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Munjal Showa Ltd.

BSE: 520043 Sector: Auto
NSE: MUNJALSHOW ISIN Code: INE577A01027
BSE 00:00 | 22 Jun 169.90 4.70
(2.85%)
OPEN

167.00

HIGH

174.60

LOW

166.15

NSE 00:00 | 22 Jun 169.80 4.30
(2.60%)
OPEN

167.00

HIGH

174.50

LOW

166.00

OPEN 167.00
PREVIOUS CLOSE 165.20
VOLUME 44692
52-Week high 176.45
52-Week low 91.65
P/E 22.12
Mkt Cap.(Rs cr) 680
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 167.00
CLOSE 165.20
VOLUME 44692
52-Week high 176.45
52-Week low 91.65
P/E 22.12
Mkt Cap.(Rs cr) 680
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Munjal Showa Ltd. (MUNJALSHOW) - Auditors Report

Company auditors report

To The Members of Munjal Showa Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Munjal Showa Limited("the Company") which comprise the Balance Sheet as at March 31 2020 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and its profit total comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibility for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. We havedetermined that there are no key audit matters to communicate in our report.

Information Other than the Financial Statements and Auditor's Report Thereon

• The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Board's Report includingAnnexures to Board's Report Corporate Governance Management Discussion and Analysis andShareholder's Information but does not include the financial statements and our auditor'sreport thereon.

• Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

• In connection with our audit of the financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

• If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit 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 Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.

e) On the basis of the written representations received from the directors as at March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas at March 31 2020 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid/ provided by the Company to its directors during theyear is in excess of the limits laid down under section 197 of the Act read with ScheduleV of the Companies Act 2013.

Details of remuneration paid in excess of the limit laid down under this section readwith Schedule V of the Companies Act 2013 which is subject to the Shareholder's approvalat the ensuing general meeting are given below:

Managerial

Position

Excess amount of remuneration paid/ provided (Rs. In lakhs) Financial

period

Treatment of the excess remuneration in the financial statements
Joint

Managing

Director

228.37 1 April 2019 to March 31 2020 Included in Employee benefits expenses

h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements- Refer Note 31 of the financial 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 financialstatements;

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 financialstatements;

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 4 of theOrder.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No.117366W/W-100018)
Jaideep Bhargava
Partner
Gurugram (Membership No. 090295)
June 30 2020 (UDIN: 20090295AAAAEL4877)

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under'Report on Other Legal and Regulatory Requirements'section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MunjalShowa Limited ("the Company") as at March 312020 in conjunction with our auditof the financial 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 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.

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 issued by the Institute of Chartered Accountants of India and theStandards on Auditing prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 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 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 March 31 2020 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.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No.: 117366W/W-100018)
Jaideep Bhargava
Partner
Gurugram (Membership No. 090295)
June 30 2020 (UDIN: 20090295AAAAEL4877)

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under 'Report on Other 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 the property plant and equipment were physically verified by the managementduring the year in accordance with a planned programme of verifying them once in threeyears which in our opinion is reasonable having regard to the size of the Company andnature of its assets. No material discrepancies were noticed 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 immovable propertiesof land and buildings included under the head "Property plant and equipment') areheld in the name of the Company as at the balance sheet date except the following:

Particulars of the land Amount (Carrying amount as at March 31 2020) (Rs. In lakhs) Remarks
Freehold land located at Manesar admeasuring 59273 sft 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 third partiesat the end of the year for which confirmations have been obtained in most of the cases andno material discrepancies were noticed on physical verification.

(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 Companies Act 2013.

(iv) The Company has not granted any loans made investments or provided guarantees andhence reporting under clause (iv) of the Order is not applicable.

(v) According to the information and explanations given to us the Company has neitheraccepted any deposit during the year nor has any unclaimed deposits within the meaning ofSection 73 to Section 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 & ServicesTax Customs Duty Cess and other material statutory dues applicable to it with theappropriate authorities. There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income-tax Goods & Services Tax Customs Duty cessand other material statutory dues in arrears as at March 31 2020 for a period of morethan six months from the date they became payable.

(b) There are no dues in respect of Sales Tax Customs Duty Excise Duty Value AddedTax and Goods & Services Tax as at March 31 2020 which have not been deposited onaccount of dispute. The following are the particulars of Income-tax which have not beendeposited/deposited under protest as at March 31 2020 by the Company on account ofdisputes:

Name of Statute Nature of Dues Amount* (Rs. in lakhs) Amount paid under protest (Rs. In lakhs) Period to which the Amount Relates Forum where Dispute is Pending
1385.91 435.36 AY 2010-11 Set aside by Income Tax Appellate Tribunal pending with Dispute resolution panel.
Income-tax Act 1961 Income-

tax

2060.47 1442.72 AY 2011-12 Set aside by Income Tax Appellate Tribunal pending with assessing officer.
61.69 61.69 AY 2013-14 Income Tax Appellate Tribunal
45.40 33.71 AY 2015-16 Income 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 or has notissued 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) ofthe 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 its officersor 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 excess of the limits and approvalsprescribed under section 197 read with Schedule V to the Companies Act 2013 which issubject to the Shareholders approval at the ensuing general meeting to the followingmanagerial personnel:

Managerial Position Excess amount of remuneration paid/ provided (Rs. In Lakhs) Period Treatment of the excess remuneration in the financial statements
Joint Managing Director 228.37 1 April 2019 to March 31 2020 Included in Employee benefits expenses

(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 and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableaccounting 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 reporting underclause (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 them 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 (Membership No. 090295)
June 30 2020 (UDIN: 20090295AAAAEL4877)