Harsh Maruti Report

Summer Internship Project Report
On
INTERNAL FINANCIAL CONTROLS
Completed At
MARUTI SUZUKI INDIA LIMITED
By
HARSH JANDWANI
Roll No. FA22019
PGDM 22-24
Under Joint Supervision of
Dr. Amisha gupta and Mrs. Vandana jain
Presented in Partial Fulfillment of the

Requirements of
Post 3, Institutional Area, Rohini, Sector-

Graduate Diploma in
5, Management
Delhi – 110085, India
3, Institutional Area, Sector-5, Rohini, Delhi-110085
Jagan Institute of Management Studies
Maruti Suzuki India Limited

Reg. office:-Plot No.1,Nelson Mandela Road,
Vasant Kunj New Delhi- 110070
Gurgoan Plant:- Old Palam Gurgoan Road,
Gurgoan-122015, Haryana
CERTIFICATE
Certified that the summer internship project report on “INTERNAL FINANCIAL CONTROLS” is the
bonafide work of “HARSH JANDWANI, Roll No: FA22019”, pursuing PGDM/PGDM-IB/PGDM-
RM, Batch (2022-24) of Jagan Institute of Management Studies, 3, Institutional Area, Rohini, Sector 5,
New Delhi - 110085. The work has been done under my supervision during 08/05/2023 – 03/07/2023.
Date:03/07/2023
Mrs. Vandana Jain
DPO
Control and Assurance Department (IAU)
2
CERTIFICATE
This is to certify that the summer internship project report on “INTERNAL FINANCIAL
CONTROLS” is a bonafide work of “HARSH JANDWANI, Roll No: FA22019”, pursuing PGDM
Batch (2022-24) of Jagan Institute of Management Studies, 3, Institutional Area, Sec-5, Rohini, New
Delhi – 110085. The report was prepared under my supervision during 08/05/2023 – 03/07/2023.
Date:03/07/2023 Dr. Amisha Gupta
Assistant Professor
JIMS, Rohini, Sector 5, New Delhi - 85
STUDENT’S DECLARATION
I declare that the Report on “INTERNAL FINANCIAL CONTROLS” is an original work
done by me in accordance with the guidelines prescribed by the Dean’s office for preparation of Summer
Internship Project Report and the work has not been submitted anywhere else for review.
I understand that if the content of the work is found to be plagiarized at any time of its evaluation, my
report can be rejected and disciplinary action may be initiated against me.
3
Harsh Jandwani
Roll. No. FA22019
PGDM Batch 22-24
Acknowledgement
I would like to express my deep sense of gratitude to the guide distinguish personality for their precious
suggestion and encouragement during the project. The Experience which is gained by me during this
project is essential for me at this turning point of my career.
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I am thankful to Dr Pratima daipuria (Dean), Dr Pooja Jain (Director), PGDM and Prof.
Ashok Bhagat (Dean-Corporate Relations & Placements) for their kind support and supervision.
I am also thankful to my corporate mentor Vandana Jain for providing me guidance and support.
Last but not the least I would like to thanks all the faculty members, Maruti’s officials, my family and
friends for their constant support.
5
S.N. Particulars Page No. List

of
1. Fig.1 9
2. Fig.2 13
3. Fig.3 17
4. Fig.4 18
5. Fig.5 19
6. Fig.6 20
7. Fig.7 21
8. Fig.8 24
9. Fig.9 58
Figures
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List of Notations and Symbols Used
1. Government:-Govt.
2. Maruti Suzuki India Limited:- Maruti
3. Committee of sponsoring organizations:- COSO
4. Gross domestic product:- GDP
5. Compounded annual growth rate:- CAGR
6. Electric vehicle:- EV
7. Internal financial controls:- IFC
7
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Table of Contents
Page No.
Certificate (from the organization) 2
Certificate (from the faculty Jagan Institute of Management Studies
mentor) 3
Author’s Declaration 4
Acknowledgement 5
List of Figures 6
List of Notations and Symbols Used 7
Executive Summary 9
Chapter1: Introduction 11- 22
1.1 Overview of the Industry 11-16
1.2 Overview of the Company 16-22
1.3 Introduction to the Project/ Research 22
Chapter 2: Research Methodology/ Methodology 23-27

2.1 Objectives and scope 23-24
2.2 Research design 24
2.3 Sources of data collection 25
2.4 Sampling Design 25-27
2.5 Data analysis - tools/techniques 27
2.6 Limitations of the study 27
Chapter 3: Conceptual Background (if applicable) 28-32
Chapter 4: Data Analysis and Findings 33-51

