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Sundaram Clayton Ltd.

BSE: 520056 Sector: Auto
NSE: SUNCLAYLTD ISIN Code: INE105A01035
BSE 00:00 | 09 Jul 1675.00 23.35
(1.41%)
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NSE 00:00 | 09 Jul 1678.85 25.30
(1.53%)
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OPEN 1653.55
PREVIOUS CLOSE 1651.65
VOLUME 444
52-Week high 2356.00
52-Week low 970.50
P/E 38.09
Mkt Cap.(Rs cr) 3,390
Buy Price 1654.00
Buy Qty 6.00
Sell Price 1725.00
Sell Qty 5.00
OPEN 1653.55
CLOSE 1651.65
VOLUME 444
52-Week high 2356.00
52-Week low 970.50
P/E 38.09
Mkt Cap.(Rs cr) 3,390
Buy Price 1654.00
Buy Qty 6.00
Sell Price 1725.00
Sell Qty 5.00

Sundaram Clayton Ltd. (SUNCLAYLTD) - Auditors Report

Company auditors report

#ARStart#

For the year ended 31st March 2019

To the Members of

Sundaram-Clayton Limited

Report on the Audit of the Standalone IND AS Financial Statements

Opinion

We have audited the standalone financial statements of Sundaram-Clayton Limited("the Company") which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "the standalonefinancial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS") andother accounting principles generally accepted in India of the state of affairs of thecompany as at 31st March 2019 the profit and total comprehensive incomechanges 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 in accordance withStandards on Auditing (SAs) specified under Section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with ethical requirements that are relevant toour audit of the financial statements under the provisions of the Companies Act 2013 andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

S.No. Key Audit Matter Auditor's Response
1 Government Grants entitlement and recognition: Principal Audit Procedures
Government grants form a significant portion of the Company's Other Operating Revenues. Government grants are to be recognized at fair value and there is a reasonable assurance that the grant will be received and the Company has fulfilled all attached conditions. We have verified the accrual of Grants after a detailed analysis of the Grant Scheme the eligibility of the Company and the fulfillment of the conditions attached to the scheme. Further realizability of these grants has been verified based on past track record.
Government grants recognized and accounted fulfill the criteria stipulated and are in accordance with Ind AS 20.
2 Tax Litigations and Provisions. Principal Audit Procedures
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. We have obtained details of completed assessments and demands relating to direct tax and indirect tax for the year ended 31st March 2019. Our audit procedures involved discussion with the company's experts on the expected outcome of these disputes in comparison with precedent case laws presenting similar facts.
Additionally we have considered the effect of any new information in respect of uncertain tax positions as at April 1 2019 to evaluate whether any change was required to management's position on these uncertainties.
On the basis of the above evaluations we have analysed the adequacy of provisions made in books against such disputed tax positions.

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

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards specified under Section 133 of the Act. 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 judgements and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial controls thatwere operating 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 misstatementswhether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatements whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

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

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained upto the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that 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 a statement that we have complied withrelevant ethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or 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.

Report on Other Legal and Regulatory Requirements

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 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in the paragraphs 3 and 4 of the Order to the extent applicable.

As required by the 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 purpose of our audit.

(b) In our opinion proper books of accounts 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 Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with books of accounts.

(d) In our opinion the aforesaid standalone financial statements comply withAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as directors in termsof Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over the financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". 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 by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

(h) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended 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 the financialposition in its standalone financial statements-Refer Note 36(i) to the financialstatements;

ii. The company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts- Refer Note 36(ii) to the financial statements;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For RAGHAVAN CHAUDHURI & NARAYANAN
Chartered Accountants
Firm Regn. No. 007761S
V. SATHYANARAYANAN
Place : Chennai Partner
Date : 2nd May 2019 Membership No. 027716

Annexure 'A' to Independent Auditors' Report - 31st March 2019 (Referred toin our report of even date)

i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

b) Fixed assets are physically verified by the management in accordance with a regularprogramme at reasonable intervals. In our opinion the interval is reasonable having regardto the size of the company and nature of its assets.

