Mar 31, 2023
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of Sundram Fasteners Limited (the âCompanyâ) which comprise the standalone balance sheet as at March 31, 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Impairment assessment of long term investments in subsidiaries Refer Notes 3 and 6 to standalone financial statements |
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The key audit matter |
How the matter was addressed in our audit |
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The Company has long-term investments in subsidiaries as at March 31, 2023. The Company assesses investment in subsidiaries at each reporting date for any impairment indicators, based on internal or external sources of information. Where, such indicators exist, the Company performs impairment testing. The changes in business environment including impact of COVID-19 pandemic on budgets and forecasts and uncertainties caused by external factors affecting estimated performance of subsidiaries has triggered impairment testing in respect of certain subsidiaries. As impairment assessment involves significant estimates and judgements, it is a key area of focus in our audit. |
In view of the significance of the matter, we performed the following key audit procedures: ⢠Assessed the design, implementation and operating effectiveness of key controls in respect of the Companyâs impairment analysis process including evaluation and approval of forecasts, and the valuation model used; ⢠Examined the valuation reports of the independent third-party specialists as engaged by the Company; ⢠Evaluated and challenged the key assumptions considered in cash flow forecasts for assessing the recoverable amount such as growth rates, profitability, discount rates etc., with reference to our understanding of the business and historical trends; ⢠Involved our valuation specialists to examine the valuation methodology and key assumptions; ⢠Performed sensitivity analysis considering possible changes in key assumptions used; ⢠Evaluated the adequacy of disclosures made in the standalone Ind AS financial statements. |
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Taxation and contingent liability related matters Refer Notes 3, 18 and 36 to standalone financial statements |
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The key audit matter |
How the matter was addressed in our audit |
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Determination of tax provisions and assessment of contingent liabilities involves judgment with respect to various tax positions on deductibility of transactions, interpretation of laws and regulations etc. Judgment is also required in assessing the range of possible outcomes for these matters. The Company makes an assessment to determine the outcome of these matters and records an accrual or discloses this as a contingent liability in accordance with applicable accounting standards. Accordingly, taxation and contingent liability related matters are areas of focus in the audit. |
In view of the significance of the matter, we applied the following key audit procedures: ⢠I nvolved our tax specialists and evaluated and challenged the underlying judgements used in respect of estimation of provisions, exposures and contingencies ⢠Considered third party advice received by the Company where applicable, status of recent and current tax assessments, outcome of previous claims, judgmental positions taken in tax returns and developments in tax environment. ⢠Evaluated the adequacy of disclosures on tax provisions and contingent liabilities made in the standalone Ind AS financial statements. |
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Revenue recognition Refer Notes 3 and 23 to standalone financial statements |
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The key audit matter |
How the matter was addressed in our audit |
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The Companyâs revenue is derived primarily from sale of automobile spare parts and components (âgoodsâ). Revenue from the sale of goods is recognised upon the transfer of control of the goods to the customer. The Company and its external stakeholders focus on revenue as a key performance metric and the Company uses various shipment terms across its operating markets. Revenue recognition has been identified as a key audit matter as there could be an incentive or external pressures to meet expectations resulting in revenue being overstated or recognized before control has been transferred. |
In view of the significance of the matter we applied the following key audit procedures in this area: ⢠Assessed the Companyâs accounting policy for revenue recognition as per applicable accounting standards. ⢠Tested the design, implementation and operating effectiveness of key controls relating to revenue recognition. ⢠Performed substantive testing of revenue transactions recorded during the year on a sample basis by verifying the underlying documents. ⢠Tested samples of revenue transactions recorded closer to the year-end by verifying underlying documents, to assess the accuracy of the period in which revenue was recognized. ⢠Tested material manual journal entries posted to revenue. |
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Information Other than the Financial Statements and Auditorâs Report Thereon
The Companyâs Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and auditorâs reports thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs and Board of Directorsâ Responsibilities for the Standalone Financial Statements
The Companyâs Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. A. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on 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 financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
B. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us:
a. The Company has disclosed the impact of pending litigations as at March 31,2023 on its financial position in its standalone financial statements - Refer Note 36 to the standalone financial statements.
b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
d. (i) The management has represented that, to the best of its knowledge and belief, as disclosed in the
Note 32 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(ii) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 32 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.
e. The first interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with Section 123 of the Act. The second interim dividend declared by the Company for the year ended 31 March 2023, is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend. However, the said dividend was not paid on the date of this audit report.
f. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from 1 April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.
C. With respect to the matter to be included in the Auditorâs Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
for B S R & Co. LLP
Chartered Accountants
Firmâs Registration number: 101248W/W-100022
S Sethuraman
Partner
Membership No.: 203491
ICAI UDIN: 23203491BGYXWR6301
Place : Chennai
Date : May 04, 2023
Mar 31, 2022
Report on the Audit of the Standalone Ind AS financial statements Opinion
We have audited the standalone Ind AS financial statements of Sundram Fasteners Limited (âthe Companyâ), which comprise the standalone balance sheet as at March 31,2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Ind AS financial statementsâ).
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 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone 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 standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone 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 of the current period. 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.
Description of Key Audit Matter
Impairment assessment of long-term investments in subsidiaries |
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The key audit matter |
How the matter was addressed in our audit |
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The Company has long-term investments in subsidiaries as at March 31, 2022. The Company assesses investment in subsidiaries at each reporting date for any impairment indicators, based on internal or external sources of information. Where, such indicators exist, the Company performs impairment testing. The changes in business environment including impact of COVID-19 pandemic on budgets and forecasts and uncertainties caused by external factors affecting estimated performance of subsidiaries has triggered impairment testing in respect of certain subsidiaries. As impairment assessment involves significant estimates and judgements, it is a key area of focus in our audit. Refer Notes 3 and 6 to the standalone Ind AS financial statements. |
In view of the significance of the matter, we performed the following key audit procedures: ⢠Assessed the design, implementation and operating effectiveness of key controls in respect of the Companyâs impairment analysis process including evaluation and approval of forecasts, and the valuation model used; ⢠Examined the valuation reports of the independent third-party specialists as engaged by the Company; ⢠Evaluated and challenged the key assumptions considered in cash flow forecasts for assessing the recoverable amount such as growth rates, profitability, discount rates etc., with reference to our understanding of the business and historical trends; ⢠Involved our valuation specialists to examine the valuation methodology and key assumptions; ⢠Performed sensitivity analysis considering possible changes in key assumptions used; ⢠Evaluated the adequacy of disclosures made in the standalone Ind AS financial statements. |
Taxation and contingent liability related matters |
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The key audit matter |
How the matter was addressed in our audit |
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Determination of tax provisions and assessment of contingent liabilities involves judgment with respect to various tax positions on deductibility of transactions, interpretation of laws and regulations etc. Judgment is also required in assessing the range of possible outcomes for these matters. The Company makes an assessment to determine the outcome of these matters and records an accrual or discloses this as a contingent liability in accordance with applicable accounting standards. Accordingly, taxation and contingent liability related matters are areas of focus in the audit. Refer Notes 3,18 and 36 to the standalone Ind AS financial statements. |
In view of the significance of the matter, we applied the following key audit procedures: ⢠I nvolved our tax specialists and evaluated and challenged the underlying judgements used in respect of estimation of provisions, exposures and contingencies ⢠Considered third party advice received by the Company where applicable, status of recent and current tax assessments, outcome of previous claims, judgmental positions taken in tax returns and developments in tax environment. ⢠Evaluated the adequacy of disclosures on tax provisions and contingent liabilities made in the standalone Ind AS financial statements. |
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Revenue recognition |
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The key audit matter |
How the matter was addressed in our audit |
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The Companyâs revenue is derived primarily from sale of automobile spare parts and components (âgoodsâ). Revenue from the sale of goods is recognised upon the transfer of control of the goods to the customer. The Company and its external stakeholders focus on revenue as a key performance metric and the Company uses various shipment terms across its operating markets. Revenue recognition has been identified as a key audit matter as there could be an incentive or external pressures to meet expectations resulting in revenue being overstated or recognized before control has been transferred. Refer Notes 3 and 23 to the standalone Ind AS financial statements. |
In view of the significance of the matter we applied the following key audit procedures in this area: ⢠Assessed the Companyâs accounting policy for revenue recognition as per applicable accounting standards. ⢠Tested the design, implementation and operating effectiveness of key controls relating to revenue recognition. ⢠Performed substantive testing of revenue transactions recorded during the year on a sample basis by verifying the underlying documents. ⢠Tested samples of revenue transactions recorded closer to the year-end by verifying underlying documents, to assess the accuracy of the period in which revenue was recognized. ⢠Tested manual journal entries posted to revenue. |
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Information Other than the Standalone Ind AS financial statements and Auditorsâ Report Thereon
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorsâ report 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 and, in doing so, consider whether the other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs and Board of Directorsâ Responsibility for the Standalone Ind AS financial statements
The Companyâs Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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, the Management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone 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 auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone 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 with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone Ind AS financial statements made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone 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 of the current period and are therefore the key audit matters. We describe these matters in our auditorsâ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorsâ Report) Order, 2020 (âthe Orderâ) issued by the Central Government in terms of section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31,2022 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 financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us:
a) The Company has disclosed the impact of pending litigations as at March 31,2022 on its financial position in its standalone Ind AS financial statements - Refer Note 36 to the standalone Ind AS financial statements;
b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
d) (i) The management has represented that, to the best of its knowledge and belief, no funds have been
advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d)(i) and (d)(ii) contain any material mis-statement.
e) The dividend declared or paid during the year by the Company is in compliance with section 123 of the
Companies Act, 2013;
(C) With respect to the matter to be included in the Auditorsâ Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
for B S R & Co. LLP
Chartered Accountants
Firmâs Registration number: 101248W/W-100022
S Sethuraman
Partner
Membership No.: 203491
ICAI UDIN: 22203491AHQDBN3113
Place : Chennai
Date : April 22, 2022
Mar 31, 2021
Report on the Audit of the Standalone Ind AS financial statements Opinion
We have audited the Standalone Ind AS financial statements of Sundram Fasteners Limited (âthe Companyâ), which comprise the standalone balance sheet as at March 31,2021, the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the Standalone Ind AS financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Ind AS financial statementsâ).
