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Munjal Auto Industries Ltd.

BSE: 520059 Sector: Auto
NSE: MUNJALAU ISIN Code: INE672B01032
BSE 00:00 | 25 Jan 54.25 0.70
(1.31%)
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53.10

HIGH

54.55

LOW

52.10

NSE 00:00 | 25 Jan 54.20 0.75
(1.40%)
OPEN

53.70

HIGH

54.55

LOW

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OPEN 53.10
PREVIOUS CLOSE 53.55
VOLUME 7886
52-Week high 72.80
52-Week low 47.60
P/E 19.44
Mkt Cap.(Rs cr) 543
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 53.10
CLOSE 53.55
VOLUME 7886
52-Week high 72.80
52-Week low 47.60
P/E 19.44
Mkt Cap.(Rs cr) 543
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Munjal Auto Industries Ltd. (MUNJALAU) - Auditors Report

Company auditors report

To

THE MEMBERS OF

MUNJAL AUTO INDUSTRIES LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of MunjalAuto Industries Limited ("the Company") which comprise the Balance Sheet asat March 312021 the Statement of Profit and Loss including Other Comprehensive Incomethe Statement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone financial statements").

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 Standardsspecified under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021and total comprehensive income (comprising of profit and other comprehensive income)changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in theAuditors' Responsibilities for the Audit of the standalone financial statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of these standalone financial statements of thecurrent year. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matters How our audit addressed the key audit matters
1. Recognition and Measurement of Deferred Taxes including Minimum Alternate Tax (MAT) credit: Principal Audit Procedures
(Refer to note 4 (xiv) 12 42 to the standalone financial statements) Our audit procedures included the following:
The recognition and measurement of deferred tax items requires at the level of the tax entity the complete determination of all differences between the recognition and the measurement of tax base of assets and liabilities. This requires significant calculations on account of the tax regulations most of which are complex. The effects and the measurement of deferred tax assets and liabilities require detailed knowledge of the applicable tax law. - Evaluating management's assessment on the sufficiency of future taxable profits in support of the recognition of deferred tax asset by comparing management's forecasts of future profits to historical results and evaluating the assumptions used in those forecasts.
We have considered the recognition and measurement of deferred tax assets including MAT credit as Key Audit Matter as recognition of these assets involves judgement by management as to the likelihood of the realization of these deferred tax assets which is based on a number of factors including whether there will be sufficient taxable profits in future periods to support recognition. - Inquiry and critical analysis of the management judgement on recognition of deferred tax asset.
- Assessing the adequacy of the deferred tax disclosures to the standalone financial statements.
Conclusion:
Based on the procedures described above we did not identify any material exceptions to the management's assertions and treatment presentation and disclosure of the subject matter in standalone financial statements.

Information Other than the Standalone Financial Statements andAuditors' 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 Corporate Governance Report and Shareholder's Informationbut does not include the standalone financial statements and our auditors' reportthereon.

Our opinion on the standalone financial statements does not cover theother information 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 identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read the information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and take appropriate actions necessitated by the circumstances and theapplicable laws and regulations.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

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 total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 also responsible for overseeing theCompany's financial reporting process.

Auditors' Responsibilities 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 auditors' 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 professionaljudgment and maintain professional skepticism 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 control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to standalonefinancial 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 auditors'report 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 up to the date of our auditors' 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 to communicatewith them all relationships and other matters that may reasonably be thought to bear onour 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 auditors' report unless law or regulation precludespublic disclosure about the matters 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of subsection(11) of section 143 of the Act we give in "Annexure -A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

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

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 Statement of Cash Flowsdealt with by this Report are in agreement with the books of account;

d. in our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act;

e. on the basis of the written representations received from thedirectors as on March 312021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director interms of Section 164(2) of the Act; f. with respect to the adequacy of the internalfinancial controls with reference to standalone financial statements of the Company andthe operating effectiveness of such controls refer to our separate report in"Annexure - B";

g. with respect to the other matters to be included in theAuditors' Report in accordance with the requirements of section 197(16) of the Actas amended: In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h. with respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. the Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements – Refer Note 43 to thestandalone financial statements;

ii. the Company did not have any material foreseeable losses onlong-term contracts including derivative contracts as at March 31 2021;

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

(Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date to the Members of MunjalAuto Industries Limited)

i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of itsfixed assets by which fixed assets are verified in a phased manner over a period of twoyears. Due to the pandemic the assets which were to be covered as per the said programmehave not been physically verified by the management during the year. As the management hasnot carried out any verification during the year we are unable to comment whether thediscrepancies if any are material.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties other than self-constructed properties are held in the name of the Company.

ii. The inventories of finished goods work-in-progress stores sparepart and raw materials have been physically verified by the management. In our opinionthe frequency of verification is reasonable. On the basis of our examination of therecords of inventory we are of the opinion that the discrepancies noticed on verificationbetween the physical stocks and book records were not material and have been properlydealt with in the books of account.

iii. 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 Companies Act 2013 and therefore reporting underclause (iii) (a) to clause (iii) (c) of the Order is not applicable to the Company.

iv. The Company has not granted any loans or provided any guarantees orsecurity to the parties covered under section 185 of the Act.

