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Mahindra & Mahindra Financial Services Ltd.

BSE: 532720 Sector: Financials
NSE: M&MFIN ISIN Code: INE774D01024
BSE LIVE 15:40 | 08 Dec 452.65 -3.55
(-0.78%)
OPEN

460.00

HIGH

460.40

LOW

449.00

NSE 15:54 | 08 Dec 452.40 -3.25
(-0.71%)
OPEN

459.95

HIGH

460.70

LOW

448.90

OPEN 460.00
PREVIOUS CLOSE 456.20
VOLUME 67421
52-Week high 461.00
52-Week low 244.35
P/E 81.27
Mkt Cap.(Rs cr) 27,962
Buy Price 0.00
Buy Qty 0.00
Sell Price 452.65
Sell Qty 50.00
OPEN 460.00
CLOSE 456.20
VOLUME 67421
52-Week high 461.00
52-Week low 244.35
P/E 81.27
Mkt Cap.(Rs cr) 27,962
Buy Price 0.00
Buy Qty 0.00
Sell Price 452.65
Sell Qty 50.00

Mahindra & Mahindra Financial Services Ltd. (M&MFIN) - Auditors Report

Company auditors report

To the Members of

Mahindra & Mahindra Financial Services Limited

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

1. We have audited the accompanying standalone financial statements of Mahindra& Mahindra Financial Services Limited ("the Company") which comprisethe balance sheet as at March 31 2017 and the statements of Profit and loss and cashflow for the year then ended and a summary of the significant accounting policies andother explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting StandardsSpecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 (as amended). This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing Specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the standalone financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

OPINION

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its Profit and its cash flows for the period from April 1 2016to March 31 2017.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

9. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act (the"Order") and on the basis of such checks of the books and records of theCompany as we considered appropriate and according to the information and explanationsgiven to us we give in the Annexure I a statement on the matters Specified in paragraphs3 and 4 of the Order to the extent applicable.

10. As required by Section 143(3) of the Act we report that:

a. we have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books;

c. the Balance Sheet the Statement of Profit and Loss and Cash Flow dealt with by thisReport are in agreement with the books of account;

d. in our opinion the aforesaid standalone financial statements comply with theAccounting Standards Specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 (as amended);

e. on the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 312017 from being appointed as a director in terms of Section 164(2) of theAct.

f. with respect to the adequacy of internal financial controls over financial reportingof the Company and the operating effectiveness of such controls refer to our separatereport in Annexure II.

g. with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and

Auditors) Rules 2014(as amended) in our opinion and to the best of our informationand according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements – Refer Note 44 to the standalonefinancial statements.

ii. The Company does not have any long-term contracts including derivative contractsfor which there are any material foreseeable losses that need provision.

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016. Based on audit procedures and relying onthe management representation we report that disclosures are in accordance with books ofaccount maintained by the company and as provided by the management – Refer Note no.42.However as stated in notes to the standalone financial statements the Company hasreceived amount aggregating Rs. 10.78 Lakhs from transactions which are not permitted;

For B. K. Khare and Co.
Chartered Accountants
Firm's Registration Number 105102W
Padmini Khare Kaicker
Place: Mumbai Partner
Date: April 25 2017 Membership No. 044784

Annexure I to the Auditor's Report

Referred to in paragraph 9 of our report of even date on the standalone financialstatements of Mahindra & Mahindra Financial Services Limited for the year endedMarch 31 2017

I. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a programmeof phased verification which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. Pursuant to the programme a portion of thefixed assets has been physically verified by the Management during the year and nomaterial discrepancies have been noticed in respect of assets verified during the year.

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

II. The Company is in the business of providing Non Banking Financial Services andconsequently does not hold any inventory. Hence para 3(ii) of the Companies (Auditor'sReport) Order 2016 is not applicable to the company.

III. There are no companies firms or other parties covered in the register maintainedunder section 189 of Companies Act 2013. Therefore para 3(iii) (a) (b) & (c) of theCompanies (Auditor's Report) Order 2016 is not applicable to the company.

IV. The provisions of section 185 of the Act are not applicable to the Company. TheCompany has complied with the provisions of section 186 of the Act to the extentapplicable.

V. The Company is a non banking finance company and consequently is exempt fromprovisions of section 73 74 75 and 76 of the Act. Hence para 3(v) of the Order is notapplicable to the Company.

VI. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.