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 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2021, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs 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 Standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone 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 of the current period. 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.
Description of Key Audit Matter
Impairment assessment of long-term investments in subsidiaries |
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The key audit matter |
How the matter was addressed in our audit |
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The Company has long-term investments in subsidiaries as at March 31, 2021. The Company assesses investment in subsidiaries at each reporting date for any impairment indicators, based on internal or external sources of information. Where, such indicators exist, the Company performs impairment testing. The changes in business environment including impact of COVID-19 pandemic on budgets and forecasts and uncertainties caused by external factors affecting estimated performance of subsidiaries has triggered impairment testing in respect of certain subsidiaries. As impairment assessment involves significant estimates and judgements, it is a key area of focus in our audit. Refer Notes 3 and 6 to the standalone financial statements. |
In view of the significance of the matter, we performed the following key audit procedures: ⢠Assessed the design, implementation and operating effectiveness of key controls in respect of the Companyâs impairment analysis process including evaluation and approval of forecasts, and the valuation model used; ⢠Examined the valuation reports of the independent third-party specialists as engaged by the Company; ⢠Evaluated and challenged the key assumptions considered in cash flow forecasts for assessing the recoverable amount such as growth rates, profitability, discount rates etc., with reference to our understanding of the business and historical trends; ⢠Involved our valuation specialists to examine the valuation methodology and key assumptions; ⢠Performed sensitivity analysis considering possible changes in key assumptions used; ⢠Evaluated the adequacy of disclosures made in the standalone financial statements. |
Taxation and contingent liability related matters |
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The key audit matter |
How the matter was addressed in our audit |
||
Determination of tax provisions and assessment of contingent liabilities involves judgment with respect to various tax positions on deductibility of expenditure, interpretation of laws and regulations etc. Judgment is also required in assessing the range of possible outcomes for these matters. |
In view of the significance of the matter, we applied the following key audit procedures: ⢠I nvolved our tax specialists and evaluated and challenged the underlying judgements used in respect of estimation of provisions, exposures and contingencies. |
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The Company makes an assessment to determine the outcome of these matters and records an accrual or discloses this as a contingent liability in accordance with applicable accounting standards. |
⢠Considered third party advice received by the Company where applicable, status of recent and current tax assessments, outcome of previous claims, judgmental positions taken in tax returns and developments in tax environment. |
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Accordingly, taxation and contingent liability related matters are areas of focus in the audit. |
⢠Evaluated the adequacy of disclosures on tax provisions and contingent liabilities made in the standalone financial statements. |
||
Refer Notes 3, 18 and 35 to the standalone financial statements. |
Revenue recognition |
|||
The key audit matter |
How the matter was addressed in our audit |
||
The Companyâs revenue is derived primarily from sale of automobile spare parts and components (âgoodsâ). Revenue from the sale of goods is recognised upon the transfer of control of the goods to the customer. The Company and its external stakeholders focus on revenue as a key performance metric and the Company uses various shipment terms across its operating markets. Revenue recognition has been identified as a key audit matter as there could be an incentive or external pressures to meet expectations resulting in revenue being overstated or recognized before control has been transferred. Refer 3 and 23 to the standalone financial statements. |
In view of the significance of the matter we applied the following key audit procedures in this area: ⢠Assessed the Companyâs accounting policy for revenue recognition as per applicable accounting standards. ⢠Tested the design, implementation and operating effectiveness of key controls relating to revenue recognition. ⢠Performed substantive testing of revenue transactions recorded during the year using statistical sampling by verifying the underlying documents. ⢠Tested samples of revenue transactions recorded closer to the year-end by verifying underlying documents, to assess the accuracy of the period in which revenue was recognized. ⢠Tested manual journal entries posted to revenue. |
Information Other than the Standalone Ind AS financial statements and Auditorsâ Report Thereon
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorsâ report 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 and, in doing so, consider whether the other information is materially inconsistent with the Standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs and Board of Directorsâ Responsibility for the Standalone Ind AS financial statements
The Companyâs Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance
with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone 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, the Management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone 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 auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone 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 with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the Standalone Ind AS financial statements made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the Standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone 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 of the current period and are therefore the key audit matters. We describe these matters in our auditorsâ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorsâ Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of section 143 (11) of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31,2021 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 financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us:
i. The Company has disclosed the impact of pending litigations as at March 31,2021 on its financial position in its Standalone Ind AS financial statements - Refer Note 35 to the Standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. The disclosures in the Standalone Ind AS financial statements regarding holdings as well as dealings in specified bank notes during the period from November 8, 2016 to December 30, 2016 have not been made in these financial statements since they do not pertain to the financial year ended March 31,2021.
(C) With respect to the matter to be included in the Auditorsâ Report under Section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
for B S R & Co. LLP
Chartered Accountants
Firmâs Registration number: 101248W/W-100022
S Sethuraman
Partner
Membership No.: 203491
ICAI UDIN: 21203491AAAACP5395
Place : Chennai
Date : May 6, 2021
Mar 31, 2019
Report on the Audit of Standalone Indian Accounting Standards (âInd ASâ) financial statements Opinion
We have audited the Standalone Ind AS financial statements of Sundram Fasteners Limited (âthe Companyâ), which comprise the standalone balance sheet as at March 31, 2019, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the Standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information. (hereinafter referred to as âthe Standalone Ind AS financial statementsâ).
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 (âActâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company, as at March 31, 2019, its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone 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 Standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Ind AS financial statements of the current period. 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.
Description of Key Audit Matter
Revenue recognition under new accounting standard Ind AS 115: Revenue from Contracts with Customers |
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The key audit matter |
How the matter was addressed in our audit |
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The Company has adopted Ind AS 115 - Revenue from Contracts with Customers (Ind AS 115) which is the new revenue accounting |
In view of the significance of the matter we applied the following key audit procedures: |
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standard. Ind AS 115 is effective for the year beginning April 1, 2018 and establishes a comprehensive framework for determining whether, how much and when revenue is recognized. This involves certain key judgments relating to identification of distinct performance obligations, determination of transaction price and appropriateness of the basis used to measure revenue recognized over a period or at a point in time. Revenue is recognized when (or as) a performance obligation is satisfied, i.e. when âcontrolâ of the goods or services underlying the particular performance obligation is transferred to the customer. In view of the above, the application and transition to this accounting standard is an area of focus in our audit. See note 22 to the Standalone Ind AS financial statements |
- Testing the design and operating effectiveness of controls relating to implementation of the new revenue accounting standard. - Verifying managementâs assessment of different types of customer contracts including the terms of contract and commercial substance thereof in order to assess the adherence to revised accounting policies in light of the requirements of Ind AS 115. - Selecting samples of existing and new contracts, testing managementâs assessment relating to identification of distinct performance obligations and determination of transaction prices. - Additionally, we also evaluated the adequacy of disclosures made in the financial statements. |
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Property, plant and equipment |
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The key audit matter |
How the matter was addressed in our audit |
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During the year, the Company has incurred significant capital expenditure on multiple projects undertaken by it towards capacity augmentation / expansion. This matter is of importance to our audit due to the nature and volume of transactions, risk that the amount capitalized do not meet the capitalization criteria and risk of inappropriate classification of capital and revenue expenditure. See note 5(a) and 5(b) to the Standalone Ind AS financial statements |
In view of the significance of the matter we applied the following key audit procedures: - Assessed whether the Companyâs accounting policy with respect to capitalization of expenditure is in accordance with the requirements of relevant accounting standards. - Obtaining an understanding of and assessing the design, implementation and operating effectiveness of controls surrounding the implementation of the aforesaid policy, in particular with respect to segregation of capital and revenue expenditure. - Also verified samples of costs incurred towards capital projects in evaluating managementâs assessment of whether costs recorded meet the capitalization criteria and that the classification of expenditure is appropriate. |
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Taxation and contingent liability related matters |
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The key audit matter |
How the matter was addressed in our audit |
||
Determination of tax provisions and assessment of contingent liabilities involves judgment with respect to various tax positions on deductibility of transactions, tax incentives/ exemptions, interpretation of laws and regulations etc. Judgment is also required in assessing the range of possible outcomes for some of these matters. Management makes an assessment to determine the outcome of these matters and decides to make an accrual or consider it to be a possible contingent liability in accordance with applicable accounting standards. Accordingly, taxation and contingent liability related matters are areas of focus in our audit. See note 17 and 34 to the Standalone Ind AS financial statements |
In view of the significance of the matter we applied the following key audit procedures: - We evaluated managementâs judgements in respect of estimates of provisions, exposures and contingencies. - In understanding and evaluating managementâs judgements, we deployed our tax specialists, considered third party advice received by the Company, wherever applicable, the status of recent and current tax assessments and enquiries, the outcome of previous claims, judgmental positions taken in tax returns and developments in the tax environment. - Additionally, we also evaluated the adequacy of disclosures on provisions and contingencies made in the financial statements. |
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Information Other than the Standalone Ind AS financial statements and Auditorsâ Report Thereon
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the financial statements and our auditorâs report 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 and, in doing so, consider whether the other information is materially inconsistent with the Standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs Responsibility for the Standalone Ind AS financial statements
The Companyâs management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone 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 and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone 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 auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone 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 with reference to financial statements in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the Standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the Standalone 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 of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
(A) As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(B) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books
c) The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account
d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(C) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditorâs) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at March 31, 2019 on its financial position in its Standalone Ind AS financial statements - Refer Note 34 to the Standalone Ind AS financial statements;
ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. The disclosures in the Standalone Ind AS financial statements regarding holdings as well as dealings in specified bank notes during the period from November 8, 2016 to December 30, 2016 have not been made in these Standalone Ind AS financial statements since they do not pertain to the financial year ended March 31, 2019.
