Mar 31, 2023
To the Members of Samvardhana Motherson International Limited (formerly known as Motherson Sumi Systems Limited)
Report on the Audit of the Standalone Financial StatementsOpinion
We have audited the accompanying standalone financial statements of Samvardhana Motherson International Limited (formerly known as Motherson Sumi Systems Limited ) (the "Companyâ), which comprise the Balance Sheet as at March 31 2023, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity 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, as amended ("the Actâ) 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, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s 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 audit 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 for the financial year ended March 31, 2023. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Impairment of Investments in Group Companies (i.e. subsidiaries, joint ventures and associates (as described in Note 6 of the standalone financial statements) |
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The Company has made investments in various subsidiaries, joint ventures and associates;whose carrying amount as at March 31, 2023 is '' 310,298 million. The impairment assessment of these investment is complex and highly judgmental due to the significant estimation required to determine the Value-In-Use (VIU). In particular, the determination of the VIU is sensitive to significant assumptions, such as changes in the discount rate, revenues, operating margin and terminal value, which are affected by expectations about future market or economic conditions and other challenges. Accordingly, the matter has been identified as key audit matter. |
The procedures performed by us include the following: a. Obtaining an understanding of the process followed and the analysis performed by management for the purpose of the impairment assessment; b. Evaluating, through an analysis of internal and external factors, whether there were any indicators of impairment in accordance with Ind AS 36; c. Reading the financial position and operating/ financial results of the respective entity''s from the financial information made available to us by the management; d. Testing the mathematical accuracy of the management''s assessment ; e. Evaluating the significant assumptions used in the management''s assessment like the operating margins, discount rates, revenue growth rates, terminal value computations with the support of valuation specialists, wherever required by performing independent calculations and sensitivity analysis. |
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditor''s report thereon. The Annual report is expected to be made available to us after the date of this auditor''s report.
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 such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Responsibilities of Management for the Standalone Financial Statements
The Company''s Board of Directors is 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 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) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 is responsible for assessing the Company''s 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.
Those charged with governance are also responsible for overseeing the Company''s financial reporting process.
Auditor''s 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 auditor''s 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 management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the 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 auditor''s 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 for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe
b) The management has represented that, to the best of its knowledge and belief, as disclosed in the note 52 (vi) to the standalone financial statements, no funds have been received by the company from any persons or entities, including foreign entities ("Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
v. c) Based on such 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 sub-clause (a) and (b) contain any material misstatement.
vi. The final dividend paid by the Company during the year, that was declared in respect of the previous year, is in
these matters in our auditor''s 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 (Auditor''s Report) Order, 2020 ("the Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1â 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity 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 Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(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) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) 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, as amended 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 standalone financial statements -Refer Note 43 to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts -Refer Note 37 to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. a) The management has represented
that, to the best of its knowledge and belief, as disclosed in the note 52 (v) 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 ("Intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
accordance with section 123 of the Act to the extent it applies to payment of dividend.
As stated in note 39 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.
vii. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.
Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
Partner
Membership Number: 091813 UDIN: 23091813BGQOXU2354 Place of Signature: Gurugram Date: May 26, 2023
Mar 31, 2022
Report on the Audit of the Standalone Financial StatementsOpinion
We have audited the accompanying standalone financial statements of Samvardhana Motherson International Limited (formerly known as Motherson Sumi Systems Limited) (the "Companyâ), which comprise the Balance Sheet as at March 31 2022, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity 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, as amended ("the Actâ) 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, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s 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 audit 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 for the financial year ended March 31, 2022. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Accounting for the Composite Scheme of Amalgamation and Arrangements (as described in Note 51 of the standalone financial statements) |
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The Hon''ble National Company Law Tribunal, Mumbai Bench ("NCLTâ) vide its order dated December 22, 2021 has approved the Composite Scheme of Amalgamation and Arrangement ("the Schemeâ) between the Company, Motherson Sumi Wiring India Limited ("MSWILâ), erstwhile Samvardhana Motherson International Limited (erstwhile SAMIL) and their respective shareholders. The Scheme entails demerger of Domestic Wiring Harness ("DWHâ) business from the Company into a new company, viz., MSWIL and subsequent merger of erstwhile SAMIL into the Company to bring all auto component and allied businesses in erstwhile SAMIL under the Company. In respect to the demerger, the carrying value of the identified net assets pertaining to the DWH business transferred to MSWIL has been adjusted against general reserve of the Company. For merger, the identifiable assets and liabilities of erstwhile SAMIL have been accounted for in accordance with IND AS 103 - "Business Combinationâ at the fair values determined by an independent valuer appointed by the Company. The above is considered as a key audit matter as transaction involves significant amount including exercise of judgement and interpretation of the relevant accounting standards and applicable tax and other statutes/regulations. |
The procedures performed by us included following: a. Read and assessed the provisions of the Scheme and the NCLT order; b. Obtained an understanding and assessed the effectiveness of process followed by the management for recording the accounting treatment prescribed in the Scheme; c. Evaluated whether the accounting treatment of the said transaction is in line with the applicable Indian Accounting Standards (Ind AS) and accounting guidance; d. Tested the management''s assessment and computation for identifying the relevant assets and liabilities of the demerged business; e. Performed testing procedures including involvement of valuation specialists for testing of the valuation reports provided by the management for the appropriateness of assumptions involved; f. Verified whether the accounting entries recorded in the books are in line with the accounting treatment assessed above, including the arithmetical accuracy of the same; g. Read and assessed the disclosure made in the standalone financial statements for assessing compliance with disclosure requirements |
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Responsibilities of Management for the Standalone Financial Statements
The Company''s Board of Directors is 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 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) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditor''s report thereon. The Annual report is expected to be made available to us after the date of this auditor''s report.
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 such other information is materially inconsistent with the financial
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 the 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 is responsible for assessing the Company''s 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.
Those charged with governance are also responsible for overseeing the Company''s financial reporting process.
Auditor''s 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 auditor''s 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 management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the 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 auditor''s 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
b) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 54 (vi) to the standalone financial statements, no funds have been received by the company from any persons or entities, including foreign entities ("Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such 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 sub-clause (a) and (b) contain any material misstatement.
most significance in the audit of the standalone financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditor''s 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 (Auditor''s Report) Order, 2020 ("the Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1â 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity 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 Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 these standalone financial statements and the operating effectiveness of such controls, refer
to our separate Report in "Annexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) 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, as amended 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 standalone financial statements -Refer Note 43 to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts -Refer Note 37 to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. a) The management has represented
that, to the best of its knowledge and belief, as disclosed in the Note 54 (v) 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 ("Intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
v. The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
As stated in Note 39 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.
Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
Partner
Membership Number: 091813 UDIN: 22091813AJRVJU4297
Place of Signature: Noida Date: May 26, 2022
Mar 31, 2021
Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the 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 audit 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 for the financial year ended March 31, 2021. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
To the Members of Motherson Sumi Systems LimitedReport on the Audit of the Standalone Financial StatementsOpinion
We have audited the accompanying standalone financial statements of Motherson Sumi Systems Limited ("the Companyâ), which comprise the Balance sheet as at March 31 2021, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity 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, as amended ("the Actâ) 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, 2021, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s 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
Key audit matters |
How our audit addressed the key audit matter |
Demerger of Domestic wiring harness Business (as described in note 51 of the standalone financial statements) |
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The Board of directors in its meeting dated July 02, 2020 approved the demerger of its Domestic wiring harness business (DWH) in India to a newly set up subsidiary company, namely Motherson Sumi Wiring India Limited ("MSWILâ) (''the Demerger'') pursuant to a Scheme of Arrangement (''the Scheme'') which is currently subject to regulatory approvals. The aforesaid Scheme has been assessed as highly probable by the management in accordance with the criteria prescribed under Ind AS 105 "Non-current Assets Held for Sale and Discontinued Operationsâ and accordingly, the proposed demerger of DWH pursuant to the scheme has been disclosed as Discontinued Operations. The above transaction has been considered as significant given the exercise of management judgment and presentation & disclosure impacts in the standalone financial statements in accordance with the applicable accounting standard. Accordingly, this matter has been identified as a key audit matter. |
The procedures performed by us included following: a. Obtained an understanding and assessed the effectiveness of process followed by the management in assessing the Company''s accounting policies in relation to discontinued operations; b. Evaluated the basis of the management''s assessment of treating the proposed demerger as Discontinued operations in accordance with the applicable accounting standards; c. Obtained an update on the regulatory communications in this respect and current status of the approval from the regulatory authorities; d. Obtained and read the proposed Scheme for understanding the impact on the standalone financial statements including identification of the assets and liabilities to be transferred and assessment of the key estimates and judgement involved therein; e. Performed procedures on the disclosures relating to discontinued operations made in the standalone financial statements for assessing the compliance with disclosure requirements. |
De-Recognition of trade receivables under factoring facilities (as described in note 8 of the standalone financial statements) |
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The Company enters into non-recourse factoring arrangements for its trade receivables with various banks/financial institutions. As at 31 March 2021 the Company had factoring facilities in place for trade receivables amounting to '' 512 million were de-recognized by using these facilities. The Company derecognizes the receivables from its books if it transfers substantially all the risks and rewards of ownership of the financial asset (i.e. receivables). The assessment of de-recognition of trade receivables under the factoring facilities is complex and requires significant judgement applied by the management. Accordingly, the matter has been identified as KAM. |
The procedures performed included following: a. Obtained an understanding of the process related to de-recognition of trade receivables; b. Evaluated the assessment made by management covering factoring contracts; c. For selected sample of new contracts entered during the year, tested their nature and evaluated whether key terms and conditions thereof are in line with the guidance prescribed under Ind AS 109, "Financial Instrumentsâ; d. Read and assessed the disclosure made in the standalone financial statements for assessing compliance with disclosure requirements. |
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does
not include the standalone financial statements and our auditor''s 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 such other information is materially inconsistent with the 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.
Responsibilities of Management for the Standalone Financial Statements
The Company''s Board of Directors is 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 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) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 is responsible for assessing the Company''s 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.
Those charged with governance are also responsible for overseeing the Company''s financial reporting process.
Auditor''s 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 auditor''s 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 management''s 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
Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the 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 auditor''s 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 for the financial year ended March 31, 2021 and are therefore the key audit matters. We describe these matters in our auditor''s 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 (Auditor''s Report) Order, 2016 ("the Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1â 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity 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 Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2021 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) 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, as amended 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 standalone financial statements -Refer Note 43 to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts -Refer Note 37 to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
Chartered Accountants ICAI Firm Registration Number: 301003E/E300005
Partner
Membership Number: 091813 UDIN: 21091813AAAADA9918
Place of Signature: Gurugram Date: June 02, 2021
Mar 31, 2019
INDEPENDENT AUDITOR''S REPORT
To the Members of Mothers on Sumi Systems Limited
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial statements of Mothers on Sumi Systems Limited ("the Companyâ), which comprise the Balance sheet as at March 31 2019, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the 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 Ind AS financial statements give the information required by the Companies Act, 2013, as amended ("the Actâ) 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, 2019, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Ind AS 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 financial statements under the provisions of the Act and the Rules there under, 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 audit opinion on the standalone Ind AS 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 Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
De-recognition of trade receivables under factoring facilities (as described in note 8 of the standalone Ind AS financial statements) |
|
The Company enters into non-recourse factoring arrangements for its trade receivables with various banks/financial institutions. As at 31 March 2019 the Company had various factoring facilities in place for trade receivables and amount of Rs,1,326 million were de-recognized by using these facilities. The Company derecognizes the receivables from its books if it transfers substantially all the risks and rewards of ownership of the financial asset (i.e. receivables). The assessment of de-recognition of trade receivables under the factoring facilities is complex and requires judgment. Accordingly, the matter has been identified as KAM. |
The procedures performed includes following: - Understand the assessment made by management covering factoring contracts; - For certain contracts sample, tested the nature of the contracts if they qualify as recourse or non-recourse agreements and if the accounting is in line with the Ind AS 109,"Financial Instrumentsâ; - Read and assessed the disclosure made in the financial statements for assessing compliance with disclosure requirements. |
Revenue Recognition under Ind AS 115, "Revenue from contracts with customers" (as described in note 45 of the standalone Ind AS financial statements)
Ind AS 115 has become applicable on the Company with effect from April 1, 2018 which prescribes detailed guidance for various elements of revenue recognition and requires detailed contract assessment as per the accounting principles prescribed under the newly applicable accounting standard. The application of new revenue accounting standard involves certain key judgements and interpretations relating to identification of separate performance obligations, principal versus agent considerations, recognition of revenue over the period and recognition of contract acquisition costs. Accordingly, the matter has been identified as KAM. |
The procedures performed includes following: - Assessed the Company''s process to identify the impact of adoption of new revenue accounting standard; - Selected a sample of contracts and evaluated them along with supporting evidence to determine whether various elements of revenue recognition are assessed in accordance with the principles prescribed under Ind AS 115; - Read and assessed the disclosure made in the financial statements for assessing compliance with disclosure requirements. |
Impairment assessment on Investments (as described in note 6 of the standalone Ind AS financial statements) |
|
The Company has made investments in various subsidiaries/joint venture/associate companies. The carrying amount of total investments as at March 31, 2019 is '' 45,836 million. Considering the long term nature of these investments, their impairment assessment requires judgment and significant estimates. Accordingly, the matter has been identified as KAM. |
The procedures performed includes following: - Assessed the process followed and controls implemented for the impairment review and analysis performed by the management; - Tested management''s impairment calculation and assessed whether the requirements of applicable accounting principles; - Read the reported net worth and profitability of the respective investments from their financial information made available to us by the management; - Where considered necessary, acquisition generating goodwill in the consolidated financial statements, evaluated the assumptions used for impairment assessment of goodwill and compared with carrying value in the Company''s books as at March 31, 2019 and for changes, if any up to the date of Board meeting |
Other Information
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the Ind AS financial statements and our auditor''s reports thereon.
Our opinion on the standalone Ind AS 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 Ind AS financial statements, our responsibility is to read the other information in as much as it relates to standalone Ind AS financial statements and, in doing so, consider whether such other information is materially inconsistent with the 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.
Responsibilities of Management and Those Charged with Governance for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone 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) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 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 standalone Ind AS financial statements, management is responsible for assessing the Company''s 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.