VII. (a) According to the records of the Company and information and explanations givento us the Company is generally regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income tax service tax duty of customsvalue added tax cess and other applicable statutory dues with the appropriateauthorities.

(b) According to the information and explanations given to us there are no undisputedamounts payable in respect of Provident Fund Employees' State Insurance Income taxService Tax duty of customs and Value Added Tax and other material statutory dues thatwere outstanding at the year-end for a period of more than six months from the date theybecame payable.

(c) except for the following cases there are no disputed dues of income tax or servicetax or duty of customs or value added tax which have not been deposited with the relevantauthority.

Nature of statute Nature of dues Amount (Rs. in Lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 126.80 2003-04 Income Tax Appellant Tribunal
Income Tax Act 1961 Income Tax penalty 59.33 2003-04 Income Tax Appellant Tribunal
Income Tax Act 1961 Income Tax 523.28 2005-06 Commissioner of Income tax (Appeal)
Income Tax Act 1961 Income Tax 781.29 2006-07 Commissioner of Income tax (Appeal)
Income Tax Act 1961 Income Tax 72.82 2007-08 Commissioner of Income tax (Appeal)
Income Tax Act 1961 Income Tax 7.86 2010-11 Commissioner of Income tax (Appeal)
Value Added Tax Value Added Tax 123.57 April 2008 to Oct 2013 Andhra Pradesh High Court
Maharashtra VAT Act Value Added Tax 242.31 2010-11 Dy. Commissioner of Sales Tax Maharashtra
Madhya Pradesh VAT Act Value Added Tax 0.42 2013-14 Appellate Authority of Commercial Authority
Madhya Pradesh VAT Act Value Added Tax 1.35 2014-15 Appellate Authority of Commercial Authority
Finance Act 1994 Service tax 5342.34 2008-13 CESTAT (tribunal)
Finance Act 1994 Service tax 70.32 2008-13 Commissioner (Appeals – I) Mumbai

VIII. On the basis of examination of relevant records and according to the informationand explanations given to us the Company has not defaulted in repayment of any dues fromfinancial institution or bank or debenture holders as at the Balance Sheet date.

IX. On the basis of examination of relevant records and according to the informationand explanations given to us during the year the Company has raised moneys by way ofpublic issue of Non-convertible Debentures.

In our opinion and according to the information and explanations given to us duringthe year the amounts raised by way of public issue of non convertible debentures and termloans have been applied for the purpose for which they were obtained.

X. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us except for 176 casesaggregating Rs. 397.06 Lakhs we have neither come across any instance of fraud by theCompany or on the Company by its officers or employees noticed or reported during theyear nor have we been informed of such case by the Management.

XI. On the basis of examination of relevant records and according to the informationand explanations given to us the Company has paid or provided managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act 2013.

XII. The Company is not a ‘Nidhi Company' therefore para 3(xii) of the Companies(Auditor's Report) Order 2016 is not applicable to the Company.

XIII. On the basis of examination of relevant records and according to the informationand explanations given to us all transactions with the related parties are in compliancewith sections 177 and 188 of Act where applicable. The Company has disclosed the detailsof transactions with related parties in the Standalone financial statements as required bythe applicable accounting standards.

XIV. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under audit therefore para3(xiv) of the Order is not applicable to the company.

XV. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us the Company has not enteredinto any non-cash transactions with its directors or persons connected with him.Accordingly the provisions of Clause 3(xv) of the Order are not applicable to theCompany.

XVI. On the basis of examination of relevant records and according to the informationand explanations given to us the Company is required to be registered under section 45-IAof the Reserve Bank of India Act 1934 and holds a valid Certificate of registration underthe same.

For B. K. Khare and Co.
Chartered Accountants
Firm's Registration Number 105102W
Padmini Khare Kaicker
Place: Mumbai Partner
Date: April 25 2017 Membership No. 044784

Annexure II to the Independent Auditor's Report

of even date on the Financial Statements of Mahindra & Mahindra FinancialServices Limited

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

We have audited the internal financial controls over financial reporting of Mahindra& Mahindra Financial Services Limited ("the Company") as of March 312017 in conjunction with our audit of the financial statements of the Company for the yearended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatoperate effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofinternal financial controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that;

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

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

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

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For B. K. Khare and Co.
Chartered Accountants
Firm's Registration Number 105102W
Padmini Khare Kaicker
Place: Mumbai Partner
Date: April 25 2017 Membership No. 044784