(D) With respect to the matter to be included in the Auditorâs Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.
Annexure A to the Independent Auditorâs Report
To the Members of Sundram Fasteners Limited on the Standalone Ind AS financial statements for the year ended March 31, 2019
(Referred to in paragraph (A) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets were physically verified during the year and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) The inventory, except goods in transit and certain stocks lying with third parties, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material. For stock lying with third parties at the year end, written confirmations have been obtained by the management.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register required under section 189 of the Act. Accordingly, paragraph 3(iii) of the Order is not applicable.
(iv) According to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Act with respect to loans, investments, guarantees and security, as applicable.
(v) In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits as mentioned in the directives issued by Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Accordingly, paragraph 3(v) of the Order is 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 subsection (1) of Section 148 of the Act in respect of products manufactured and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance, income tax, duty of customs, goods and service tax and other material statutory dues have generally been regularly deposited by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of cess, sales tax, service tax, duty of excise and value added tax. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income tax, duty of customs, goods and service tax and other material statutory dues were in arrears as at March 31, 2019 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the dues set out in Appendix I in respect of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax and goods and service tax have not been deposited by the Company on account of disputes.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks or financial institutions. The Company has not taken any loans or borrowings from government and have not issued any debentures.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. According to information and explanations given to us, money raised through term loans during the year has been utilised for the purpose for which there were raised.
(x) According to the information and explanations given to us, no fraud by the Company or any material fraud on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the managerial remuneration for the year ended March 31, 2019 has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act and rules framed thereunder.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the Standalone Ind AS financial statements as required under applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any noncash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.
Appendix I as referred to under para (vii)(b) of Annexure A to the Independent Auditorâs Report
To the Members of Sundram Fasteners Limited on the Standalone Ind AS financial statements for the year ended March 31, 2019
Name of the Statute |
Nature of the Dues |
Amount* (Rs. in Crores) |
Period to which the amount relates |
Forum where the dispute is pending |
Central Excise Act, 1944 |
Excise duty |
7.34 |
FY 2004-16 |
Customs, Excise and Service tax Appellate Tribunal |
1.12 |
FY 2005-17 |
Commissioner - Appeals |
||
0.21 |
FY 2009-18 |
Adjudicating authority/ Assessing Officer/ Division |
||
Finance Act, 1994 |
Service tax |
0.49 |
FY 2004-18 |
Customs, Excise and Service tax Appellate Tribunal |
1.60 |
FY 2008-16 |
Commissioner - Appeals |
||
1.59 |
FY 2008-17 |
Joint / Deputy / Assistant / Additional Commissioner |
||
0.11 |
FY 2012-16 |
Adjudicating authority/ Assessing Officer/ Division |
||
Income Tax Act, 1961 |
Income-tax dues |
1.11 |
AY 2006-07 |
The Commissioner of Income-tax (Appeals) |
Income Tax Act, 1961 |
Income-tax dues |
1.31 |
AY 2012-13 |
The Income tax Appellate Tribunal |
Income Tax Act, 1961 |
Income-tax dues |
0.13 |
AY 2012-13 |
The Commissioner of Income-tax (Appeals) |
Income Tax Act, 1961 |
Income-tax dues |
1.27 |
AY 2013-14 |
The Income tax Appellate Tribunal |
Income Tax Act, 1961 |
Income-tax dues |
15.05 |
AY 2014-15 |
The Commissioner of Income-tax (Appeals) |
Tamil Nadu Value Added Tax Act, 2006, Telangana Value Added Tax Act, 2005, Central Sales Tax Act, 1956 |
Sales tax |
0.77 |
FY 2006-17 |
Joint/Deputy/Assistant/ Additional Commissioner |
0.34 |
FY 2014-17 |
High Court of Madras |
||
Customs Act, 1962 |
Customs duty |
0.69 |
FY 2014-15 |
Customs, Excise and Service tax Appellate Tribunal |
0.65 |
FY 2014-15 |
High Court of Madras |
* net of amount paid under protest
Annexure B to the Independent Auditorâs Report
To the Members of Sundram Fasteners Limited on the Standalone Ind AS financial statements for the year ended March 31, 2019
Report on the Internal Financial Controls with reference to financial statements under clause (/) of sub-section 3 of section 143 of the Companies Act, 2013 (âthe Actâ)
(Referred to in paragraph ((B)(f)) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
Opinion
We have audited the internal financial controls with reference to financial statements of Sundram Fasteners Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.
In our opinion, the Company has, in all material respects, an adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at March 31, 2019, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India (âICAIâ).
Management''s Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements established by the Company considering the essential components of internal control stated in the Guidance Note issued by ICAI. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively as at March 31, 2019 for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the standards on auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to 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 system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to 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 auditorâs 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 Companyâs internal financial controls system with reference to financial statements.
Meaning of Internal financial controls with reference to financial statements
A companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls with reference to financial statements 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 companyâs assets that could have a material effect on the financial statements.
Inherent limitations of internal financial controls with reference to financial statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
for B S R & Co. LLP
Chartered Accountants
Firmâs Registration number: 101248W/W-100022
S Sethuraman
Partner
Membership No.: 203491
Place : Chennai
Date : May 9, 2019
Mar 31, 2018
Report on the Audit of Standalone Indian Accounting Standards (âInd ASâ) financial statements
We have audited the accompanying Standalone Ind AS financial statements of Sundram Fasteners Limited (âthe Companyâ), which comprise the standalone balance sheet as at March 31, 2018, the standalone statement of profit and loss, the standalone statement of changes in equity and the standalone statement of cash flows for the year then ended, and summary of significant accounting policies and other explanatory information (herein after referred to as âStandalone Ind AS financial statementsâ).
Managementâs responsibility for the Standalone Ind AS financial statements
The Companyâs board of directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit or loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditorâs responsibility
Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder.
We conducted our audit of the Standalone Ind AS financial statements in accordance with the standards on auditing specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditorâs 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.
We are also responsible to conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entityâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditorâs report. However, future events or conditions may cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.
Opinion
In our opinion, and to the best of our information and according to the explanations given to us, the aforesaid 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, 2018, its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Other Matters
The Standalone Ind AS financial statements of the Company for the year ended March 31, 2017, were audited by another auditor who expressed an unmodified opinion on those statements on May 24, 2017. Our opinion is not modified in respect to this matter.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government in terms of Section 143 (11) of the Act, we give in "Annexure A" 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 standalone balance sheet, the standalone statement of profit and loss, the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this report are in agreement with the books of account;
(d) in our opinion, the aforesaid Standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
(e) on the basis of written representations received from the directors as on March 31, 2018, taken on record by the board of directors, none of the directors are 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
(g) with respect to the other matters to be included in the auditorâs report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) the Company has disclosed the impact of pending litigations on its financial position in its Standalone Ind AS financial statements - refer note 35(a) to the Standalone Ind AS financial statements;
(ii) the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
(iii) there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
(iv) the disclosures in the financial statements regarding holdings as well as dealings in specified bank notes during the period from November 8, 2016 to December 30, 2016 have not been made since they do not pertain to the financial year ended March 31, 2018. However amounts as appearing in the audited Standalone Ind AS financial statements for the period ended March 31, 2017 have been disclosed - refer note 13 of standalone Ind AS financial statements.
Annexure A to the Independent Auditorâs Report
To the Members of Sundram Fasteners Limited on the Standalone Ind AS financial statements for the year ended March 31, 2018
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) The inventory, except goods in transit and certain stocks lying with third parties, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material. For stock lying with third parties at the year end, written confirmations have been obtained by the management.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register required under Section 189 of the Act. Accordingly, paragraph 3(iii) of the Order is not applicable.
(iv) According to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Act with respect to loans, investments, guarantees and security, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits as mentioned in the directives issued by Reserve Bank India and the provisions of sections 73 to 76 are any other relevant provisions of the Act and the rules framed thereunder. Accordingly, paragraph 3(v) of the Order is 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 subsection (1) of Section 148 of the Act in respect of products manufactured and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax and other material statutory dues have generally been regularly deposited by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of cess.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax and other material statutory dues were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, the dues set out Appendix I in respect of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, have not been deposited by the Company on account of disputes.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks or financial institutions. The Company has not taken any loans or borrowings from government and have not issued any debentures.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. According to information and explanations given to us, money raised through term loans during the year has been utilised for the purpose for which there were raised.