Those charged with Governance are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s 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 Ind AS 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 Ind AS 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 system 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 management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the 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 auditor''s 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 Ind AS financial statements, including the disclosures, and whether the standalone Ind AS 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 Ind AS financial statements for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditor''s 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 (Auditor''s Report) Order, 2016 ("the Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1âa 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 including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) 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, as amended 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 standalone Ind AS financial statements - Refer Note 43 to the standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts
- Refer Note 37 to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 of "Report on Other Legal and Regulatory Requirements" of our report of even date Re: Mothers on Sumi Systems Limited (the "Company")
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(i) (b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(i) (c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31, 2019 and no material discrepancies were noticed in respect of such confirmations.
(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 Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of its products and related services, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with
appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues applicable to it.
(vii) (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(vii) (c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, excise duty or value added tax on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs.million)4 |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act, 1961 |
Income Tax |
13 |
A.Y. 2002-03 |
Supreme Court |
Income Tax Act, 1961 |
Income Tax |
20 |
A.Y. 2003-04 to 2005-06 |
High Court, Delhi |
Income Tax Act, 1961 |
Income Tax |
30 |
A.Y. 2010-11 & 2011-12 |
Income tax appellate Tribunal |
Income Tax Act, 1961 |
Income Tax |
6 |
A.Y. 2008-09 |
Commissioner of Income Tax (Appeals) |
Income Tax Act, 1961 |
Income Tax |
3 |
A.Y. 2015-2016 |
Dispute Resolution Panel (DRP) |
U.P. VAT Act, 2008 |
Value Added Tax & Sales Tax |
1 |
2017-18 |
Additional commissioner (Appeals) |
Karnataka VAT Act, 2003 |
Value Added Tax & Sales Tax |
2 |
2008-09 |
Karnataka Appellate Tribunal |
Central Excise Act, 1944 |
Excise |
3 |
2011-12 & 2017-2018 |
Additional Commissioner |
Central Excise Act, 1944 |
Excise |
8 |
2012-13 to 2013-14, 2014-2015 & 2015-2016 to 2017-2018 |
Commissioner (Appeals) |
Central Excise Act, 1944 |
Excise |
12 |
2007-2008 |
High Court, Allahabad |
Central Excise Act, 1944 |
Excise |
3 |
2014-2015, 2015-2016 & 2016-2017 |
CESTAT |
Central Excise Act, 1944 |
Excise |
3 |
2015-16 to 2017-18 |
Commissioner |
Finance Act, 1994 |
Service tax |
2 |
1999-00 to 2000-01 |
High Court, Allahabad |
Finance Act, 1994 |
Service tax |
7 |
2010-11 |
Additional Commissioner |
Finance Act, 1994 5 |
Service tax |
0 |
2009-10 to 2014-15 |
Commissioner (Appeals) |
Finance Act, 1994 |
Service tax |
18 |
2002-2004, 2007-08, 2009-10 to 2014-15, & 2015-16, |
CESTAT |
Finance Act, 1994 ** |
Service tax |
0 |
2009-10 |
Deputy Commissioner |
Finance Act, 1994 |
Service tax |
2 |
2002-03 to 2003-04 & 2010-11 |
Commissioner |
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a bank. The Company does not have any dues outstanding to debenture holder or financial institution or government in the nature of loan or borrowing.
(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
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 Mothers on Sumi Systems Limited ("the Companyâ) as of March 31, 2019 in conjunction with our audit of the standalone 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 issued by the Institute of Chartered Accountants of India. 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 the 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 Companies Act, 2013.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 with reference to these standalone financial statements 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 over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, 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 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 internal financial controls over financial reporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements
A company''s internal financial control over financial reporting with reference to these standalone 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 company''s internal financial control over financial reporting with reference to these standalone financial statements includes 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 authorizations of management and directors of the company; and (3) 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 With Reference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone 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 over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements 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, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2019, 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 issued by the Institute of Chartered Accountants of India.
For S.R. Batliboi & CO. LLP
Chartered Accountants ICAI
Firm Registration Number: 301003E/E300005
Per Pankaj Chadha
Partner
Membership Number: 091813
Place of Signature: Noida
Date: May 27, 2019
Mar 31, 2018
INDEPENDENT AUDITORS'' REPORT
To the Members of Motherson Sumi Systems Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Motherson Sumi Systems Limited ("the Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Actâ) with respect to the preparation of these standalone 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone 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 standalone financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone 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 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 standalone 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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone 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 March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matter
The financial statements of the Company for the year ended March 31, 2017, included in these standalone financial statements, have been audited by the predecessor auditor who expressed an unmodified opinion on those statements on May 19, 2017.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 ("the Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 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 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 it appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity 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 Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 over financial reporting of the Company with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2â to this report;
(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 standalone financial statements - Refer Note
20 and Note 43 to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 36 to the standalone financial statements;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory
Requirements" of our report of even date
Re: Motherson Sumi Systems Limited (the "Company")
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(i) (b) All fixed assets were physically verified by the management in the previous year in accordance with a planned programme of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(i) (c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification.
(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 Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of its products and related services, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues applicable to it.
(vii) (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(vii) (c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, customs duty, excise duty or value added tax on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs, million)* |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act, 1961 |
Income Tax |
13 |
2002-03 |
Supreme Court |
Income Tax Act, 1961 |
Income Tax |
20 |
2003-04 to 2005-06 |
High Court |
Income Tax Act, 1961 |
Income Tax |
30 |
2010-11 & 2011-12 |
Income tax appellate Tribunal |
Income Tax Act, 1961 |
Income Tax |
21 |
2003-04 to 2004-05, 2006-07 & 2008-09 |
Commissioner of Income Tax (Appeals) |
Name of the statute |
Nature of dues |
Amount (Rs, million)2 |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act, 1961 |
Income Tax |
15 |
2014-15 |
Dispute resolution panel (DRP) |
U.P. VAT Act, 2008 |
Value Added Tax & Sales Tax |
1 |
2013-14 |
Assessing Officer |
U.P. VAT Act, 2008 |
Value Added Tax & Sales Tax |
1 |
2017-18 |
Additional commissioner (Appeals) |
Karnataka VAT Act, 2003 |
Value Added Tax & Sales Tax |
2 |
2008-09 |
High Court |
Central Excise Act, 1944 |
Excise |
4 |
2011-12 & 2014-15 to 2015-16 |
Additional Commissioner |
Central Excise Act, 1944 |
Excise |
4 |
2007-08 & 2012-13 to 2013-14 |
Commissioner (Appeals) |
Central Excise Act, 1944 |
Excise |
8 |
2012-13 |
High Court |
Central Excise Act, 19443 |
Excise |
0 |
2011-12 |
CESTAT |
Central Excise Act, 1944 |
Excise |
2 |
2012-13 to 2013-14 |
Commissioner |
Finance Act, 1994 |
Service tax |
2 |
1999-00 to 2000-01 |
High Court |
Finance Act, 1994 |
Service tax |
7 |
2010-11 |
Additional Commissioner |
Finance Act, 1994 |
Service tax |
5 |
2009-10 to 2014-15 |
Commissioner (Appeals) |
Finance Act, 1994 |
Service tax |
14 |
2007-08, 2009-10, 2010-11 & 2015-16 |
CESTAT |
Finance Act, 1994** |
Service tax |
0 |
2009-10 |
Deputy Commissioner |
Finance Act, 1994 |
Service tax |
2 |
2002-03 to 2003-04 & 2010-11 |
Commissioner |
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a bank. The Company does not have any dues outstanding to debenture holder or financial institution or government in the nature of loan or borrowing.