Chapter 5: Discussion and Conclusion 52-54
Chapter 6: Recommendations 55
Chapter 7: Learnings from Summer Internship 56
References 57
Annexure 58
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Executive Summary
Fig.1
Internal control system encompasses the policies and procedures adopted by the management of an entity
to assist in achieving management’s objective of ensuring, as far as practicable, orderly and efficient
conduct of business, including adherence to management policies, safeguarding of assets, prevention and
detection of fraud and error, accuracy and completeness of the accounting records, executing orderly,
ethical, economical, efficient and effective operations.
As per Section 134 of the Companies Act 2013, the term 'Internal Financial Controls' means the policies
and procedures adopted by the company for ensuring the orderly and efficient conduct of its business,
including adherence to company's policies, safeguarding of its assets, prevention and detection of frauds
and errors, accuracy and completeness of the accounting records, and timely preparation of reliable
financial information.
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This project is an effort to audit and analyse the Internal Financial controls of Maruti Suzuki India Limited.
Every company faces the need of strong Internal Financial control which would help it safeguard itself
from frauds and errors in the organization and enable to achieve important objectives sustain and improve
its performance. COSO’s Internal Control-Integrated Framework (Framework) enables organizations to
effectively and efficiently develop systems of Internal control that adapt to changing business and
operating environments, mitigate risks to acceptable levels, and support sound decision making and
governance of the organization.
Designing and implementing an effective system of internal control can be challenging; operating that
system of internal control to be agile in adapting to changes in business, operating and regulatory
environments. An effective system of internal control demands more than rigorous adherence to policies
and procedures, It requires the use of judgment, Management and board of directors use judgment to
determine how much control is enough. Management and other personnel, apply judgment as they monitor
and access the effectiveness of the system of internal control.
The internship is a bridge between the institute and organization. This made me to be involved in project
that helped me to employ my theoretical knowledge about the myriad and fascinating facets of finance.
Moreover, in the process I could contribute substantially to the organization’s growth. The experience I
gathered over the training period has certainly provided the orientation, which I believe will help in
shouldering any responsibility in future.
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Chapter1: Introduction
1.1 Overview of the Industry
Automobile Industry in India
The first automobile with a petrol engine was built in 1885 and soon the figure for total cars in the world
will be touching a mark of 1000 million cars and light trucks. This article presents a quick overview of
what we mean with the Automotive Industry and how it started and what is the scale of this industry today.
The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of
the earth's most important economic sectors by revenue.
The term automotive industry usually does not include industries dedicated to automobiles after delivery to
the customer, such as repair shops and motor fuel filling stations. The first practical automobile with a
petrol engine was built by Karl Benz in 1885 in Mannheim, Germany. Benz was granted a patent for his
automobile on 29 January 1886, and began the first production of automobiles in 1888, after Bertha Benz,
his wife, had proved with the first long-distance trip in August 1888 (104 km from Mannheim to Pforzheim
and back) that the horseless coach was absolutely suitable for daily use. Since 2008 a Bertha Benz
Memorial Route commemorates this event. Soon after, in 1889, Gottlieb Daimler and Wilhelm Maybach in
Stuttgart designed a vehicle from scratch to be an automobile, rather than a horse-drawn carriage fitted
with an engine. They also are usually credited as inventors of the first motorcycle, the Daimler Reitwagen,
in 1885, but Italy's Enrico Bernardi, of the University of Padua, in 1882, patented a 0.024 horsepower
(17.9 W) 122 cc (7.4 cu in) one-cylinder petrol motor, fitting it into his son's tricycle, making it at least a
candidate for the first automobile, and first motorcycle. Until 2005, the U.S.A. led the world in total
automobile production.
In 1929 before the Great Depression, the world had 32,028,500 automobiles in use, and the US automobile
industry produced over 90% of them. At that time the U.S. had one car per 4.87 persons. In 2006, Japan
narrowly passed the U.S. in production and held this rank until 2009, when China took the top spot with
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13.8 million units. By producing 18.3 million units in 2010, China produced nearly twice the number of
second-place Japan (9.6 million units), with the U.S. in third place with 7.8 million units. 7 Around the
world, there were about 806 million cars and light trucks on the road in 2007, consuming over 260 billion
US gallons (980,000,000 m3) of gasoline and diesel fuel yearly. The automobile is a primary mode of
transportation for many developed economies. The Detroit branch of Boston Consulting Group predicts
that, by 2014, one-third of world demand will be in the four BRIC markets (Brazil, Russia, India, and
China). Other potentially powerful automotive markets are Iran and Indonesia. Emerging auto markets
already buy more cars than established markets. According to a J.D. Power study, emerging markets
accounted for 51 percent of the global light-vehicle sales in 2010. The study expects this trend to
accelerate. India is home to a vibrant automobile of more than 40 million vehicles. It has been one of the
few countries worldwide which saw growing passenger car sales during the recession of the past two years.
It is believed this upward trend will be sustained in the foreseeable future due to a strong domestic market
and increased thrust on exports. The Indian economy has grown at an average rate of around 9 percent over
the past five years and is expected to continue this growth in the medium term. This is predicted to drive an
increase in the percentage of the Indian population able to afford vehicles. India’s car per capita ratio
(expressed in cars per 1,000 populations) is currently among the lowest in the world’s top 10 auto markets.
The twin phenomena of low car penetration and rising incomes, when combined with the increasing
affordability of cars, are expected to contribute to an increase in India’s automobile demand. In the current
competitive business environment, businesses must be able to reduce their manufacturing costs by
eliminating all non-value adding processes, ensuring compliance to industry standards, ensuring proper
storage of data, and fostering innovations in the industry.
Many manufacturers now adhere to the global environmental norms regarding emission/technological
standards and quality certifications. The industry grew by around 20% annually in the 1990s, and the
average annual growth of exports was around 15% during that period. Over the years, it has been able to
modernize its technology and improve quality and has developed capabilities to manufacture components
for new-generation vehicles. Indian companies maintained their traditional strengths in casting, forging and
precision machining, and fabricating (welding, grinding, and polishing) at technology levels matching 8
the required scale of operations. They achieved significant success in garnering engineering capabilities
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and adapted to local requirements through local design. High growth has taken place in engine, drive
transmission, and steering parts. Engine parts, being high value-added in its nature, have been contributing
most to total production. Endowed with the potential of low-cost quality products, India edges over many
other developing countries in component manufacturing.
The Indian automobile industry contributes almost 6.4% of India's GDP and 35% of manufacturing GDP
and is a leading employment provider.
The Indian automobile industry has historically been a good indicator of how well the economy is doing, as
the automobile sector plays a key role in both macroeconomic expansion and technological advancement.
The two-wheelers segment dominates the market in terms of volume, owing to a growing middle class and
a huge percentage of India’s population is young. Moreover, the growing interest of companies in
exploring the rural markets further aided the growth of the sector. The rising logistics and passenger
transportation industries are driving up demand for commercial vehicles. Future market growth is
anticipated to be fueled by new trends including the electrification of vehicles, particularly three-
wheelers and small passenger automobiles.
India enjoys a strong position in the global heavy vehicles market as it is the largest tractor producer,
second-largest bus manufacturer, and third-largest heavy truck manufacturer in the world. India’s annual
production of automobiles in FY22 was 22.93 million vehicles.
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Fig.2
India is also a prominent auto exporter and has strong export growth expectations for the near future. In
addition, several initiatives by the Government of India such as the Automotive Mission Plan 2026,
scrappage policy, and production-linked incentive scheme in the Indian market are expected to make
India one of the global leaders in the two-wheeler and four-wheeler market by 2022.
MARKET SIZE
The Indian passenger car market was valued at US$ 32.70 billion in 2021, and it is expected to reach a
value of US$ 54.84 billion by 2027 while registering a CAGR of over 9% between 202227.
The electric vehicle (EV) market is estimated to reach Rs. 50,000 crore (US$ 7.09 billion) in India by
2025. A study by CEEW Centre for Energy Finance recognised a US$ 206 billion opportunity for electric
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vehicles in India by 2030. This will necessitate a US$ 180 billion investment in vehicle manufacturing and
charging infrastructure.
According to NITI Aayog and the Rocky Mountain Institute (RMI), India's EV finance industry is likely to
reach Rs. 3.7 lakh crore (US$ 50 billion) by 2030. A report by the India Energy
Storage Alliance estimated that the EV market in India is likely to increase at a CAGR of 36% until 2026.
In addition, the projection for the EV battery market is expected to expand at a CAGR of 30% during the
same period.
Indian automotive industry is targeting to increase the export of vehicles by five times during 2016-26. In
FY22, total automobile exports from India stood at 5,617,246.
The $222 Bn Automobile industry is expected to reach $300 Bn by 2026.
In the Automobile market in India, Two-wheelers and passenger cars accounted for 76% and 17.4% market
share, respectively. Passenger car sales are dominated by small and midsized cars.
Export of total number of automobiles increased from 4,134,047 in 2020-21 to 5,617,246 in 2021-22,
registering a positive growth of 35.9%
India aims to double auto industry size to INR 15 lakh Cr by 2024 end.
In April 2021 to March 2022, Passenger Vehicle Exports increased from 404,397 to 577,875 units
(registering a positive growth of 42.9%), Commercial Vehicle Exports increased from 50,334 to 92,297
units, Three-Wheeler Exports increased from 393,001 to 499,730 units and Two-Wheeler Exports
increased from 3,282,786 to 4,443,018 units in April 2021 to March 2022 over same period last year.
In the Union Budget 2023, the government has increased the budget allocation of FAME II by 78 %.
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 INVESTMENTS
To keep up with the growing demand, several auto makers have started investing heavily in

various segments of the industry during the last few months. The industry attracted Foreign
Direct Investment equity inflow (FDI) worth US$ 33.77 billion between April 2000-September

2022, accounting for 5.48% of the total equity FDI during the period.
Some of the recent/planned investments and developments in the automobile sector in India are
 as follows:
In January 2023, MG Motor India to invest US$ 100 million to expand capacity, eyes 70 percent growth

in 2023.

In December 2022, Mahindra & Mahindra to invest Rs 10,000 crore (US$ 1.2 billion) for an EV
manufacturing plant in Pune.

In November 2022, Maruti Suzuki India announced plans to spend nearly Rs. 7,000 crore (US$
865.12 million) on several projects this year, including the building of its new facility in Haryana and

the introduction of new models.
 In October 2022, the total production of passenger vehicles*, three wheelers, two wheelers, and
quadricycles was 2,191,090 units.
In October 2022, Maruti Suzuki was India’s biggest car seller, with 136,700 units sold.

In October 2022, Hero MotoCorp sold 507,587 two-wheelers, the highest in the segment, which gave

it a market share of 32.31%.
In September 2022, Maruti Suzuki launched the Grand Vitara at a starting price of Rs. 10.45 lakh (US$
12,915).
In September 2022, Hero MotoCorp announced an investment of US$ 60 million in Californiabased

Zero Motorcycles to collaborate on the development of electric motorcycles.
In August 2022, Volkswagen Group's Indian subsidiary, Skoda Auto Volkswagen India, has begun
a feasibility study for its next phase of investment in India after rolling out its India 2.0 strategic

plan.
In July 2022, TVS Motor lines up fresh investments of Rs 1,000 crore in EV push.
In April 2022, Tata Motors announced plans to invest Rs. 24,000 crore (US$ 3.08 billion) in its
passenger vehicle business over the next five years.
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19
 In March 2022, MG Motors, owned by China's SAIC Motor Corp, announced plans to raise US$ 350-
500 million in private equity in India to fund its future needs, including EV expansion.

In March 2022, Hyundai plans US$ 79.2 billion investment through 2030, to focus majorly on
EVs.

In February 2022, a memorandum of understanding (MoU) was signed between electric twowheeler
company Ather Energy and Electric Supply Companies (ESCOMs) of Karnataka for setting up
 1,000 fast charging stations across the state.
In February 2022, Tata Power and Apollo Tyres Ltd announced a strategic partnership for the
 establishment of 150 public charging stations across India.
In January 2022, Kinetic Green Energy announced plans to invest Rs. 80-100 crore (~US$ 10-13
 million) in a two-wheeler EV project, in collaboration with Chinese EV major Aima Technology Group.
Two-wheeler EV maker HOP Electric Mobility, a diversified business venture of Rays Power Infra,
is looking at investing Rs. 100 crore (US$ 13.24 million) over the next two years to expand

manufacturing capacity for its EVs.
 Investment flow into EV start-ups in 2022 (until September 15) has raised funds worth around US$
673 million, according to Fintrackr.
In December 2021, TVS Motor Company and BMW Motorrad, announced a partnership in the two-