(x) According to the information and explanations given to us, no fraud by the Company or any material fraud on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the managerial remuneration for the year ended March 31, 2018 has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act and rules framed thereunder.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. The details of such related party transactions have been disclosed in the Standalone Ind AS financial statements as required under applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any noncash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.
Appendix I as referred to under para (vii)(b) of Annexure A to the Independent Auditorâs Report
To the Members of Sundram Fasteners Limited on the Standalone Ind AS financial statements for the year ended March 31, 2018
Name of the Statute |
Nature of the Dues |
Amount* (Rs. in crores) |
Period to which the amount relates |
Forum where the dispute is pending |
Central Excise Act, 1944 |
Excise duty |
7.38 |
FY 2004-15 |
Customs, Excise and Service tax Appellate Tribunal |
1.12 |
FY 2005-16 |
Joint/Deputy/Assistant Commissioner |
||
0.35 |
FY 2005-16 |
Commissioner - Appeals |
||
Finance Act, 1994 |
Service tax |
1.74 |
FY 2004-16 |
Commissioner - Appeals |
1.06 |
FY 2009-16 |
Joint/Deputy/Assistant Commissioner |
||
1.16 |
FY 2004-15 |
Customs, Excise and Service tax Appellate Tribunal |
||
Income Tax Act, 1961 |
Income-tax dues |
1.11 |
AY 2006-07 |
The Commissioner of Income-tax (Appeals) |
Income Tax Act, 1961 |
Income-tax dues |
1.37 |
AY 2012-13 |
The Income tax Appellate Tribunal |
Income Tax Act, 1961 |
Income-tax dues |
0.13 |
AY 2012-13 |
The Commissioner of Income-tax (Appeals) |
Income Tax Act, 1961 |
Income-tax dues |
1.27 |
AY 2013-14 |
The Income tax Appellate Tribunal |
Income Tax Act, 1961 |
Income-tax dues |
19.98 |
AY 2014-15 |
The Commissioner of Income-tax (Appeals) |
Tamil Nadu Value Added Tax Act, 2006, Telangana Value Added Tax Act, 2005, Central Sales Tax Act, 1956 |
Sales tax |
3.06 |
FY 2006-13 |
Joint/Deputy/Assistant Commissioner |
0.34 |
FY 2014-17 |
High Court of Madras |
||
Customs Act, 1962 |
Customs duty |
0.69 |
FY 2014-15 |
Customs, Excise and Service tax Appellate Tribunal |
0.65 |
FY 2014-15 |
High Court of Madras |
* net of amount paid under protest
for B S R & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 101248W/W-100022
S Sethuraman
Partner
Membership No.: 203491
Place : Chennai
Date : May 9, 2018
Mar 31, 2017
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of SUNDRAM FASTENERS LIMITED, Chennai - 600 004 ("the companyâ), which comprise the Balance Sheet as at 31st March 2017, the Statement of Profit and Loss (including Other Comprehensive Income), 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 Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (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 Rule 4 of Companies (Indian Accounting Standards) Rules, 2015.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting the 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgement, 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 Company''s 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 Company''s Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations furnished 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 including the Ind AS;
a) of the State of affairs (financial position) of the Company as at March 31, 2017;
b) of the Profit (financial performance including Other Comprehensive Income) for the year ended on that date;
c) of the Cash Flows for the year ended on that date; and
d) of the Changes in Equity for the year ended on that date.
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-âAâ, a statement on the matters specified in the paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the 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 Accounting Standards specified under Section 133 of the Act, read with Rule 4 of the Companies (Indian Accounting Standards) Rules, 2015.
e. On the basis of written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors are 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 internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure - "Bâ.
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 furnished 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 no. 43 to the standalone Ind AS financial statements.
ii. The Company has long-term derivative contracts but material foreseeable losses are not expected. There are no other long term contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes from November 08, 2016 to December 30, 2016 and these are in accordance with the books of account maintained by the Company.
Annexure "A" referred to in our report under "Report on Other Legal and Regulatory requirements Para 1" of even date on the accounts for the year ended 31st March 2017.
1. (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) Fixed assets are physically verified by the management in accordance with a regular programme at reasonable intervals. In our opinion the interval is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties of the company are held in the name of the Company based on the confirmation received from the Company.
2. The inventory has been physically verified, including inventories with third parties, at reasonable intervals during the year by the management. The discrepancies between the physical stocks and the books were not material and have been properly dealt with in the books of account.
3. During the year, the company has not granted any loan to a company, firm, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. The Company has invested in Equity shares of the wholly owned subsidiary and furnished guarantee to one wholly owned subsidiary and investment in equity shares of other companies. These investments comply with provisions of Sec 186 of the Companies Act, 2013.
4. During the year, the company has not granted any loan nor provided any security. Hence reporting on whether there is compliance with provisions of section 185 of the Companies Act, 2013 on these aspects does not arise.
The company has furnished guarantees in relation to loans availed by subsidiaries amounting to Rs. 6,542.83 lakhs. This is in compliance with section 186 of the Companies Act, 2013.
5. The company has not accepted any deposit within the meaning of sections 73 to 76 of the Companies Act, 2013, during the year.
6. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government under section 148(1) of the Companies Act, 2013 for maintenance of cost records and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
7. (a) According to the records provided to us, the company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues to the appropriate authorities. However, certain delays were noticed in remittance of Income Tax deducted at source, Value Added Tax / Central Sales Tax and Service Tax into Government.
(b) According to the information and explanations furnished to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and Cess were in arrears, as at 31st March 2017 for a period of more than six months from the date they became payable.
(c) According to information and explanations furnished to us, the following are the details of the disputed dues that were not deposited with the concerned authorities:
Name of the statute |
Nature of dues |
Amount (Rs.In lakhs) |
Forum Where the dispute is pending |
Central Excise Act, 1944 |
Excise Duty |
353.50 |
Customs Excise and Service Tax Appellate Tribunal, Chennai |
43.35 |
Commissioner (Appeals), Chennai |
||
396.85 |
|||
Finance Act, 1994 |
Service Tax |
43.10 |
Assistant Commissioner |
42.53 |
Customs Excise and Service Tax Appellate Tribunal, Chennai |
||
200.10 |
Commissioner (Appeals), Chennai |
||
285.73 |
|||
Property Tax |
25.10 |
The Honourable High Court of Judicature at Madras |
|
Income Tax Act, 1961 |
Income tax |
1,425.99 |
Income Tax Appellate Tribunal |
2,024.34 |
Commissioner of Income Tax (Appeals), Chennai |
||
3,450.33 |
|||
Tamilnadu Value Added Tax Act, 2006, Telangana Value Added Tax Act, 2005 and Central Sales Tax Act, 1956 |
Sales Tax |
256.78 |
Joint/Deputy/Assistant Commissioner |
1,054.71 |
Commissioner (Appeals) |
||
332.52 |
Sales Tax Appellate Tribunal |
||
1,644.01 |
|||
Customs Act, 1962 |
Customs duty |
65.49 |
The Honourable High Court of Judicature at Madras |
69.24 |
Customs Excise and Service Tax Appellate Tribunal, Chennai |
||
134.73 |
8. Based on our verification and according to the information and explanations furnished by the management, the company has not defaulted in repayment of dues to its banks. The company has not issued debentures and hence question of reporting delay in repayment of dues does not arise.
9. (a) The company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Hence reporting on utilization of such money does not arise.
(b) The company has availed term loan during the year and the proceeds of the loan were applied for the purpose for which they were availed.
10. Based on the audit procedures adopted and information and explanations furnished to us by the management, no fraud on or by the company has been noticed or reported during the course of our audit.
11. In our opinion and according to the information and explanations furnished to us, managerial remuneration has been paid and provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
12. The Company is not a Nidhi company and as such this clause of the Order is not applicable.
13. (a) In our opinion and according to the information and explanations furnished to us, all transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013.
(b) The details of transactions during the year have been disclosed in the Financial Statements as required by the applicable accounting standards. Refer note no. 38 to the financial statements.
14. During the year, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures under section 42 of the Companies Act, 2013.
15. In our opinion and according to the information and explanations furnished to us, the company has not entered into any non-cash transactions with directors or persons connected with them.
16. The company is not required to register under section 45-IA of the Reserve Bank of India Act, 1934.
For SUNDARAM & SRINIVASAN
Chartered Accountants
Regn. No. 004207S
Chennai M BALASUBRAMANIYAM
May 24, 2017 Partner
Membership No. F7945
Mar 31, 2016
We have audited the accompanying standalone financial statements of
SUNDRAM FASTENERS LIMITED, Chennai ("the company"), which comprise the
Balance Sheet as at 31st March 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
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 that 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
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
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
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.
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.
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 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;
a) of the state of affairs of the Company as at March 31, 2016;
b) of the Profit for the year ended on that date; and
c) of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order"), issued by the Central Government 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 the paragraphs 3 and 4 of the
Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations
which to the 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 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 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 - 2".
