customer i.e. on |
⢠|
Evaluated the appropriateness of the revenue |
delivery to customer. The Company tracks proof of delivery |
recognition accounting policies in compliance with the |
|
and reverses the value of goods not delivered by the balance |
accounting standards. |
|
sheet date. |
⢠|
Tested the design and operating effectiveness of relevant |
We identified revenue recognition as a key audit matter given |
key controls with respect to revenue recognition on a |
|
it is a key performance indicator of the Company. Pressure to achieve targets, earning expectations or incentive |
sample basis. |
|
schemes linked to performance could create an incentive for |
⢠|
Tested the design, implementation and operating |
revenue to be overstated or recognised before control has |
effectiveness of the Companyâs general IT controls and |
|
been transferred. |
key application controls over the Companyâs IT systems which govern revenue recognition in the general ledger accounting system. |
|
⢠|
Performed substantive testing of selected samples of revenue transactions, recorded during the year by testing the underlying documents. |
The key audit matter |
How the matter was addressed in our audit |
|
Analytical procedures on revenue recognised during the year to identify and inquire on unusual variances, if any. |
||
⢠|
Circularization of independent confirmation on a sample basis of customer balances at the balance sheet date. |
|
Obtaining supporting documentation, on a sample basis for sales transactions recorded near to balance sheet date to determine whether revenue was recognised in the correct period. |
||
⢠|
Tested, on a sample basis, manual journal entries relating to revenues to identify and inquire on unusual items, if any. |
Information Other than the Financial Statements and Auditorâs Report Thereon
The Companyâs Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and auditorâs report(s) thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs and Board of Directorsâ Responsibilities for the Standalone Financial Statements
The Companyâs Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2 A. 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 best of 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 the Company so far as it appears from our examination of those books, except that the back-up of the books of account and other relevant books and papers in electronic mode has not been kept on servers physically located in India on a daily basis. However, the back-up is kept in a servers located outside India on a daily basis.
c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.
f. The remarks relating to the maintenance of back up of books and accounts in servers physically located in India on a daily basis, therewith are as stated in the paragraph 2(A)(b) above.
g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
B. With respect to the other matters to be included in the Auditorâs 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 the explanations given to us:
a. The Company has disclosed the impact of pending litigations as at March 31, 2023 on its financial position in its standalone financial statements - Refer Note 15, 34 and 36 to the standalone financial statements.
b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
d (i) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 43 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(ii) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 43 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.
e. The interim dividend declared and paid by the Company during the year and until the date of this audit report is in compliance accordance with Section 123 of the Act.
As stated in Note 47 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
f. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from April 01, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.
C. With respect to the matter to be included in the Auditorâs Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
Chartered Accountants Firmâs Registration No.:101248W/W-100022
Partner
Place: Bangalore Membership No.: 064597
Date: May 30, 2023 ICAI UDIN:23064597BGYQQA5089
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of 3M India Limited (the âCompanyâ), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profit and other comprehensive income, 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) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matter Revenue Recognition
See note 3(h) and 19 to the standalone financial statements
The key audit matter |
How the matter was addressed in our audit |
The products of the Company are mainly sold through distributors, modern trade and direct sale channels amongst others. Revenue from sale of goods is recognised when control of the product is transferred to the customer i.e. on delivery to customer. The Company tracks proof of delivery and reverses the value of goods not delivered by the balance sheet date. We identified revenue recognition as a key audit matter given it is a key performance indicator of the Company. Pressure to achieve targets, earning expectations or incentive schemes linked to performance could create an incentive for revenue to be overstated or recognised before control has been transferred. |
To obtain sufficient and appropriate audit evidence our principal audit procedures included, amongst others: ⢠Evaluated the appropriateness of the revenue recognition accounting policies in compliance with the accounting standards. ⢠Tested the design and operating effectiveness of relevant key controls with respect to revenue recognition on a sample basis. ⢠Tested the design, implementation and operating effectiveness of the Companyâs general IT controls and key application controls over the Companyâs IT systems which govern revenue recognition in the general ledger accounting system. ⢠Performed substantive testing of selected samples of revenue transactions, recorded during the year by testing the underlying documents. ⢠Analytical procedures on revenue recognised during the year to identify and inquire on unusual variances, if any. ⢠Independent confirmation on a sample basis of customer balances at the balance sheet date. ⢠Obtaining supporting documentation, on a sample basis for sales transactions recorded near to balance sheet date to determine whether revenue was recognised in the correct period. ⢠Tested, on a sample basis, manual journal entries relating to revenues to identify and inquire on unusual items, if any. |
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Companyâs Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the standalone financial statements and our auditorâs report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs and Board of Directorsâ Responsibilities for the Standalone Financial Statements
The Companyâs Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) 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 best of 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 the Company 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 and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditorâs) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 15, 34 and 36 to the standalone financial statements.
b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
d) (i) The management has represented that, to the best of its knowledge and belief, as disclosed in note
43 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:
⢠directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Company or
⢠provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The management has represented, that, to the best of its knowledge and belief, as disclosed in note 43 to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall:
⢠directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party or
⢠provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under subclause (d) (i) and (d) (ii) contain any material mis-statement.
e) The Company has neither declared nor paid any dividend during the year.
