|BSE: 500290||Sector: Auto|
|NSE: MRF||ISIN Code: INE883A01011|
|BSE 00:00 | 24 Sep||79463.55||
|NSE 00:00 | 24 Sep||79456.50||
|Mkt Cap.(Rs cr)||33,693|
|Mkt Cap.(Rs cr)||33692.54|
MRF Ltd. (MRF) - Auditors Report
Company auditors report
TO THE MEMBERS OF
We have audited the Separate financial statements (also known asStandalone Financial Statements) of MRF Limited ("the Company") which comprisethe Balance Sheet as at 31st March 2021 the Statement of Profit and Loss (including OtherComprehensive Income) Statement of Changes in Equity and Statement of Cash Flows for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standards(Ind AS) prescribed under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the state of affairs (financial position) of the Company as at 31st March 2021and its profit (financial performance including Other Comprehensive Income) the Changesin Equity and its Cash Flows for the year ended on that date.
2. Basis for Opinion
We conducted our audit of the Standalone Financial Statements inaccordance with the Standards on Auditing specified under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.
3. Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
4. Information Other than the Standalone Financial Statementsand Auditor's Report thereon
The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Board's Report including Annexures to Board's Report ManagementDiscussion and Analysis Report on Corporate Governance Business Responsibility Reportbut does not include the Standalone Financial Statements and our auditor's reportthereon. Our opinion on the Standalone Financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
5. Management's Responsibility for the Standalone FinancialStatements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the financial position financialperformance Changes in Equity and Cash Flows of the Company in accordance with the Ind ASand other accounting principles generally accepted in India. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the Standalone Financial Statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Company'sfinancial reporting process.
6. Auditor's Responsibility for the audit of the StandaloneFinancial Statements
Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under Section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls with referenceto financial statements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
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 Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the Standalone Financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained upto date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
7. Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
As required by Section 143(3) of the Act based on our audit we reportthat:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept 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 OtherComprehensive Income the Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid Standalone Financial Statements complywith the Ind AS prescribed under section 133 of the Act.
e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors are disqualified as on 31st March 2021 from being appointed as adirector in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B". Our reportexpresses an unmodified opinion on the adequacy and operating effectiveness of theCompany's internal financial controls over financial reporting.
g) As required by section 197(16) of the Act based on our audit wereport that the Company has paid and provided for remuneration to its directors during theyear in accordance with the provisions of and limits laid down under section 197 read withSchedule V to the Act.
h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and according tothe explanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Financial Statements Refer Note 27 (p) to theStandalone Financial Statements;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT OF EVENDATE ON THE STANDALONE FINANCIAL STATEMENTS OF MRF LIMITED
i) In respect of its Property Plant and Equipment:
a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment;
b) 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) On the basis of our examination of the records of the Company thetitle deeds of immovable properties are held in the name of the Company.
ii) The inventory has been physically verified by the management duringthe year. In our opinion the frequency of verification is reasonable. No materialdiscrepancies were noticed on such physical verification. As regards materials lying withthird parties confirmations have been obtained;
iii) The Company has not granted any loans secured or unsecured duringthe year to companies firms limited liability partnerships or other parties covered inthe register maintained 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 the Company has complied with the provisions ofSection 185 and 186 of the Act with respect to investments made.
v) The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable tothe Company.
vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148 (1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained.
vii) a) The Company is regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales-Tax ServiceTax Goods Service Tax duty of customs duty of excise value added tax cess and anyother statutory dues with appropriate authorities where applicable. There are noundisputed amounts payable in respect of such statutory dues which have remainedoutstanding as at 31st March 2021 for a period of more than six months from thedate they became payable.
b) According to the records of the Company the dues outstanding ofincome-tax sales-tax service tax duty of customs duty of excise and value added tax onaccount of any dispute are as follows:
viii) The Company has not defaulted in repayment of its loans orborrowings to banks and debenture holders.
ix) The Company has not raised any moneys by way of Initial publicoffer or further Public offer (Including debt instruments) during the year. Moneys raisedby way of Term Loan were applied for the purpose for which those are raised.
x) On the basis of our examination and according to the information andexplanations given to us no fraud by the Company or any material fraud on the Company byits officers or employees has been noticed or reported during the year nor have we beeninformed of any such case by the management.
xi) The managerial remuneration has been paid/provided in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Act.
xii) The Company is not a nidhi Company and accordingly provisions ofclause (xii) of Para 3 of the order are not applicable to the Company.
xiii) On the basis of our examination and according to the informationand explanations given to us we report that all the transaction with the related partiesare in compliance with Section 177 and 188 of the Act and the details have been disclosedin the Standalone Financial Statements in Refer Note 27(d) as required by the applicableIndian Accounting standards.
xiv) The Company has not made any preferential allotment or privateplacement of share or fully or partly paid convertible debentures during the year andaccordingly provisions of clause (xiv) of Para 3 of the Order are not applicable to theCompany.
xv) Based on our examination of the records of the Company the Companyhas not entered into any non-cash transactions with directors or persons connected withthe directors. Accordingly provisions of clause (xv) of Para 3 of the Order are notapplicable to the company.
xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act1934 and accordingly provisions of clause (xvi) of Para3 of the Order are not applicable to the Company.
"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVENDATE ON THE STANDALONE FINANCIAL STATEMENTS OF MRF LIMITED.
Report on the Internal Financial Controls WITH REFERENCE TO FINANCIALSTATEMENTS under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls with reference toFinancial Statements of MRF LIMITED ("the Company") as of March 31 2021in conjunction with our audit of the Standalone Financial Statements of the Company forthe year ended on that date.
In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to Financial Statements and suchcontrols were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the Institute ofChartered Accountants of India(ICAI).
2. Management's Responsibility for Internal FinancialControls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.
3. Auditors' Responsibility
Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance Note") issued by Institute ofChartered Accountants of India and the Standards on Auditing prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of InternalFinancial Controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to Financial Statements wereestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to Financial Statements andtheir operating effectiveness. Our audit of internal financial controls with reference toFinancial Statements includes obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to Financial Statements.
4. Meaning of Internal Financial Controls With reference toFinancial Statements
A Company's internal financial control with reference to FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A Company's internalfinancial control with reference to Financial Statements includes those policies andprocedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorisations of management and directors of theCompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the Company's assetsthat could have a material effect on the financial statements.
5. Inherent Limitations of Internal Financial Controls Withreference to Financial Statements
Because of the inherent limitations of internal financial controls withreference to Financial Statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to Financial Statements to future periods are subject to the riskthat the internal financial control with reference to Financial Statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.