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 financial statements - Refer Note no. 31(29)
(A) (ii) to the financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure referred to in our report under "Report on Other Legal and
Regulatory requirements Para 1" of even date on the accounts for the
year ended 31st March 2016.
1. (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of
fixed assets;
(b) Fixed assets are verified physically by the management in
accordance with a regular programme at reasonable intervals. In our
opinion the interval is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) The title deeds of immovable properties of the Company are held in
the name of the company based on the confirmation received from the
Company.
2. The inventory has been physically verified at reasonable intervals
during the year by the management. The discrepancies between the
physical stocks and the books were not material and have been properly
dealt with in the books of account.
3. During the year, the company has not granted any loan to a company,
firm, Limited Liability Partnerships or other parties covered in the
register maintained under Section 189 of the Companies Act, 2013.
4. During the year, the company has furnished guarantees to facilitate
loans to subsidiaries amounting to Rs, 12,074.23 lakhs in compliance
with Section 186 of the Companies Act, 2013.
5. The company has not accepted any deposits within the meaning of
sections 73 to 76 of the Companies Act, 2013, during the year.
6. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government under
section 148(1) of the Companies Act, 2013 for maintenance of cost
records and are of the opinion that prima-facie, the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
7. (a) According to the records provided to us, the company is
generally regular in depositing undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise,
Value Added Tax, Cess and other statutory dues with the appropriate
authorities. However we have observed instances of delay in remittance
of Income tax deducted at source, Employees'' State Insurance
remittance, service tax remittance and short remittance of Dividend
Distribution Tax (which was later remitted)
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and
Cess were in arrears, as at 31st March 2016 for a period of more than
six months from the date they became payable.
According to information and explanations furnished to us, the
following are the details of the disputed dues that were not deposited
with the concerned authorities:
Nature of Amount
Name of the statute Forum Where the
dispute is pending
dues In lakhs)
Central Excise Act, Excise Duty 0.31 The Honourable
High Court of
Judicature at
1944. Madras
166.72 Customs Excise
and Service Tax
Appellate
Tribunal, Chennai
29.40 Commissioner
(Appeals), Chennai
196.43
Finance Act, 1994 Service Tax 3.16 The Honourable
High Court of
Judicature at
Madras
58.65 Customs Excise
and Service Tax
Appellate
Tribunal, Chennai
25.42 Commissioner
(Appeals), Chennai
87.23
Property Tax 25.10 The Honourable
High Court of
Judicature at
Madras
Income Tax
Act, 1961 Income tax 19.64 The Honourable
High Court of
Judicature at
Madras
26.65 Commissioner of
Income Tax
(Appeals),
Chennai
46.29
Tamilnadu Value Sales Tax 41.25 The Honourable
High Court of
Judicature at
Added Tax Act, 2006, Madras
Telangana Value 788.72 Joint/Deputy/
Assistant
Commissioner
Added Tax Act, 2005 19.69 Commissioner
(Appeals)
and Central Sales Tax 14.63 Sales Tax
Appellate Tribunal
Act, 1956 864.29
Customs Act, 1962 Customs duty 65.49 Commissioner of
Customs (Appeals),
Chennai
219.26 Customs Excise
and Service Tax
Appellate
Tribunal, Chennai
284.75
8. Based on our verification and according to the information and
explanations furnished by the management, the Company has not defaulted
in repayment of dues to its banks. The Company has not issued
debentures and hence question of reporting delay in repayment of dues
does not arise.
9. (a) The company has not raised any money by way of initial public
offer or further public offer (including
debt instruments) during the year. Hence reporting on utilization of
such money does not arise.
(b) The company has availed term loan during the year and the proceeds
of the loan were applied for the purpose for which they were availed.
10. Based on the audit procedures adopted and information and
explanations furnished to us by the management, no fraud on or by the
company has been noticed or reported during the course of our audit.
11. In our opinion and according to the information and explanations
furnished to us, managerial remuneration has been paid and provided in
accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Companies Act,2013.
12. The Company is not a Nidhi company and as such this clause of the
Order is not applicable.
13. (a) In our opinion and according to the information and
explanations furnished to us, all transactions with
the related parties are in compliance with sections 177 and 188 of the
Companies Act, 2013.
(b) The details of transactions during the year have been disclosed in
the Financial Statements as required by the applicable accounting
standards. Refer Note no  31 (18) (III) to the Financial statements..
14. During the year, the company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures under section 42 of the Companies Act, 2013.
15. According to the information and explanations furnished to us, the
company has not entered into any non- cash transactions with directors
or persons connected with them.
16. The company is not required to register under section 45-IA of the
Reserve Bank of India Act, 1934.
i. existing policies and procedures adopted by the Company for ensuring
orderly and efficient conduct of business.
ii. continuous adherence to Company''s policies.
iii. existing procedures in relation to safeguarding of Company''s fixed
assets, investments, inventories, receivables, loans and advances made
and cash and bank balances.
iv. existing system to prevent and detect fraud and errors.
v. accuracy and completeness of Company''s accounting records; and
vi. existing capacity to prepare timely and reliable financial
information.
For SUNDARAM & SRINIVASAN
Chartered Accountants
Regn. No. 004207S
Chennai M BALASUBRAMANIYAM
May 20, 2016 Partner
Membership No. F7945
Mar 31, 2015
We have audited the accompanying standalone financial statements of
SUNDRAM FASTENERS LIMITED, Chennai - 600 004 ("the Company"), which
comprise the Balance Sheet as at 31st March, 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
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 that 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 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
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
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
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 auditors consider 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.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
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;
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government in terms of sub-section (11)
of section 143 of the Act, we give in Annexure, a statement on the
matters specified in paragraph 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid 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 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 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 Auditors'
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 financial statements - refer note no.
31(29)(A) to the financial statements;
ii. The Company did not have any long-term contracts including
derivative contract for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SUNDRAM
FASTENERS LIMITED, CHENNAI FOR THE YEAR ENDED 31ST MARCH 2015 Annexure
referred to in our report of even date on the financial statements for
the year ended 31st March 2015
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have not been physically verified by the
management during the year but there is a regular programme of physical
verification at reasonable intervals, which, in our opinion is
reasonable having regard to the size of the company and nature of its
assets. No material discrepancies were noticed on such verification.
(ii) (a) The inventory other than in transit has been physically
verified at reasonable intervals during the year by the management. In
our opinion, the frequency of such verification is adequate. In respect
of inventories lying with third parties, which are not physically
verified, there is a process of obtaining confirmation from such
parties.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventory
followed by the management were reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion, the company has maintained proper records of
inventory. The discrepancies noticed between the physical stocks and
the books were not material and have been properly dealt with in the
books of account.
(iii) During the year, the Company has not granted any loans, secured
or unsecured to companies, firms or other parties covered in the
register maintained under section 189 of the Companies Act, 2013. The
Company has waived interest due of Rs. 132.09 lakhs from a subsidiary
Company viz. Peiner Umformtechnik GmbH, Peine, Germany for the period
upto 31st December, 2014 on a loan granted upto 31st March, 2014.
Interest has been charged on the loan granted on or after 1st April,
2014.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business, with regard to purchase of inventory, fixed assets and for
the sale of goods. During the course of our audit, no minor or major
continuing failure has been noticed in the internal control system.
(v) The Company has not accepted deposits within the meaning of
sections 73 to 76 of the Companies Act, 2013, during the year.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government under
section 148(1) of the Companies Act, 2013 for maintenance of cost
records and are of the opinion that prima-facie, the prescribed
accounts and records have been made and maintained. We have, however,
not made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(vii) (a) According to the records provided to us, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and
other statutory dues with the appropriate authorities. However, certain
delays were noticed in respect of remittance of service tax, employees'
state insurance and Income tax into the Government. (b) According to
the information and explanations given to us, no undisputed amounts
payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax,
Duty of Customs, Duty of Excise, Value Added Tax and Cess were in
arrears, as at 31st March 2015 for a period of more than six months
from the date they became payable.
According to information and explanations furnished to us, the
following are the details of the disputed dues that were not deposited
with the concerned authorities:
Nature of Amount
Name of the statute Forum Where the dispute
is pending
dues (Rs.In
lakhs)
Central Excise Act, Excise Duty 2.54 The Honourable High Court
of Judicature at
1944. Madras
15.02 Customs Excise and Service
Tax Appellate
Tribunal, Chennai
61.95 Commissioner (Appeals)
50.22 Additional / Assistant
Commissioner
Finance Act, 1994 Service Tax 66.56 Customs Excise and
Service Tax Appellate
Tribunal, Chennai
41.07 Commissioner (Appeals),
Chennai
50.69 Joint / Deputy /
Assistant Commissioner
Property Tax Property Tax 1.56 The Honourable High Court
of Judicature at
Madras
Income Tax Act, Income tax 19.64 The Honourable High Court
of Judicature at
1961 Madras
331.72 Commissioner of Income
Tax (Appeals),
Chennai
Customs Act, 1962 Customs duty 229.25 Customs Excise and
Service Tax Appellate
Tribunal, Chennai
(c) During the year, the Company has transferred the amount required to
be transferred to Investor Education and Protection Fund in accordance
with the relevant provisions of the Companies Act, 1956 (1 of 1956) and
Rules made thereunder within time.
(viii) The Company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
and in the immediately preceding financial year.
(ix) Based on our verification and according to the information and
explanations given by the management, the Company has not defaulted in
repayment of dues to its banks.