(C) With respect to the matter to be included in the Auditorâs Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
for B S R & Co. LLP
Chartered Accountants Firm Registration No: 101248W/W-100022
Vikash Gupta
Partner
Place : Bengaluru Membership Number: 064597
Date: 27 May 2022 UDIN: 22064597AJSPPS1347
Mar 31, 2021
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of 3M India Limited (âthe Companyâ), which comprise the standalone balance sheet as at 31 March 2021, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2021, and profit and other comprehensive income, 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) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorsâ Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matter Revenue Recognition
See note 3 (h) and 20 to the standalone financial statements
The key audit matter |
How the matter was addressed in our audit |
The products of the Company are mainly sold through distributors, modern trade and direct sale channels amongst others. Revenue from sale of goods is recognised when control of the product is transferred to the customer i.e. on delivery to customer. The Company tracks proof of delivery and reverses the value of goods not delivered by the balance sheet date. We identified revenue recognition as a key audit matter given it is a key performance indicator of the Company. Pressure to achieve targets, earning expectations or incentive schemes linked to performance could create an incentive for revenue to be overstated or recognised before control has been transferred. |
To obtain sufficient and appropriate audit evidence our principal audit procedures included, amongst others: ⢠Evaluated the appropriateness of the revenue recognition accounting policies in compliance with the accounting standards. ⢠Tested the design and operating effectiveness of relevant key controls with respect to revenue recognition on a sample basis. ⢠Tested the design, implementation and operating effectiveness of the Companyâs general IT controls and key application controls over the Companyâs IT systems which govern revenue recognition in the general ledger accounting system. ⢠Performed substantive testing of selected samples of revenue transactions, recorded during the year by testing the underlying documents. ⢠Analytical procedures on revenue recognised during the year to identify and inquire on unusual variances, if any. ⢠Independent confirmation on a sample basis of customer balances at the balance sheet date. ⢠Obtaining supporting documentation, on a sample basis for sales transactions recorded near to balance sheet date to determine whether revenue was recognised in the correct period. ⢠Tested, on a sample basis, manual journal entries relating to revenues to identify and inquire on unusual items, if any. |
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorsâ report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs and Board of Directorsâ Responsibility for the Standalone Financial Statements
The Companyâs Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorsâ Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorsâ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorsâ report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorsâ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorsâ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) 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 best of 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 the Company 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 and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the other matters to be included in the Auditorsâ 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 the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2021 on its financial position in its standalone financial statements - Refer Note 34 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these financial statements since they do not pertain to the financial year ended 31 March 2021.
(C) With respect to the matter to be included in the Auditorsâ Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firmâs Registration No: 101248W/W-100022
Vikash Gupta
Partner
Place : Bengaluru Membership Number: 064597
Date : 28 May 2021 UDIN: 21064597AAAABS6450
Mar 31, 2019
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of 3M India Limited (âthe Companyâ), which comprise the standalone balance sheet as at 31 March 2019, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2019, and profit and other comprehensive income, changes in equity and cash flows for the year ended 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 are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current year. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matter
Investment in 3M Electro & Communication India Private Limited See note 3(d) and 6 to the standalone financial statements
The key audit matter |
How the matter was addressed in our audit |
- During the year, the Company acquired 100% stake in 3M Electro & Communication India Private Limited from its existing shareholders (related parties of the Company) at a consideration of INR 58,470 lakhs. - We identified the above investment transaction as a key audit matter given it involved compliance with various regulations and fair valuation of the acquiree. |
Our audit procedures included: - Assessment of the controls to identify and disclose related party relationships and transactions in accordance with the relevant accounting standards. - Assessment of compliance with the regulations under the Companies Act, 2013 and the listing regulations with respect to the investment. - Evaluating the work of the external expert for fair valuation of the acquired entity, reasonableness of the methodology and the underlying assumptions used in the valuation. - Evaluating the accounting and disclosures of the investment in a subsidiary in compliance with the accounting standards. |
- The Company recognises revenue when control is transferred |
Our audit procedures included: |
|
to the customer i.e. on delivery to customer. The Company |
- |
Assessing the appropriateness of the revenue recognition |
tracks proof of delivery and reverses the value of goods not |
accounting policies in compliance with the accounting |
|
delivered by the balance sheet date. |
standards. |
|
- We identified revenues recognised closer to the balance |
- |
Tested the design and operating effectiveness of relevant key |
sheet date as a key audit matter given it is a significant key |
controls with respect to revenue recognition on a sample |
|
performance indicator and there is a risk of overstatement of |
basis. |
|
revenues at the balance sheet date. |
- |
We performed substantive testing by selecting samples (using statistical sampling) of revenue transactions, recorded during the year by testing the underlying documents. |
- |
Analytical procedures on revenue recognised during the year to identify and inquire on unusual variances, if any. |
|
Independent confirmation on a sample basis of customer invoice balances at the balance sheet date using statistical sampling. |
||
Obtaining supporting documentation, on a sample basis for sales transactions recorded near to balance sheet date as well as credit notes issued subsequent to the balance sheet date to determine whether revenue was recognised in the correct period. |
||
Tested, on a sample basis using statistical sampling, manual journal entries relating to revenues to identify and inquire on unusual items, if any. |
Other Information
The Companyâs Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorsâ report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone financial statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorsâ report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorsâ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(A) 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 best of 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 the Company 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 and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the other matters to be included in the Auditorsâ 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 the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2019 on its financial position in its standalone financial statements - Refer Note 36 to the standalone financial statements;
ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses ;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;
iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these financial statements since they do not pertain to the financial year ended 31 March 2019.
(C) With respect to the matter to be included in the Auditorsâ Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
ANNEXURE - A TO THE INDEPENDENT AUDITORSâ REPORT
With reference to the Annexure A referred to in paragraph 1 in Report on Other Legal and Regulatory Requirements of the Independent Auditorsâ Report to the Members of the Company on the Standalone financial statements for the year ended 31 March 2019, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are physically verified in a phased manner over a period of three years.In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets have been physically verified during the year and no material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.
In respect of immovable properties been taken on lease and disclosed as property, plant and equipment in the standalone financial statements, the lease agreements are in the name of the Company. Also refer explanatory note (a) of Note (4) to the Standalone financial statements.
(ii) The inventory, except goods-in-transit and stocks lying with third parties has been physically verified by the Management during the year. In our opinion, the frequency of such physical verification is reasonable. The discrepancies noticed on physical verification between the physical stock and the book records were not material and have been appropriately dealt with in the books of accounts. For stocks lying with third parties at the year end, written confirmations have been obtained by the Management.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 186 of the Act in respect of investments made. Further, there are no loans, guarantees and security given in respect of which provisions of Sections 185 and 186 of the Act are applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits from the public in accordance with the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, the provisions of clause 3(v) of the Order are not applicable to the Company.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for maintenance of cost records under section 148(1) of the Act in respect of products manufactured and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees State Insurance, Income-tax, Duty of customs, Goods and Services tax, Cess and any other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Sales-tax, Service-tax, Duty of excise and Value added tax during the year. Also refer note 36 to the financial statements.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees State Insurance, Income-tax, Duty of customs, Goods and Services tax, Cess and any other material statutory dues were in arrears as at 31 March 2019 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the particulars of dues of Income-tax, Sales-tax, Service-tax, Duty of customs, Duty of excise and Value added tax as at 31 March 2019 which have not been deposited by the Company on account of disputes are mentioned in Appendix-1.