In our opinion and according to the information and explanation givento us the Company has complied with the provisions of section 186 of the Act in respectof the Investments made.

v. According to the information and explanations given to us theCompany has not accepted any deposits during the year from the public within the meaningof provisions of section 73 to 76 of the Act and the rules framed thereunder or under thedirectives issued by the Reserve Bank of India and therefore reporting under clause (v)of the Order is not applicable to the Company.

vi. In our opinion and according to the information and explanationsgiven to us the Central Government has not prescribed maintenance of cost records undersub-section (1) of section 148 of the Companies Act 2013 and rules 3 of the Companies(Cost Records and Audit) Amendment Rules 2014 for any of the products of the Company andtherefore reporting under clause (vi) of the Order is not applicable to the Company.

vii. (a) According to the information and explanations given to us andon the basis of our examination of the records the Company has been regular in depositingwith appropriate authorities undisputed statutory dues including provident fundemployee's state insurance income-tax duty of customs goods and service tax cessand any other statutory dues applicable to it. Further no undisputed amounts payable inrespect of income tax duty of customs goods and service tax cess and other statutorydues were in arrears as at March 31 2021 for a period of more than six months from thedate they become payable.

(b) According to the information and explanations given to us thereare no disputed dues in respect of Income Tax Goods and Service Tax Service tax and Dutyof Customs. According to the information and explanations given to us the followings arethe particulars of Sales Tax and Duty of Excise as at March 31 2021 which have not beendeposited on account of dispute:

Name of the statute Nature of disputed dues Amount in Rs. Period to which the amount relates Forum where pending
The Gujarat Sales Act 1969 Sales Tax 2549704 Financial Year 2002-2003 Commissioner of Commercial Tax Tax (Appeals)
The Central Excise Act 1944 Duty of Excise 5876332 June 2008- March 2009 Commissioner of Customs Excise and Service Tax (Appeals)
The Uttarakhand Value Added Tax Act 2005 Sales Tax 407488536 FY 2016-17 Joint Commissioner (Appeals) 1 – State Tax
The Central Sales Tax Act 1956 Sales Tax 1450000 FY 2016-17 Joint Commissioner (Appeals) 1 – State Tax

viii. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to anybank. The Company has not taken any loans from financial institution or Government. It hasnot issued any debentures.

ix. In our opinion and according to information and explanation givento us the term loans taken by the Company have been applied for the purpose for whichthey were raised. The company has not raised any money by way of initial public offer orfurther public offer (including debt instruments) during the year.

x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management of the Company.

xi. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the provisions of Section 197 read withSchedule V to the Act.

xii. In our opinion the Company is not a Nidhi company and thereforereporting under clause (xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanationsgiven to us transactions with the related parties are in compliance with sections 177 and188 of the Act where applicable and the details of such transactions have been disclosedin the standalone financial statements as required by the applicable Indian accountingstandards.

xiv. According to the information and explanations given to us andbased on our examination of the records the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year and therefore reporting under clause (xiv) of the Order is not applicable to theCompany.

xv. In our opinion and according to the information and explanationsgiven to us the Company has not entered into non-cash transactions with directors orpersons connected with him and therefore reporting under clause (xv) of the Order is notapplicable to the Company.

xvi. In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of Munjal AutoIndustries Limited on the standalone financial statements of even date)

Report on the Internal Financial Controls with reference to standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the Act.

We have audited the internal financial controls with reference tostandalone financial statements of Munjal Auto Industries Limited ("theCompany") as of March 31 2021 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

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("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 tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting (the "Guidance note") and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Companies Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by the ICAI.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofinternal financial controls with reference to standalone financial statements assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 standalone 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 with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to standalonefinancial statements

A company's internal financial controls with reference tostandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of standalonefinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial controls with reference tostandalone financial statements includes those policies and procedures 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 standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; 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 standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference tostandalone financial statements

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2021 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.

For K. C. Mehta & Co.
Chartered Accountants
Firm's Registration No. 106237W
Vishal P. Doshi
Place : Vadodara Partner
Date : June 09 2021 Membership No.101533
UDIN: 21101533AAAABV9195

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