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Maruti Suzuki India
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« Mar 13
Auditor's Report (Maruti Suzuki India) Year End : Mar '14
1.  We have audited the accompanying financial statements of Maruti
 Suzuki India Limited (the Company), which comprise the Balance Sheet
 as at 31st March 2014, and the Statement of Profit and Loss and Cash
 Flow Statement for the year then ended, and a summary of significant
 accounting policies and other explanatory information, which we have
 signed under reference to this report.
 
 MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
 
 2.  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 referred to in sub-section
 (3C) of section 211 of ''the Companies Act, 1956'' of India (the Act)
 and Accounting Standard 30, Financial Instruments: Recognition and
 Measurement issued by the Institute of Chartered Accountants of India
 to the extent it does not contradict any other accounting standard
 referred to in sub-section (3C) of Section 211 of the Act/ issued
 pursuant to the Companies (Accounting Standards) Rules, 2006 as per
 Section 211(3C) of the Companies Act, 1956 read with the General
 Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate
 Affairs in respect of Section 133 of the Companies Act, 2013. 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
 
 3.  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 and other applicable authoritative
 pronouncements 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.
 
 4.  An audit involves performing procedures to obtain audit evidence,
 about the amounts and disclosures in the financial statements. The
 procedures selected depend on the auditors'' 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 auditors consider 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 entity''s internal control. An audit also includes
 evaluating the appropriateness of accounting policies used and the
 reasonableness of the accounting estimates made by Management, as well
 as evaluating the overall presentation of the financial statements.
 
 5.  We believe that the audit evidence we have obtained is suffcient
 and appropriate to provide a basis for our audit opinion.
 
 OPINION
 
 6.  In our opinion, and to the best of our information and according to
 the explanations given to us, the accompanying 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 for
 the year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 EMPHASIS OF MATTER
 
 7.  We draw attention to Note 32 (vii) to the financial statements
 regarding demands received from Haryana State Industrial &
 Infrastructure Development Corporation Limited (HSIIDC) towards
 enhanced compensation for the Company''s freehold land at Manesar
 amounting to Rs. 7,496 million and Rs. 1,376 million. In respect of the
 demand 0f Rs. 7,496 million; pursuant to the Supreme Court of India
 setting aside the judgment of and remitting the case back to the Punjab
 & Haryana High Court (High Court) for fresh determination of the
 compensation amount payable to the landowners, the Company has fled an
 impleadment application before the High Court. In respect of the demand
 for Rs. 1,376 million; the Company''s appeal with the High Court is
 pending adjudication. In respect of the aforesaid demands, the Company
 has made a payment of Rs. 3,700 million to HSIIDC under protest. As the
 amount(s), if any, of the final price adjustment(s) is/ are not
 determinable at this stage, no provision is considered necessary
 towards enhanced compensation for the aforesaid freehold land.
 
 REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
 
 8.  As required by ''the Companies (Auditor''s Report) Order, 2003'', as
 amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'',
 issued by the Central Government of India in terms of sub- section (4A)
 of section 227 of the Act (hereinafter referred to as the Order), and
 on the basis of such checks of the books and records of the Company as
 we considered appropriate and according to the information and
 explanations given to us, we give in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the Order.
 
 9.  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 purpose of our
 audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account;
 
 (d) In our opinion, the Balance Sheet, Statement of Profit and Loss,and
 Cash Flow Statement dealt with by this report comply with the
 Accounting Standards referred to in sub-section (3C) of Section 211 of
 the Act and Accounting Standard 30, Financial Instruments: Recognition
 and Measurement issued by the Institute of Chartered Accountants of
 India to the extent it does not contradict any other accounting
 standard referred to in sub- section (3C) of Section 211 of the Act/
 issued pursuant to the Companies (Accounting Standards) Rules, 2006 as
 per Section 211(3C) of the Companies Act, 1956 read with the General
 Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate
 Affairs in respect of Section 133 of the Companies Act, 2013;
 
 (e) On the basis of written representations received from the directors
 as on 31st March 2014, and taken on record by the Board of Directors,
 none of the directors is disqualifed as on 31st March 2014, from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of the Act.
 