(viii) In our opinion and according to the information and explanations given to us, the Company did not have any loans or borrowings from financial institutions or banks or government and there were no dues to debenture holders during the year.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year. Accordingly, para 3(ix) of the Order is not applicable to the Company.
(x) According to the information and explanations given to us, no material fraud on the Company by its officers and employees or fraud by the Company has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) According to the information and explanations given to us, in our opinion the Company is not a Nidhi Company as prescribed under Section 406 of the Act. Accordingly, para 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with Section 177 and 188 of the Act, where applicable, and details of all transactions have been disclosed in the Standalone financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or issued fully or partly convertible debentures during the year. Accordingly, para 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him/ her. Accordingly, para 3(xv) of the Order is not applicable to the Company.
(xvi) According to the information and explanations given to us and in our opinion the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Appendix 1 to the Annexure A to the Independent Auditorâs Report
Statute / Nature of dues |
Demand amount (Rs. in lakhs) |
Payment under protest |
Net amount (Rs. in lakhs) |
Period to which it pertains |
Forum where the dispute is pending |
Income tax |
13,140.09 |
1,965.31 |
11,174.78 |
2010-2016 |
Commissioner of Income Tax (Appeals) |
2,062.56 |
561.79 |
1,500.77 |
2006-2013 |
Income Tax appellate tribunal |
|
Sales tax/ Value added tax / Central Sales tax |
11,675.84 |
1,522.13 |
10,153.70 |
2004-2015 |
Appellate Authority up to Commissionerâs level |
2,813.59 |
1,451.49 |
1,362.10 |
2006-2013 |
Sales Tax appellate tribunal |
|
Excise (including service tax) |
193.23 |
- |
193.23 |
2010-2017 |
Commissioner- Appeals |
1,956.61 |
117.26 |
1,839.35 |
2006-2015 |
Customs, Excise and service tax appellate tribunal |
|
Custom duty |
1,961.51 |
- |
1,961.51 |
2005-2010 |
Customs, Excise and service tax appellate tribunal |
16,387.03 |
577.01 |
15,810.02 |
2011-2014 |
Directorate of Revenue Intelligence |
Annexure B to the Independent Auditorsâ report on the standalone financial statements of 3M India Limited for the year ended 31 March 2019
Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (Referred to in paragraph 1 (A)(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
Opinion
We have audited the internal financial controls with reference to standalone financial statements of 3M India Limited (âthe Companyâ) as of 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the âGuidance Noteâ).
Managementâs Responsibility for Internal Financial Controls
The Companyâs management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as âthe Actâ).
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and whether such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls with reference to standalone financial statements.
Meaning of Internal Financial controls with Reference to Financial Statements
A companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial controls with Reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/W-100022
Amit Somani
Place : Paris Partner
Date : May 28, 2019 Membership Number: 060154
Mar 31, 2018
Report on the Audit of the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of 3M India Limited(âthe Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss,the Statement of Changes in Equity, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe Ind AS financial statementsâ).
Managementâs Responsibility for the Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting (IndAS) prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We are also responsible to conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entityâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditorâs report to the related disclosures in the Ind AS financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditorâs report. However, future events or conditions may cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31 March 2018, its profit and other comprehensive income, its changes in equity and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act,we give in âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 best of 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 the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, the Statement of Profit and Loss,the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act;
(e) On the basis of the written representations received from the directors as on 31 March 2018, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to Ind AS financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ;
(g) With respect to the other matters to be included in the Auditorâs 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 the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer notes 35 and 37 to the Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
iv. The disclosures in the Ind AS financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made since they do not pertain to the financial year ended 31 March 2018.
ANNEXURE - A TO THE AUDITORâS REPORT
With reference to the Annexure A referred to in paragraph 1 in Report on Other Legal and Regulatory Requirements of the Independent Auditorâs Report to the Members of the Company on the Ind AS financial statements for the year ended 31 March 2018, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are physically verified in a phased manner over a period of three years. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets have been physically verified during the year and no material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties (including immovable properties under lease arrangements) which are included in property, plant and equipment are held in the name of the Company. Also refer explanatory note (a) of Note (4) to the Ind AS financial statements.
(ii) The inventory, except goods-in-transit and stocks lying with third parties has been physically verified by the Management during the year. In our opinion, the frequency of such physical verification is reasonable. The discrepancies noticed on physical verification between the physical stock and the book records were not material and have been appropriately dealt with in the books of accounts. For stocks lying with third parties at the year end, written confirmations have been obtained by the Management.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company.
(iv) According to the information and explanations given to us, there are no loans, investments, guarantees and security given in respect of which provisions of section 185 and 186 of the Act are applicable. Accordingly, the provisions of clause 3(iv) of the Order are not applicable to the Company.
(v) According to information and explanations given to us, the Company has not accepted any deposits from the public in accordance with the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for maintenance of cost records under section 148(1) of the Act in respect of products manufactured and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employeesâ State Insurance, Income-tax, Sales-tax, Service tax, Goods and Services tax, Duty of customs, Duty of excise, Value added tax, Cess and any other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employeesâ State Insurance, Income-tax, Sales-tax, Service-tax, Goods and Services tax, Duty of customs, Duty of excise, Value added tax, Cess and any other material statutory dues were in arrears as at 31 March 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the particulars of dues of Income-tax, Sales-tax, Service-tax, Duty of customs, Duty of excise and Value added tax as at 31 March 2018 which have not been deposited by the Company on account of disputes are mentioned in Appendix-1.
(viii) In our opinion and according to the information and explanations given to us, the Company did not have any loans or borrowings to financial institutions or banks or government and there were no dues to debenture holders during the year.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year.
(x) According to the information and explanations given to us, no material fraud on the Company by its officers and employees or fraud by the Company has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) According to the information ad explanations given to us, in our opinion the Company is not a Nidhi Company as prescribed under Section 406 of the Act. Accordingly, para 3(xii) of the Order is not applicable.