(x) The Company has furnished guarantee to banks and financial
institution for loans availed by subsidiary companies. The terms and
conditions of such guarantees are not prejudicial to the interests of
the Company.
(xi) The term loans were applied for the purpose for which the loans
were obtained.
(xii) Based on the audit procedures adopted and information and
explanations given to us by the management, no fraud on or by the
Company has been noticed or reported during the course of our audit.
For SUNDARAM & SRINIVASAN
Chartered Accountants
Regn. No. 004207S
M BALASUBRAMANIYAM
Chennai Partner
May 29, 2015 Membership No. F7945
Mar 31, 2014
We have audited the accompanying financial statements of Sundram
Fasteners Limited, Chennai ("the Company"), which comprise of Balance
Sheet as at 31st March 2014, and the Statement of Profit and Loss and
the Cash Flow Statement for the year ended on that date along with
Notes to financial statements.
Management''s Responsibility for the Financial Statements
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 ("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.
Auditor''s Responsibility
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.
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 financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations furnished to us, the 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 31st March 2014;
b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
INDEPENDENT AUDITORS'' REPORT (Contd.)
2. 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 comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors
as on 31st March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to in para 1 of our report on other legal
requirements of even date
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification at
reasonable intervals, 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.
(c) The Company has not disposed off substantial part of its fixed
assets, which will affect the going concern status of the Company.
(ii) (a) The inventory other than in transit has been physically
verified at reasonable intervals during the year by the management. In
our opinion, the frequency of such verification is adequate. In respect
of inventory lying with third parties which have not been physically
verified, there is a process of obtaining confirmation from such
parties.
(b) In our opinion and according to the information and explanations
furnished to us, the procedures for 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) In our opinion, the Company has maintained proper records of
inventory. The discrepancies between the physical stocks and book
stocks were not material and have been properly dealt with in the books
of account.
(iii) (a) During the year, the Company has not granted any loan to
Company, firms or parties covered in the register maintained under
Section 301 of the Act. However, the Company has received repayments
amounting to Rs 670 lakhs towards loan balance due from a wholly owned
subsidiary Company covered in the register maintained under Section 301
of the Act. The balance due at the year end after the repayment amounts
to Rs 1180 lakhs.
The Company has waived interest due from subsidiary companies viz.,
Peiner Umformtechnik Germany and TVS Peiner Services, Germany amounting
to Rs 363.49 lakhs and Rs 24.52 lakhs respectively.
(b) In our opinion, the rate of interest and other terms and conditions
on which such loan is made is not prima facie prejudicial to the
interest of the Company.
(c) The recovery of principal amount and interest thereon are in
accordance with the terms of loan.
(d) As on the date of Balance Sheet there was no overdue amount
recoverable on the said loan.
(e) The Company has not availed any loan secured or unsecured from
Companies, firms or other parties covered in the Register maintained
under Section 301 of the Act and accordingly paragraphs 4 (iii) (e),
(f) and (g) are not applicable.
(iv) In our opinion and according to the information and explanations
furnished to us, there are adequate internal control systems
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and for
the sale of goods. During the course of our audit, no minor or major
continuing failure has been noticed in the internal control procedures.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered in the
register maintained in pursuance of Section 301 of the Act have been
properly entered in the said register;
Annexure referred to in para 1 of our report on other legal
requirements of even date (Contd.)
(b) In our opinion and according to the information and explanations
furnished to us, the transactions entered in the Register maintained
under Section 301 of the Act and exceeding Rupees five Lakhs during the
year in respect of each party have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time;
(vi) The Company has not accepted any deposits from the public.
(vii) The Company has an internal audit system which, in our opinion,
is commensurate with the size and nature of its business;
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government under
Section 209 (1) (d) of the Act for maintenance of cost records and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained. However, we have not made a detailed
examination of records with a view to determining whether they are
accurate or complete.
(ix) (a) According to the records provided to us, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Employees'' State Insurance, Investor Education and Protection
Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other statutory dues with the appropriate
authorities. However, few delays were noticed in respect of remittance
of Employees'' State Insurance, Employees'' Provident Fund, Income Tax
Collected at Source, Income Tax Deducted at Source, Customs Duty, Works
Contract Tax and Service Tax into Government and contribution to
Tamilnadu Labour Welfare Fund.
(b) According to the information and explanations furnished to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
as at 31st March 2014 for a period of more than six months from the
date they became payable.
(c) According to the information and explanations furnished to us, the
following are the details of the disputed Income Tax, Customs Duty,
Sales Tax, Service Tax and Excise Duty that was not paid to the
concerned authorities.
Nature of demand Amount Forum where the dispute is pending
(Rslakhs)
Income Tax 19.64 High Court of Judicature at Madras
Income Tax 359.41 Commissioner of Income Tax (Appeals)
Excise Duty 70.39 Customs, Excise & Service Tax Appellate
Tribunal
Excise Duty 81.02 Commissioner (Appeals)
Excise Duty 2.54 High Court of Judicature at Madras
Property Tax 1.56 High Court of Judicature at Madras
Sales Tax/VAT 76.90 Joint Commissioner (Appeals) -
Commercial Tax
Central Sales Tax 106.69 Sales Tax Appellate Tribunal
Service Tax 0.04 Assistant Commissioner
Service Tax 61.50 Customs, Excise & Service Tax
Appellate Tribunal
Service Tax 59.45 Commissioner (Appeals)
Customs Duty 229.25 Customs, Excise & Service Tax
Appellate Tribunal
Annexure referred to in para 1 of our report on other legal
requirements of even date (Contd.)
(x) The Company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
and in the immediately preceding year.
(xi) According to the records of the Company examined by us and the
information and explanations furnished to us by the management, the
Company has not defaulted in repayment of dues to any financial
institution or bank as at the balance sheet date.
(xii) Based on our examination and according to the information and
explanations furnished to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not a chit fund/nidhi/ mutual benefit fund/
society and clause (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments other than in the units of mutual
funds. Proper records have been maintained in respect of these
transactions and contracts and timely entries have been made therein.
The investments have been held by the Company in its own name except to
the extent of exemption granted under Section 49 of the Act, in respect
of shares held in subsidiary companies through the nominees.
(xv) The Company has furnished guarantee to banks and financial
institution for loans taken by Subsidiary Companies and also housing
loans availed by its employees. The terms and conditions of such
guarantees are not prejudicial to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
furnished to us, the term loans have been applied for the purposes for
which they have been obtained.
(xvii) On the basis of our examination of the Balance sheet of the
Company and according to the explanations furnished to us, in our
opinion, funds raised on short term basis have not been used for long
term investment.
(xviii) The Company has not allotted any shares on preferential basis
to parties and companies covered in the Register maintained under
section 301 of the Act.
(xix) The Company has not issued any secured debentures;
(xx) The Company has not raised any money by issue of shares to the
public.
(xxi) During the course of 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
furnished to us by the management, no fraud on or by the Company has
been noticed or reported during the course of audit.
For SUNDARAM & SRINIVASAN
Chartered Accountants
Regn. No. 004207S
Chennai M BALASUBRAMANIYAM
May 30, 2014 Partner
Membership No. F7945
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Sundram
Fasteners Limited, Chennai ("the Company"), which comprise of Balance
Sheet as at 31st March 2013, and the Statement of Profit and Loss and
the Cash Flow Statement for the year ended on that date along with
Notes to financial statements.
Management''s Responsibility for the Financial Statements
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 ("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.
Auditor''s Responsibility
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.
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 financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers 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.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 31st March 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
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. 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 comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors
as on 31st March 2013, and taken on record by the Board of Directors,
none of the directors are disqualified as on 31st March 2013, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956.
Levy and Collection of cess on turnover or gross receipts
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
Annexure referred to in para 1 of our report on other legal
requirements of even date
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification at
reasonable intervals, 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.
(c) The Company has not disposed off substantial part of its fixed
assets, which will affect the going concern status of the company.
(ii) (a) The inventory other than in transit has been physically
verified at reasonable intervals during the year by the management. In
our opinion, the frequency of such verification is adequate. In respect
of inventory lying with third parties which have not been physically
verified, there is a process of obtaining confirmation from such
parties.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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) In our opinion, the Company has maintained proper records of
inventory. The discrepancies between the physical stocks and book
stocks were not material and have been properly dealt with in the books
of account.
(iii) (a) During the year, the Company has granted unsecured loan to a
wholly-owned subsidiary company covered in the register maintained
under Section 301 of the Act amounting to Rs 250 Lakhs (Balance due as
at the year end is Rs 1,850 Lakhs from one company). The Company has
waived interest due from subsidiary companies viz., Peiner
Umformtechnik GmbH and TVS Peiner Services, GmbH amounting to Rs 212.04
lakhs and Rs 13.77 lakhs respectively.
(b) In our opinion, the rate of interest and other terms and conditions
on which such loan is made is not prima facie prejudicial to the
interest of the company.
(c) The recovery of principal amount and interest thereon are in
accordance with the terms of loan.
(d) As on the date of Balance Sheet there was no overdue amount
recoverable on the said loan.
(e) The Company has not taken any loan secured or unsecured from
Companies, firms or other parties covered in the Register maintained
under Section 301 of the Act and accordingly paragraphs 4 (iii) (e),
(f) and (g) are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and for the sale of goods.
