THE MEMBERS OF SUNDARAM BRAKE LININGS LIMITED
Report on the Audit of the Financial Statements
1.1 We have audited the financial statements of Sundaram Brake Linings Limited("the Company") which comprise the Balance Sheet as at 31st March2021 and the Statement of Profit and Loss Statement of changes in equity and Statementof cash flows for the year then ended and notes to the financial statements including asummary of significant accounting policies and other explanatory information ("thefinancial statements").
1.2 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 2021 the Profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
2 Basis for Opinion
2.1 We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities 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 together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
3 Emphasis of Matter
We draw attention to Note No 3 Critical accounting estimates and judgments - Impact ofCoVID-19 on the Financial Statements wherein the Company has disclosed its assessment ofCoVID- 19 pandemic. As mentioned therein the assessment of the Management does notindicate any material effect on the carrying value of its assets and liabilities of theCompany on the reporting date or any adverse change in the ability of the Company tocontinue as a Going Concern. The assessment of Management is dependent on the circumstanceas they evolve considering the uncertainties prevailing in the economic situation.
Our opinion is not modified in respect of this matter.
4 Key Audit Matters
4.1 Key audit matters are those matters that in our professional judgment were ofmost significance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters. We have determined that there are no key audit matters to communicate in ourreport.
|Key audit matters ||How our audit addressed the key audit matter |
|Assessment of provisions for taxation (Direct and indirect) ||Assessing the adequacy of Company's tax provisions by reviewing correspondence with tax authorities; |
|- As at 31st March 2021 the Company had provisions in respect of taxation litigation at various jurisdictions. These provisions are estimated using a significant degree of management judgement in interpreting the various relevant rules regulations and practices and in considering precedents in the various jurisdictions. ||1. Discussing litigation and claims in detail with the management; |
|This is a key audit matter because of the quantum of the balances and significant judgement required. ||2. Obtaining letters from company external legal advisors including their views regarding the likely outcome and magnitude of and exposure to the relevant litigation and claims; |
| ||3. Reviewing previous judgements made by the relevant taxation authorities; and |
| ||4. Assessing the past estimates. |
5 Information Other than the Financial Statements and Auditor's Report Thereon
5.1 The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in Board's Reportbut does not include the financial statements and our auditor's report thereon.
5.2 Our opinion on the financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.
5.3 In connection with our audit of the financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit 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.
6 Responsibilities of Management and Those Charged with Governance for the FinancialStatements
6.1 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 financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
6.2 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.
6.3 Those Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.
7 Auditor's Responsibilities for the Audit of the Financial Statements
7.1 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 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 financial statements.
7.2 As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
b. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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.
c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management. d. Conclude on theappropriateness of management's use of the going concern basis of accounting and based onthe audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a goingconcern.
If we conclude that a material uncertainty exists we are required to draw attention inour auditor's report to the related disclosures in the 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 auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern. e. Evaluate theoverall presentation structure and content of the financial statements including thedisclosures and whether the financial statements represent the underlying transactionsand events in a manner that achieves fair presentation.
7.3 We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
7.4 We also provide those charged with governance with a statement that we havecomplied 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.
7.5 From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
8 Report on Other Legal and Regulatory Requirements
8.1 As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
8.2 As required by Section 143 (3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) The Balance Sheet the Statement of Profit and Loss Statement of Changes in Equityand the Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount;
d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards prescribed under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in termsof Section 164 (2) of the Act;
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 B";
g) In our opinion the managerial remuneration for the year ended March 31 2021 hasbeen paid/ provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act; and
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 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note No: 37 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
ANNEXURE - A TO AUDITORS' REPORT
(Referred to in Paragraph 8.1 of our Report on Other Legal and Regulatory Requirementsrelevant to paragraph 3 & 4 of "the order")
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the financial statements for the year ended 31 March 2021 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) According to the information given to us the fixed assets are physically verifiedby the management according to a phased program designed to cover all the items over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. The physical verification of fixed assets hasbeen conducted by the management during the previous year.
No material discrepancies were noticed on such verification. and have been properlydealt with in the books of account.
(c) The title deeds of immovable properties are held in the name of the Company.
(ii) The inventory has been physically verified by the management at reasonableintervals. The discrepancies between the physical stocks and the book stocks were notmaterial and have been properly dealt with in the books of account.
(iii) According to the information and explanations given to us during the year theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Companies Act 2013.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act2013 with respect to the loans and investments made.
(v) The Company has not accepted any deposit within the meaning of Sections 73 to 76 ofthe Companies Act 2013 during the year.
(vi) In respect of the Company the provisions of the maintenance of cost recordsprescribed under sub-section (1) of Section 148 of the Act do not apply to the company.
(vii) The Company has not defaulted in repayment of loans or borrowing to a financialinstitution bank and Government. The Company has not issued any debentures.
(viii) The Company had not raised moneys either by way of initial public offer orfurther public offer (including debt instruments) and The Company has not availed any termloans.
(ix) According to the information and explanations given to us by the management andbased on audit procedures performed no material fraud on or by the Company by itsofficers or employees has been noticed or reported during the course of our audit.
(x) 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 the Act.
(xi) The Company is not a Nidhi company.
(xii) (a) According to the records of the Company the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including ProvidentFund Employees State Insurance Income-Tax Customs duty Goods and Service Tax Cess andany other statutory dues with the appropriate authorities. According to the informationand explanations given to us no undisputed amounts payable in respect of the above werein arrears as at March 31 2021 for a period of more than six months from the date on whenthey become payable. Sales tax Service Tax Excise duty and Value added Tax are notapplicable to the Company for the current year.
(b) According to the information and explanations given to us there are no duespayable in respect of Sales Tax Income Tax Excise Duty Goods and Service Tax WealthTax Custom Duty Service Tax and Cess as at 31.03.2021 which were disputed except thefollowing:
|Name of the Statute ||Nature of the dues ||Total amount (in lakhs) ||Financial year to which amount relates ||Forum where dispute is pending |
|Tamil Nadu VAT Act 2006 ||Disallowance of Input Tax Credit ||44.19 ||2007-08 2008-09 2009-10 2011-12 2012-13 2013-14 and 2014-15 ||Madras High Court |
|Tamil Nadu VAT Act 2006 ||Disallowance of Input Tax Credit ||4.57 ||2010-11 ||Assistant Commissioner (Commercial Taxes) |
|Tamil Nadu General Sales Tax Act 1959 ||Sales Tax ||15.36 ||1986-87 1992-93 and 2009-10 ||Sales Tax Appellate Tribunal |
(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) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year.
(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 to its directors and hence provisions of Section 192 of theCompanies Act 2013 are not applicable to the Company.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE - B TO THE AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SundaramBrake Linings Limited ("the Company") as of March 31 2021 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
1. 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 Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
2. Auditors' 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 on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing to the extent applicable toan audit of internal financial controls both issued by the Institute of CharteredAccountants of India. 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 over financial reporting was established andmaintained and if such controls 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 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.
3. 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.
4. 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For M/s BRAHMAYYA & CO ||Chartered Accountants |
|Firm Registration Number: 000511 S ||K JITENDRA KUMAR |
| ||Partner |
| ||Membership No. 201825 |
|UDIN No: ||21201825AAAAFO3817 |
Place : Chennai
Date : 22nd May 2021