(xiii) According, to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with Section 177 and 188 of the Act, where applicable, and details of all transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or issued fully or partly convertible debentures during the year. Accordingly, para 3(xiii) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, para 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us and in our opinion the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Appendix 1 to the Annexure A to the Independent Auditorâs Report
Statute / Nature of dues |
Demand amount (Rs. in lakhs) |
Payment under protest |
Net amount (Rs. in lakhs) |
Period to which it pertains |
Forum where the dispute is pending |
Income tax |
8,364.37 |
1,319.78 |
7,044.59 |
2010-2015 |
Commissioner of Income Tax (Appeals) |
1,795.05 |
569.32 |
1,225.73 |
2006-2014 |
Income Tax appellate tribunal |
|
Sales tax/ Value added tax / Central Sales tax |
11,473.81 |
565.52 |
10,908.29 |
2005-2015 |
Appellate Authority up to Commissionerâs level |
2,848.59 |
1,494.22 |
1,354.36 |
2006-2013 |
Sales Tax appellate tribunal |
|
Excise (including service tax) |
75.46 |
- |
75.46 |
2010-2014 |
Commissioner- Appeals |
1,861.55 |
117.26 |
1,744.29 |
2006-2015 |
Customs, Excise and service tax appellate tribunal |
|
Custom duty |
1,961.51 |
- |
1,961.51 |
2005-2010 |
Customs, Excise and service tax appellate tribunal |
16,387.03 |
577.01 |
15,810.02 |
2011-2014 |
Directorate of Revenue Intelligence |
For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/W-100022
Amit Somani
Place : Bangalore Partner
Date : May 30, 2018 Membership Number: 060154
Mar 31, 2017
INDEPENDENT AUDITOR''S REPORT
To the Members of 3M India Limited Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of 3M India Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2017, the statement of Profit and Loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as "Ind AS financial statements")
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with relevant rules issued there under.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31 March 2017 and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other matters
The comparative financial information of the Company for the year ended 31 March 2016 and the transition date opening balance sheet as at 1 April 2015 included in these Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31 March 2016 and 31 March 2015 dated 27 May 2016 and 29 May 2015 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of section 143(11) of the Act, we give in the "Annexure A", a statement on the matters specified in the paragraph 3 and 4 of the Order.
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 best of 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 the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, the statement of Profit and Loss, the statement of Cash Flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid Ind AS financial statements comply with the India Accounting Standards specified under Section 133 of the Act, read with relevant rules issued there under;
(e) On the basis of the written representations received from the Directors as on 31 March 2017 taken on record by the Board of Directors, none of the Directors is disqualified as on 31 March 2017 from being appointed as a Director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditor''s 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 the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements
- Refer note 36 and 39 to the Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses - Refer note 36 to the Ind AS financial statements.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management - Refer note 34.
With reference to the Annexure A referred to in paragraph 1 in Report on Other Legal and Regulatory Requirements of the Independent Auditor''s Report to the Members of the Company on the Ind AS financial statements for the year ended 31 March 2017, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are physically verified in a phased manner over a period of three years. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets have been physically verified during the year and no material discrepancies were observed on such verification.
(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company. Also refer explanatory note (a) of Note 4 to the Ind AS financial statements.
(ii) The inventory, except goods-in-transit and stocks lying with third parties has been physically verified by the Management during the year. In our opinion, the frequency of such physical verification is reasonable. The discrepancies noticed on physical verification between the physical stock and the book records were not material. For stocks lying with third parties at the year end, written confirmations have been obtained by the management.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly paragraph 3 (iii) of the Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has not granted any loans or made any investments, or provided any guarantees or security to parties covered under the provisions of Section 185 and 186 of the Act. Accordingly paragraph 3(iv) of the Order is not applicable to the Company.
(v) According to information and explanations given to us, the Company has not accepted any deposits from the public in accordance with the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for maintenance of cost records under section 148(1) of the Act in respect of products manufactured and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the
Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees'' State Insurance, Income-tax, Sales-tax, Service tax, Duty of customs, Duty of excise, Value added tax, Cess and any other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees'' State Insurance, Income-tax, Sales-tax, Service-tax, Duty of customs, Duty of excise, Value added tax, Cess and any other material statutory dues were in arrears as at 31 March 2017 for a period of more than six months from the date they became payable except dues in relation to tax deducted at source as shown in the Statement below:
Statement of arrears of statutory dues outstanding for more than six months:
Name of the Statute |
Nature of the dues |
Amount (Rs in Lakhs) |
Period to which the amount relates |
Due date |
Date of payment |
Income-tax Act, 1961 |
Tax deducted at source (TDS) |
15.94 |
2013-14 to 2016-17 |
Various dates |
Not paid |
(b) According to the information and explanations given to us, the particulars of dues of Income-tax, Sales-tax, Service-tax, Duty of customs, Duty of excise and Value added tax as at 31 March 2017 which have not been deposited by the Company on account of disputes are mentioned in Appendix-1.
(viii) The Company does not have any loans or borrowings from any financial institution or banks or Government, nor has it issued any debentures. Accordingly, para 3(viii) of the Order is not applicable.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year.
(x) According to the information and explanations given to us, no material fraud on the Company by its officers and employees or fraud by the Company has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) According to the information and explanations given to us, in our opinion the Company is not a Nidhi Company as prescribed under Section 406 of the Act. Accordingly, para 3(xii) of the Order is not applicable.
(xiii) According, to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with Section 177 and 188 of the Act, where applicable, and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or issued fully or partly convertible debentures during the year. Accordingly, para 3(xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with Directors or persons connected with him. Accordingly, para 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us and in our opinion the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Statute / Nature of dues |
Demand amount (Rs. in lakhs) |
Payment under protest |
Net amount (Rs. in lakhs) |
Period to which it pertains |
Forum where the dispute is pending |
Income tax |
1,579.57 |
566.25 |
1,013.32 |
2005-2013 |
Income Tax appellate tribunal |
4,955.52 |
544.85 |
4,410.67 |
2010-2015 |
Commissioner of Income Tax (Appeals) |
|
Sales tax/ Value added tax / Central Sales tax |
18,930.16 |
1,032.07 |
17,898.09 |
2005-2012 |
Deputy Commissioner of Commercial taxes |
8,523.30 |
227.83 |
8,295.47 |
2007-2014 |
Assistant Commissioner of Commercial Taxes |
|
343.27 |
196.59 |
146.68 |
2003-2011 |
Joint / Senior commissioner of Commercial taxes / Appeals |
|
724.64 |
- |
724.64 |
2010-2012 |
Value Added Tax Officer |
|
916.65 |
418.63 |
498.02 |
2011-2013 |
Sales Tax appellate tribunal |
|
1,019.84 |
- |
1,019.84 |
2010-2013 |
Excise and Taxation Officer - cum Assessing Authority |
|
Excise (including service tax) |
1,803.52 |
215.37 |
1,588.15 |
2009-2015 |
Customs, Excise and service tax appellate tribunal |
Custom duty |
1,961.51 |
- |
1,961.51 |
2005-2010 |
Customs, Excise and service tax appellate tribunal |
8,007.49 |
50.00 |
7,957.49 |
2011-2014 |
Directorate of Revenue Intelligence |
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of 3M India Limited ("the Company") as of 31 March 2017 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting ("Guidance Note") issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by ICAI.
