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Mahindra & Mahindra Financial Services Ltd.

BSE: 532720 Sector: Financials
NSE: M&MFIN ISIN Code: INE774D01024
BSE 09:21 | 24 Apr 427.50 3.55
(0.84%)
OPEN

425.00

HIGH

429.95

LOW

425.00

NSE 09:07 | 24 Apr 425.85 1.75
(0.41%)
OPEN

425.85

HIGH

425.85

LOW

425.85

OPEN 425.00
PREVIOUS CLOSE 423.95
VOLUME 4590
52-Week high 537.50
52-Week low 351.00
P/E 18.95
Mkt Cap.(Rs cr) 26,409
Buy Price 427.05
Buy Qty 176.00
Sell Price 427.65
Sell Qty 24.00
OPEN 425.00
CLOSE 423.95
VOLUME 4590
52-Week high 537.50
52-Week low 351.00
P/E 18.95
Mkt Cap.(Rs cr) 26,409
Buy Price 427.05
Buy Qty 176.00
Sell Price 427.65
Sell Qty 24.00

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

We have audited the accompanying standalone financial statements of Mahindra &Mahindra Financial Services Limited (the "Company") which comprise the BalanceSheet as at 31 March 2018 the Statement of Profit and Loss the Cash Flow Statement forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

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.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

AUDITOR'S RESPONSIBILITY

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

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.

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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.

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

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 31 March 2018 and its profits and its cash flows for the year ended on that date.

OTHER MATTER

The financial statements of the Company for the year ended 31 March 2017 were auditedby another auditor who expressed an unmodified opinion on those statements on 25 April2017.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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 ofthe Act we give in the Annexure A a statement on the matters specified in paragraph 3and 4 of the Order to the extent applicable.

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 and the Cash Flow Statementdealt with by this Report 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; e) On the basis of the written representations receivedfrom the directors as on 31 March 2018 taken on record by the Board of Directors none ofthe directors is disqualified as on 31 March 2018 from being appointed as a director interms of Section 164 (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"; and

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 financial statements – Refer Note 46 to the standalone financialstatements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 44 to the standalone financial statements; and

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

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made since they do not pertain to the financial year ended 31 March2018. However amounts as appearing in the audited standalone financial statements for theperiod ended 31 March 2017 have been disclosed.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Venkataramanan Vishwanath
Place : Mumbai Partner
Date : 25 April 2018 Membership No: 113156

Annexure A to the Independent Auditor's Report - 31 March 2018

The Annexure referred to in Independent Auditor's Report to the members of the Companyon the

standalone financial statements for the year ended 31 March 2018 we report that:

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 the fixed assets havebeen physically verified by the management during the year and no material discrepancieswere noticed on such 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 areheld in the name of the Company. ii. The Company is in the business of providingNon-Banking Financial Services and consequently does not hold any inventory. Hence para3(ii) of the Order is not applicable to the company. iii. According to the information andexplanations given to us the Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Act. Accordingly paragraph 3(iii) of the Order is notapplicable to the Company. iv. In our opinion and according to the information andexplanations given to us the provisions of section 185 are not applicable to the Company.The Company 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 exemptfrom provisions of section 73 74 75 and 76 of the Act. Hence paragraph 3(v) of theOrder is not applicable to the Company. vi. According to the information and explanationsgiven to us the Central Government has not prescribed the maintenance of cost recordsunder section 148(1) of the Act for any activities conducted/ services rendered by theCompany. vii. (a) According to the information and explanations given to us and on thebasis of our examination of the records of the Company amounts deducted / accrued in thebooks of account in respect of undisputed statutory dues including provident fundemployees' state insurance income-tax service tax value added tax cess and othermaterial statutory dues have generally been regularly deposited during the year by theCompany with the appropriate authorities except delays noted in depositing the labourwelfare fund. Labour welfare fund amounting to Rs. 1.62 lakhs had remained outstanding asat 31 March 2018 for a period of more than six months from the date it became payablewhich has been paid subsequent to 31 March 2018.

(b) According to the information and explanations given to us the following dues havenot been deposited by the Company on account of any disputes.

Name of the statute Nature of dues Amount Period to which the amount relates Forum where dispute is pending
(Rs. in lakhs)
Income Tax Act 1961 Income Tax 126.80 2003-04 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 59.33 2003-04 Income Tax Appellant Tribunal
Income Tax Act 1961 Income Tax 698.98 2004-05 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 523.28 2005-06 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 781.29 2006-07 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 72.82 2007-08 Commissioner of Income Tax (Appeals)
Andhra Pradesh Value Added Tax 123.57 April 2008 to Andhra Pradesh High Court
Value Added Tax Act October 2013
Maharashtra Value Added Tax 87.32 2010-11 Maharashtra Sales Tax Tribunal
Value Added Tax Act
Madhya Pradesh Value Added Tax 0.56 2013-14 Appellate Authority of Commercial Taxes
Value Added Tax Act
Madhya Pradesh Value Added Tax 1.50 2014-15 Appellate Authority of Commercial Taxes
Value Added Tax Act
Finance Act 1994 Services Tax 3404.77 2008-13 Customs Excise And Service Tax Appellate
Tribunal (CESTAT)

viii. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not defaulted in the repaymentof outstanding dues to financial institution bank or debenture holder during the year.The Company did not have any borrowings from the government during the year.

ix. According to the information and explanations given to us the Company has utilisedthe money raised by way of issue of non-convertible debentures and the terms loans duringthe year for the purpose for which they were raised. The Company has not raised moneys byway of initial public offer or further public offer during the year.

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 130 casesaggregating Rs. 170.63 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 management.

xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company. xiii. According to the information and explanations given to usand on the basis of our examination of the records of the Company transactions with therelated parties are in compliance with section 177 and 188 of the Act where applicable andthe details have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given by the management the Companyhas complied with provisions of Section 42 of the Companies Act 2013 in respect of thepreferential allotment and private placement of equity shares during the year. Accordingto the information and explanations given by management we report that the amountsraised have been used for the purposes for which the funds were raised.

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 paragraph 3(xv) ofthe Order is not applicable.

xvi. According to the information and explanations given to us the Company hasregistered as required under Section 45-IA of the Reserve Bank of India Act 1934.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Venkataramanan Vishwanath
Place : Mumbai Partner
Date : 25 April 2018 Membership No: 113156

Annexure B to the Independent Auditor's Report - 31 March 2018

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 31 March 2018 inconjunction with our audit of the financial statements of the Company for the year endedon 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India (the"ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to theCompany's policies safeguarding of its assets prevention and detection of frauds anderrors accuracy and completeness of the accounting records and timely preparation ofreliable financial information as required under the Act.

AUDITOR'S 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 and the Standards on Auditing issued by the ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgment 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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.

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 31 March 2018 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 theICAI.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Venkataramanan Vishwanath
Place : Mumbai Partner
Date : 25 April 2018 Membership No: 113156