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MRF Ltd.

BSE: 500290 Sector: Auto
NSE: MRF ISIN Code: INE883A01011
BSE 15:40 | 16 Jan 70272.30 -1350.75
(-1.89%)
OPEN

71400.00

HIGH

71788.00

LOW

69946.00

NSE 15:47 | 16 Jan 70284.55 -1249.45
(-1.75%)
OPEN

71401.00

HIGH

71900.50

LOW

69889.60

OPEN 71400.00
PREVIOUS CLOSE 71623.05
VOLUME 425
52-Week high 74499.00
52-Week low 49600.00
P/E 30.36
Mkt Cap.(Rs cr) 29,795
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 71400.00
CLOSE 71623.05
VOLUME 425
52-Week high 74499.00
52-Week low 49600.00
P/E 30.36
Mkt Cap.(Rs cr) 29,795
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

MRF Ltd. (MRF) - Auditors Report

Company auditors report

TO THE MEMBERS OF MRF LIMITED

1. REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

1.1 We have audited the accompanying standalone Ind AS financial statements of MRFLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss (including other comprehensive income) the CashFlow Statement and the statement of changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

2. MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS.

2.1 The Company’s Board of Directors is responsible for the matters stated inSection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the state of affairs (financial position) profit or loss (financial performanceincluding other comprehensive income) cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

2.2 This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

3. AUDITOR’S RESPONSIBILITY

3.1 Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

3.2 We conducted our audit of the Standalone Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS financial statements are freefrom material misstatement.

3.3 An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the Standalone Ind AS financial statements. The procedures selecteddepend on the auditor’s judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company’s preparation of the Standalone Ind AS financial statementsthat give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompany’s Directors as well as evaluating the overall presentation of the StandaloneInd AS financial statements.

3.4 We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone Ind AS financial statements.

4. OPINION

4.1 In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at 31st March 2017 its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

5. OTHER MATTERS

5.1 The comparative financial information of the company for the period ended 31stMarch 2016 and the transition date opening balance sheet as at 1st October 2014 preparedin accordance with Ind AS included in these standalone Ind AS financial statements havebeen audited by a predecessor auditor who had jointly audited the financial statements forthe relevant periods. The report of the predecessor auditor on the comparative financialinformation and the opening balance sheet dated 25th March 2017 expressed an unmodifiedopinion.

Our Opinion on the standalone Ind AS financial statement and our report on other legaland regulatory requirements is not modified in respect of these matters.

6. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

6.1 As required by the Companies (Auditor’s Report) Order 2016("theOrder") issued by the Central Government in terms of Section 143 (11) of the Act wegive in "Annexure A" - a statement on the matters specified in paragraphs 3 and4 of the Order.

6.2 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 bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

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 in our opinionand 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 financialposition in its Standalone Ind AS financial statements Refer Note 28 (v) (iii) to theStandalone Ind AS financial statements;

ii. The Company has long-term contracts including derivative contracts for which therewere no material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the company during the year ended 31st March2017.

iv. The Company has provided requisite disclosures in its Ind AS financial statementsas to holdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December

2016 and these are in accordance with the books of accounts maintained by the Company.

For SASTRI & SHAH For SCA AND ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Regn. No. 003643S Firm Regn. No. 101174W
(C R Kumar) (Shivratan Agarwal)
Partner Partner
Mem. No. 26143 Mem. No. 104180
Chennai Dated May 04 2017

ANNEXURE "A" TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF MRF LIMITED

i) In respect of its Fixed Assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets;

b) As explained to us the Assets have been physically verified by the management inaccordance with a phased programme of verification which in our opinion is reasonableconsidering the size and the nature of its business. The frequency of verification isreasonable and no material discrepancies have been noticed on such physical verification;

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

ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. As regards materials lying with third partiesconfirmations have been obtained;

iii) The Company has not granted any loans secured or unsecured during the year tocompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Act. Accordingly the clauses 3(iii) (a) (b) and (c)of the Order are not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto loans and making investments.