During the course of our audit, no minor or major continuing failure
has been noticed in the internal control procedures.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered in the
register maintained in pursuance of Section 301 of the Act have been
properly entered in the said register;
(b) In our opinion and according to the information and explanations
given to us, the transactions entered in the Register maintained under
Section 301 of the Act and exceeding Rupees five Lakhs during the year
in respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time;
(vi) The Company has not accepted any deposits from the public.
(vii) The Company has an internal audit system which, in our opinion,
is commensurate with the size and nature of its business;
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government under
Section 209 (1) (d) of the Act for maintenance of cost records and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained.
(ix) (a) According to the records provided to us, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Employees'' State Insurance, Investor Education and Protection
Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty,
Excise Duty, Cess and other statutory dues with the appropriate
authorities. However, certain marginal delays were noticed in respect
of remittance of Employees'' State Insurance, Income Tax Deducted at
Source on sub contract payments and professional services, Works
Contract Tax and Service Tax into Government and contribution to
Tamilnadu Labour Welfare Fund.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
as at 31st March 2013 for a period of more than six months from the
date they became payable.
(c) According to the information and explanations given to us, the
following are the details of the disputed Income Tax, Customs Duty,
Service Tax, Excise Duty and Property Tax that was not paid to the
concerned authorities.
Nature of demand Amount (Rs
lakhs) Forum where the dispute is pending
Income Tax 19.64 High Court of Judicature at Madras
Income Tax 346.12 Commissioner of Income Tax (Appeals)
Excise Duty 48.22 Central Excise & Service Tax Appellate
Tribunal
Excise Duty 51.48 Commissioner (Appeals)
Excise Duty 2.23 High Court of Judicature at Madras
Property Tax 50.67 Commissioner & Secretary to Govt
of Tamilnadu
Sales Tax/VAT 812.17 Joint Commissioner (Appeals) -
Commercial Tax
Central Sales Tax 33.33 Commercial Tax Officer
Service Tax 42.36 Central Excise & Service Tax
Appellate Tribunal
Service Tax 45.85 Commissioner (Appeals)
(x) The Company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
and in the immediately preceding year.
(xi) According to the records of the Company examined by us and the
information and explanations given to us by the management, the Company
has not defaulted in repayment of dues to any financial institution or
bank as at the balance sheet date.
(xii) Based on our examination and according to the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not a chit fund / nidhi / mutual benefit fund /
society and clause (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments other than in the units of mutual
funds. Proper records have been maintained in respect of these
transactions and contracts and timely entries have been made therein.
The investments have been held by the Company in its own name except to
the extent of exemption granted under Section 49 of the Act, in respect
of shares held in subsidiary companies through the nominees.
(xv) The Company has given guarantee to banks and financial institution
for loans taken by Subsidiary Companies and also housing loans availed
by its employees. The terms and conditions of such guarantees are not
prejudicial to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they have been obtained.
(xvii) On the basis of our examination of the Balance sheet of the
Company and according to the explanations given to us, in our opinion,
funds raised on short term basis have not been used for long term
investment.
(xviii) The Company has not allotted any shares on preferential basis
to parties and companies covered in the Register maintained under
section 301 of the Act.
(xix) The Company has not issued any secured debentures;
(xx) The Company has not raised any money by issue of shares to the
public.
(xxi) During the course of 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 by the management, no fraud on or by the Company has been
noticed or reported during the course of audit.
For SUNDARAM & SRINIVASAN
Chartered Accountants
Regn. No. 004207S
Chennai M BALASUBRAMANIYAM
May 30, 2013 Partner
Membership No. F7945
Mar 31, 2012
1. We have audited the attached Balance Sheet of M/s Sundram Fasteners
Limited, Chennai 600 004 as at 31st March 2012, the Statement of Profit
& Loss and also the Cash Flow Statement for the year ended on that date
annexed thereto. 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 the audit in accordance with auditing standards
generally accepted in India. These 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 issued
by the Central Government in terms of sub-section (4A) of Section 227
of the Companies Act, 1956 (the Act), we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
order to the extent applicable.
4. Further to our comments in the Annexure referred to above, we state
that:
(i) 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;
(ii) 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;
(iii) 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;
(iv) 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;
(v) On the basis of written representations received from directors of
the Company, as on 31st March 2012 and taken on record by the Board of
Directors, we report that no director is disqualified from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act as on the said date;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies, and other notes thereon 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 31st March 2012;
(b) In the case of the Statement of Profit & 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.
Annexure referred to in para 3 of our report of even date
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification at
reasonable intervals, 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.
(c) The Company has not disposed off substantial part of its fixed
assets, which will affect the going concern status of the company.
(ii) (a) The inventory other than in transit have been physically
verified at reasonable intervals during the year by the management. In
our opinion, the frequency of such verification is adequate. In respect
of inventory lying with third parties which have not been physically
verified, there is a process of obtaining confirmation from such
parties.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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) In our opinion, the Company has maintained proper records of
inventory. The discrepancies between the physical stocks and book
stocks were not material and have been properly dealt with in the books
of account.
(iii) (a) The Company has granted unsecured loan to wholly-owned
subsidiary company covered in the Register maintained under Section 301
of the Act. The maximum amount involved during the year and at the end
of the year was Rs.2267.30 lakhs. The terms and conditions of such
loans are, prima facie, not prejudicial to the interests of the
company.
(b) The Company has not taken any loans secured or unsecured from
Companies, firms or other parties covered in the Register maintained
under Section 301 of the Act, 1956 and accordingly paragraphs 4 (iii)
(b), (c), (d), (e), (f) and (g) are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and for the sale of goods.
During the course of our audit, no major continuing failure has been
noticed in the internal control procedures.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered in the
register maintained in pursuance of Section 301 of the Act have been
properly entered in the said register;
(b) In our opinion and according to the information and explanations
given to us, the transactions entered in the Register maintained under
Section 301 of the Act and exceeding Rupees five lakhs during the year
in respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time;
(vi) The Company has not accepted any deposits from the public.
(vii) The Company has an internal audit system which, in our opinion,
is commensurate with the size and nature of its business;
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government under
Section 209 (1)(d) of the Act for maintenance of cost records and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained.
(ix) (a) According to the records provided to us, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Employees' State Insurance, Investor Education and Protection
Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues with the
appropriate authorities. However, certain delays were noticed in
respect of remittance of Employees' State Insurance and tax deducted at
source on salary and sub-contract payments into government.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
as at 31st March 2012 for a period of more than six months from the
date they became payable.
(c) According to the information and explanations given to us, the
following are the details of the disputed Income Tax, Customs Duty,
Service Tax, Excise Duty and Property Tax that was not paid to the
concerned authorities.
Nature of
demand Amount (Rs lakhs) Forum where the dispute
is pending
Income Tax 19.64 High Court of Judicature
at Madras
Income Tax 20.38 Income Tax Appellate Tribunal
Income Tax 1.38 Commissioner of Income Tax
(Appeals)
Income Tax 0.95 Assessing Officer
Excise Duty 505.11 Central Excise & Service
Tax Appellate Tribunal
Excise Duty 92.16 Commissioner Appeals
Excise Duty 2.23 High Court of Judicature
at Madras
Property Tax 50.67 Commissioner & Secretary
to Govt of Tamil Nadu
Central Sales Tax 0.03 Commercial Tax Officer
Sales Tax / VAT 657.74 Joint Commissioner -
Commercial Tax
Central Sales Tax 33.30 Sales Tax Appellate Tribunal
Service Tax 40.17 Central Excise & Service Tax
Appellate Tribunal
Service Tax 16.27 Commissioner Appeals
(x) The Company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
and in the immediately preceding year.
(xi) According to the records of the Company examined by us and the
information and explanations given to us by the management, the Company
has not defaulted in repayment of dues to any financial institution or
bank as at the balance sheet date.
(xii) Based on our examination and according to the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not a chit fund/nidhi/mutual benefit fund/society
and clause (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments other than in the units of mutual
funds in respect of which the Company is maintaining adequate and
proper records.
(xv) The Company has given guarantee to banks and financial
institutions for loans taken by Subsidiary Companies and also housing
loans availed by its employees. The terms and conditions of such
guarantees are not prejudicial to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they have been obtained.
(xvii) On the basis of our examination of the Balance sheet of the
Company and according to the explanations given to us, in our opinion,
funds raised on short term basis have not been used for long term
investment.
(xviii) The Company has not allotted any shares on preferential basis
to parties and companies covered in the Register maintained under
section 301 of the Act.
(xix) The Company has not issued any secured debentures;
(xx) The Company has not raised any money by issue of shares to the
public.
(xxi) During the course of 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 not come across any instance of fraud by the
Company. As regards fraud on the Company reference may be made to Note
22A to the financial statements.
For SUNDARAM & SRINIVASAN
Regn. No. 004207S
Chartered Accountants
Chennai M BALASUBRAMANIYAM
May 28, 2012 Partner
Membership No. F7945
Mar 31, 2011
1. We have audited the attached Balance Sheet of M/s Sundram Fasteners
Limited, Chennai 600 004 as at 31st March 2011, the Profit & Loss
Account and also the Cash Flow Statement for the year ended on that
date annexed thereto. 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 the audit in accordance with auditing standards
generally accepted in India. These 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 issued
by the Central Government in terms of sub-section (4A) of Section 227
of the Companies Act, 1956 (the Act), we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
order to the extent applicable.