wheeler EV space, with plans to release their first electric two-wheeler within the next two years.
 In December 2021, Hyundai announced plans to invest Rs, 4,000 crore (US$ 530.25 million) in
R&D in India, to launch six EVs by 2028.
A cumulative investment of Rs. 12.5 trillion (US$ 180 billion) in vehicle production and charging
infrastructure would be required until 2030 to meet India’s EV ambitions.
1.2 Overview of the Company
Maruti Suzuki India Limited (MSIL), a subsidiary of Suzuki Motor Corporation, Japan, is India’s
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largest passenger car maker. Maruti Suzuki is credited with having ushered in the automobile
revolution in the country. The Company is engaged in the business of manufacturing and sale of
passenger vehicles in India. Making a small beginning with the iconic Maruti 800 car, Maruti
Suzuki today has a vast portfolio of 16 car models with over 150 variants. Maruti Suzuki’s
product range extends from entry level small cars like Alto 800, Alto K10 to the luxury sedan
Ciaz. Other activities include facilitation of pre-owned car sales fleet management, car financing.
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The Company has manufacturing facilities in Gurgaon and Manesar in Haryana and a state of the
art R&D centre in Rohtak, Haryana.
Fig.3
The Company, formerly known as Maruti Udyog Limited, was incorporated as a joint venture
between the Government of India and Suzuki Motor Corporation, Japan in February, 1981.
Presently, Suzuki Motor Corporation owns equity of 56.2%. The Company’s shares are traded on
the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
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Fig.4
Fig.5
Production capacity
The company has two state of the art manufacturing facilities located in Gurugram and Manesar
in Haryana, capable of producing 1.5 million units per annum. Highly efficient lean
manufacturing processes, together with a skilled and motivated workforce, enable manufacturing
of reliable and quality products.
Suzuki Motor Gujarat Private Limited (SMG), a subsidiary of SMC, was set up in Hansalpur,
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Gujarat to cater to the increasing market demand for the Company’s products and has been
operational since 2017. In April 2021, the 3rd manufacturing plant with an annual production
capacity of 0.25 million units, was made operational. With this new capacity addition, an annual
production capacity of 0.75 million units has been made available at SMG, thereby taking the
Company’s combined production capability to ~2.25 million units. The Company is responsible
for the sales and distribution of units produced at the SMG facility.
VALUE CREATION PROCESS
The Company connects well with customers and understands their needs. The strength of the
Company lies in its ability to offer relevant ‘Products, Technologies and Services’ that India
needs. The Indian customer is unique and demands features of high-end cars in smaller cars. This
is where the unique capability of Suzuki Motor Corporation (SMC) in designing feature-rich,
environment-friendly products with world-class quality at an affordable price greatly supports the
Company in offering the product that customers desire. The able and passionate workforce
committed to making things happen, allows the Company to be agile in challenging situations
and emerge stronger.
The Company strives to provide the best value proposition to customers not only during the
purchase of a car, but also throughout the ownership cycle. This leads to creation of customer
delight, thus ensuring customers’ long-term association with the Company. The conscious and
concerted efforts in expanding its distribution network, pursuing a multi-channel strategy,
providing ease of maintenance through affordable and easily available spare parts, and proximity
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of service workshops, demonstrate the Company’s endless pursuit to serve customers better with
every passing day.
The blend of Japanese technology and Indian spirit makes the Company distinct and unique in
the way it creates value. One of its fundamental elements of value creation is ‘optimum resource
utilisation’. Since inception, the Company has inculcated the 3R principle, Japanese practices
and SMC’s basic philosophy of ‘fewer, smaller, lighter, neater and shorter’ in all its operating
practices. These not only make the operations efficient but also support in resource optimisation
and conservation, thus supporting the Company’s contribution towards circular economy.
Moreover, the environment-friendly products of the Company greatly help in reducing its carbon
footprint.
PERFORMANCE HIGHLIGHT 2021-22
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Fig.6
Fig.7
COMPLIANCE MANAGEMENT
There is a strong focus on strengthening the culture of compliance in the Company. A robust
Compliance Management System is in place to ensure appropriate compliance with statutory
laws and meet the requirements of an ever-evolving regulatory framework. During the year
2021-22, over 3,500 applicable compliances, including those related to labour, environmental,
financial and corporate laws, were monitored through the Compliance Management System.
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More than 120 compliance health checks were also conducted covering various Company
facilities. The Company complies with the requirements pertaining to a listed company under the
Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
In every quarter of the reporting period, a compliance certificate was submitted to the Board of
Directors providing a status of compliance with applicable laws and relevant standards. There
has been no significant non-compliance with the applicable laws and regulations during the year.
In order to reinforce the commitment to compliance and integrity, the Compliance Month was
observed virtually in October 2021 with the theme ‘Being Resilient in the New Normal with
Compliance’.
1.3 Introduction to the Project/ Research
The Maruti Suzuki India Limited is entrusted with great resources and commensurately great
responsibilities for the creation, dissemination, and preservation of knowledge. Business Officers
play a key role in assuring that high standards of business and ethical practices permeate
throughout the activities surrounding the custody and use of these resources. The purpose of
Understanding Internal financial Controls is to assist employees in their stewardship role in
achieving the Maruti’s objectives. It also serves to provide guidance for the existence of basic
and consistent business controls throughout the organization and to define our responsibilities for
managing them.
This guide is designed to satisfy the basic objectives of most business systems as they relate to
carrying out the work of the organization. It addresses five interrelated components of a business
system:
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The organization's operating environment

Goals and objectives and related risk assessment
Controls and related policies and procedures
Information systems and communication methods
Activities to monitor performance
Understanding Internal Financial Controls provides an additional reference tool for all employees
to identify and assess operating controls, financial reporting, and legal/regulatory compliance
processes and to take action to strengthen controls where needed. By developing effective
systems of internal control, we can contribute to enhancing the University’s ability to meet its
objectives and reducing the potential liability from fines and penalties that could be imposed for
violations.
Understanding Internal Controls is based upon the internal control guidelines as recommended
by the Committee of Sponsoring Organizations (COSO) of the Tradeway Commission. COSO
was formed to support the Commission's recommendation to develop additional, integrated
guidance on internal control. This organizational approach provides the Maruti Suzuki India
Limited with a common, accepted, and recommended reference point to assess the quality of its
internal control systems
Chapter 2: Research Methodology / Methodology *
The term research refers to the systematic method consists of enunciating the problem,
formulating a hypothesis collecting the data, analyzing the facts and reaching the certain
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conclusions either in the form of solution towards the concern problem or in certain
generalization for some theoretical formation.
Research Methodology is a way to solve systematically the research problem. It may be

understood as a science of studying how research is done scientifically.
2.1 Objectives and Scope
Primary objective of IFC to identify opportunities for improvement and to draw up

recommendations & good practices that can be used as a benchmark to develop or strengthen
their internal control systems and enhance the reliability of their financial statements.
• Efficiency and effectiveness in operations

• Prevention and detection of fraud and error
• Safeguarding of assets
• Accuracy and completeness of accounting records Reliability of Financial Reporting
Scope
Understanding Internal Controls applies to all departments and operations. The examples of
control activities contained in this guide are not presented as all-inclusive or exhaustive of all the
specific controls appropriate in each department or unit. Over time, controls may be expected to
change to reflect changes in our operating environment. An effective control system provides
reasonable, but not absolute assurance for the safeguarding of assets, the reliability of financial
information, and the compliance with laws and regulations. Reasonable assurance is a concept
that acknowledges that control systems should be developed and implemented to provide
management with the appropriate balance between risk of a certain business practice and the
level of control required to ensure business objectives are met.
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The cost of a control should not exceed the benefit to be derived from it.
The degree of control employed is a matter of good business judgment. When business controls
are found to contain weaknesses, we must choose among the following alternatives:
· Increase supervision and monitoring;

