To The Members of MUNJAL SHOWA LIMITED Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of Munjal Showa Limited("the Company") which comprise the Balance Sheet as at 31st March 2018 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
Management's Responsibility for the Ind AS 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderissued under section 143(11) of the Act.
We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany'spreparation of the Ind AS financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of theaccounting estimates made by the Company's Directors as well asevaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to usthe aforesaid Ind AS financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with the Ind ASand other accounting principles generally accepted in India of the state of affairs ofthe Company as at 31st March 2018 and its profit total comprehensive income its cashflows and the changes in equity for the year ended on that date.
The comparative financial information of the Company for the year ended 31stMarch 2017 and the transition date opening balance sheet as at 1st April 2016included in these Ind AS financial statements are based on the statutory financialstatements prepared in accordance with the Companies (Accounting Standards) Rules 2006audited by the predecessor auditor whose report for the year ended 31st March2017 and 31st March 2016 dated 19th May 2017 and 20thMay 2016 respectively expressed an unmodified opinion on those financial statements andhave been restated to comply with Ind AS. Adjustments made to the previously issued saidfinancial information prepared in accordance with the Companies (Accounting Standards)Rules 2006 to comply with Ind AS have been audited by us.
Our opinion on the Ind AS financial statements is not modified in respect of thismatter.
Report on Other Legal and Regulatory Requirements
1. 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 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 Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account.
d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors of theCompany as on 31st March 2018 taken on record by the Board of Directors none ofthe directors is disqualified as on 31st March 2018 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 over financialreporting of the Companyand the operating effectiveness of such controls refer toour separate Report in "Annexure A".Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
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 asamended 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 its financialposition in its Ind AS financial statements- Refer note 31(b) of the Ind ASfinancial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses- Refer note 37 of the Ind ASfinancial statements;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company- Refer note 38 of the IndAS financial statements .
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date) Report on the Internal FinancialControls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MUNJALSHOWA LIMITED ("the Company") as of 31st March 2018 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on 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 FinancialReporting" (the "Guidance Note") issued by the Institute of CharteredAccountants of India. 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 of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.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 over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the Ind AS 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 Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASfinancial 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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2018 based on internal financialcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India.
ANNEXURE "B" TO THE AUDITORS' REPORT
(Referred to in paragraph 2 under Report on Legal and Regulatory Requirements'section of our report of even date)
(i) In respect of its Property plant and equipment:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the Property plant and equipment.
(b) All theProperty plant and equipmentwere physically verified by the management inthe year ended March 31 2016 in accordance with a planned programme of verifyingthem once in three years which in our opinion is reasonable having regard to thesize of the Company and nature of its assets. No material discrepancies werenoticed on such verification.
(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed and conveyance deedprovided to us we report that the title deeds comprising all the immovableproperties of land and buildings included under the head "Property plant and equipment"are held in the name of the Company as at the balance sheet date except the following:
|Particulars of the land ||Amount (Carrying amount as at 31st March 2018) (in Rs. Lakhs) ||Remarks |
|Freehold land located at Manesar admeasuring 59273sft ||2377.36 ||Pending registration in the name of Company |
(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals other than for inventories lying with thirdparties at the end of the year for which confirmations have been obtained in mostof the cases and no material discrepancies were noticed on physical verification. (iii)The Company has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.
(iv) The Company has not granted any loans made investments or provided guarantees andhence reporting under clause (iv) of the CARO 2016 is not applicable. (v) Accordingto the information and explanations given to us the Company has neither accepted anydeposit during the year nor has any unclaimed deposits within the meaning ofSection 73 to 76 or any other relevant provisions of the Companies Act 2013.
(vi) The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident fund Employees' State Insurance Income-tax Goods &Services Tax Sales Tax Service Tax Customs Duty Excise Duty Value Added Taxcess and other material statutory dues applicable to it with the appropriate authorities.There were no undisputed amounts payable in respect of Provident fund Employees'State Insurance Income-taxGoods & Services Tax Sales Tax Service Tax CustomsDuty Excise Duty Value Added Tax cess and other material statutory dues inarrears as at 31st March 2018 for a period of more than six months fromthe date they became payable.
(b) There are no disputed dues in respect of Goods & Services Tax Sales TaxCustoms Duty Excise Duty and Value Added Tax as at 31st March 2018which have not been deposited on account of dispute. The following are theparticulars ofIncome-tax & Service Tax dues which have not been deposited / depositedunder protest as on 31st March 2018 by the Company on account of disputes:
|Name of Statute ||Nature of Dues ||Amount* (Rs. in lakhs) ||Amount paid under protest (Rs. lakhs) ||Period to which the Amount Relates ||Forum where Dispute is Pending |
| || ||1251.76 ||625.88 ||AY 2009-10 ||Income Tax Appellate Tribunal |
| || ||1385.91 ||435.36 ||AY 2010-11 ||Income Tax Appellate Tribunal |
|Income-tax Act 1961 ||Income-tax ||2060.47 ||668.45 ||AY 2011-12 ||Income Tax Appellate Tribunal |
| || ||57.88 ||18.81 ||AY 2013-14 ||Income Tax Appellate Tribunal |
|Finance Act 1994 ||Service Tax ||134.07 ||- ||FY 2007-08 & FY 2008- 09 ||Customs Excise Service Tax Appellate Tribunal |
* Amount as per demand orders including interest and penalty wherever indicated in theorder and excludes disputed dues fully paid.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans/ borrowings to banks. The Company hasnot taken any loans or borrowings from financial institutions and government andhas not issued any debentures during the year.
(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause(ix) of the Order is not applicable.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by itsofficers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable. (xiii) In our opinion and according to the information andexplanations given to us the Company is in compliance with Section 177 and 188 ofthe Companies Act 2013 where applicable for all transactions with the related partiesand the details of related party transactions have been disclosed in the financialstatements as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reportingunder clause (xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For DELOITTE HASKINS & SELLS LLP |
| ||Chartered Accountants |
| ||(Firm's Registration No.117366W/W-100018) |
| ||Jaideep Bhargava |
| ||Partner |
|Gurugram 30th May 2018 ||(Membership No. 090295) |