| We have audited the accompanying financial statements of MAHINDRA
COMPOSITES LIMITED ("the Company"), which comprise the Balance Sheet as
at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended and a summary of the significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under the Companies
Act, 1956 ("the Act") (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs) and in accordance with the accounting principles generally
accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company's preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of 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 the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Act (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs).
(e) On the basis of the written representations received from the
directors as on 31 st March, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2014
from being appointed as a director in terms of Section 274(1 )(g) of
the Act.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory
Requirements' section of our report of even date)
(i) Having regard to the nature of the Company's business / activities
/ result, etc. during the year, clauses (vi), (x), (xii),
(xiii),(xiv),(xv),(xviii),(xix) and (xx) of paragraph 4 of the order
are not applicable to the Company.
(ii) - In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular program of verification which,
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) The Fixed Assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals (except for items
lying with third parties for which confirmations have been obtained as
at the year end).
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventory
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanation
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iv) The Company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information and explanations
given to us, having regard to the explanations that most of the items
purchased are of a special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and for the sale of goods and services.
During the course of our audit, we have not observed any major weakness
in such internal control system.
(vi) Based upon the audit procedures performed and according to the
information and explanations given to us, during the year there are no
contracts or arrangements that need to be entered into the register
maintained in pursuance of section 301 of the Companies Act, 1956.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1 )(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete."
(ix) According to the information and explanations given to us in
respect of Statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues including Provident Fund, Employees' State Insurance,
Investor Education and Protection Fund, Income tax, Sales tax, Wealth
tax, Service Tax, Custom Duty, Excise Duty, cess and other material
statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees' State Insurance, Investor Education and Protection
Fund, Income tax, Sales tax, Wealth tax, Service Tax, Custom Duty,
Excise Duty, cess and other material statutory dues in arrears as at
31st March, 2014 for a period of more than six months from the date
they became payable.
(c) Details of the dues of Income-tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty and Cess which have not been deposited as
on 31st March 2014 on account of disputes are given below:
Amounts involved Period to
Nature of (dues quantified which the
Name of Statute the dues to the extent not amount
deposited) (Rs.) relates
Central Excise Act, 1944 Excise Duty 189,106 1999-2000
Central Excise Act, 1944 Service Tax 207,889 2005-2006
Central Excise Act, 1944 Excise Duty 496,533 2013-2014
Central Excise Act, 1944 Service Tax 35,973 2013-2014
Central Excise Act, 1944 Service Tax 1,887,225 2013-2014
Income Tax Act, 1961 Income Tax 2,740,030 2010-2011
Total 5,556,756
Forum where
Name of Statute dispute is pending
Central Excise Act, 1944 Asistant Deputy Commissioner
of Central Excise, Mahad
Central Excise Act, 1944 Assistant Deputy Commissioner
of Central Excise, Mahad
Central Excise Act, 1944 Assistant Commissioner of
Central Excise, Mahad
Central Excise Act, 1944 Assistant Commissioner of
Central Excise, Mahad
Central Excise Act, 1944 Assistant Commissioner of
Central Excise, Mahad
Income Tax Act, 1961 Deputy Commissioner of Income Tax
(x) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions. There are no dues to debenture
holders.
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xiii) To the best of our knowledge and according to the information
and explanations given to us, no fraud by the Company and no fraud on
the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 117365W)
Z. F. Billimoria
Partner
(Membership No. 42791)
Mumbai: 29th April, 2014.
| 