(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Report on the Internal Financial Controls under Clause
(i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Actâ)
We have audited the internal financial controls over financial reporting of Motherson Sumi Systems Limited ("the Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone 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 issued by the Institute of Chartered Accountants of India. 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 the 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 Companies Act, 2013.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 with reference to these standalone financial statements 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 over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, 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 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 internal financial controls over financial reporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements
A company''s internal financial control over financial reporting with reference to these standalone 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 company''s internal financial control over financial reporting with reference to these standalone financial statements includes 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 authorizations of management and directors of the company; and (3) 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 With Reference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone 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 over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements 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, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2018, 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 issued by the Institute of Chartered Accountants of India.
For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Pankaj Chadha
Partner
Membership Number: 091813
Place of Signature: Noida
Date: May 23, 2018
Mar 31, 2017
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying standalone financial statements of Motherson Sumi Systems Limited(âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. 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 standalone Ind AS financial statements to 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 specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunder including 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.
5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10)of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorsâ judgment,including the assessment of the risks of material misstatement of the standalone 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 standalone 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 standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 March 31, 2017, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other Matter
9. The financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2016 and March 31, 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated May 17, 2016 and May 12, 2015 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (âthe Orderâ), 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 B a statement on the matters specified in paragraphs 3 and 4 of the Order.
11. 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 (including other comprehensive income), the Cash Flow Statement 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 standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31, 2017taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 A.
(g) 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 knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2017on its financial position in its standalone Ind AS financial statements - Refer Note 20 and Note 43;
ii. The Company has made provision as at March 31, 2017, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 36;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017;
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 November 8, 2016 to December 30, 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 44.
Annexure B to Independent Auditorsâ Report
Referred to in paragraph 10 of the Independent Auditorsâ Report of even date to the members of Motherson Sumi Systems Limited on the standalone Ind AS financial statements as of and for the year ended March 31, 2017
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) The title deeds of immovable properties, as disclosed in Note 3 on fixed assets to the financial statements, are held in the name of the Company.
ii. The physical verification of inventory excluding stocks with third parties have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them.
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. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said 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 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, 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.
vii. (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 regular in depositing undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess 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 duty of customs which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax, duty of excise and value added tax as at March 31, 2017 which have not been deposited on account of a dispute, are as follows:
Name of the statute |
Nature of dues |
Amount in Rs. (million) (*) |
Period (AY) to which the amount relates |
Forum where the dispute is pending |
Income Tax Act, 1961 |
Income Tax |
12.69 |
2002-03 |
Honâble Supreme Court |
Income Tax Act, 1961 |
Income Tax |
19.62 |
2003-04, 2004-05and 2005-06 |
Honâble High Court, Delhi |
Income Tax Act, 1961 |
Income Tax |
53.45 |
2004-05 and 201011 to 2012-13 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income Tax |
21.77 |
2003-04, 2004-05, 2006-07&2008-09 |
Commissioner of Income Tax (Appeals) |
Central Excise Act, 1944 |
Central Excise |
22.49 |
2005-06 to 200809 |
Honâble High Court, Allahabad |
Central Excise Act, 1944 |
Central Excise |
11.60 |
2007-08 |
Custom, Excise and Service Tax Appellate Tribunal |
Central Excise Act, 1944 |
Central Excise |
4.78 |
2014-15 to 2015-16 |
Commissioner of Central Excise (Appeals) |
Central Excise Act, 1944 |
Service Tax |
1.60 |
1999-2000 to 200102 |
Honâble High Court, Allahabad |
Central Excise Act, 1944 |
Service Tax |
8.12 |
2002-03 to 200304 |
Custom, Excise and Service Tax Appellate Tribunal |
Central Excise Act, 1944 |
Service Tax |
8.14 |
2007 to 2015 |
Commissioner of Central Excise (Appeals) |
Karnataka VAT Act, 2003 |
Value Added Tax & Sales Tax |
9.18 |
2010-11 |
Honâble High Court, Karnataka |
U.P. VAT Act, 2008 |
Value Added Tax & Sales Tax |
7.69 |
2008-09 & 2011-12 |
Additional Commissioner (Appeals) |
* Amount under dispute is net of advance deposited, if any.
viii. 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 loans or borrowings to any financial institution or bank or Government as at the balance sheet date. The Company has no debentures as at the balance sheet date.
ix. In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied for the purposes for which they were obtained. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments).
x. 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 by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. 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. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standards (IndAS) 24, related party disclosures specified in the Companies (Indian Accounting Standards) Rule, 2015 (as amended) under Section 133 of Act.
xiv. The Company has made a private placement of shares during the year under review, in compliance with the requirements of Section 42 of the Act. The amounts raised have been used for the purpose for which funds were raised.
xv. The Company has not entered into any noncash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company,
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company,
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Rajib Chatterjee
Place: Noida Partner
Date: May 19, 2017 Membership Number: 057134
Mar 31, 2016
1. We have audited the accompanying standalone financial statements of
Motherson Sumi Systems Limited ("the Company"), which comprise the
Balance Sheet as at March 31 2016, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone
Financial Statements
2. 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 standalone financial statements to
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014 and Accounting Standard
30, Financial Instruments: Recognition and Measurement issued by the
Institute of Chartered Accountants of India to the extent it does not
contradict any other accounting standard referred to in Section 133 of
the Act read with Rule 7 of Companies (Accounts) Rules, 2014. 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 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 standalone
financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules
made thereunder including the accounting standards and matters which
are required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements 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.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the 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 auditor considers internal financial control relevant
to the Company''s preparation of the 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 financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
Opinion
8. 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 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 March 31, 2016, and its profit and its
cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by ''the Companies (Auditor''s Report) Order, 2016'',
issued by the Central Government of India in terms of sub-section (11)
of section 143 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 B of a statement on
the matters specified in paragraphs 3 and 4 of the Order.
10. 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, and the Cash
Flow Statement 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 Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and
Accounting Standard 30, Financial Instruments: Recognition and
Measurement issued by the Institute of Chartered Accountants of India
to the extent it does not contradict with any other accounting standard
referred to in Section 133 of the Act read with Rule 7 of Companies
(Accounts) Rules , 2014.
(e) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
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 A.
(g) With respect to the other matters to be included in the Auditors''
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our knowledge and belief
and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending
litigations as at March 31, 2016 on its financial position in its
standalone financial statements - Refer Note 32 & 50;
ii. The Company has made provision as at March 31, 2016, as required
under the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts including derivative
contracts - Refer Note 43;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended March 31, 2016.
Annexure A to Independent Auditors'' Report
Referred to in paragraph 10(f) of the Independent Auditors'' Report of
even date to the members of Motherson Sumi Systems Limited on the
standalone financial statements for the year ended March 31, 2016
Report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial
reporting of Motherson Sumi Systems Limited ("the Company") as of March
31, 2016 in conjunction with our audit of the standalone financial
statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
2. 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 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
3. 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 on
Audit of Internal Financial Controls Over Financial Reporting (the
"Guidance Note") and the Standards on Auditing 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.
4. 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 judgement, including the assessment of the
risks of material misstatement of the financial statements, whether due
to fraud or error.