· Institute additional or compensating controls; and/or
· Accept the risk inherent with the control weakness (assuming management approval
The guidance presented in this document should not be considered to "stand alone." This guide
should be used in conjunction with existing policies and procedures.
Responsibility
All employees of the organization are responsible for managing internal controls. Each Group,
Business Unit, or Department Head is specifically responsible for ensuring that internal controls
are established, properly documented, and maintained in each organization.
There are many resources to assist employees in managing their internal control systems and
Processes. Primary resources include the campus Controller and the Internal Audit Department.
In general, while all employees are responsible for the quality of their internal Controls,
Controllers are responsible for providing campus leadership to ensure that effective Internal
control and accountability practices are in place. Internal Audit is primarily responsible for
assisting management in their oversight and operating responsibilities through independent audits
and consultations designed to evaluate and promote the systems of internal control.
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2.2 Research design
Fig.8
2.3 Sources of data collection
There are two types of collecting data
1. Primary data
2. Secondary data
Here the analysis done on the basis of primary data, which includes
• Inquiry
• Inspection
• Observation
• Walkthrough and test check
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2.4 Sampling Design
The auditor should test the operating effectiveness of a control by determining whether the
control is operating as designed and whether the person performing the control possesses the
necessary authority and competence to perform the control effectively.
Note:
In some situations, a company might use a third party to provide assistance with certain financial
reporting functions. When assessing the competence of personnel responsible for a company's
financial reporting and associated controls, the auditor may take into account the combined
competence of company personnel and other parties that assist with functions related to financial
reporting. Procedures the auditor performs to test operating effectiveness include a mix of
inquiry of appropriate personnel, observation of the company’s operations, inspection of relevant
documentation, and re-performance of the control. When planning a particular audit sample for a
test of controls, the auditor should consider:
The relationship of the sample to the objective of the test of controls.
The maximum rate of deviations from prescribed controls that would support the planned
assessed level of control risk.
The auditor's allowable risk of assessing control risk too low.
Characteristics of the population, that is, the items comprising the account balance or class of
transactions of interest.
For many tests of controls, sampling does not apply. Procedures performed to obtain an
understanding of internal control sufficient to plan an audit do not involve sampling. Sampling
generally is not applicable to tests of controls that depend primarily on appropriate segregation of
duties or that otherwise provide no documentary evidence of performance. In addition, sampling
may not apply to tests of certain documented controls. Sampling may not apply to tests directed
toward obtaining evidence about the design or operation of the control environment or the
accounting system. For example, inquiry or observation of explanation of variances from budgets
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when the auditor does not desire to estimate the rate of deviation from the prescribed control.
When designing samples for tests of controls the auditor ordinarily should plan to evaluate
operating effectiveness in terms of deviations from prescribed controls, as to either the rate of
such deviations or the monetary amount of the related transactions. In this context, pertinent
controls are ones that, had they not been included in the design of internal control would have
adversely affected the auditor's planned assessed level of control risk. The auditor's overall
assessment of control risk for a particular assertion involves combining judgments about the
prescribed controls, the deviations from prescribed controls, and the degree of assurance
provided by the sample and other tests of controls.
The auditor should determine the maximum rate of deviations from the prescribed control that
he or she would be willing to accept without altering his planned assessed level of control risk.
This is the tolerable rate. In determining the tolerable rate, the auditor should consider
(a) the planned assessed level of control risk, and
(b) the degree of assurance desired by the evidential matter in the sample. For example, if the
auditor plans to assess control risk at a low level, and desires a high degree of assurance from
the evidential matter provided by the sample for tests of controls (i.e., not perform other tests
of controls for the assertion), he or she might decide that tolerable rate of 5 percent or
possibly less would be reasonable. If the auditor either plans to assess control risk at a higher
level, or desires assurance from other tests of controls along with that provided by the sample
(such as inquiries of appropriate entity personnel or observation of the application of the
policy or procedure), the auditor might decide that a tolerable rate of 10 percent or more is
reasonable. In assessing the tolerable rate of deviations, the auditor should consider that,
while deviations from pertinent controls increase the risk of material misstatements in the
accounting records, such deviations do not necessarily result in misstatements.
For example, a recorded disbursement that does not show evidence of required approval may
nevertheless be a transaction that is properly authorised and recorded. Deviations would result in
misstatements in the accounting records only if the deviations and the misstatements occurred on
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the same transactions. Deviations from pertinent controls at a given rate ordinarily would be
expected to result in misstatements at a lower rate.
Considerations when assessing findings and concluding on the operating effectiveness of controls
include:
Determining whether a deviation is identified.
Determining the nature and cause of the deviation(s).
2.5 Data analysis - tools/techniques
I used the different tools/techniques to analyse internal financial control of Maruti Suzuki India
Limited
• Analysis of existing controls or change in internal controls

• Analysis of operating effectiveness of the control
• Conducting a test check
• Conducting a walkthrough
2.6 Limitations of the study
•Internal Financial controls are driven by cost benefit analysis
• Frauds and collusions cannot be ruled out however strong the controls
• Internal Financial controls are designed for standard transactions. But innovative products are
designed and launched even before systems and processes are put in place
• Management overrules processes while dealing with crisis which then sometimes become a
practice. Exceptions become a rule.
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Chapter 3: Conceptual Background
The Companies Act 2013 has ushered in the new era of corporate Governance and transparency
and is set to have far reaching implications. The new regime is expected to turnaround the
governance of corporate sector in India.
The recent corporate frauds (Satyam, Enron etc) have created an atmosphere of mistrust in the
governance of corporate.
The USA Adopted the Sarbanes oxley Act in 2002 which contains regulations on the internal
concontrol expected from companies. In June 2006, the Finnacial Instruments and Exchange Act
(J-SOX) was passed by the Diet, the National Legislature of Japan. The requirements of
legislature are similar to the requirement of internal control over financial reporting under SOX.
Thus it was imperative for govt. to come up with regulations to re-instill the trust in the corporate
sector
Meaning of Internal Financial Controls (IFC)
As per Section 134 of the Companies Act, 2013 (the Act), the term "Internal Financial Controls"
means the policies and procedures adopted by the company for ensuring: orderly and efficient
conduct of business, including adherence to company's policies, safeguarding of its assets,
prevention and detection of frauds and errors, accuracy and completeness of the accounting
records, and timely preparation of reliable financial information.
The Act has set increased responsibility and accountability on Board of Directors, Audit
Committee, Senior Management and Independent Auditors. The approach that should be adopted
by Companies should be that of a comprehensive risk management program - Enterprise Risk
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Management (ERM). Objective of IFC Primary objective of IFC to identify opportunities for
improvement and to draw up recommendations & good practices that can be used as a
benchmark to develop or strengthen their internal control systems and enhance the reliability of
their financial statements.
Efficiency and effectiveness in operations Prevention and detection of fraud and error
Safeguarding of assets Accuracy and completeness of accounting records Reliability of Financial
Reporting Internal Control = Internal Control over financial reporting + Operational control
reporting + Fraud prevention reporting Roadmap to implement Internal Financial Controls
Assess the current state of internal controls Embrace a widely acceptable framework or
guidelines Set the right tone at the top i.e. those charged with governance Ascertain
organizational risks which have a financial impact Define the Control Objectives and Control
Activities to mitigate the risk Ongoing continuous monitoring of the functioning of controls
Obtain independent assurance on the effectiveness of the internal controls i.e. Independent
Auditors Advantages of a robust internal financial control system By placing more accountability
and responsibility on the Board and Audit Committee with respect to internal financial controls,
the 2013 Act is attempting to align the corporate governance and financial reporting standards
with global best practices.
With adequate and effective internal financial controls, some of the benefits that the companies
would experience include:
Senior Management Accountability Improved controls over financial reporting process Improved
investor confidence in entity's operations and financial reporting process Promotes culture of
openness and transparency within the entity Trickling down of accountability to operational
management Improvements in Board, Audit Committee and senior management engagement in
financial reporting and financial controls More accurate, reliable financial statements Making
audits more comprehensive
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Internal Financial Controls - Why important?
Internal financial controls also become important as they help derive values in the form of Fresh
independent look at key business processes Identification of potential operating process
opportunities
Updated formal, centralized, and managed internal financial controls documentation for the
company Enhanced support to CEO/CFO certifications Enhanced control environment, thereby
mitigating risk Better understanding of inherent and residual control risks in internal controls.
Helps in business process redesigning to plug revenue leakages & cost Containment
opportunities Helps in rationalizing the number of controls across organization - moving to smart
and automated controls
Helps in standardizing policies and procedures for multi-location/ multi-business companies
Fosters a control conscious work culture for people behind controls Provides assurance to the
CEO/ CFO as well as improves business performance In some instances, also serves as a base for
blue print of optimal procedures while thinking about ERP.
Where it is laid down
Section 134: In the case of a listed company, the Directors' Responsibility states that directors,
have laid down IFC to be followed by the company and that such controls are adequate and
operating effectively
Section 143: The auditor's report should also state whether the company has adequate IFC system
in place and the operating effectiveness of such controls.
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Section 177: Audit committee may call for comments of auditors about internal control systems
before their submission to the Board and may also discuss any related issues with the internal and
statutory auditors and the management of the company.
Schedule IV: The independent directors should satisfy themselves on the integrity of financial
information and ensure that financial controls and systems of risk management are robust and
defensible.
Rule 8(5)(viii) of the Companies (Accounts) Rules, 2014: The director's report should contain
details in respect of adequacy of internal financial controls with reference to the financial
reporting.
Responsibilities of Various Stakeholders
A. Company Management Create & test the framework of internal controls IFC (including
operational & Compliance) Controls documentation
B. Auditor Focus on Internal Control to the extent these relates to the financial Reporting
(ICFR) Responsibility limited to evaluation of "Financial Reporting Controls"
C. Audit Committee /Independent Director Would like to see a robust framework that is
aligned to acceptable standards Review & question the basis of your controls design and ongoing
assessment
D. Board of Directors Would rely on the assessments and view of the audit committee They
may ask for additional information Guidance Note issued by ICAI on Internal Financial Controls
over Financial Reporting Under section 143(3)(i) of the Act, an auditor of a company is required
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to state in his/her audit report whether the company has an adequate Internal Financial Controls
(IFC) system in place and the operating effectiveness of such controls. Explanation to Section
134(5)(e) of the Act defines IFC to include policies and procedures adopted by the company for
ensuring orderly and efficient conduct of its business, accuracy and completeness of the
accounting records, and timely preparation of reliable financial information.
As per the Guidance Note "Internal Financial Controls Over Financial Reporting" (ICFR) shall
mean: "A process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles". A company's internal financial control over financial
reporting includes those policies and procedures: Pertain to the maintenance of the records that,
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the company: Provides reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statement in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and director of the company. Provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
company's assets that could have a material effect of the financial statement.
Internal Control Over financial Reporting = Maintenance of financial records (details &
Accuracy) + Authorization of Transactions + Safeguarding of assets of the Company.
The overview of revised Guidance Note issued by the ICAI are as follows: Reporting
responsibility of the management Section 134(5)(e) of the Act (which deals with the directors'
responsibility statement) requires directors of listed companies to state whether they had laid
down IFC to be followed by the company and that such IFC are adequate and were operating
effectively.
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Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 financial controls, that
were operating effectively for ensuring the accuracy and completeness of the accounting records,
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.
Rule 8(5)(viii) of the Companies (Accounts) Rules, 2014 (Rules) requires Board's report of every
company to state the details in respect of adequacy of IFC with reference to the financial
statements.
Though not specifically mentioned, the Guidance Note appears to suggest that for: Listed
Companies: The directors' responsibility statement to state that IFC are adequate and operating
effectively.
The Board's report to state the adequacy of IFC with respect to financial statements. Other
Companies: The Board's report to state adequacy of IFC with respect to financial statements.
Reporting by auditors - whether same scope as that of management.
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The auditor's objective in an audit of IFC - FR (which is generally carried out along with an audit
of financial statements) is to express an opinion on the adequacy and operating effectiveness of
the company's IFC - FR.
A company's internal financial control cannot be considered effective if one or more material
weakness exists. Globally also, auditor's reporting on internal controls is together with the
reporting on financial statements and such internal controls reported upon relate only to internal
controls over financial reporting.
Opportunities for Companies
To truly unlock the value that can be achieved by adopting the internal financial controls,
management should take a step back and evaluate how it is addressing the risks to its
organization in light of the company's size, complexity, global reach, and risk profile. In
companies' implementation of the internal financial controls, there is a difference between doing
the minimum and doing the right thing to effectively address the requirements. Companies that
choose to do the right thing will unlock the value, reduce fraud risk, avoid financial reporting
surprises, and support sustained business performance over the long term.
*Please note Ministry of Corporate Affairs (MCA) has notified that Section 143(3)(i) of the
Companies Act 2013 shall not be applicable for those audit reports of private limited
companies /One-person companies (OPC) which has Annual turnover of less than Rs 50 Crores
or has aggregate borrowings of less than 25 Crores from banks, Financial institutions or body
corporate at any time during the financial year issued after 13th June 2017.
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Chapter 4: Data Analysis and Findings
It is the risk that the auditor may fail to express an appropriate opinion in an audit assignment. An
auditor may consider audit risk both at overall level as well as at the level of individual account
balances or classes of transactions. This means that at overall level the auditor applies their
professional judgment to determine the extent of risk which he considers to be an acceptable
level. At account balance level, audit risk refers to the risk that error in monetary terms exists
beyond a tolerable error limit in the account balances or class of transaction which the auditor
fails to defect. AUDIT RISK means the risk that the auditor gives an inappropriate audit opinion
when the financial statement is materially misstated. SA 315 establishes requirements and
provides guidance on identifying and assessing the risks of material misstatement at the financial
statement and assertion levels.
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Risk of material misstatement may be defined as the risk that the financial statements are
materially misstated prior to audit. This consists of two components, described as follows at the
assertion level:
(A) Inherent risk
The susceptibility of an assertion about a class of transaction, account balance or disclosure to a