4. Further to our comments in the Annexure referred to above, we state
that:
(i) 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;
(ii) 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;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) 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;
(v) On the basis of written representations received from directors of
the Company, as on 31st March 2011 and taken on record by the Board of
Directors, we report that no director is disqualified from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act as on the said date;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies, and other notes thereon 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 31st March 2011;
(b) In the case of the Profit & Loss Account, 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.
Annexure referred to in para 3 of our report of even date
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification at
reasonable intervals, 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.
(c) The Company has not disposed off substantial part of its fixed
assets, which will affect the going concern status of the company.
(ii) (a) The inventory other than in transit have been physically
verified at reasonable intervals during the year by the management. In
our opinion, the frequency of such verification is adequate. In respect
of inventory lying with third parties which have not been physically
verified, there is a process of obtaining confirmation from such
parties.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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) In our opinion, the Company has maintained proper records of
inventory. The discrepancies between the physical stocks and book
stocks were not material and have been properly dealt with in the books
of account.
(iii) (a) The Company has granted unsecured loan to wholly-owned
subsidiary company covered in the Register maintained under Section 301
of the Act. The maximum amount involved during the year and at the end
of the year was Rs.2227.30 lakhs. The terms and conditions of such
loans are, prima facie, not prejudicial to the interests of the
company.
(b) The Company has not taken any loans secured or unsecured from
Companies, firms or other parties covered in the Register maintained
under Section 301 of the Act, 1956 and accordingly paragraphs 4 (iii)
(b), (c), (d), (e), (f) and (g) are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and for the sale of goods.
During the course of our audit, no major continuing failure has been
noticed in the internal control procedures.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered in the
register maintained in pursuance of Section 301 of the Act have been
properly entered in the said register;
(b) In our opinion and according to the information and explanations
given to us, the transactions entered in the Register maintained under
Section 301 of the Act and exceeding Rupees five lakhs during the year
in respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time;
(vi) The Company has not accepted any deposits from the public.
(vii) The Company has an internal audit system which, in our opinion,
is commensurate with the size and nature of its business;
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government under
Section 209 (1)(d) of the Act for maintenance of cost records and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained.
(ix) (a) According to the records provided to us, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Employees' State Insurance, Investor Education and Protection
Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues with the
appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
as at 31st March 2011 for a period of more than six months from the
date they became payable.
(c) According to the information and explanations given to us, the
following are the details of the disputed Income Tax, Customs Duty,
Service Tax, Excise Duty and Property Tax that was not paid to the
concerned authorities.
Nature of demand Amount (Rs lakhs) Forum where the
dispute is pending
Income Tax 19.64 Madras High Court
Income Tax 20.38 Income Tax Appelate
Tribunal
Income Tax 1.38 Commissioner (Appeals)
Income Tax 0.95 Assessing Officer
Excise Duty 418.46 CESTAT
Excise Duty 165.49 Commissioner Appeals
Property Tax 6.87 Commissioner & Secretary
to Govt of TamilNadu
Central Sales Tax 0.03 Commercial Tax Officer
Central Sales Tax 33.30 Sales Tax Appellate
Tribunal
Service Tax 2.14 Commissioner Appeals
(x) The Company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
and in the immediately preceding year.
(xi) According to the records of the Company examined by us and the
information and explanations given to us by the management, the Company
has not defaulted in repayment of dues to any financial institution or
bank as at the balance sheet date.
(xii) Based on our examination and according to the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The Company is not a chit fund/n id hi/mutual benefit
fund/society and clause (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments other than in the units of mutual
funds in respect of which the Company is maintaining adequate and
proper records.
(xv) The Company has given guarantee to banks and financial
institutions for loans taken by Subsidiary Companies and also housing
loans availed by its employees. The terms and conditions of such
guarantees are not prejudicial to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they have been obtained.
(xvii) On the basis of our examination of the Balance sheet of the
Company and according to the explanations given to us, in our opinion,
funds raised on short term basis have not been used for long term
investment.
(xviii) The Company has not allotted any shares on preferential basis
to parties and companies covered in the Register maintained under
section 301 of the Act.
(xix) The Company has not issued any secured debentures;
(xx) The Company has not raised any money by issue of shares to the
public.
(xxi) During the course of 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 SUNDARAM & SRINIVASAN
Regd No. 004207S
Chartered Accountants
M BALASUBRAMANIYAM
Chennai Partner
May 30, 2011 Membership No. F7945
Mar 31, 2010
1. We have audited the attached Balance Sheet of M/s Sundram Fasteners
Limited, Chennai 600 004 as at 31st March 2010, the Profit & Loss
Account and also the Cash Flow Statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the CompanyÃs management . Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted the audit in accordance with auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003 issued
by the Central Government in terms of sub-section (4A) of Section 227
of the Companies Act, 1956 (the Act), we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
order to the extent applicable.
4. Further to our comments in the Annexure referred to above, we state
that:
(i) 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;
(ii) 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;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) 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;
(v) On the basis of written representations received from directors of
the Company, as on 31st March 2010 and taken on record by the Board of
Directors, we report that no director is disqualified from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act as on the said date;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies, and other notes thereon 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 31st March 2010;
(b) In the case of the Profit & Loss Account, 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.
Annexure referred to in para 3 of our report of even date
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification at
reasonable intervals, 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.
(c) The Company has not disposed off substantial part of its fixed
assets, which will affect the going concern status of the company.
(ii) (a) The inventory other than in transit have been physically
verified at reasonable intervals during the year by the management. In
our opinion, the frequency of such verification is adequate. In respect
of inventory lying with third parties which have not been physically
verified, there is a process of obtaining confirmation from such
parties.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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) In our opinion, the Company has maintained proper records of
inventory. The discrepancies between the physical stocks and book
stocks were not material and have been properly dealt with in the books
of account.
(iii) (a) The Company has granted unsecured loan to a company covered
in the Register maintained under Section 301 of the Act. The maximum
amount involved during the year and at the end of the year was
Rs.1997.30 lakhs. The terms and conditions of such loans are, prima
facie, not prejudicial to the interests of the company.
(b) The Company has not taken any loans secured or unsecured from
Companies, firms or other parties covered in the Register maintained
under Section 301 of the Act, 1956 and accordingly paragraphs 4 (iii)
(b), (c), (d), (e), (f) and (g) are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and for the sale of goods.
During the course of our audit, no major continuing failure has been
noticed in the internal control procedures.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered in the
register maintained in pursuance of Section 301 of the Act have been
properly entered in the said register;
(b) In our opinion and according to the information and explanations
given to us, the transactions entered in the Register maintained under
Section 301 of the Act and exceeding Rupees five lakhs during the year
in respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time;
(vi) The Company has not accepted any deposits from the public.
Annexure referred to in para 3 of our report of even date (Contd.)
(vii) The Company has an internal audit system which, in our opinion,
is commensurate with the size and nature of its business;
(viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government under
Section 209 (1)(d) of the Act for maintenance of cost records and are
of the opinion that, prima facie, the prescribed accounts and records
have been made and maintained.
(ix) (a) According to the records provided to us, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Employeesà State Insurance, Investor Education and Protection
Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues with the
appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
as at 31st March 2010 for a period of more than six months from the
date they became payable.
(c) According to the information and explanations given to us, the
following are the details of the disputed Income Tax, Customs Duty,
Service Tax, Excise Duty and Property Tax that was not paid to the
concerned authorities.
Nature of demand Amount (Rs lakhs) Forum where the dispute is pending
Income Tax 19.64 Madras High Court
Income Tax 20.38 Income Tax Appelate Tribunal
Income Tax 312.56 Commissioner (Appeals)
Excise Duty 30.53 cestat
Excise Duty 719.84 Commissioner Appeals
Customs Duty 2.23 Commissioner Appeals
Property Tax 5.31 Commissioner & Secretary to
Govt of TamilNadu
Property Tax 6.27 Ambattur Municipality
Service Tax 1.65 CESTAT
Service Tax 88.08 Commissioner Appeals
(x) The Company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
and in the immediately preceding year.
(xi) According to the records of the Company examined by us and the
information and explanations given to us by the management, the Company
has not defaulted in repayment of dues to any financial institution or
bank as at the balance sheet date.
(xii) Based on our examination and according to the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
Annexure referred to in para 3 of our report of even date (Contd.)
(xiii) The Company is not a chit fund/nidhi/mutual benefit fund/society
and clause (xiii) of the Order is not applicable.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments other than in the units of mutual
funds in respect of which the Company is maintaining adequate and
proper records.
(xv) The Company has given guarantee to banks and financial
institutions for loans taken by Subsidiary Companies and also housing
loans availed by its employees. The terms and conditions of such
guarantees are not prejudicial to the interests of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they have been obtained.
(xvii) On the basis of our examination of the Balance sheet of the
Company and according to the explanations given to us, in our opinion,
funds raised on short term basis have not been used for long term
investment.
(xviii) The Company has not alloted any shares on preferential basis to
parties and companies covered in the Register maintained under section
301 of the Act.
(xix) The Company has not issued any secured debentures;
(xx) The Company has not raised any money by issue of shares to the
public.
(xxi) During the course of 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 SUNDARAM & SRINIVASAN
Regd No. 004207S
Chartered Accountants
M BALASUBRAMANIYAM
Chennai Partner
May 29, 2010 Membership No. F7945