sundram fasteners ltd Auditors report

To the Members of

Sundram Fasteners Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone fi nancial statements of Sundram Fasteners Limited (the "Company") which comprise the standalone balance sheet as at March 31, 2023, and the standalone statement of profi t and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash fl ows for the year then ended, and notes to the standalone fi nancial statements, including a summary of signifi cant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone fi nancial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profi t and other comprehensive income, changes in equity and its cash fl ows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifi ed under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone fi nancial statements under the provisions of the Act and the Rules thereunder, and we have fulfi lled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinion on the standalone fi nancial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most signifi cance in our audit of the standalone fi nancial statements of the current period. These matters were addressed in the context of our audit of the standalone fi nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Impairment assessment of long term investments in subsidiaries
Refer Notes 3 and 6 to standalone fi nancial statements
The key audit matter	How the matter was addressed in our audit
	In view of the signifi cance of the matter, we performed the following
The Company has long-term investments in subsidiaries as at March 31, 2023. The Company assesses investment in subsidiaries at each reporting date for any impairment indicators, based on internal or external sources of information. Where, such indicators exist, the Company performs impairment testing.	key audit procedures:
The changes in business environment including impact of COVID-19 pandemic on budgets and forecasts and uncertainties caused by external factors affecting estimated performance of subsidiaries has triggered impairment testing in respect of certain subsidiaries.	• Assessed the design, implementation and operating effectiveness of key controls in respect of the Companys impairment analysis process including evaluation and approval of forecasts, and the valuation model used;
	• Examined the valuation reports of the independent third-party specialists as engaged by the Company;
	• Evaluated and challenged the key assumptions considered in cash fl ow forecasts for assessing the recoverable amount such as growth rates, profi tability, discount rates etc., with reference to our understanding of the business and historical trends;
As impairment assessment involves signifi cant estimates and judgements, it is a key area of focus in our audit.	• Involved our valuation specialists to examine the valuation methodology and key assumptions;
	• Performed sensitivity analysis considering possible changes in key assumptions used;
	• Evaluated the adequacy of disclosures made in the standalone Ind AS fi nancial statements.
Taxation and contingent liability related matters
Refer Notes 3, 18 and 36 to standalone fi nancial statements
The key audit matter	How the matter was addressed in our audit
Determination of tax provisions and assessment of contingent liabilities involves judgment with respect to various tax positions on deductibility of transactions, interpretation of laws and regulations etc. Judgment is also required in assessing the range of possible outcomes for these matters.	In view of the signifi cance of the matter, we applied the following key audit procedures:
The Company makes an assessment to determine the outcome of these matters and records an accrual or discloses this as a contingent liability in accordance with applicable accounting standards.	• Involved our tax specialists and evaluated and challenged the underlying judgements used in respect of estimation of provisions, exposures and contingencies
	• Considered third party advice received by the Company where applicable, status of recent and current tax assessments, outcome of previous claims, judgmental positions taken in tax returns and developments in tax environment.
Accordingly, taxation and contingent liability related matters are areas of focus in the audit.	• Evaluated the adequacy of disclosures on tax provisions and contingent liabilities made in the standalone Ind AS fi nancial statements.
Revenue recognition
Refer Notes 3 and 23 to standalone fi nancial statements
The key audit matter	How the matter was addressed in our audit
The Companys revenue is derived primarily from sale of automobile spare parts and components ("goods"). Revenue from the sale of goods is recognised upon the transfer of control of the goods to the customer.	In view of the signifi cance of the matter we applied the following key audit procedures in this area:
	• Assessed the Companys accounting policy for revenue recognition as per applicable accounting standards.
The Company and its external stakeholders focus on revenue as a key performance metric and the Company uses various shipment terms across its operating markets.	• Tested the design, implementation and operating effectiveness of key controls relating to revenue recognition.
Revenue recognition has been identifi ed as a key audit matter as there could be an incentive or external pressures to meet expectations resulting in revenue being overstated or recognized before control has been transferred.	• Performed substantive testing of revenue transactions recorded during the year on a sample basis by verifying the underlying documents.
	• Tested samples of revenue transactions recorded closer to the year-end by verifying underlying documents, to assess the accuracy of the period in which revenue was recognized.
	• Tested material manual journal entries posted to revenue.

Information Other than the Financial Statements and Auditors Report Thereon

The Companys Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companys annual report, but does not include the fi nancial statements and auditors reports thereon.

Our opinion on the standalone fi nancial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone fi nancial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone fi nancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managements and Board of Directors Responsibilities for the Standalone Financial Statements

The Companys Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone fi nancial statements that give a true and fair view of the state of affairs, profi t/ loss and other comprehensive income, changes in equity and cash fl ows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specifi ed under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal fi nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone fi nancial statements, the Management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys fi nancial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone fi nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of these standalone fi nancial statements.