For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/W-100022
Amit Somani
Place : Mumbai Partner
Date : May 26, 2017 Membership Number: 060154
Mar 31, 2014
1. We have audited the accompanying financial statements of 3M India
Limited (the "Company"), which comprise the Balance Sheet as at March
31, 2014, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information, which we have signed under
reference to this report.
Management''s Responsibility for the Financial Statements
2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards notified under the
Companies Act, 1956 (the "Act") read with the General Circular 15/2013
dated September 13, 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing and other applicable authoritative
pronouncements issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by Management, as well
as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion, and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
7. As required by ''the Companies (Auditor''s Report) Order, 2003'', as
amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'',
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act (hereinafter referred to as the "Order"), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
8. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement dealt with by this report comply with the
Accounting Standards notified under the Companies Act, 1956 read with
the General Circular 15/2013 dated September 13, 2013 of the Ministry
of Corporate Affairs in respect of Section 133 of the Companies Act,
2013;
(e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT Referred to in paragraph 7 of
the Independent Auditors'' Report of even date to the members of 3M
India Limited on the financial statements as of and for the year ended
March 31, 2014.
i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of 3 years which, in our opinion, is reasonable having regard to
the size of the Company and the nature of its assets. Pursuant to the
programme, a portion of the fixed assets has been physically verified
by the Management during the year and no material discrepancies have
been noticed on such verification.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
ii. (a) The inventory excluding stocks with third parties has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
iii. (a) The Company has not granted any loans, secured or unsecured,
to companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Therefore, the provisions of Clause
4(iii)(b),(c) and (d) of the said Order are not applicable to the
Company.
(b) The Company has not taken any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Therefore, the provisions of Clause
4(iii) (f) and (g) of the said Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanation that, except for certain
items of fixed assets which are of special/ proprietary nature for
which suitable alternative sources do not exist, there is an adequate
internal control system commensurate with the size of the Company and
the nature of its business for the purchase of inventory, fixed assets
and for the sale of goods and services. Further, on the basis of our
examination of the books and records of the Company, and according to
the information and explanations given to us, we have neither come
across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
v. (a) According to the information and explanations given to us, there
have been no contracts or arrangements that need to be entered in the
register maintained under Section 301 of the Act.
(b) In our opinion, and according to the information and explanations
given to us, there are no transactions made in pursuance of such
contracts or arrangements exceeding the value of Rupees Five Lakhs in
respect of any party during the year.
vi. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub- section (1) of Section 209 of the
Act, and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing undisputed statutory dues in respect
of professional tax, service tax, and income tax, though there has been
a slight delay in a few cases , and is regular in depositing undisputed
statutory dues, including provident fund, investor education and
protection fund, employees'' state insurance, sales tax, wealth tax,
customs duty, excise duty and other material statutory dues , as
applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth-tax
which have not been deposited on account of any dispute. The
particulars of dues of income tax, sales tax, service tax, excise duty
and customs duty as at March 31, 2014 which have not been deposited on
account of a dispute, are as follows:
Name of the Nature of dues Demand Payment
statute Amount under protest
(Rs. in Lakhs) (Rs. in Lakhs)
The Income
Tax Act, Income Tax 242.42 83.71
1961 and Interest
The Income Tax
Act, Income Tax 386.59 -
1961 and Interest
The Income Tax
Act, Income Tax 94.26 -
1961 and Interest
The Income Tax
Act, Income Tax 776.88 -
1961 and Interest
The Income Tax
Act, Income Tax and 133.40 -
1961 Interest
Customs Act, 1962 Customs Duty, 1,961.51 -
Interest and
penalty
The West Bengal Value Added Tax
Value Added (VAT) 18.82 -
Tax Rules, 2005 0.63 -
9.86 -
The Central Sales Central Sales Tax
Tax (West Bengal) (CST) 16.25 -
Rules, 1958 20.04 -
25.56 -
The Bombay Bombay
Sales Tax Act,
1959 Sales Tax (BST) 65.31 20.00
59.07 20.00
The Central
Sales Tax Central Sales
(Bombay) Rules,
1957 Tax (CST) 0.50 0.20
36.78 12.00
Maharashtra
Value Value Added
Added Tax
Act, 2002 Tax (VAT), interest 539.50 16.08
and penalty 1,406.66 48.04
3,565.54 47.81
1,709.87 16.78
Central Sales
Tax Act, Central Sales
1956
(Central Sales Tax (CST) 101.11 -
Tax (Bombay) 61.31 -
Rules, 1957) 677.71 -
870.57 -
Central Sales Tax Central Sales 12.36 -
Act, 1956 Tax (CST)
Central Sales Tax Central Sales 420.06 -
Act, 1956 Tax (CST)
Central Sales Tax Central Sales 8.47 -
Act, 1956 Tax (CST)
Central Sales Tax Central Sales 3.68 -
Act, 1956 Tax (CST)
Uttar Pradesh Value Added 51.00 -
Value Added Tax Tax (VAT)
Act, 2008
Name of the Statue Net Amount Period to Forum where
which the the dispute
(Rs. in Lakhs) amount
relates is pending
The Income Tax
Act, 1961 158.71 Assessment Year Income Tax
2006 Â 07 Appellate
Tribunal
The Income Tax Act,
1961 386.59 Assessment Year Income Tax
2007 Â 08 Appellate
Tribunal
The Income Tax Act,
1961 94.26 Assessment Year Income Tax
2008 Â 09 Appellate
Tribunal
The Income Tax Act,
1961 776.88 Assessment Year Income Tax
2009 Â 10 Appellate
Tribunal
The Income Tax Act,
1961 133.40 Assessment Year Commissioner
of
2012 Â 13 Income Tax
(Appeals)
Customs Act, 1962 1,961.51 Financial Years Customs,Excise&
2005 Â 06 Service Tax
2006 Â 07 Appellate Tribunal
2007 Â 08
2008 Â 09
2009 Â 10
The West Bengal
Value Added
Tax Rules, 2005 Financial Years The Senior Jt.
