annual-report-FY2021

141 MAHINDRA & MAHINDRA LTD. INTEGRATED ANNUAL REPORT 2020-21 Further, the Internal Control Systems have been designed to provide reasonable assurance with regard to recording and providing reliable nancial and operational information. In the highly networked IT environment of the Company, validation of IT Security receives focussed attention from IT specialists and Statutory Auditors. The Chief Internal Auditor reports directly to the Chairman of the Board. The Internal Audit function develops an audit plan for the Company, which covers, inter alia, corporate, core business operations, as well as support functions. The Audit Committee reviews the annual internal audit plan. Signicant audit observations are presented to the Audit Committee, together with the status of the management actions and the progress of the implementation of the recommendations. The Audit Committee reviews the adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations. During the year, the Company has taken steps to review and document the adequacy and operating effectiveness of internal controls. Nonetheless, your Company recognises that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis. Your Company's Management has carried out the evaluation of design and operative effectiveness of these controls and noted no signicant deciencies/material weaknesses that might impact nancial statements as at the Balance Sheet date. Overview The nancial statements have been prepared in accordance with Ind AS as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notied under Section 133 of the Companies Act, 2013 (the 'Act') and other relevant provisions of the Act. The Group's consolidated nancial statements have been prepared in compliance with Ind AS 110 on Consolidation of Accounts and presented in a separate section. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE Property, Plant and Equipment and Intangible Assets st As at 31 March, 2021, the Property, Plant and Equipment and Intangible Assets stood at Rs. 15,012 crores as st compared to Rs. 14,404 crores as at 31 March, 2020. During the year, the Company incurred capital expenditure of Rs. 2,839 crores (previous year Rs. 3,992 crores). The major items of capital expenditure were on new product development and capacity enhancement. FINANCIAL INFORMATION [STANDALONE] Long-term borrowings Short-term borrowings Current maturities of long- term borrowings Unclaimed matured deposits Total 7,070 25 572 0.1 7,667 F21 5,038 (875) 436 0.0 4,599 Inc./(Dec.) 2,032 900 136 0.1 3,068 F20 (Rs. in crores) Borrowings Borrowings Borrowings (including current maturities of long-term debt and unclaimed matured deposits) have increased from Rs. 3,068 crores in the previous year to Rs. 7,667 crores in the current year, mainly due to new borrowings in current year. Raw materials and bought out components as a % of cost of materials consumed Finished goods and stock-in-trade as a % of sales of products 5.7% 4.9% 2021 4.9% 4.4% 2020 Inventories The increase in rawmaterials and bought out components as a percentage of cost of materials consumed, and increase in nished goods and stock-in-trade as a percentage of sales of products, have been mainly on account of new product launches and inventory built-up on expected better upcoming seasons.