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

• Identify and assess the risks of material misstatement of the standalone fi nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suffi cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal fi nancial controls with reference to fi nancial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone fi nancial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone fi nancial 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone fi nancial statements, including the disclosures, and whether the standalone fi nancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signifi cant audit fi ndings, including any signifi cant defi ciencies in internal control that we identify during our audit.

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

From the matters communicated with those charged with governance, we determine those matters that were of most signifi cance in the audit of the standalone fi nancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefi ts of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specifi ed in paragraphs 3 and 4 of the Order, to the extent applicable.

2. A. 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 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 standalone balance sheet, the standalone statement of profi t and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash fl ows dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone fi nancial statements comply with the Ind AS specifi ed under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualifi ed as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal fi nancial controls with reference to fi nancial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

B. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a. The Company has disclosed the impact of pending litigations as at March 31, 2023 on its fi nancial position in its standalone fi nancial statements - Refer Note 36 to the standalone fi nancial statements.

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

d. (i) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 32 to the standalone fi nancial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identifi ed in any manner whatsoever by or on behalf of the Company ("Ultimate Benefi ciaries") or provide any guarantee, security or the like on behalf of the Ultimate Benefi ciaries.

(ii) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 32 to the standalone fi nancial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identifi ed in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Benefi ciaries") or provide any guarantee, security or the like on behalf of the Ultimate Benefi ciaries.

(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.

e. The fi rst interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with Section 123 of the Act. The second interim dividend declared by the Company for the year ended 31 March 2023, is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend. However, the said dividend was not paid on the date of this audit report.

f. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from 1 April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.

C. With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

Annexure A to the Independent Auditors Report on the Standalone Financial Statements of Sundram Fasteners Limited for the year ended March 31, 2023

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

(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has a regular programme of physical verifi cation of its Property, Plant and Equipment by which all property, plant and equipment are verifi ed in a phased manner over a period of three years. In accordance with this programme, certain property, plant and equipment were verifi ed during the year. In our opinion, this periodicity of physical verifi cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifi cation.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the standalone fi nancial statements are held in the name of the Company.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its Property, Plant and Equipment (including Right-of-Use assets) or intangible assets or both during the year.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

(ii) (a) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verifi ed by the management during the year.For stocks lying with third parties at the year-end, written confi rmations have been obtained and for goods-in-transit subsequent evidence of receipts has been linked with inventory records. In our opinion, the frequency of such verifi cation is reasonable and procedures and coverage as followed by management were appropriate. No discrepancies were noticed on verifi cation between the physical stocks and the book records that were more than 10% in the aggregate of each class of inventory

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has been sanctioned working capital limits in excess of fi ve crore rupees, in aggregate, from banks or fi nancial institutions on the basis of security of current assets. In our opinion, the quarterly returns or statements fi led by the Company with such banks/ or fi nancial institutions are in agreement with the books of account of the Company except as follows:

Quarter	Name of bank	Particulars	Amount as per books of account (in crores)	Amount as reported in the quarterly return / statement (in crores)	Amount of difference (in crores)	Whether return / statement subsequently rectifi ed
Quarter ended	HDFC Bank	Sales	1,218.19	1,216.05	2.14	Yes
September 2022	ICICI Bank
	Standard Chartered Bank
	HSBC Bank
Quarter ended	HDFC Bank	Production	1,032.63	1,028.42	4.21	Yes
September 2022	ICICI Bank
	Standard Chartered Bank
	HSBC Bank
Quarter ended	HDFC Bank	Sales	1,226.87	1,229.01	2.14	Yes
December 2022	ICICI Bank
	Standard Chartered Bank
	HSBC Bank
Quarter ended	HDFC Bank	Production	1,047.98	1,052.19	4.21	Yes
December 2022	ICICI Bank
	Standard Chartered Bank
	HSBC Bank

(iii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any investments, provided guarantee or security, granted loans or advances in the nature of loans, secured or unsecured to fi rms or to limited liability partnership. The Company has not provided any guarantee or security, granted any secured loans, secured or unsecured advances in the nature of loans to any companies during the year. The Company has made investments and granted unsecured loan to companies during the year. The Company has not provided guarantee or security, granted secured loans, secured or unsecured advances in the nature of loans, to any other parties during the year. However, the Company has made investments in mutual funds and granted unsecured loans to employees.