18.82 2008 Â 09 Commissioner,
0.63 2009 Â 10 Commercial Tax
9.86 2010 Â 11
The Central Sales
Tax (West Bengal)
Rules, 1958 Financial Years The Senior Jt.
16.25 2008 Â 09 Commissioner,
20.04 2009 Â 10 Commercial Tax
25.56 2010 Â 11
The Bombay
Sales Tax Act, 1959 Financial Years Jt. Commissioner
of
45.31 2003 Â 04 Sales Tax (Appeal)
39.07 2004 Â 05 III, Mumbai
The Central Sales Tax
(Bombay) Rules, 1957 Financial Years Jt.Commissioner of
0.30 2003 Â 04 Sales Tax (Appeal)
24.78 2004 Â 05 III, Mumbai
Maharashtra Value
Added Tax Act, 2002 Financial Years Deputy Commissioner
523.42 2005 Â 06 of Sales Tax, Mumbai
1,358.62 2006 Â 07
3,517.73 2008 Â 09
1,693.09 2009 Â 10
Central Sales Tax Act,
1956 (Central Sales
Tax (Bombay)
Rules, 1957) Financial Years Deputy Commissioner
101.11 2005 Â 06 of Sales Tax, Mumbai
61.31 2006 Â 07
677.71 2008 Â 09
870.57 2009 Â 10
Central Sales Tax
Act, 1956 12.36 Financial Year Deputy Commissioner
2006 Â 07 of Sales Tax, Delhi
Central Sales Tax
Act, 1956 420.06 Financial Year Excise and Taxation
2011 Â 12 Officer-cum-
Assessing Authority,
Gurgaon
Central Sales Tax
Act, 1956 8.47 Financial Year Assistant
2010 Â 11 Commissioner (CT),
LTU, Hyderabad
Central Sales Tax
Act, 1956 3.68 Financial Year Deputy Commissioner,
2010 Â 11 Commercial Tax,
Lucknow
Uttar Pradesh
Value Added Tax
Act, 2008 51.00 Financial Year Deputy Commissioner,
2010 Â 11 Commercial Tax,
Lucknow
Name of the Nature of dues Demand Payment
statute Amount under protest
(Rs. in Lakhs) (Rs. in Lakhs)
Central Sales
Tax Central Sales 28.34 -
Act, 1956 Tax (CST)
Finance Act,
1994 Service tax, 26.55 26.55
interest and
penalty
Central Excise
Act, Penalty 64.28 -
1944
(Cenvat Credit
Rules, 2004)
Central Excise
Act, Cenvat Credit, 674.22 -
1944 (Cenvat
Credit interest and
Rules, 2004) penalty
Central Excise
Act, Cenvat Credit, 190.11 95.06
1944 (Cenvat
Credit interest and
Rules, 2004) penalty
Name of the Statue Net Amount Period to Forum where
which the the dispute
(Rs. in Lakhs) amount
relates is pending
Central Sales Tax
Act, 1956 28.34 Financial
Year Assistant
2011 Â 12 Commissioner
(Commercial
Taxes),
Chennai
Finance Act, 1994 - Financial Year Customs,
Excise and
2010 Â 11 Service Tax
Appellate
Tribunal,
Bangalore
Central Excise Act,
1944 (Cenvat Credit
Rules, 2004) 64.28 Financial Years Customs,
Excise and
2007 Â 08 Service Tax
2008 Â 09 Appellate
Tribunal,
2009 Â 10 Bangalore
2010 Â 11
Central Excise Act,
1944 (Cenvat Credit
Rules, 2004) 674.22 Financial Years Customs,
Excise and
2009 Â 10 Service Tax
2010 Â 11 Appellate
Tribunal,
Bangalore
Central Excise Act,
1944 (Cenvat Credit
Rules, 2004) 95.05 Financial Years Customs,
Excise and
2006 Â 07 Service Tax
2007 Â 08 Appellate
Tribunal,
Bangalore
x. The Company has no accumulated losses as at the end of the financial
year and it has not incurred any cash losses in the financial year
ended on that date or in the immediately preceding financial year.
xi. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.
xii. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of Clause 4(xii) of the Order are not
applicable to the Company.
xiii. As the provisions of any special statute applicable to chit fund/
nidhi/ mutual benefit fund/societies are not applicable to the Company,
the provisions of Clause 4(xiii) of the Order are not applicable to the
Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Order are not applicable to the
Company.
xv. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 4(xv) of the Order are not
applicable to the Company.
xvi. The Company has not raised any term loans. Accordingly, the
provisions of Clause 4(xvi) of the Order are not applicable to the
Company.
xvii. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, we report
that the no funds raised on short-term basis have been used for
long-term investment.
xviii.The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year. Accordingly, the provisions of Clause
4(xviii) of the Order are not applicable to the Company.
xix. The Company has not issued any debentures during the year and does
not have any debentures outstanding as at the beginning of the year and
at the year end. Accordingly, the provisions of Clause 4(xix) of the
Order are not applicable to the Company.
xx. The Company has not raised any money by public issues during the
year. Accordingly, the provisions of Clause 4(xx) of the Order are not
applicable to the Company.
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For Lovelock & Lewes
Firm Registration No.301056E
Chartered Accountants
Dibyendu Majumder
Place:Bangalore Partner
Date:May 29, 2014 Membership No. : 057687
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying financial statements of 3M India
Limited (the "Company"), which comprise the Balance Sheet as at March
31, 2013, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information, which we have signed under
reference to this report.
Management''s Responsibility for the Financial Statements
2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards referred to in sub-section
(3C) of section 211 of''the Companies Act, 1956'' of India (the "Act").
This responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by Management, as well as evaluating the overall
presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion. Opinion
6. In our opinion, and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
7. As required by''the Companies (Auditor''s Report) Order, 2003'', as
amended by''the Companies (Auditor''s Report) (Amendment) Order, 2004''
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act (hereinafter referred to as the "Order"), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
8. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of section 211 of
the Act;
(e) On the basis of written representations received from the directors
as on March 31,2013, and taken on record by the Board of Directors,
none of the Directors is disqualified as on March 31, 2013, from being
appointed as a Director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
Referred to in paragraph 7 of the Independent Auditors'' Report of even
date to the members of3M India Limited on the financial statements as
of and for the year ended March 31,2013.
i. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies have been noticed on such verification.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
ii. (a) The inventory excluding stocks with third parties has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
iii. (a) The Company has not granted any loans, secured or unsecured,
to companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Therefore, the provisions of Clause
4(iii) (b), (c) and (d) of the said Order are not applicable to the
Company.