misstatement that could be material, either individually or when aggregated with other
misstatements, before consideration of any related controls.
(B)Control risk
The risk that a misstatement that could occur in an assertion about class of transaction, account
balance or disclosure and that could be material, either individually or when aggregated with
other misstatements, will not be prevented, or detected and corrected, on a timely basis by the
entity’s internal control. Detection Risk: The risk that the procedures performed by the auditor to
reduce audit risk to an acceptably low level will not detect a misstatement that exists and that
could be material, either individually or when aggregated with other misstatements. The Internal
Control structure in an organization is referred to as the policies and procedures established by
the entity to provide reasonable assurance that the objectives are achieved. The control structure
in an organization basically has the following components:
1. Control Environment -
Control environment covers the effect of various factors like management attitude; awareness and
actions for establishing, enhancing or mitigating the effectiveness of specific policies and
procedures.
2. Accounting System -
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Accounting system means the series of task and records of an entity by which transactions are
processed for maintaining financial records. Such system identifies, assemble, analyze, calculate,
classify, record, summarize and report transactions and other events.
3. Control Procedure -
Policies and procedures mean those policies and procedures in addition to the control
environment and accounting systems which the management has established to achieve the
entity’s Specific objectives. In this regard, the managements responsible for maintaining an
adequate account system incorporating various internal controls to the extent that they are
appropriate to the size and nature of the business. There should be reasonable assurance for the
auditor that the accounting system is adequate and that all the accounting information required to
be recorded has in fact been recorded. Internal controls normally contribute to such assurance.
The auditor should gain an understanding of the accounting system and related internal controls
and should study and evaluate the operation of those internal controls upon which he wishes to
rely in determining the nature, timing and extent of other audit procedures.
Where the auditor concludes that he can rely on certain internal controls, he could reduce his
substantive procedures which otherwise may be required and may also differ as to the nature and
timing. Specific Requirement under SA 315 -“Identifying and Assessing the Risks of Material
Misstatement through Understanding the Entity and its Environment” deals with the auditor’s
responsibility to identify and assess the risks of material misstatement in the financial statements,
through understanding the entity and its environment, including the entity’s internal control.SA
315 further states that the auditor should identify and assess the risks of material misstatement,
whether due to fraud or error, at the financial statement and assertion levels, through
understanding the entity and its environment, including the Entities Internal control, thereby
providing a basis for designing and implementing responses to the assessed risks of material
misstatement. This will help the auditor to reduce the risk of material misstatement to an
acceptably low level.
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INTERNAL CONTROL SYSTEM - NATURE, SCOPE
Internal controls are a system consisting of specific policies and procedures designed to provide
management with reasonable assurance that the goals and objectives it believes important to the
entity will be met. “Internal Control System" means all the policies and procedures (internal
controls) adopted by the management of an entity to assist in achieving management's objective
of ensuring, as far as practicable, the orderly and efficient conduct of its business, including
adherence to management policies, the safeguarding of assets, the prevention and detection of
fraud and error, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information. To state whether a set of financial statements
presents a true and fair view, it is essential to benchmark and check the financial statements for
compliance with the framework. The Accounting Standards specified under the Companies Act,
1956 (which are deemed to be applicable as per Section 133 of the 2013 Act, read with Rule 7 of
Companies(Accounts) Rules, 2014) is one of the criteria constituting the financial reporting
framework on which companies prepare and present their financial statements under the Act and
against which the auditors evaluate if the financial statements present a true and fair view of the
state of affairs and the results of operations of the company in an audit of the financial statements
carried out under the Act. Nature of Internal Control -A set of internally generated policies and
procedures adopted by the management of an enterprise is a prerequisite for an organizations
efficient and effective performance. It is thus, a primary responsibility of every management to
create and maintain an adequate system of internal control appropriate to the size and nature of
the business entity.
SA 315 defines the system of internal control as the process designed, implemented and
maintained by those charged with governance, management and other personnel to provide
reasonable assurance about the achievement of an entity’s objectives with regard to reliability of
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financial reporting, effectiveness and efficiency of operations, safeguarding of assets, and

compliance with applicable laws and regulations.
Scope of Internal Controls –
The scope of internal controls extends beyond mere accounting controls and includes all
administrative controls concerned with the decision - making process leading to managements
authorization of transaction, such controls include, production method, time and motion study,
pricing policies, quality control, work standard, budgetary control, policy appraisal, quantitative
controls etc. In an independent financial audit, the auditor is primarily concerned with those
policies and procedures having a bearing on the assertions underlying the financial statements.
These comprise primarily controls relating to safeguarding of assets, prevention and detection of
fraud and error, accuracy and completeness of accounting records and timely preparation of
reliable financial information. Administrative controls, on the other hand, have only a remote
relationship with financial records and the auditor may evaluate only those administrative
controls which have a bearing on the reliability of the financial records. The fundamental
therefore is that effective internal control is a process affected by people that supports the
organization in several ways, enabling it to provide reasonable assurance regarding risk and to
assist in the achievement of objectives. Fundamental to a system of internal control is that it is
integral to the activities of the company, and not something practiced in isolation.
Internal Financial Controls
Testing of Operative Effectiveness
Different techniques may be used to document information relating to accounting and internal
control systems. Selection is a matter for the auditor's judgment.
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Tests of Control - Tests of control are performed to obtain audit evidence about the effectiveness
of the:
(a) design of the accounting and internal control systems, that is, whether they are suitably
designed to prevent or detect and correct material misstatements; and(b) operation of the internal
controls throughout the period.
Tests of control include tests of elements of the control environment where strengths in the
control environment are used by auditors to reduce control risk. Some of the procedures
performed to obtain the understanding of the accounting and internal control systems may not
have been specifically planned as tests of control but may provide audit evidence about the
effectiveness of the design and operation of internal controls relevant to certain assertions and,
consequently, serves tests of control. For example, in obtaining the understanding of the
accounting and internal control systems pertaining to cash, the auditor may have obtained audit
evidence about the effectiveness of the bank reconciliation process through inquiry and
observation. When the auditor concludes that procedures performed to obtain the understanding
of the accounting and internal control systems also provide audit evidence about the suitability of
design and operating effectiveness of policies and procedures relevant to a particular financial
statement assertion, the auditor may use that audit evidence, provided it is sufficient to support a
control risk assessment at less than high level.
Tests of control may include:
Inspection of documents supporting transactions and other events to gain audit evidence those
internal controls have operated properly, for example, verifying that a transaction has been
authorised.
Inquiries about, and observation of, internal controls which leave no audit trail, for example,
determining who actually performs each function and not merely who is supposed to perform it.
Re-performance of internal controls, for example, reconciliation of bank accounts, to ensure