5. 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
6. 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 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 (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 company''s assets that could have a material effect
on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial
Reporting
7. 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
8. 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 March 31, 2016, 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 issued by the Institute of Chartered Accountants of India
Annexure B to Independent Auditors'' Report
Referred to in paragraph 9 of the Independent Auditors'' Report of even
date to the members of Motherson Sumi Systems Limited on the standalone
financial statements for the year ended March 31, 2016
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) The title deeds of immovable properties, as disclosed in Note 12 on
fixed assets to the financial statements, are held in the name of the
Company.
ii. The physical verification of inventory [excluding stocks with
third parties] have been conducted at reasonable intervals by the
Management during the year. In respect of inventory lying with third
parties, these have substantially been confirmed by them.
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.
Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and
(iii)(c) of the said 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
185 and 186 of the Companies Act, 2013 in respect of the loans and
investments made, and guarantees and security provided by it.
v. The Company has not accepted any deposits from the public within
the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules
framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the
Company is required to maintain cost records as specified under Section
148(1) of the Act in respect of its products. We have broadly reviewed
the same, 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.
vii. (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 regular in depositing undisputed statutory dues, including provident
fund, employees'' state insurance, sales tax, service tax, income tax,
duty of customs, duty of excise, value added tax 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 duty of
custom which have not been deposited on account of any dispute. The
particulars of dues of income tax, sales tax, service tax, duty of
excise and value added tax as at March 31, 2016 which have not been
deposited on account of a dispute, are as follows:
Name of the statute Nature of Amount Period to which
the amount
dues (Rs. in relates
million)
(*)
Income Tax Act, 1961 Income Tax 12.69 2002-03
Income Tax Act, 1961 Income Tax 43.46 2003-04 to 2005-06
Income Tax Act, 1961 Income Tax 6.39 2006-07 and 2008-09
Income Tax Act, 1961 Income Tax 31.82 2004-05, 2010-11
& 2011-12
Income Tax Act, 1961 Income Tax 22.01 2012-13
Central Excise
Act, 1944 Central Excise 22.49 2005-06 to 2008-09
Central Excise
Act, 1944 Central Excise 24.83 2000-01, 2001-02,
2003-04, 2005-06,
2007-08
Central Excise
Act, 1944 Service Tax 1.60 1999-200 0 to 2001-02
Central Excise
Act, 1944 Service Tax 8.12 2002-03 to 2003-04
Central Excise
Act, 1944 Service Tax 9.45 2007 to 2014
U.P. VAT Act, 2008 Value Added 21.60 2008-09,2010-11 &
2011-12
Tax & Sales Tax
Name of the Statute Forum where the dispute is pending
Income Tax Act, 1961 Hon''ble Supreme Court, Delhi
Income Tax Act, 1961 Hon''ble High Court
Income Tax Act, 1961 CIT(A)
Income Tax Act, 1961 ITAT
Income Tax Act, 1961 DRP
Central Excise Act, 1944 Hon''ble High Court
Central Excise Act, 1944 CESTAT
Central Excise Act, 1944 Hon''ble High Court, Allahabad
Central Excise Act, 1944 CESTAT
Central Excise Act, 1944 Commissioner of Central Excise (Appeals)
U P VAT Act, 2008 Additional Commissioner (Appeals)
* Amount under dispute is net of advance deposited, if any.
viii. 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 loans or borrowings to any financial institution or
bank or Government or dues to debenture holders as at the balance sheet
date.
ix. In our opinion, and according to the information and explanations
given to us, the moneys raised by way of term loans have been applied
for the purposes for which they were obtained. The Company has not
raised any money by way of initial public offer or further public offer
(including debt instruments).
x. 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 by the Company or on the Company by its officers or
employees, noticed or reported during the year, nor have we been
informed of any such case by the Management.
xi. 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. As the Company is not a Nidhi Company and the Nidhi Rules, 2014
are not applicable to it, the provisions of Clause 3(xii) of the Order
are not applicable to the Company.
xiii. The Company has entered into transactions with related parties
in compliance with the provisions of Sections 177 and 188 of the Act.
The details of such related party transactions have been disclosed in
the financial statements as required under Accounting Standard (AS) 18,
Related Party Disclosures specified under Section 133 of the Act, read
with Rule 7 of the Companies (Accounts) Rules, 2014.
xiv. The Company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures during
the year under review. Accordingly, the provisions of Clause 3(xiv) of
the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with
its directors or persons connected with him. Accordingly, the
provisions of Clause 3(xv) of the Order are not applicable to the
Company.
xvi. The Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1934. Accordingly, the provisions of
Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Rajib Chatterjee
Place: Noida Partner
Date: May 17, 2016 Membership Number: 057134
Mar 31, 2015
1. We have audited the accompanying standalone financial statements of
Motherson Sumi Systems Limited("the Company"), which comprise the
Balance Sheet as at March 31, 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
2. 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 standalone financial statements to
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies(Accounts) Rules, 2014. 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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules
made thereunder including the accounting standards and matters which
are required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10)of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements 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.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s 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 auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view, in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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 financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
Opinion
8. 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 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 March 31, 2015, and its profit and its
cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by ''the Companies (Auditor''s Report) Order, 2015'',
issued by the Central Government of India in terms of sub- section (11)
of section 143 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 3 and 4 of the Order.
10. 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, and the Cash
Flow Statement 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 Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) 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 knowledge and belief
and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations
as at March 31, 2015 on its financial position in its standalone
financial statements - Refer Note 32 and 49;
ii. The Company has made provision as at March 31, 2015, as required
under the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts including derivative
contracts - Refer Note 43;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended March 31, 2015.
Annexure to Independent Auditors'' Report Referred to in paragraph 9 of
the Independent Auditors'' Report of even date to the members of
Motherson Sumi Systems Limited on the standalone financial statements
as of and for the year ended March 31, 2015
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.
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. The Company has granted unsecured loans, to one company covered in
the register maintained under Section 189 of the Act. The Company has
not granted any secured/ unsecured loans to firms or other parties
covered in the register maintained under Section 189 of the Act.
(a) In respect of the aforesaid loans, the party has repaid the
outstanding principal amount during the year, as stipulated, and was
also regular in payment of interest.
(b) In respect of the aforesaid loans, there is no overdue amount more
than Rupees One Lakh.
