MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2022-23

64 MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2022-23 Your Company’s Financial Statements are prepared on the basis of the Signi cant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time. Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP Systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Policies related to the Information Management reinforce the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are subjected to Internal Audit and their ndings and recommendations are reviewed by the Audit Committee which ensures the implementation. The SAP ERP System has feature of recording an Audit Trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled, as mandated under the recent amendment under Companies (Accounts) Rules, 2014, effective 1 st April, 2023. Your Company has in place adequate internal nancial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company’s Internal Financial Controls were deployed through Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company’s operations and nancial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the Management, no reportable material weakness or signi cant de ciencies in the design or operation of internal nancial controls was observed. Your Company recognizes that the Internal Financial Controls cannot provide absolute assurance of achieving nancial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis. E. M ANAGEMENT DISCUSSION AND ANALYSIS REPORT A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report. F. RELATED PARTY TRANSACTIONS The Company has in place a robust process for approval of Related Party Transactions and on Dealing with Related Parties. As per the process, necessary details for each of the Related Party Transactions as applicable along with the justification are provided to the Audit Committee in terms of the Company’s Policy on Materiality and Dealing with Related Party Transactions and as required under SEBI Circular dated 22 nd November, 2021. The Material Related Party Transactions approved by the Members of the Company are also reviewed /monitored on quarterly basis by the Audit Committee of the Company as per Regulation 23 of the Listing Regulations and Section 177 of the Companies Act, 2013. All Related Party Transactions entered during the year were in the ordinary course of business and on arm’s length basis. During the year under review, your Company has entered into Material Related Party Transactions as approved by the Members under Regulation 23 of the Listing Regulations. The Company has not entered into Material Related Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under section 134(3)(h) of the Companies Act, 2013 is given in Form AOC-2 as Annexure II, which forms part of this Annual Report. The Policy on Materiality of and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company’s website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investor- relations/policies-and-documents . G. AUDITORS Statutory Auditors and Auditors’ Report Messrs B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 101248W/W-100022) were re-appointed as the Statutory Auditors of the Company to hold of ce for a second term of 5 years from the conclusion of the 76 th Annual General Meeting (AGM) held on 5 th August, 2022 until the conclusion of the 81 st AGM of the Company to be held in the year 2027.