(b) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Therefore, the provisions of Clause
4(iii) (f) and (g) of the said Order are not applicable to the Company.
iv. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control system.
v. (a) According to the information and explanations given to us,
there have been no contracts or arrangements that need to be entered in
the register maintained under Section 301 of the Act.
(b) In our opinion, and according to the information and explanations
given to us, there are no transactions made in pursuance of such
contracts or arrangements exceeding the value of Rupees Five Lakhs in
respect of any party during the year.
vi. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub- section (1) of Section 209 of the
Act, and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing undisputed statutory dues in respect
of professional tax, though there has been a slight delay in a few
cases, and is regular in depositing undisputed statutory dues,
including provident fund, investor education and protection fund,
employees'' state insurance, income tax, sales tax, wealth tax, service
tax, customs duty, excise duty and other material statutory dues, as
applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of, wealth-tax
which have not been deposited on account of any dispute. The
particulars of dues of income tax, sales tax, service-tax, customs duty
and excise duty as at March 31, 2013 which have not been deposited on
account of a dispute, are as follows:
x. The Company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.
xi. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
xii. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Therefore, the provisions of Clause 4(xii) of the Order are not
applicable to the Company.
xiii. As the provisions of any special statute applicable to chit
fund/ nidhi/ mutual benefit fund/ societies are not applicable to the
Company, the provisions of Clause 4(xiii) of the Order are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of Clause 4(xiv) of the Order are not applicable to the
Company.
xv. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 4(xv) of the Order are not
applicable to the Company.
xvi. The Company has not raised any term loans. Accordingly, the
provisions of Clause 4(xvi) of the Order are not applicable to the
Company.
xvii. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, we report
that the no funds raised on short-term basis have been used for
long-term investment.
xviii. The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Act during the year. Accordingly, the provisions of
Clause 4(xviii) of the Order are not applicable to the Company.
xix. The Company has not issued any debentures during the year and does
not have any debentures outstanding as at the beginning of the year and
at the year end. Accordingly, the provisions of Clause 4(xix) of the
Order are not applicable to the Company.
xx. The Company has not raised any money by public issues during the
year. Accordingly, the provisions of Clause 4(xx) of the Order are not
applicable to the Company.
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For Lovelock & Lewes
Firm Registration No.301056E
Chartered Accountants
Dibyendu Majumder
Place : Bangalore Partner
Date : May 30, 2013 Membership No.: 057687
Mar 31, 2012
1. We have audited the attached Balance Sheet of 3M India Limited (the
"Company") as at March 31, 2012, and the related Statement of Profit
and Loss and Cash Flow Statement for the year ended on that date
annexed thereto, which we have signed under reference to this report.
These financial statements are the responsibility of the Company's
Management. Our respon- sibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956'
of India (the 'Act') and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which, to the
best of 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 the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Act;
(e) On the basis of written representations received from the
Directors, as on March 31, 2012 and taken on record by the Board of
Directors, none of the Directors is disqualified as on March 31, 2012
from being appointed as a Director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS' REPORT
Referred to in paragraph 3 of the Auditors' Report of even date to the
members of 3M India Limited on the financial statements for the year
ended March 31, 2012.
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situa- tion, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
been noticed.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reason- able and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
(b) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
4. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
afore- said internal control system.
5. According to the information and explanations given to us, there
have been no contracts or arrangements referred to in Section 301 of
the Act during the year to be entered in the register required to be
maintained under that Section. Accordingly, the question of commenting
on transactions made in pursuance of such contracts or arrange- ments
does not arise.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursu- ant to the rules made by
the Central Government of India, the maintenance of cost records has
been prescribed under clause (d) of sub-section (1) of Section 209 of
the Act, and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is generally regular in depositing undisputed statutory dues in respect
of profes- sional tax though there has been a slight delay in a few
cases, and is regular in depositing undisputed statu- tory dues,
including provident fund, investor education and protection fund,
employees' state insurance, in- come tax, wealth tax, service tax,
customs duty, excise duty and other material statutory dues, as
applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income tax as at March 31, 2012 which have not been deposited on
account of a dispute, are as follows:
Name of the Nature of Amount Period to which Forum where the
statute Dues (Rs. in the amount relates dispute is pending
Lakhs)
The Income
Tax Income Tax Assessment Year Commissioner of
Act, 1961 and interest 231.24 2005-06 Income Tax
(Appeals)
The Income
Tax Income Tax Assessment Year Income Tax
Act, 1961 and interest 158.71 2006-07 Appellate Tribunal
The Income
Tax Income Tax Assessment Year Commissioner of
Act, 1961 and interest 386.59 2007-08 Income Tax
(Appeals)
The Income
Tax Income Tax Assessment Year Commissioner of
Act, 1961 and interest 462.16 2008-09 Income Tax
(Appeals)
10. The Company has no accumulated losses.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund/
nidhi/ mutual benefit fund/ societies are not appli- cable to the
Company.
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. The Company has not obtained any term loans.
17. On the basis of an overall examination of the Balance Sheet of the
Company, in our opinion, and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The Company has not issued any debentures during the year; and
does not have any debentures outstanding as at the year end.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of any such case by the Management.
For Lovelock & Lewes
Firm Registration No.301056E
Chartered Accountants
Dibyendu Majumder
Place: Bangalore
Partner
Date : May 28, 2012 Membership No. : 057687
Mar 31, 2011
1. We have audited the attached Balance Sheet of 3M India Limited (the
"Company") as at March 31, 2011, and the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the Companys
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of ÃThe Companies Act, 1956
of India (the ÃAct) and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which, to the
best of 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 the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
Directors, as on March 31, 2011 and taken on record by the Board of
Directors, none of the Directors is disqualified as on [Balance Sheet
date] from being appointed as a Director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT
Referred to in paragraph 3 of the Auditors Report of even date to the
members of 3M India Limited on the financial statements for the year
ended March 31, 2011.