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. The Company has not accepted any deposits from the public within the
meaning of Sections 73,74, 75 and 76 of the Act and the rules framed
there under to the extent notified.
vi. 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
specified under sub- section (1) of Section 148 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.
vii (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 service tax and provident fund, though there has been a slight delay
in a few cases, and is regular in depositing undisputed statutory dues,
including employees'' state insurance, sales tax, income tax, wealth
tax, duty of customs , duty of excise, value added tax 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
and duty of custom which have not been deposited on account of any
dispute. The particulars of dues of income tax, sales tax, service tax,
duty of excise and value added tax as at March 31, 2015 which have not
been deposited on account of a dispute, are as follows:-
Name of the statute Nature of dues Amount
(Rs. in Million)
Income Tax Act, 1961 Income Tax 18.20
Income Tax Act, 1961 Income Tax 0.75
Income Tax Act, 1961 Income Tax 34.47
Income Tax Act, 1961 Income Tax 1.39
Central Excise Act,
1944 Central Excise 0.019
Central Excise Act, 1944 Central Excise 47.32
Central Excise Act, 1944 Central Excise 1.92
Central Excise Act, 1944 Service Tax 1.61
Central Excise Act, 1944 Service Tax 8.12
Central Excise Act, 1944 Service Tax 2.78
U.P Trade Act, 1948 Value Added Tax 8.15
& Sales Tax
U.P Trade Act, 1948 Value Added Tax 13.91
& Sales Tax
Name of the statue Period to which the Forum where the dispute
is pending
amount relates
Income Tax Act, 1961 2003-04 to 2005-06 Hon''ble High Court
Income Tax Act, 1961 2006-07 CIT(A)
Income Tax Act, 1961 2010-11 & 2011-12 Dispute Resolution Panel
(DRP)
Income Tax Act, 1961 2004-05 ITAT
Central Excise Act,
1944 2000-01 to 2003-04 Hon''ble Supreme Court
Central Excise Act,
1944 2000-01, 2001-02, CESTAT
2003-04, 2005-06
to 2008-09
Central Excise Act,
1944 2010-11 Commissioner of Central
Excise (Appeals)
Central Excise Act,
1944 1999-2000 Hon''ble High Court,
Allahabad
to 2001-02
Central Excise Act,
1944 2002-03 to 2003-04 CESTAT
Central Excise Act,
1944 2007 to 2009 Commissioner of Central
Excise (Appeals)
& 2011 to 2014
U.P Trade Act, 1948 2008-09 Tribunal
&2009-2010
U.P Trade Act, 1948 2010-11 Additional Commissioner
(Appeals)
* Amount under dispute is net of advance deposited, if any.
(c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 1956 and the rules
made thereunder.
viii. 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.
ix. 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.
x. In our opinion, and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
xi. In our opinion, and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained.
xii. 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 Price Waterhouse
Chartered Accountants LLP (*)
Firm Registration Number: 012754N/N500016
Rajib Chatterjee
Place: Noida Partner
Date: May 12, 2015 Membership Number: 057134
(*) Formerly known as "Price Waterhouse"
Mar 31, 2014
1. We have audited the accompanying fi nancial statements of Motherson
Sumi Systems 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 fi nancial statements that give a true and fair view of the fi
nancial position, fi nancial performance and cash fl ows of the Company
in accordance with the Accounting Standards notifi ed 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 and Accounting
Standard 30, Financial Instruments: Recognition and Measurement issued
by the Institute of Chartered Accountants of India to the extent it
does not contradict any other accounting standard referred to in
sub-section (3C) of Section 211 of the Act. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the fi nancial
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 fi nancial
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 fi nancial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the fi nancial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the fi nancial
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 fi nancial
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 fi nancial
statements.
5. We believe that the audit evidence we have obtained is suffi cient
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 fi nancial 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 fl ows 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 specifi ed 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 notifi ed 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 disqualifi ed 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.
Annexure to Independent Auditors'' Report Referred to in paragraph 7 of
the Independent Auditors'' Report of even date to the members of
Motherson Sumi Systems Limited on the fi nancial 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 fi xed
assets.
(b) The fi xed assets are physically verifi ed 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 fi xed assets has been physically verifi ed
by the Management during the year and no material discrepancies have
been noticed on such verifi cation.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fi xed assets has not been disposed
off by the Company during the year.
ii. (a) The inventory excluding stocks with third parties has been
physically verifi ed by the Management during the year. In respect of
inventory lying with third parties, these have substantially been confi
rmed by them. In our opinion, the frequency of verifi cation is
reasonable.
(b) In our opinion, the procedures of physical verifi cation 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 verifi cation of inventory as
compared to book records were not material.
iii. (a) The Company has granted an unsecured loan, to one company
covered in the register maintained under Section 301 of the Act. The
maximum amount involved during the year and the year-end balance of
such loans aggregated to Rs. 150 million and Rs. 100 million, respectively.
The Company has not granted any secured/ unsecured loans to fi rms or
other parties covered in the register maintained under Section 301 of
the Act.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(c) In respect of the aforesaid loans, the parties are repaying the
principal amounts, as stipulated, and are also regular in payment of
interest as applicable.
(d) In respect of the aforesaid loans, there is no overdue amount more
than Rupees One Lakh.
(e) The Company has not taken any loans, secured or unsecured, to
companies, fi rms 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, we are
of the opinion that the particulars of all contracts or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
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 entry 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, income tax, wealth tax, service 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, 2014, for a period of more
than six months from the date they became payable are as follows:
Name Nature Amount Period Due Date of
of the of dues (Rs.in to which date Payment
statute Million) the
amount
relates
The Entry Tax 0.78 2011-12 March 31, Not Paid
Rajasthan 2012
Entry Tax
- Goods
Act, 2003
(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
and customs duty which have not been deposited on account of any
dispute. The particulars of dues of income tax, sales tax, service tax,
as at March 31, 2014 which have not been deposited on account of a
dispute, are as follows:
Name of the statute Nature of dues Amount
(Rs.in Millions)
Income Tax Act, 1961 Income Tax 13.07
Income Tax Act, 1961 Income Tax 0.93
U.P Trade Act, 1948 Value Added Tax, 32.51
CST, Sales Tax
U.P Trade Act, 1948 Sales Tax 10.08
U.P Trade Act, 1948 Sales Tax 0.72
U.P Trade Act, 1948 Sales Tax 2.75
Central Excise Act,
1944 Central Excise 0.02
Central Excise Act, 1944 Central Excise 24.60
Central Excise Act, 1944 Service Tax 1.61
Central Excise Act, 1944 Service Tax 11.39
Central Excise Act, 1944 Service Tax 2.14
Central Excise Act, 1944 Service Tax 0.31
Central Excise Act, 1944 Service Tax 0.38
UP Tax on Entry of Goods Entry Tax 3.37
Rules, 1999
Name of the Statue Period to which Forum where the dispute
is pending
the amount relates
Income Tax Act, 1961 2003-04 ITAT
2004-05
2005-06
Income Tax Act, 1961 2006-07 CIT (A)
2010-11
U.P Trade Act, 1948 2007-08 Joint Commissioner
(Corporate Circle),
2008-09 Commercial Tax Department,
Noida
2009-10
U.P Trade Act, 1948 2000-01 to
2006-07 Assessing Officer
U.P Trade Act, 1948 2006-07 Additional Commissioner
(Appeals)
U.P Trade Act, 1948 2005-06 Joint Commissioner,
Commercial Tax
Department, Noida
Central Excise Act, 1944 2000-01 to
2003-04 Hon''able Supreme Court
Central Excise Act, 1944 2000-01 &
2001-02 CESTAT
2005-06 to
2008-09
2003-04 &
2005-06
Central Excise Act, 1944 1999-00 to
2001-02 Hon''able High Court,
Allahabad
Central Excise Act, 1944 2002-03 CESTAT
2002-03 to
2003-04
2005-06
Central Excise Act, 1944 2007-09 Commissioner of
Central Excise (Appeals)
Central Excise Act, 1944 2003-04 Hon''able High Court,
Madras
Central Excise Act, 1944 2012-13 Commissioner of Central
Excise (Appeals)
2013-14
UP Tax on Entry of Goods
Rules, 1999 1999-00 to
2001-02 Hon''able High Court,
Allahabad
x. The Company has no accumulated losses as at the end of the fi
nancial year and it has not incurred any cash losses in the fi nancial
year ended on that date or in the immediately preceding fi nancial
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 fi nancial 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 benefi t 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 terms and conditions of the guarantees given by the
Company for loans taken by others from banks or fi nancial institutions
during the year, are not prejudicial to the interest of the Company.
xvi. In our opinion, and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained.