 ANNEXURE TO AUDITORS'' REPORT
 
 Referred to in paragraph 8 of the Auditors'' Report of even date to the
 members of Maruti Suzuki India Limited on the financial statements as of
 and for the year ended 31st March 2014
 
 i. (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets are physically verifed by the Management according
 to a phased programme designed to cover all the items, except furniture
 and fixtures, office appliances and certain other assets having an
 aggregate net book value of Rs. 1,412 million, over a period of three
 years which, in our opinion, is reasonable having regard to the size of
 the Company and the nature of its assets. Pursuant to the programme, a
 portion of the fixed assets has been physically verifed by the
 Management during the year and no material discrepancies have been
 noticed on such verifcation.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 ii. (a) The inventory, excluding stocks with third parties, has been
 physically verifed by the Management during the year. In respect of
 inventory lying with third parties, these have substantially been
 confirmed by them. In our opinion, the frequency of verifcation is
 reasonable.
 
 (b) In our opinion, the procedures of physical verifcation of inventory
 followed by the Management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory.  The
 discrepancies noticed on physical verifcation of inventory as compared
 to book records were not material.
 
 iii. (a) The Company has not granted any secured/ unsecured loans, to
 companies / firms / other parties covered in the register maintained
 under Section 301 of the Act. Accordingly, the provisions of clause
 4(iii) (b),(c) and (d) of the said Order are not applicable to the
 Company.
 
 (e) The Company has taken unsecured loan from its holding company
 Suzuki Motor Corporation covered in the register maintained under
 Section 301 of the Act. The maximum amount involved during the year and
 the year-end balance of such loans aggregated to Rs. 1,741 million and Rs.
 1,666 million, respectively.
 
 (f) In our opinion, the rate of interest and other terms and conditions
 of such loans are not prima facie prejudicial to the interest of the
 Company.
 
 (g) In respect of the aforesaid loans, as per the repayment schedule,
 the Company would begin repayments from September 2014.
 
 iv. In our opinion, and according to the information and explanations
 given to us, having regard to the explanation that except for certain
 items of inventory purchased which are of special nature for which
 suitable alternative sources do not exist for obtaining comparative
 quotations, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods and
 services.  Further, on the basis of our examination of the books and
 records of the Company, and according to the information and
 explanations given to us, we have neither come across, nor have been
 informed of, any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 v. (a) According to the information and explanations given to us, we
 are of the opinion that the particulars of all contracts or
 arrangements that need to be entered into the register maintained under
 section 301 of the Companies Act, 1956 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rupees Five Lakhs amounted to Rs.
 42,444 millions in respect of purchase of goods including components
 and services from the holding company where we are unable to comment as
 there are no comparable market prices available being goods including
 components and services of specialized nature.
 
 vi. The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under .
 
 vii. In our opinion, the Company has an internal audit system
 commensurate with its size and the nature of its business.
 
 viii. We have broadly reviewed the books of account maintained by the
 Company in respect of products where, pursuant to the rules made by the
 Central Government of India, the maintenance of cost records has been
 prescribed under clause (d) of sub-section (1) of Section 209 of the
 Act, and are of the opinion that, prima facie, the prescribed accounts
 and records have been made and maintained. We have not, however, made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.
 
 ix. (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is regular in depositing the undisputed statutory dues, including
 provident fund, investor education and protection fund, employees''
 state insurance, income tax, sales tax, wealth tax, service tax,
 customs duty, excise duty and other material statutory dues, as
 applicable, with the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income tax, sales tax, wealth tax, service tax, customs duty and excise
 duty as at 31st March 2014 which have not been deposited on account of
 a dispute, are as follows:
 