v) The Company has complied with the directives issued by Reserve Bank of India and theProvisions of Section 73 to 76 of the Act and the rules framed thereunder with regard todeposits accepted from the public. We are informed by the management that no order hasbeen passed by the Company Law Board or National Company Law Tribunal or Reserve Bank ofIndia or any court or any other Tribunal on the Company.

vi) We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148 (1) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained.

vii) a) The Company is regular in depositing undisputed statutory dues includingProvident Fund Employees’ State Insurance Income Tax Sales-Tax Service Tax dutyof customs duty of excise value added tax cess and any other statutory dues withappropriate authorities where applicable. According to the information and explanationsgiven to us there are no undisputed amounts payable in respect of such statutory dueswhich have remained outstanding as at 31st March 2017 for a period of more than sixmonths from the date they became payable.

b) According to the records of the Company the dues outstanding of income-taxsales-tax service tax duty of customs duty of excise and value added tax on account ofany dispute are as follows:

Statute and nature of dues Financial year to which the matter pertains Forum where the dispute is pending ` in Crores
CENTRAL SALES TAX ACT 1956 & VAT LAWS
Sales tax / VAT and penalty 2000-01 to 2016-17 Appellate Commissioner 4.14
1997-98 to 2010- 11 & 2013-14 to 2016-17 Appellate Tribunal 13.87
1996-97 2006-07 to 2016-17 High Court 20.45
1996-97 2000-01 & 2002-03 Supreme Court 0.01

 

CUSTOMS ACT 1962
Customs Duty and penalty 1992-93 to 1994-95 High Court 74.89
CENTRAL EXCISE ACT 1944
Excise duty and penalty 1997-98 & 2006-07 Appellate Commissioner 0.09
1993-94 1999-2000 to 2001-2002 & 2014-15 Appellate Tribunal 1.03
2001-02 Supreme Court 0.06
INCOME TAX 1961
Income Tax 2001-02 2003-04 2007-08 2009-10 2010-11 & 2011-12 High Court 66.04

viii) The Company has not defaulted in repayment of its loans or borrowings to banksand debenture holders.

ix) The Company has not raised any moneys by way of Initial public offer or furtherPublic offer (Including debt instruments) during the year. Moneys raised by way of TermLoan were applied for the purpose for which those are raised.

x) On the basis of our examination and according to the information and explanationsgiven to us no fraud by the Company or any material fraud on the company by its officersor employees has been noticed or reported during the year nor have we been informed ofany such case by the management.

xi) The managerial remuneration has been paid/provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii) The Company is not a nidhi Company and accordingly provisions of clause (xii)ofPara 3 of the order are not applicable to the Company.

xiii) On the basis of our examination and according to the information and explanationsgiven to us we report that all the transaction with the related parties are in compliancewith Section 177 and 188 of the Act and the details have been disclosed in the Financialstatements in Note no.28 (m) as required by the applicable Ind AS.

xiv) The Company has not made any preferential allotment or private placement of shareor fully or partly convertible debentures during the year and accordingly provisions ofclause (xiv) of Para 3 of the Order are not applicable to the Company.

xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly provisions ofclause (xv) of Para 3 of the Order are not applicable to the company.

xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act1934 and accordingly provisions clause (xvi) of Para 3 of the Order arenot applicable to the Company.

For SASTRI & SHAH For SCA AND ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Regn. No. 003643S Firm Regn. No. 101174W
(C R Kumar) (Shivratan Agarwal)
Partner Partner
Mem. No. 26143 Mem. No. 104180
Chennai Dated May 04 2017

"ANNEXURE B" TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF MRF LIMITED.

1. REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")

We have audited the internal financial controls over financial reporting of MRF LIMITED("the Company") as of March 31 2017 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that date.

2. 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 thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to 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.

3. 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 Institute ofChartered accountants of India and deemed to be prescribed under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch 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 controlssystem over financial reporting.

4. MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A Company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

5. 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.

6. 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 issued by the Institute of Chartered Accountants of India.

For SASTRI & SHAH For SCA AND ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Regn. No. 003643S Firm Regn. No. 101174W
(C R Kumar) (Shivratan Agarwal)
Partner Partner
Mem. No. 26143 Mem. No. 104180
Chennai Dated May 04 2017