they were correctly performed by the entity.
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Testing of internal control operating on specific computerised applications or over the overall
information technology function, for example, access or program change controls. The auditor
should obtain audit evidence through tests of control to support any assessment of control risk
which is less than high. The lower the assessment of control risk, the more evidence the auditor
should obtain that accounting and internal control systems are suitably designed and operating
effectively. When obtaining audit evidence about the effective operation of internal controls, the
auditor considers :
how they were applied,
the consistency with which they were applied during the period by
whom they were applied.
The concept of effective operation recognises that some deviations may have occurred.
Deviations from prescribed controls may be caused by such factors as changes in key personnel,
significant seasonal fluctuations in volume of transactions and human error. When deviations are
detected the auditor makes specific inquiries regarding these matters, particularly, the timing of
staff changes in key internal control functions. The auditor then ensures that the tests of control
appropriately cover such a period of change or fluctuation. Based on the results of the tests of
control, the auditor should evaluate whether the internal controls are designed and operating as
contemplated in the preliminary assessment of control risk. The evaluation of deviations may
result in the auditor concluding that the assessed level of control risk needs to be revised. In such
cases, the auditor would modify the nature, timing and extent of planned substantive procedures.
Quality and Timeliness of Audit Evidence
Certain types of audit evidence obtained by the auditor are more reliable than others. Ordinarily,
the auditor's observation provides more reliable audit evidence than merely making inquiries, for
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example, the auditor might obtain audit evidence about the proper segregation of duties by
observing the individual who applies control procedure or by making inquiries of appropriate
personnel. However, audit evidence obtained by some tests of control, such as observation,
pertains only to the point in time at which the procedure was applied. The auditor may decide,
therefore, to supplement these procedures with other tests of control capable of providing audit
evidence about other periods of time.
In determining the appropriate audit evidence to support a conclusion about control risk, the
auditor may consider the audit evidence obtained in prior audits. In continuing engagement, the
auditor will be aware of the accounting and internal control systems through work carried out
previously but will need to update the knowledge gained and consider the need to obtain further
audit evidence of any changes in control. Before relying on procedures performed in prior audits,
the auditor should obtain audit evidence which supports this reliance. The auditor would obtain
audit evidence as to the nature, timing and extent of any changes in the entity's accounting and
internal control systems since such procedures were performed and assess their impact on the
auditor's intended reliance. The longer the time elapsed since the performance of such procedures
the less assurance that may result. The auditor should consider whether the internal controls were
in use throughout the period. If substantially different controls were used at different times
during the period, the auditor would consider each separately. A breakdown in internal controls
for a specific portion of the period requires separate consideration of the nature, timing and
extent of the audit procedures to be applied to the transactions and other events of that period.
The auditor may decide to perform some tests of control during an interim visit in advance of the
period end. However, the auditor cannot rely on the results of such tests without considering the
need to obtain further audit evidence relating to the remainder of the period.
Factors to be considered include:
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The results of the interim tests.
The length of the remaining period.
Whether any changes have occurred in the accounting and internal control systems during the
remaining period.
The nature and amount of the transactions and other events and the balances involved.
The control environment, especially supervisory controls.
The nature, timing and extent of substantive procedures which the auditor plans to carry out.
If a control is not designed properly, it cannot operate effectively; therefore, there is no need to
test the operating effectiveness of controls that are improperly designed. The auditor should test
the operating effectiveness of a control by determining whether the control is operating as
designed and whether the person performing the control possesses the necessary authority and
competence to perform the control effectively. If the control does not operate effectively (e.g., the
auditor is unable to obtain sufficiently persuasive evidence that the control is operating as
designed), then it is a “deficiency in operating effectiveness.”
A deficiency in internal financial controls exists when the operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A deficiency in operation exists when a
properly designed control does not operate as designed, or the person performing the control
does not possess the necessary authority or competence to perform the control effectively.
Process flow for testing operative effectiveness of controls

This process flow illustrates the steps applicable to testing the operating effectiveness of a
control. It is applied for each relevant control for which the auditor is required, or for which the
auditor elects, to test operating effectiveness. Applying each of these steps requires professional
judgment. Assess the risks associated with the controls. When the auditor has determined that it
is necessary to test the operating effectiveness of a control, both for purposes of reporting on
internal financial controls and when relying on the operating effectiveness of the control to
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reduce the extent of substantive procedures for purposes of the financial statement audit, he or
she considers the risk associated with the control.
The risk associated with the control is the risk that the control might not be effective. The
assessment of risk associated with the control determines the persuasiveness of the evidence to
be obtained about the effectiveness of the control. The auditor should assess the risk associated
with the Control as either “higher” or “not higher” and use this assessment to plan the nature,
timing, and extent of the testing of each control. For each control selected for testing, the
evidence necessary to persuade the auditor that the control is effective depends upon the risk
associated with the control. The risk associated with a control consists of the risk that the control
might not be effective and, if not effective, the risk that a significant deficiency or material
weakness would result. As the risk associated with the control being tested increases, the
evidence that the auditor should obtain also increases.
Factors considered when assessing the risk associated with the control
Factors that affect the risk associated with a control include:
The nature and materiality of misstatements that the control is intended to prevent or detect;
The inherent risk associated with the related account(s) and assertion(s);
Whether there have been changes in the volume or nature of transactions that might adversely
affect control design or operating effectiveness;
Whether the account has a history of errors;
The effectiveness of entity-level controls especially controls that monitor other controls;
The nature of the control and the frequency with which it operates;
The degree to which the control relies on the effectiveness of other controls (e.g., the control
environment or information technology general controls);
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The competence of the personnel who perform the control or monitor its performance and
whether there have been changes in key personnel who perform the control or monitor its
performance;
Whether the control relies on performance by an individual or is automated (i.e., an automated
control would generally be expected to be lower risk if relevant information technology general
controls are effective);
Whether the control relies on performance by an individual or is automated
For example, an automated control generally would be expected to have a lower risk associated
with it when general IT controls (e.g., program change controls and security access controls) are
effective. Although all of the factors listed above are potentially relevant when assessing the risk
associated with a particular control, the auditor’s consideration could begin with the inherent risk
(i.e., whether or not the control addresses a significant risk of material misstatement) and the
consideration of the complexity of the control and the significance of the judgments that must be
made in connection with its operation will, in most cases, provide a sound foundation for
consideration of the other factors.
For example, a control that comprises a three-way match (i.e., a control whereby invoices are
matched to a valid purchase order and an approved packing slip or receiver) generally is not
complex and requires minimal judgment in its operation, even if it is performed manually.
Alternatively, a review -type control related to an asset impairment analysis performed by an
impairment committee will be much more likely to have a higher risk associated with it, because
much more can go wrong with the review of an asset impairment due to the complexity and
significant judgements that are likely to be involved in the operation of the review. Accordingly
the nature, timing, and extent of operating effectiveness tests for the three- way match and the
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review-type control will likely be different in order to respond to each of these controls’
assessment of the risk that the control might not be effective.
Plan the nature, timing, and extent of tests of operating effectiveness of controls
When the auditor plans the nature, timing, and extent of substantive tests, he or she designs
substantive tests that address the risks of material misstatement. When the auditor plans the
nature, timing and extent of tests of operating effectiveness of a relevant control that addresses
one or more risks of material misstatement, he or she should design tests to address the risk
associated with the control.
As the risk associated with the control increases, the auditor may do one or more of the
following:
Increase the persuasiveness of the nature of the audit evidence that will be obtained
Increase the extent of testing,
Perform procedures closer to the balance sheet or obtain more persuasive evidence of the
operation of the control during the roll forward period,
Identify and test other redundant controls, and
Perform the procedures themselves rather than using the work of others.
The planning for tests of operating effectiveness begins with the detailed description of the
control procedure [i.e., the details of how the control is performed (e.g., who, what, and when)]
to determine which characteristics of each control need to be tested. When the auditor tests the
design effectiveness of the control, he or she concludes whether the control procedure as
documented is designed effectively. Testing operating effectiveness simply means testing to
determine whether the control procedure was performed properly (i.e., whether all of the
important steps or characteristics identified in the detailed control description, in fact, operated as
designed or intended, and for the period of intended reliance).
Evaluating whether the deviation is a control deficiency.
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Using the Work of Internal Auditors and an Auditor’s Expert
The role and objectives of the internal audit function are determined by management and, where
applicable, those charged with governance. While the objectives of the internal audit function
and the auditor are different insofar as it relates to financial statements, the ways in which the
internal audit function and the auditor achieve their respective objectives in an audit of internal
financial controls may be similar. The auditor's consideration of the internal audit function in an
audit of internal financial controls, applies in a combined audit of internal financial controls over
financial reporting and financial statements. The objectives of the auditor, where the entity has an
internal audit function that the auditor has determined is likely to be relevant to the audit, are to
determine:
Whether, and to what extent, to use specific work of the internal auditors
Whether the work of the internal auditors is likely to be adequate for purposes of the audit; and
If so, the planned effect of the work of the internal auditors on the nature, timing or extent of
the auditor’s procedures.
If so, whether such work is adequate for the purposes of the audit.
The auditor should apply the requirements of paragraphs 8, 9 and A4 of SA 610 “Using the
Work of Internal Auditors” to assess the competence and objectivity of
internal auditors. The auditor should apply the principles underlying those paragraphs to assess
the competence and objectivity of persons other than internal auditors whose work the auditor
plans to use.
The auditor may also use the work of an auditor’s expert in an audit of internal financial controls.
In this regard the auditor should apply the requirements of SA 620“Using the Work of an
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Auditor’s Expert”. Auditor’s expert is an individual or organization possessing expertise in a

