To the Members of
Motherson Sumi Systems Limited Report on the Standalone Indian Accounting Standards(Ind AS) Financial Statements
1. We have audited the accompanying standalone financial statements of MothersonSumi Systems Limited("the Company") which comprise the Balance Sheet as atMarch 31 2017 the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone Ind AS Financial Statements
2. The Companys 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 to give a true and fair viewof the financial position financial performance (including other comprehensive income)cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standardsspecified in the Companies (Indian Accounting Standards) Rules 2015 (as amended) underSection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of 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 designimplementation and maintenance ofadequate internal financial controlsthat were operating Effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone Ind AS financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.
4. We have taken into account the provisions of the Act and the Rules madethereunder including the accounting and auditing standards and matters which are requiredto be included in the audit report under the provisions of the Act and the Rules madethereunder.
5. We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing specified under Section 143(10)of the Act andother applicable authoritative pronouncements issued by the Institute of CharteredAccountants of India. Those Standards and pronouncements require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the standalone Ind AS financial statements. The proceduresselected depend on the auditors judgmentincluding the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Companys preparation of the standalone Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Companys Directors as well as evaluating the overall presentation of thestandalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is suicient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.
8. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaairs of the Company as at March 31 2017 and its profit (including other comprehensiveincome) its cash flows and the changes in equity for the year ended on that date.
9. The financial information of the Company for the year ended March 31 2016 andthe transition date opening balance sheet as at April 1 2015 included in these standaloneInd AS financial statements are based on the previously issued statutory financialstatements for the years ended March 31 2016 and March 31 2015 prepared in accordancewith the Companies (Accounting Standards) Rules 2006 (as amended) which were audited byus on which we expressed an unmodified opinion dated May 17 2016 and May 12 2015respectively. The adjustments to those financial statements for the differences inaccounting principles adopted by the Company on transition to the Ind AS have been auditedby us.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditors Report) Order 2016 issued by theCentral Government 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 B a statement on the matters specified in paragraphs3 and 4 of the Order.
11. As required by Section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the 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 (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March31 2017taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct.
(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 A.
(g) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:
i. The Company has disclosed the impact if any of pending litigations as at March31 2017on its financial position in its standalone Ind AS financial statements Refer Note 20 and Note 43;
ii. The Company has made provision as at March 31 2017 as required under theapplicable law or accounting standards for material foreseeable lossesif any onlong-term contracts including derivative contracts Refer Note 36;
iii. There has been no delay in transferring amounts required to be transferredto the Investor Education and Protection Fund by the Company during the year ended March31 2017;
iv. The Company has provided requisite disclosures in the financial statementsas to holdings as well as dealings in Specified Bank Notes during the period from November8 2016 to December 30 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management Refer Note 44.
| ||For Price Waterhouse Chartered |
| ||Accountants LLP |
| ||Firm Registration Number: 012754N/N500016 |
| ||Rajib Chatterjee |
|Place: Noida ||Partner |
|Date: May 19 2017 ||Membership Number: |
| ||057134 |
Annexure A to Independent Auditors Report
Referred to in paragraph 11(f) of the Independent Auditors Report of even date tothe members of Motherson Sumi Systems Limited on the standalone Ind AS financialstatements for the year ended March 31 2017 Report on the Internal Financial Controlsunder Clause (i) of Sub-section 3 of Section 143 of the Act 1. We have audited theinternal financial controls over financial reporting of Motherson Sumi Systems 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.
Managements Responsibility for Internal Financial Controls
2. The Companys management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the designimplementation and maintenance of adequate internalfinancial controls that were operating Effectively for ensuring the orderly andeicient conduct of its business including adherence to companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Companys 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 deemed to be prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of internal financial controls and both issued bythe ICAI. 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.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 auditors judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
5. We believe that the audit evidence we have obtained is suicient andappropriate to provide a basis for our audit opinion on the Companys internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. A companys 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 companys internal financial control overfinancial reporting includes those policies and procedures that (i) pertain to themaintenance of records that in reasonable detailaccurately and fairly reflect thetransactions and dispositions of the assets of the Company; (ii)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 (iii) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompanys assets that could have a material Effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of internal financial controls over 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.