(a) Based on the audit procedures carried on by us and as per the information and explanations given to us the Company has provided loans or provided advances in the nature of loans, or stood guarantee, or provided security to any other entity as below:

Particulars	Guarantees	Loans
Aggregate amount during the year
Subsidiaries*	-	Rs 2.52 crores
Joint ventures*	-	-
Associates*	-	-
	-	Rs 3.02 crores
Others
Balance outstanding as at balance sheet date
Subsidiaries*	Rs 140.25 crores	Rs 18.22 crores
Joint ventures*	-	-
Associates*	-	-
	-	Rs 1.54 crores
Others*

*As per the Companies Act, 2013

(b) According to the information and explanations given to us and based on the audit procedures conducted by us, in our opinion the investments made during the year and the terms and conditions of the grant of loans provided during the year are, prima facie, not prejudicial to the interest of the Company. There are no guarantees, security or advance in the nature of loans provided by the Company during the year.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in the case of loans given, in our opinion the repayment of principal and payment of interest has been stipulated and the repayments or receipts have been regular except for the loan of Rs. 5.75 crores given to TVS Upasana Limited and Rs. 0.08 crores given to Sundram International Inc., USA which is repayable on demand. As informed to us, the Company has not demanded repayment of the loan during the year. Thus, there has been no default on the part of the party to whom the money has been lent. The payment of interest has been regular. Further, the Company has not given any advance in the nature of loan to any party during the year.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is no overdue amount for more than ninety days in respect of loans given. Further, the Company has not given any advances in the nature of loans to any party during the year.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is no loan or advance in the nature of loan granted falling due during the year, which has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to same parties.

(f) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment.

(iv) According to the information and explanations given to us and on the basis of our examination of records of the Company, in respect of investments made and loans, guarantees and security given by the Company, in our opinion the provisions of Section 185 and 186 of the Companies Act, 2013 ("the Act") have been complied with.

(v) The Company has not accepted any deposits or amounts which are deemed to be deposits from the public. Accordingly, clause 3(v) of the Order is not applicable.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Act in respect of its manufactured goods and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not carried out a detailed examination of the records with a view to determine whether these are accurate or complete.

(vii) (a) The Company does not have liability in respect of Service tax, Duty of excise, Sales tax and Value added tax during the year since effective 1 July 2017, these statutory dues has been subsumed into GST.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, in our opinion amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Duty of Customs or Cess or other statutory dues have generally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, no undisputed amounts payable in respect of Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Duty of Customs or Cess or other statutory dues were in arrears as at 31 March 2023 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, statutory dues relating to Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Duty of Customs or Cess or other statutory dues which have not been deposited on account of any dispute are as disclosed in Appendix I:

(viii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not defaulted in repayment of loans and borrowing or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a wilful defaulter by any bank or fi nancial institution or government or government authority.

(c) In our opinion and according to the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(d) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us and on an overall examination of the standalone fi nancial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries as defi ned under the Act. The Company does not hold any investment in any associate or joint venture as defi ned under the Companies Act.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries (as defi ned under the Act). The Company does not hold any investment in any associate or joint venture as defi ned under the Companies Act.

(x) (a) The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). Accordingly, clause 3(x)(a) of the Order is not applicable.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause 3(x)(b) of the Order is not applicable.

(xi) (a) Based on examination of the books and records of the Company and according to the information and explanations given to us, considering the principles of materiality outlined in Standards on Auditing, we report that no fraud by the Company or on the Company has been noticed or reported during the course of the audit. (b) According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the Act has been fi led by the auditors in Form ADT-4 as prescribed under Rule 13 of the Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) As represented to us by the management, there are no whistle blower complaints received by the Company during the year.

(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the transactions with related parties are in compliance with Section 177 and 188 of the Act, where applicable, and the details of the related party transactions have been disclosed in the standalone fi nancial statements as required by the applicable accounting standards.

(xiv) (a) Based on information and explanations provided to us and our audit procedures, in our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports of the Company issued till date for the period under audit.

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence, provisions of Section 192 of the Act are not applicable to the Company.

(xvi) (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause 3(xvi)(a) of the Order is not applicable.

(b) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause 3(xvi)(b) of the Order is not applicable.

(c) The Company is not a Core Investment Company (CIC) as defi ned in the regulations made by the Reserve Bank of India. Accordingly, clause 3(xvi)(c) of the Order is not applicable.

(d) According to the information and explanations provided to us, the Group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have more than one CIC.

(xvii) The Company has not incurred cash losses in the current and in the immediately preceding fi nancial year.

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, clause 3(xviii) of the Order is not applicable.

(xix) According to the information and explanations given to us and on the basis of the fi nancial ratios, ageing and expected dates of realisation of fi nancial assets and payment of fi nancial liabilities, other information accompanying the standalone fi nancial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) (a) In our opinion and according to the information and explanations given to us, there is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to any project other than ongoing projects. Accordingly, clause 3(xx)(a) of the Order is not applicable.

(b) In our opinion and according to the information and explanations given to us, there is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to any ongoing project. Accordingly, clause 3(xx)(b) of the Order is not applicable.