field other than accounting or auditing, whose work in that field is used by the auditor to assist
the auditor in obtaining sufficient appropriate audit evidence.
An auditor’s expert may be either an auditor’s internal expert (who is a partner or staff, including
temporary staff, of the auditor’s firm or a network firm), or an auditor’s external expert.
The key considerations for an auditor in using the work of an auditor’s expert are:
Determining the need for the expert.
Nature, timing and extent of audit procedures to be performed by the expert and the auditor.
The competence, capability and objectivity of the auditor’s expert.
Obtaining an understanding of the field of expertise of the auditor’s expert.
Agreement with the auditor’s expert.
Evaluating the adequacy of the auditor’s expert’s work.
Effect of entity-level controls on testing of other controls
The auditor's evaluation of entity-level controls can result in increasing or decreasing the testing
that the auditor otherwise might have performed on other controls. For example, if the auditor
has designed an audit approach with an expectation that certain entity-level controls (e.g.,
controls in the control environment) will be effective and those controls are not effective, the
auditor might re-evaluate the planned audit approach and decide to expand his or her audit
procedures. On the other hand, the auditor's evaluation of some entity-level controls can result in
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reduction of his or her testing of other controls, such as controls over corresponding relevant
assertions. The degree to which the auditor might be able to reduce testing of controls over
relevant assertions in such cases depends on the precision of the entity-level controls.
Monitoring the effectiveness of other controls
An Accounts Officer is charged with performing bank reconciliations, the bank reconciliations
prepared by the Accounts Officer as a means to determine: whether reconciliations are being
prepared on a timely basis, the nature of reconciling items identified through the process, and
whether reconciling items are investigated and resolved on a timely basis.
Audit Approach:
In this example, the purpose of the control is one of the factors that the auditor considers in
assessing precision of the CFO's review. The auditor has noted that the purpose of the CFO's
review is to check that the staff has performed there conciliations as described above. Therefore,
the auditor does not expect the CFO's review of the reconciliations to be sufficiently precise to
detect misstatements by itself. However, the CFO's review could still influence the auditor's
assessment of risk because it provides additional information about the nature and consistency of
the reconciliation procedures. The auditor obtains evidence about the CFO's review through
inquiry and document inspection, evaluates the review's effectiveness, and determines the
amount of direct testing of the reconciliation controls that is needed based on the assessed level
of risk. If the auditor concludes that the CFO's review is effective, he or she could reduce the
direct testing of the reconciliation controls, absent other indications of risk.
Entity-level controls related to payroll processing audit Approach:
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The auditor evaluates the effectiveness of the CFO's reviews, including the precision of those
reviews. He or she inquires about the CFO's review process and obtains other evidence of the
review. He or she notes that the CFO's threshold for investigating significant differences from
expectations is adequate to detect misstatements that could cause the financial statements to be
materially misstated. He or she selects some significant differences from expectations that were
flagged by the CFO and determines that the CFO appropriately investigated the differences to
determine whether the differences were caused by misstatements. Also, in considering evidence
obtained throughout the audit, the auditor observes that the results of the financial statement
audit procedures did not identify likely misstatements in payroll expense. The auditor decides
that the reviews could detect misstatements related to payroll processing because the CFO's
threshold for investigating significant differences from expectations is adequate. However, he or
she determines that the control depends on reports produced by the company's IT system, so the
CFO's review can be effective only if controls over the completeness and accuracy of those
reports are effective. After performing the tests of the relevant computer controls, the auditor
concludes that the review performed by the CFO, when coupled with relevant controls over the
reports, meets the control objectives for the relevant aspects of payroll processing described
above.
Assessing the risk of management override and evaluating mitigating actions
The risk of management override of controls exists in all organizations, but the extensive
involvement of owners and/or senior management in day-to-day activities and fewer levels of
management can provide additional opportunities for management to override controls in
smaller, less complex companies. Company actions to mitigate the risk of management override
are important to the consideration of the effectiveness of internal financial controls. In a
combined audit of internal financial controls over financial reporting and financial statements,
the auditor should consider the risk of management override in connection with assessing the risk
of material misstatement due to fraud, as he or she evaluates mitigating actions in connection
with the evaluation of entity-level controls and selecting other controls to test.
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Assessing the risk of management override SA 240 requires the auditor to assess the risk of
material misstatement due to fraud("fraud risk"). As part of that assessment, the auditor is
directed to perform the following procedures to obtain information to be used in identifying fraud
risks, which includes procedures to assess the risk of management override:
Conducting an engagement team discussion regarding fraud risks. This discussion includes
brainstorming about how and where management could override controls to engage in or conceal
fraudulent financial reporting.
Making inquiries of management, the audit committee, if any, and others in the company to
obtain their views about the risks of fraud and how those risks are addressed. These inquiries can
provide information about the possibility of management override of controls.
Considering fraud risk factors. Fraud risk factors include events or conditions that indicate
incentives and pressures for management to override controls, opportunities for management
override, and attitudes or rationalisations that enable management to justify override of controls.
After identifying fraud risks, the auditor should assess those risks, taking into account an
evaluation of the company's programs and controls that are intended to address those risks.
Because of the characteristics of fraud, the auditor's exercise of professional skepticism is

particularly important when considering the risk of material misstatement due to fraud, including
the risk of management override of controls.
Evaluating mitigating controls
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less complex company can take a no of actions to address the risk of management override.
Maintaining integrity and ethical values;
Active oversight by the audit committee;