                                                  Rs. in million
 
 Name of the 
 statute            Amount    Amount deposited    Period to which the
 (Nature of dues)   under
                    dispute    under dispute         amount relates
 
 Income Tax Act, 
 1961               20,910        7,135            1991 to 2014
 (Tax & Interest)
 
 Wealth Tax Act, 
 1957 (Tax)            1            1              1997 to 1998
 
 Haryana General 
 Sales Tax Act         3            -              1983 to 1988
 (Tax & Interest)
 
 Delhi Sales 
 Tax Act (Tax)          50            2            1987 to 1991
 
 The Central 
 Excise Act, 1944   14,773          378           April 1986 to
 (Duty, Interest 
 & Penalty)                                          March 2013
 
 The Finance 
 Act, 1994           4,638           14           April 2002 to
 (Service Tax, 
 Interest & Penalty)                              December 2013
 
 Customs Act, 1962      27           22        February 2003 to
 (Duty & Interest)                                  August 2003
 
 
 Name of the statue         Forum where the dispute is pending
 (Nature of dues)
 
 Income Tax Act, 1961
 (Tax & Interest)           Income Tax Appellate Tribunal/ High Court/
                            AO(TDS)
 
 Wealth Tax Act, 1957 (Tax) High Court
 
 Haryana General Sales Tax 
 Act
 (Tax & Interest)           Assessing Authority
 
 Delhi Sales Tax Act (Tax)  Additional Commissioner
 
 The Central Excise Act, 1944
 (Duty, Interest & Penalty) CIT(A)/Customs Excise & Service
                            Tax Appellate Tribunal/ High Court/ 
                            Supreme Court
 
 The Finance Act, 1994
 (Service Tax, Interest 
 & Penalty)                 CIT(A)/Customs Excise & Service Tax Appellate
                            Tribunal/Commissioner (Appeals)
 
 Customs Act, 1962
 (Duty & Interest)          Customs Excise & Service Tax Appellate 
                            Tribunal
 
 x. The Company has no accumulated losses as at the end of the financial
 year and it has not incurred any cash losses in the financial year ended
 on that date or in the immediately preceding financial year.
 
 xi. According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 xii. The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 Therefore, the provisions of Clause 4(xii) of the Order are not
 applicable to the Company.
 
 xiii. As the provisions of any special statute applicable to chit fund/
 nidhi/ mutual benefit fund/ societies are not applicable to the Company,
 the provisions of Clause 4(xiii) of the Order are not applicable to the
 Company.
 
 xiv. In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments. Accordingly, the
 provisions of Clause 4(xiv) of the Order are not applicable to the
 Company.
 
 xv. In our opinion, and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 Accordingly, the provisions of Clause 4(xv) of the Order are not
 applicable to the Company.
 
 xvi. In our opinion, and according to the information and explanations
 given to us, the term loans have been applied, on an overall basis, for
 the purposes for which they were obtained.
 
 xvii. According to the information and explanations given to us and on
 an overall examination of the balance sheet of the company, in our
 opinion, there are no funds raised on short-term basis which have been
 used for long-term investment.
 
 xviii. The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year. Accordingly, the provisions of Clause
 4(xviii) of the Order are not applicable to the Company.
 
 xix. The Company has not issued any debentures during the year and does
 not have any debentures outstanding as at the beginning of the year and
 at the year end. Accordingly, the provisions of Clause 4(xix) of the
 Order are not applicable to the Company.
 
 xx. The Company has not raised any money by public issues during the
 year. Accordingly, the provisions of Clause 4(xx) of the Order are not
 applicable to the Company.
 
 xxi. During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of any such case by the Management.
 
                                              For Price Waterhouse
 
                                 Firm Registration Number: 301112E
 
                                             Chartered Accountants
 
                                                     ABHISHEK RARA
 
                                                           Partner
 
                                        Membership Number - 077779
 
 Place: New Delhi
 
 Date : 25th April 2014
Source : Dion Global Solutions Limited
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