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 Price Waterhouse
Firm Registration Number: 012754N
Chartered Accountants
Rajib Chatterjee
Place: Noida Partner
Date: May 22, 2014 Membership Number 057134
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying financial statements of Motherson
Sumi Systems 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 and proper returns adequate for the purposes of our audit
have been received from branches not visited by us;
(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 and with the returns received from branches not visited by us ;
(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 balance sheet date, 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.
Annexure to Independent Auditors'' Report
Referred to in paragraph 7 of the Independent Auditors'' Report of even
date to the members of Motherson Sumi Systems 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 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 granted unsecured loans, to one company
covered in the register maintained under Section 301 of the Act. The
maximum amount involved during the year and the year-end balance of
such loans aggregated to Rs. 200 million and Rs. 150 million,
respectively.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(c) In respect of the aforesaid loans, the parties are repaying the
principal amounts, as stipulated, and are also regular in payment of
interest as applicable.
(d) In respect of the aforesaid loans, there is no overdue amount more
than Rupees One Lakh.
(e) 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 in respect of loans taken 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, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
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 regular in depositing the 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
and customs duty which have not been deposited on account of any
dispute. The particulars of dues of income tax, sales tax, service tax
and excise duty as at March 31, 2013 which have not been deposited on
account of a dispute, are as follows
Name of the statute Nature of dues Amount
(in Rs.
million)
Central Excise Act, 1944 Central Excise 0.019
Central Excise Act, 1944 Central Excise 1.435
Central Excise Act, 1944 Central Excise 22.49
UP Tax on Entry of Entry Tax 3.37
Goods Rules,1999
Central Excise Act, 1944 Central Excise 0.68
Income Tax Act, 1961 Income Tax 0.562
UP Trade Tax Act Sales Tax 10.083
UP Trade Tax Act, 1948 Sales Tax 0.484
UP Trade Tax Act, 1948 Sales Tax 0.24
Central Excise Act, 1944 Service Tax 3.275
Central Excise Act, 1944 Service Tax 0.385
Central Excise Act, 1944 Service Tax 1.60
Central Excise Act, 1944 Service Tax 2.62
Central Excise Act, 1944 Service Tax 5.088
Central Excise Act, 1944 Service Tax 2.41
UP Trade Tax Act Value Added Tax 0.052
Karnataka VAT Act, 2003 Value Added Tax 0.720
UP Trade Tax Act Value Added Tax 14.536
UP Trade Tax Act Value Added Tax & 9.869
CST
UP Trade Tax Act Value Added Tax & 12.457
Sales Tax
Name of the Statute Period to which the Forum where the dispute
is pending
amount relates
Central Excise Act,
19944 2000-01 to 2003-04 Supreme Court of India
Central Excise Act,
1944 2000-01 to 2001-02 Customs, Excise and
Service Tax Appellate
Tribunal, Delhi
Central Excise Act,
1944 2005-06 t0 2008-09 Customs, Excise and
Service Tax Appellate
Tribunal, Noida
UP Tax on Entry of
Goods Rules, 1999 1999-00 to 2001-02 Hon''ble High Court,
Allahabad
Central Excise Act,
1944 2003-04 & 2005-06 Customs, Excise and
Service Tax Appellate
Tribunal
Income Tax Act 1961 AY 2002-03 Income Tax Appellate
Tribunal
UP Trade Tax Act 2003-2004 Supreme Court
UP Trade Tax Act 1948 2006-07 Additional Commissioner
(Appeals)
UP Trade Tax Act 1948 2006-07 Additional Commissioner
(Appeals)
Central Excise Act
1944 2002-03 and 2003-04 Commissioner of Central
Excise (Appeals), Noida
Central Excise Act,
1944 2007-08 to 2010-11 Customs, Excise and
Service Tax Appellate
Tribunal
Central Excise Act,
1944 1999-00 to 2001-02 Hon''ble High Court,
Allahabad
Central Excise Act,
1944 2007-2009 Commissioner of Central
Excise (Appeals)
Central Excise Act,
1944 2002-2003 Commissioner of Central
Excise
Central Excise Act,
1944 2007-09 Commissioner of Central
Excise (Appeals)
UP Trade Tax Act 2010-11 Additional Commissioner
(Appeals), Noida
Karnataka VAT Act,
2003 2007-08 Joint Commissioner
(Corporate Circle),
Commercial Tax
Department, Bangalore
UP Trade Tax Act 2007-08 Joint Commissioner
(Corporate Circle),
Commercial Tax
Department, Noida
UP Trade Tax Act 2008-09 Joint Commissioner
(Corporate Circle),
Commercial Tax
Department, Noida
UP Trade Tax Act 2009-2010 Joint Commissioner
(Corporate Circle),
Commercial Tax
Department, Noida
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 terms and conditions of the guarantees given by the
Company for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
xvi. In our opinion, and according to the information and explanations
given to us, except for the unutilized proceeds of term loans, to the
extent of Rs.500 million, that were obtained for capital expenditure
but held in fixed deposit with banks at the year end, the term loans
have been applied for the purposes for which they were obtained.
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 Price Waterhouse
Firm Registration Number: 012754N
Chartered Accountants
Anupam Dhawan
Noida Partner
May 17, 2013 Membership Number 084451
Mar 31, 2012
1. We have audited the attached Balance Sheet of Motherson Sumi
Systems 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 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 (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 aff airs 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 Motherson Sumi Systems Limited on the financial statements
as of and for the year ended March 31, 2012
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 (including stocks with third parties) has been
physically verified by the Management during the year. 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 granted an unsecured loan to a Company covered
in the register maintained under Section 301 of the Act. The maximum
amount involved during the year and the year-end balance of such loans
aggregated to Rs. 1,000 Lakhs and Rs. 1,000 Lakhs respectively.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not prima facie prejudicial to the interest of the
Company.
(c) In respect of the aforesaid loan, the Company is repaying the
principal amounts, as stipulated, and is also regular in payment of
interest, as applicable.
(d) In respect of the aforesaid loans, there is no overdue amount more
than Rupees One Lakh.
(e) 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. Accordingly, clauses (iii) (e), (iii) (f
) and (iii) (g) of paragraph 4 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 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.