Maintaining a whistleblower program; and
Controls over certain journal entries.
When assessing a company's anti-fraud programs and controls, the auditor should evaluate
whether the company has appropriately addressed the risk of management override. Often, a
combination of actions might be implemented to address the risk of management override.
Evaluating integrity and ethical values
An important part of an effective control environment is sound integrity and ethical values,
particularly of top management, which are communicated and practiced throughout the company.
A code of conduct or ethics policy is one way that a company can communicate its policies with
respect to ethical behavior. This type of control can be effective if employees are aware of the
company's policies and observe the policies in practice. Auditors should evaluate integrity and
ethical values as part of the assessment of the control environment component of internal control.
One approach for testing the effectiveness of the company's communications regarding integrity
and ethical values is to gain an understanding of what the company believes it is communicating
to employees and interview employees to determine if they are aware of the existence of the
company's policies for ethical behavior and what they understand those policies to be. A
discussion with employees regarding observed behaviors can assist the auditor further in
understanding management's past actions and determining whether management’s behavior
demonstrates and enforces the principles in its code of conduct. The auditor's experience with the
company can also be an important source of information about whether management
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demonstrates integrity and ethical values in its business practices and supports the achievement
of effective internal control in its day to day activities.
Evaluating audit committee oversight
An active and independent audit committee evaluates the risk of management override, including
identifying areas in which management override of internal control could occur, and assesses
whether those risks are appropriately addressed within the company. As part of their oversight
duties, the audit committee might perform duties such as meeting with management to discuss
significant accounting estimates and reviewing the reasonableness of significant assumptions and
judgments. The consideration of the effectiveness of the audit committee's oversights part of the
evaluation of the control environment. In connection with the auditor's inquiries of the audit
committee, the auditor may interview audit committee members to determine their level of
involvement and their activities regarding the risk of management override. For example, the
auditor might read minutes of audit committee discussions on matters related to the committee’s
oversight or might observe some of those discussions if the auditor attends the meetings in
connection with the audit. In addition, the auditor can examine evidence of the board of directors
or audit committee's activities that address the risk of management override, such as monitoring
of certain transactions.
Evaluating whistleblower programs
Whistleblower program provides an outlet for employees or others to report behaviors that might
have violated company policies and procedures, including management override of controls. A
key aspect of an effective whistleblower program is the appropriateness of responses to concerns
expressed by employees through the program. The audit committee may review reports of
significant matters and consider the need for corrective actions. Audit procedures relating to a
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whistleblower program are intended to assess whether the program is appropriately designed,
implemented, monitored, and maintained. Such procedures might include inquiry of employees,
inspection of communications to employees about the program, and, if tips or complaints have
been received, follow-up procedures to evaluate whether remedial actions were taken as
necessary.
Evaluating controls over journal entries
Controls that prevent or detect unauthorized journal entries can reduce the opportunity for the
quarterly and annual financial statements to be intentionally misstated. Such controls might
include, among other things, restricting access to the general ledger system, requiring dual
authorisations for manual entries, or performing periodic reviews of journal entries to identify
unauthorized entries. As part of obtaining an understanding of the financial reporting process, the
auditor should consider how journal entries are recorded in the general ledger and whether the
company has controls that would either prevent unauthorized journal entries from being made to
the general ledger or directly to the financial statements or detect unauthorised entries.
Considering the effects of other evidence
The auditor might identify indications of management override in other phases of the combined
audit of internal financial controls over financial reporting and financial statements. For example,
the auditor is required to perform procedures in response to the risk of management override,
including examining journal entries for evidence of fraud, reviewing accounting estimates for
bias, and evaluating the business rationale for significant, unusual transactions. Also, if the
auditor performs walkthroughs during the audit of internal control, he or she could obtain
information about potential management override by asking employees about their knowledge of
override. Also, the auditor might identify indications of management override when evaluating
108
the results of tests of controls or other audit procedures. If the auditor identifies indications of
management override of controls, he or she should take such indications into account when
evaluating the risk of override and the effectiveness of mitigating actions.
Chapter 5: Discussion and Conclusion
The Company recognizes that managing risk is an integral part of good management practice and
an essential element of good corporate governance. It aims to have a common, formalized and
systematic approach for managing risk and implementing risk management process across the
Company. The intent of the policy is to ensure the effective communication and management of
risk across all risk categories. The Company has identified elements of risk, which may threaten
the existence and financial position of the Company, which are set out in the Management
Discussion and Analysis Report.
The Company’s Internal Financial Control systems are Commensurate with the nature of its
business, financial statements and the size and complexity of its operations. These are routinely
tested and certified by the Statutory as well as Internal Auditors. Significant audit observations
and follow up actions thereon are reported to the Audit Committee. Maruti has an effective
internal control environment which ensures that the businesses and operations are managed
efficiently and effectively, assets are safeguarded, regulatory requirements are complied with and
109
transactions are recorded after appropriate authorizations. The Company’s strong and
independent internal audit function performs regular audits. The internal controls are constantly
upgraded based on internal audit recommendations. Every quarter the significant audit findings,
the corrective steps recommended and their implementation status are presented to the Audit
Committee.
EXTRACT OF THE ANNUAL FINANCIAL STATEMENTS OF MARUTI SUZUKI INDIA

LIMITED.
Referred to paragraph 1(f) under ‘Report on other Legal and Regulatory Requirements’ section of
our report of even date ‘Report on Other Legal and Regulatory Requirements’ in our Independent
Auditor’s Report to the members of the Company on the Standalone Financial Statements for the
year ended March 31, 2022. Report on the Internal Financial Controls under Clause (i) of Sub-
section 3 of Section 143 of the Companies Act, 2013 (“the Act”) we have audited the internal
financial controls over financial reporting of Maruti Suzuki India Limited
(“the Company”) in conjunction with our audit of the standalone Ind AS financial statements of
the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial
controls based on “the internal control over financial reporting 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
110
Chartered Accountants of India”. These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were operating effectively for ensuring
the orderly and efficient conduct of its business, including adherence to respective company’s
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
financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over
financial reporting of the Company based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the
“Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on
Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable
to an audit of internal financial controls. 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 financial controls over financial reporting was 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 financial controls system over financial reporting and their operating effectiveness. Our
audit of internal financial controls over financial reporting included obtaining an understanding
of internal financial controls over financial reporting, 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 auditor’s judgement, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud
or error.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion on the Company’s internal financial controls system over financial
reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal financial control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of
financial 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 Company’s
assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting,
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 financial controls over financial reporting to future periods are subject
to the risk that the internal financial control over financial reporting may become inadequate
112
because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us , the
Company has, in all material respects, an adequate internal financial controls system over
financial reporting and such internal financial controls over financial reporting were operating
effectively as at March 31, 2022, based on “the criteria for internal financial control over
financial reporting established by the respective 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”.
For DELOITTE HASKINS & SELLS LLP

Chartered Accountants
(Firm‘s Registration No.117366W/W-100018)
Jitendra Agarwal
Partner
Place: New Delhi (Membership No. 87104)
Date: 29 April 2022 (UDIN: 22087104AIBDDX3715)
Chapter 6: Recommendations
In my opinion, company has, in all material aspects, an adequate internal financial control system
over financial reporting and such financial reporting controls over financial reporting were operating
113
effectively as at March 2022 based on the internal control over financial reporting criteria established
by the company considering the essential components of internal controls over financial reporting
issued by the Institute of chartered accountants of India.
The introduction of IFC regulations has definitely given us the chance to improve the internal control
environment in most organizations by drawing the attention of Board of Directors and auditors to this
neglected concept earlier.
It has been years since the IFC regulations has been introduced, now it is responsibility of the
management and auditors to look at it from a fresh perspective beyond compliance and use it as an
opportunity to promote risk management and governance process within their organizations so that
we don’t have another satyam in making.
114
Chapter 7: Learnings from Summer Internship
Working on Maruti helped me to explore real job life and how Corporate operates. This has been
by far the most interesting and cherished worthy experience of my life. This internship has
provided me with a wonderful opportunity to acquire practical knowledge, communication skills,
negotiation skills, and technical skills. Though it may take some time to polish those skills, at this
moment I am confident I to improve them in the future. I have tried my soul to incorporate the
necessary relevant information in my report. During the period of internship, I have tried to learn
the art of learning and deliver the knowledge that I have gathered.
My first exposure to professional life through internship has benefited me mostly in

strengthening my personal skills. I have developed a positive attitude, and a strong sense of
responsibility, being innovative, resourceful, open, and responsive to changes. It has created in
me an interest in lifelong learning.
I would like to express my gratitude to the Faculty of JIMS to keep internship credit in the
curriculum of the post-graduation program and give me a scope of tasting the flavor of
industryoriented tasks and the field of work with my interest.
115
Taking responsibility is another vital lesson that I learned that all liability goes to one person and
that person is responsible for that job. So, in my internship program, I learned how to perform
my duty with proper responsibility. And it was very much challenging because any fault makes
me accept the penalty.
Changes can make humans either immortal or ordinary. In my case, there occurred a radical
change in me too. Somehow, I have the power of learning to work exceptionally well. The
initiative is one of the most important characteristics. In a company, everybody works in a group,
and in each group, every person has his own responsibilities. There is no culture to push anybody
to do his or her responsibilities.
116
References
International Organization of Motor Vehicle Manufacturers

Media Reports

Press Releases
 Department for Promotion of Industry and Internal Trade (DPIIT)
 Automotive Component Manufacturers Association of India (ACMA)
 Society of Indian Automobile Manufacturers(SIAM)
 Union Budget 2023-24

Articles, ICAI study

Material website of Maruti

suzuki


57
3, Institutional Area, Sector -5, Rohini, Delhi-110085
Annexure
Validation controls - confirmation, verifications of assets/bank balances, valuations
Fig.9
58

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Summer Internship Project Report

INTERNAL FINANCIAL CONTROLS

MARUTI SUZUKI INDIA LIMITED

Under Joint Supervision of

Dr. Amisha gupta and Mrs. Vandana jain

Presented in Partial Fulfillment of the

Post 3, Institutional Area, Rohini, Sector-

Jagan Institute of Management Studies

Maruti Suzuki India Limited

Vasant Kunj New Delhi- 110070

Gurgoan Plant:- Old Palam Gurgoan Road,

Mrs. Vandana Jain

Control and Assurance Department (IAU)

Jagan Institute of Management Studies

Date:03/07/2023 Dr. Amisha Gupta

JIMS, Rohini, Sector 5, New Delhi - 85

I declare that the Report on “INTERNAL FINANCIAL CONTROLS” is an original work

Jagan Institute of Management Studies

Roll. No. FA22019

PGDM Batch 22-24

Jagan Institute of Management Studies

Jagan Institute of Management Studies

S.N. Particulars Page No. List

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List of Notations and Symbols Used

2. Maruti Suzuki India Limited:- Maruti

3. Committee of sponsoring organizations:- COSO

4. Gross domestic product:- GDP

5. Compounded annual growth rate:- CAGR

7. Internal financial controls:- IFC

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Chapter 2: Research Methodology/ Methodology 23-27

Chapter 3: Conceptual Background (if applicable) 28-32

Chapter 4: Data Analysis and Findings 33-51

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Jagan Institute of Management Studies

1.1 Overview of the Industry

Automobile Industry in India

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The $222 Bn Automobile industry is expected to reach $300 Bn by 2026.

In September 2022, Hero MotoCorp announced an investment of US$ 60 million in Californiabased

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 1,000 fast charging stations across the state.

1.2 Overview of the Company

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