Appendix I

Name of the statute	Nature of the dues	Amount (in crores)	Period to which the amount relates	Forum where dispute is pending
Central Excise Act, 1944	Excise duty	2.26	FY 2004-16	Customs, Excise and Service tax
				Appellate Tribunal
Central Excise Act, 1944	Excise duty	0.01	FY 2005-17	Commissioner - Appeals
Central Excise Act, 1944	Excise duty	0.21	FY 2009-18	Adjudicating authority / Assessing
				Offi cer/ Division
Central Excise Act, 1944	Excise duty	0.32	FY 2013-18	Additional Director General,
				Directorate of Goods and Service
				Tax Intelligence
Finance Act, 1994	Service tax	0.22	FY 2004-18	Customs, Excise and Service tax
				Appellate Tribunal
Finance Act, 1994	Service tax	0.06	FY 2008-16	Commissioner - Appeals
Income Tax Act, 1961	Income-tax dues	0.64*	AY 2007-08	The Income tax Appellate Tribunal
Income Tax Act, 1961	Income-tax dues	3.90	AY 2015-16	The Income tax Appellate Tribunal
Income Tax Act, 1961	Income-tax dues	0.02	AY 2016-17	The Income tax Appellate Tribunal
Income Tax Act, 1961	Income-tax dues	0.46	AY 2017-18	The Income tax Appellate Tribunal
Income Tax Act, 1961	Income-tax dues	0.25	AY 2018-19	The Income tax Appellate Tribunal
Income Tax Act, 1961	Income-tax dues	0.04	AY 2019-20	The Income tax Appellate Tribunal
Tamil Nadu Value Added	Sales tax	0.60	FY 2006-17	Joint / Deputy / Assistant /
Tax Act, 2006 / Telangana				Additional Commissioner
Value Added Tax Act, 2005 /
Central Sales Tax Act, 1956
Tamil Nadu Value Added	Sales tax	0.01	FY 2017-18	Joint / Deputy / Assistant /
Tax Act, 2006 / Telangana				Additional Commissioner
Value Added Tax Act, 2005 /
Central Sales Tax Act, 1956
Tamil Nadu Value Added	Sales tax	0.34	FY 2014-17	Joint / Deputy / Assistant /
Tax Act, 2006 / Telangana				Additional Commissioner
Value Added Tax Act, 2005 / Central Sales Tax Act, 1956
Goods and Services Tax, 2017	GST	0.08	FY 2017-18	Joint / Deputy / Assistant / Additional Commissioner
Goods and Services Tax, 2017	GST	1.56	FY 2017-20	Assistant Commissioner, Circle III, Audit I Commissionerate

* Rectifi cation order received along with refund, pending closure of appeal

Annexure B to the Independent Auditors Report on the standalone fi nancial statements of Sundram Fasteners Limited for the year ended March 31, 2023

Report on the internal fi nancial controls with reference to the aforesaid standalone fi nancial statements under Clause (i) of Sub-section 3 of Section 143 of the Act (Referred to in paragraph 2(A)(f) under ‘Report on Other Legal and Regulatory Requirements section of our report of even date)

Opinion

We have audited the internal fi nancial controls with reference to fi nancial statements of Sundram Fasteners Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the standalone fi nancial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to fi nancial statements and such internal fi nancial controls were operating effectively as at March 31, 2023, based on the internal fi nancial controls with reference to fi nancial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "Guidance Note").

Managements and Board of Directors Responsibilities for Internal Financial Controls

The Companys Management and the Board of Directors are responsible for establishing and maintaining internal fi nancial controls based on the internal fi nancial controls with reference to fi nancial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal fi nancial controls that were operating effectively for ensuring the orderly and effi cient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable fi nancial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal fi nancial controls with reference to fi nancial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal fi nancial controls with reference to fi nancial statements were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal fi nancial controls with reference to fi nancial statements and their operating effectiveness. Our audit of internal fi nancial controls with reference to fi nancial statements included obtaining an understanding of internal fi nancial controls with reference to fi nancial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone fi nancial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion on the Companys internal fi nancial controls with reference to fi nancial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

A companys internal financial controls with reference to fi nancial statements is a process designed to provide reasonable assurance regarding the reliability of fi nancial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal fi nancial controls with reference to fi nancial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly refl ect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone fi nancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the standalone fi nancial statements.

Inherent Limitations of Internal Financial Controls with Reference to Financial Statements

Because of the inherent limitations of internal fi nancial controls with reference to fi nancial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal fi nancial controls with reference to fi nancial statements to future periods are subject to the risk that the internal fi nancial controls with reference to fi nancial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

for B S R & Co. LLP

Chartered Accountants

Firms Registration number: 101248W/W-100022

S Sethuraman

Partner

Membership No.: 203491

ICAI UDIN: 23203491BGYXWR6301

Place : Chennai

Date : May 04, 2023