5. (a) In our opinion, and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
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, 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, the Company
is regular in depositing the 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, the particulars of dues of
income tax, sales tax, wealth tax, service tax, customs duty and excise
duty as at March 31, 2012 which have not been deposited on account of a
dispute, are as follows:
Name of Statute Nature of dues Amount (Rs.'000) Period to which the
amount relates
Uttar Pradesh
Trade Tax Act Sales Tax 10,083 2003-2004
Central Excise
Act, 1944 Excise Duty 678 2003-04 & 2005-06
Central Excise
Act, 1944 Service Tax 3,275 2002-03 and 2003-04
Uttar Pradesh
Trade Tax Act Value Added Tax 52 2010-11
Income Tax
Act, 1961 Income Tax 562 AY 2002-03
Income Tax
Act, 1961 Income Tax 3,164 AY 2005-06
Central Excise
Act, 1944 Central Excise 19 2000-01 to 2003-04
Central Excise
Act, 1944 Service Tax 74 2006-07
Central Excise
Act, 1944 Service Tax 68 2007-08
Central Excise
Act, 1944 Service Tax 190 2008-09
Central Excise
Act, 1944 Service Tax 44 2006-07 and 2007-08
Central Excise
Act, 1944 Service Tax 563 2008-09 to 2009-10
Central Excise
Act, 1944 Service Tax 385 2007-08 to 2010-11
Central Excise
Act, 1944 Central Excise 1,370 2003-04
Central Excise
Act, 1944 Central Excise 1,436 2000-01 to 2001-02
Central Excise
Act, 1944 Central Excise 90 2007-08 to 2008-09
Central Excise
Act, 1944 Central Excise 1,720 2007-08
Central Excise
Act, 1944 Service Tax 2,786 1999-00 to 2001-02
UP Tax on
Entry of Goods Entry Tax 3,307 1999-00 to 2001-02
Rules,1999
Uttar Pradesh
Value Added Value Added Tax 15,561 2007-08
Tax Act, 2008
Central Sales
Tax Act, 1956 Central Sales Tax 3,564 2007-08
Central Excise
Act, 1944 Central Excise 22,492 2005-06 t0 2008-09
UP Trade
Tax Act, 1948 Sales Tax 484 2006-07
Central
Excise Act,
1944 Service Tax 311 1999-2000
Sales Tax Sales Tax 437 2006-07
Name of Statute Forum where the dispute is pending
Uttar Pradesh Trade Tax Act Supreme Court of India
Central Excise Act, 1944 Customs, Excise and Service Tax
Appellate Tribunal
Central Excise Act, 1944 Commissioner of Central Excise
(Appeals), Noida
Uttar Pradesh Trade Tax Act Additional Commissioner (Appeals),
Noida
Income Tax Act, 1961 Income Tax Appellate Tribunal
Income Tax Act, 1961 Commissioner of Income Tax (Appeals)
Central Excise Act, 1944 Supreme Court of India
Central Excise Act, 1944 Commissioner (Appeals), Bangalore
Central Excise Act, 1944 Customs, Excise and Service
Tax Appellate Tribunal, Bangalore
Central Excise Act, 1944 Commissioner (Appeals)
Central Excise Act, 1944 Customs, Excise and Service Tax
Appellate Tribunal
Central Excise Act, 1944 Commissioner of Central
Excise (Appeal)
Central Excise Act, 1944 Customs, Excise and Service
Tax Appellate Tribunal
Central Excise Act, 1944 Customs, Excise and Service Tax
Appellate Tribunal, Chennai
Central Excise Act, 1944 Customs, Excise and Service Tax
Appellate Tribunal, Delhi
Central Excise Act, 1944 Commissioner (Appeals)
Central Excise Act, 1944 Customs, Excise and Service Tax
Appellate Tribunal, Gurgaon
Central Excise Act, 1944 Hon'ble High Court, Allahabad
UP Tax on Entry of Goods
Rules,1999 Hon'ble High Court, Allahabad
Uttar Pradesh Value Added
Tax Act, 2008 Joint Commissioner
(Corporate Circle), Commercial Tax
Department, Noida
Central Sales Tax Act, 1956 Joint Commissioner (Corporate Circle),
Commercial Tax Department, Noida
Central Excise Act, 1944 Customs, Excise and Service Tax
Appellate Tribunal, Noida
UP Trade Tax Act, 1948 Additional Commissioner (Appeals)
Central Excise Act, 1944 Hon'ble High Court, Chennai
Sales Tax Additional Commissioner (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 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 terms and conditions of the guarantees given by the
Company for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained.
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 Price Waterhouse
Firm Registration Number: 012754N
Chartered Accountants
Anupam Dhawan
Place: Noida Partner
Date: May 28, 2012 Membership Number: F084451
Mar 31, 2010
1. We have audited the attached Balance Sheet of Motherson Sumi
Systems Limited (the "Company") as at March 31, 2010, 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 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, 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 balance sheet date;
(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
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.
(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, 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. a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
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, 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, service-tax, excise duty and cess as at balance
sheet date which have not been deposited on account of a dispute, are
as follows:
Name of Statute Nature of dues Amount (Rs.) Paid under
protest (Rs.)
Central Excise Act, 1944 Central Excise 1,435,600 -
Central Excise Act, 1944 Central Excise 3,830,600 -
Central Excise Act, 1944 Central Excise 2,198,740 -
Central Excise Act, 1944 Central Excise 200,000 -
Central Excise Act, 1944 Central Excise 197,000 -
Central Excise Act, 1944 Central Excise 19,000 -
UP Tax on Entry of Entry Tax 8,186,190 4,535,904
Goods Rules, 1999
Income Tax Act, 1961 Income tax 2,184,862 1,209,610
Sales Tax Sales Tax 3,379,769 2,779,642
UP Trade Tax Act, 1948 Right to use & 2,241,541 -
amortization
UP Trade Tax Act, 1948 Sales Tax 483,740 -
Central Excise Act, 1944 Service Tax 28,000 -
Central Excise Act, 1944 Service Tax 128,340 -
Central Excise Act, 1944 Service Tax 2,785,850 -
Central Excise Act, 1944 Service Tax 311,000 -
Name of Statute Period to Forum where the dispute
the which is pending
relates amount
Central Excise Act, 1944 2000-01 & Customs, Excise and Service
2001-02 Tax Appellate Tribunal,Delhi
Central Excise Act, 1944 2001-02 Customs, Excise and Service
Tax Appellate Tribunal,
Mumbai
Central Excise Act, 1944 2000-01 & Customs, Excise and Service
2003-04 Tax Appellate Tribunal,
Chennai
Central Excise Act, 1944 1997-98 The Commissioner (Appeals)
Central Excise Noida
Central Excise Act, 1944 2000-01 Honble High Court, Chennai
Central Excise Act, 1944 2000-01 & Supreme Court of India
2003-04
UP Tax on Entry of 1999-00 to Honble High Court,
Goods Rules, 1999 2001-02 Allahabad
Income Tax Act, 1961 2003-04 Income Tax Appellate Tribunal,
New Delhi
Sales Tax 2006-07 & Additional Commissioner
2008-09 (Appeals)
UP Trade Tax Act, 1948 2005-06 Joint Commissioner
(Appeal-3) Trade Tax
UP Trade Tax Act, 1948 2006-07 Additional Commissioner
(Appeals)
UP Trade Tax Act, 1948 2008-09 The Assistant Commissioner
Central Excise Gurgaon
-2007-08 & Central Excise Commissioner,
Central Excise Act, 1944 2008-09 Bangalore
Central Excise Act, 1944 1999-00 to Honble High Court,
Central Excise Act, 1944 2001-02 Allahabad
Central Excise Act, 1944 1999-2000 Honble High Court, Chennai
10. The Company has no accumulated losses as at balance sheet date 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 terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
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 created security or charge in respect of
privately placed debentures aggregating Rs 150,000,000 issued and
outstanding 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 such case by the Management.
For Price Waterhouse
Firm Registration Number 007568S
Chartered Accountants
Anupam Dhawan
Date : May 18, 2010 Partner
Place : New Delhi Membership Number 084551
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