8. 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 Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
| ||Rajib Chatterjee |
|Place: Noida ||Partner |
|Date: May 19 2017 ||Membership Number: 057134 |
Annexure B to Independent Auditors Report
Referred to in paragraph 10 of the Independent Auditors Report of even date tothe members of Motherson Sumi Systems Limited on the standalone Ind AS financialstatements as of and for the year ended March 31 2017
i. (a) The Company is maintaining 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 phasedprogramme designed to cover all the items over a period of 3 years which in our opinionis reasonable having regard to the size of the Company and the nature of its assets.Pursuant to the programme a portion of the fixed assets has been physically verified bythe Management during the year and no material discrepancies have been noticed on suchverification.
(c) The title deeds of immovable properties as disclosed in Note 3 on fixed assets tothe financial statements are held in the name of the Company.
ii. The physical verification of inventory excluding stocks with third parties havebeen conducted at reasonable intervals by the Management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them.
iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it.
v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.
vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositingundisputed statutory dues including provident fund employees state insuranceincome tax sales tax service tax duty of customs duty of excise value added tax cessand other material statutory dues as applicable with the appropriate authorities.
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of duty of customs which have not been depositedon account of any dispute. The particulars of dues of income tax sales tax service taxduty of excise and value added tax as at March 31 2017 which have not been deposited onaccount of a dispute are as follows:
|Name of the statute ||Nature of dues ||Amount in Rs. (million) (*) ||Period (AY) to which the amount relates ||Forum where the dispute is pending |
|Income Tax Act 1961 ||Income Tax ||12.69 ||2002 03 ||Hon'ble Supreme Court |
|Income Tax Act 1961 ||Income Tax ||19.62 ||2003 04 2004- 05and 2005 06 ||Honble High Court Delhi |
|Income Tax Act 1961 ||Income Tax ||53.45 ||2004 05 and 2010- 11 to 2012 13 ||Income Tax Appellate Tribunal |
|Income Tax Act 1961 ||Income Tax ||21.77 ||2003 04 2004 05 2006 07&2008 09 ||Commissioner of Income Tax (Appeals) |
|Central Excise Act 1944 ||Central Excise ||22.49 ||2005 06 to 2008- 09 ||Honble High Court Allahabad |
|Central Excise Act 1944 ||Central Excise ||11.60 ||2007 08 ||Custom Excise and Service Tax Appellate Tribunal |
|Central Excise Act 1944 ||Central Excise ||4.78 ||201415 to 201516 ||Commissioner of Central Excise (Appeals) |
|Central Excise Act 1944 ||Service Tax ||1.60 ||19992000 to 2001- 02 ||Honble High Court Allahabad |
|Central Excise Act 1944 ||Service Tax ||8.12 ||200203 to 2003- 04 ||Custom Excise and Service Tax Appellate Tribunal |
|Central Excise Act 1944 ||Service Tax ||8.14 ||2007 to 2015 ||Commissioner of Central Excise (Appeals) |
|Karnataka VAT Act 2003 ||Value Added Tax & Sales Tax ||9.18 ||201011 ||Honble High Court Karnataka |
|U.P. VAT Act 2008 ||Value Added Tax & Sales Tax ||7.69 ||200809 & 201112 ||Additional Commissioner (Appeals) |
* Amount under dispute is net of advance deposited if any.
viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government as at the balance sheet date. TheCompany has no debentures as at the balance sheet date.
ix. In our opinion and according to the information and explanations given to us themoneys raised by way of term loans have been applied for the purposes for which they wereobtained. The Company has not raised any money by way of initial public oer or furtherpublic oer (including debt instruments).
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 we have neither come across anyinstance of material fraud by the Company or on the Company by its oicers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standards (IndAS) 24 related party disclosures specified in the Companies(Indian Accounting Standards) Rule 2015 (as amended) under Section 133 of Act.
xiv. The Company has made a private placement of shares during the year under reviewin compliance with the requirements of Section 42 of the Act. The amounts raised have beenused for the purpose for which funds were raised.
xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.
xvi. The Company is not required to be registered under Section 45IA of theReserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Orderare not applicable to the Company.
|For Price Waterhouse Chartered Accountants LLP || |
|Firm Registration Number: 012754N/N500016 || |
| ||Rajib Chatterjee |
|Place: Noida ||Partner |
|Date: May 19 2017 ||Membership Number: 057134 |