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of 3 years which, in our opinion, is reasonable having regard to
the size of the Company and the nature of its assets. Pursuant to the
programme, a portion of the fixed assets has been physically verified
by the Management during the year and no material discrepancies between
the book records and the physical inventory have been noticed.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year. In respect of
inventory lying with third parties, these have substantially been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act and accordingly, paragraphs iii(b), iii(c)
and iii(d) of the Order, are not applicable.
(b) The Company has not taken any loans secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act and accordingly, paragraphs iii(f) and
iii(g) of the Order, are not applicable.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. According to the information and explanations given to us, there
have been no contracts or arrangements referred to in Section 301 of
the Act during the period to be entered in the register required to be
maintained under that Section. Accordingly, the question of commenting
on transactions made in pursuance of such contracts or arrangements
does not arise.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub- section (1) of Section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except dues
in respect of service tax, the Company is regular in depositing
undisputed statutory dues including investor education and protection
fund, employees state insurance, income-tax, wealth tax, service tax,
customs duty, excise duty and other material statutory dues as
applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess as at March 31, 2011 which have not been deposited on
account of a dispute, are as follows:
Name of the Nature of Amount Amount Balance Period to
which Forum where
the
statute Dues Claimed Paid Payable the amount
relates dispute is
pending
Rs. Rs. Rs.
Income
Tax Act, Income
Tax Assessment
Year Commissi
-oner of
1961 and
interest 2,31,24,330 - 2,31,24,330 2005-06 Income
Tax
(Appeal)
Income
Tax Act, Income
Tax Assessment
Year Income Tax
1961 and
interest 2,42,42,054 83,71,027 1,58,71,027 2006-07 Appellate
Tribunal
Income
Tax Act, Income
Tax Assessment
Year Commiss
-ioner of
1961 and
interest 3,86,59,222 - 3,86,59,222 2007-08 Income
Tax
(Appeal)
10. The Company has no accumulated losses as at March 31, 2011 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund/ societies are not applicable to the
Company.
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. The Company has not obtained any term loans.
17. On the basis of an overall examination of the Balance Sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
For Lovelock & Lewes
Firm Registration No.301056E
Chartered Accountants
Dibyendu Majumder
Place:Bangalore Partner
Date:May 28, 2011 Membership No. : 057687
Mar 31, 2010
1. We have audited the attached Balance Sheet of 3M India Limited (the
ÃCompanyÃ) as at March 31, 2010, and the related Profit and Loss
Account and Cash Flow Statement for the period from January 1, 2009 to
March 31, 2010 annexed thereto, which we have signed under reference to
this report. These financial statements are the responsibility of the
CompanyÃs Management. Our responsibility is to express an opinion on
these financial statements based on our audit
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003, as
amended by the Companies (AuditorÃs Report) (Amendment) Order, 2004
(together the ÃOrderÃ), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of ÃThe Companies Act, 1956Ã
of India (the ÃActÃ) and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations, which to the
best of 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 the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
(e) On the basis of written representations received from the
directors, as on March 31, 2010 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto, give, in the prescribed
manner, the information required by the Act and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
(ii) in the case of the Profit and Loss Account, of the profit for the
period ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
ANNEXURE TO AUDITORSÃ REPORT Referred to in paragraph 3 of the
Auditorsà Report of even date to the members of 3M India Limited on the
financial statements for the period ended March 31, 2010.
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the period and no material
discrepancies between the book records and the physical inventory have
been noticed.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the period.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the period.
In respect of inventory lying with third parties, these have
substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act and accordingly, paragraphs iii(b), iii(c)
and iii(d) of the Order, are not applicable.
(b) The Company has not taken any loans secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act and accordingly, paragraphs iii(f) and
iii(g) of the Order, are not applicable.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. According to the information and explanations given to us, there
have been no contracts or arrangements referred to in Section 301 of
the Act during the period to be entered in the register required to be
maintained under that Section. Accordingly, the question of commenting
on transactions made in pursuance of such contracts or arrangements
does not arise.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act, and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except
certain dues in respect of service tax and provident fund, the Company
is regular in depositing undisputed statutory dues including provident
fund, investor education and protection fund, employeesà state
insurance, income-tax, wealth tax, customs duty, excise duty and other
material statutory dues as applicable, with the appropriate
authorities. The extent of the arrears of statutory dues outstanding as
at March 31, 2010, for a period of more than six months from the date
they became payable are as follows:
Name of Nature of Amount Period to which
the statute dues (Rs.) the amount relates
Finance Act,
1994 Service tax 9,27,000 December 2008
The Employees Contribution to 7,66,444 July to
Provident Funds Provident Fund September 2009
and Miscellaneous
Provisions Act, 1952
Name of the Statue Due date Date of
Payment
Finance Act, 1994 January 6, 2009 May 26, 2010
The Employees
Provident Funds
and Miscellaneous
Provisions Act, 1952 August to May 26, 2010
October 2009
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth tax, service tax, customs duty, excise
duty and cess as at March 31, 2010 which have not been deposited on
account of a dispute, are as follows.
Name of Nature of Amount Period to which
the statute Dues Claimed (Rs.) the amount relates
Income Tax
Act, 1961 Income Tax 2,31,24,330 Assessment Year
2005-06
Income Tax
Act, 1961 Income Tax 2,37,92,770 Assessment Year
2006-07
Central Sales
Act, 1956 Sales tax 18,32,203 Financial Year
2005-06
Central Sales
Act, 1956 Sales tax 2,67,24,219 Financial Year
2007-08
Name of the Statue Forum where the
dispute is pending
Income Tax Act, 1961 Commissioner of
Income Tax (Appeal)
Income Tax Act, 1961 Dispute Resolution
Panel (DRP)
Central Sales Act, 1956 Deputy Commissioner of
Commercial Taxes (Karnataka)
Central Sales Act, 1956 Deputy Commissioner of
Commercial Taxes (Karnataka)
10. The Company has no accumulated losses as at March 31, 2010 and it
has not incurred any cash losses in the financial period ended on that
date or in the immediately preceding financial year.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund/ societies are not applicable to the
Company.
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the period.
16. The Company has not obtained any term loans.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the period.
19. The Company has not issued any debentures during the period.
20. The Company has not raised any money by public issues during the
period.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the period, nor
have we been informed of such case by the Management.
For Lovelock & Lewes
Firm Registration No.301056E
Chartered Accountants
Dibyendu Majumder
Place:Bangalore Partner
Date :May 28, 2010 Membership No. : 057687
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