No material discrepancies have been noticed on such verifications;

c) The title deeds of the immovable properties of the company are held in the name ofthe Company;

ii) The inventory other than in-transit has been physically verified at reasonableintervals during the year under review by the management. The discrepancies noticedbetween the book stock and physical stock were not material and have been properly dealtwith in the books of accounts.

In respect of inventories with third parties which have not been physically verifiedthere is a process of obtaining confirmation from such parties.

iii) During the year the Company has not granted any loan to a company firm or otherparties covered in the register maintained under Section 189 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 Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable;

v) The Company has not accepted any deposits from the public within the meaning ofSection 73 to 76. Hence reporting under subclause (v) of paragraph 3 of the Order is notapplicable to the Company;

vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules made by the Central Government under Section 148(1) of the Companies Act2013 for the maintenance of cost records and we are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have however not madea detailed examination of the cost records with a view to determine whether they areaccurate or complete.

vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the company the Company is generally regular indepositing undisputed statutory dues including provident fund employees state insuranceincome-tax sales-tax customs duty excise duty service tax value added tax cessgoods and services tax and any other material statutory dues with the appropriateauthorities except for few marginal delays.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of income-tax sales-tax customs duty excise duty service tax valueadded tax cess goods and services tax were in arrears as at 31st March 2019for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us following are thedetails of the disputed dues that have not been deposited on account of any dispute as on31st March 2019:

Name of the statute Nature of dues Amount of dispute ($ in crores) Forum where the dispute is pending
Central Excise Act 1944 Excise Duty 1.84 Central Excise & Service Tax Appellate Tribunal
Finance Act 1994 Service Tax 2.37 Central Excise & Service Tax Appellate Tribunal
Finance Act 1994 Service Tax 0.12 Commissioner (Appeals) Chennai
Income Tax Act 1961 Income Tax 4.35 Commissioner of Income Tax (Appeals)
Tamil Nadu Value Added Tax Act 2006 Value Added Tax 0.15 Tamil Nadu Sales Tax Appellate Tribunal

viii) Based on our verification and according to the information and explanations givenby the management the company has not defaulted in repayment of dues to its banks. Thecompany has not borrowed from any financial institution or Government nor has issued anydebentures.

ix) a) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Hence reporting on utilizationof such money does not arise.

b) In our opinion and according to the information and explanations given to us theterm loans availed by the Company have been utilised for the purposes for which they wereobtained;

x) Based on the audit procedures adopted and the information and explanations given tous no fraud by the Company or on the Company has been noticed or reported during thecourse of our audit;

xi) In our opinion and according to the information and explanations given to usmanagerial remuneration paid / provided are in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V of the Act;

xii) The Company is not a Nidhi Company and as such this clause of the order is notapplicable;

xiii) In our opinion and according to the information and explanations given to us alltransactions with the related parties are in compliance with Section 177 and 188 of theAct and details of such transactions have been disclosed in standalone Ind AS financialstatements as required by the applicable accounting standards.

xiv) According to the information and explanations given to us and in our opinion theCompany has not made any preferential or private placement of shares or fully or partlyconvertible debentures during the year under review;

xv) According to the information and explanations given to us and in our opinion thecompany has not entered into any non-cash transactions with directors or persons connectedwith them.

xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank Act 1934.

For RAGHAVAN CHAUDHURI & NARAYANAN
Chartered Accountants
Firm Regn. No. 007761S
V. SATHYANARAYANAN
Place : Chennai Partner
Date : 2nd May 2019 Membership No. 027716

Annexure 'B' to the Independent Auditors' Report for the year ended 31stMarch 2019

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting ofSundaram-Clayton Limited ("the Company") Jayalakshmi Estates #29 HaddowsRoad Chennai - 600006 as of 31st March 2019 in conjunction with our audit ofthe standalone 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 Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

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 issued by Institute ofChartered Accountants of India and deemed to be 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 judgment 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 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 standalone 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 the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the Company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.

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 31st March 2019 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 RAGHAVAN CHAUDHURI & NARAYANAN
Chartered Accountants
Firm Regn. No. 007761S
V. SATHYANARAYANAN
Place : Chennai Partner
Date : 2nd May 2019 Membership No. 027716

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