We have audited the attached Balance Sheet of Asian Paints Limited
(''the Company'') as at 31st March, 2012, and also the Statement of
Profit and Loss and the Cash Flow Statement of the Company for the year
ended on that date, annexed thereto. These financial statements are the
responsibility of the Company''s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis of
As required by the Companies (Auditor''s Report) Order, 2003, issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956 (''the Act''), we enclose in
the Annexure a statement on the matters specified in paragraphs 4 and 5
of the said Order to the extent applicable.
Further to our comments in the Annexure referred to above, we report
(a) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
(c) the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement referred to in this report are in agreement with the books of
(d) in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Section 211(3C) of the Act.
(e) on the basis of the written representations received from the
Directors of the Company as at 31st March, 2012, and taken on record by
the Board of Directors, we report that none of the directors of the
Company is disqualified as on 31st March, 2012, from being appointed as
a Director in terms of clause (g) of sub-section (1) of Section 274 of
the Act; and
(f) in our opinion, and to the best of our information and according to
the explanations given to us, the said financial statements give the
information required by the Act, in the prescribed manner and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as on 31st March, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors'' Report - 31st March, 2012
(Referred to in our report of even date)
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of the fixed
(b) The Company has a regular programme of physical verification of its
fixed assets by which all the fixed assets are verified in a phased
manner, over a period of 3 years. In our opinion, this periodicity of
physical verification is reasonable, having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) Fixed assets disposed of during the year were not substantial and
therefore do not affect the going concern assumption.
2. (a) The inventory, except goods-in-transit and stocks lying with
third parties, have been physically verified by the management during
the year. In our opinion, the frequency of verification is reasonable.
For stocks lying with third parties at the year end, written
confirmations have been obtained.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company has maintained proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
book records were not material.
3. The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, firms or other parties covered in the
register required to be maintained under Section 301 of the Act.
4. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventories and fixed assets and with regard to sale of
goods and services. We have not observed any major weakness in the
internal control system during the course of the audit.
5. (a) According to the information and explanations given to us, the
particulars of all contracts and arrangements referred to in Section
301 of the Act, have been entered in the register required to be
maintained under that section.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs 5
lakh with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
6. The Company has not accepted any deposits from the public.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules prescribed by the Central Government for
the maintenance of cost records under Section 209(1) (d) of the Act and
are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made a
detailed examination of the records.
9. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth
tax, Service tax, Customs duty, Excise duty, Cess and other material
statutory dues have been generally regularly deposited during the year
by the Company with the appropriate authorities. According to the
information and explanations given to us, no undisputed amounts payable
in respect of Provident Fund, Employees'' State Insurance, Investor
Education and Protection Fund, Income-tax, Sales-tax, Wealth tax,
Service tax, Customs duty, Excise duty, Cess and other material
statutory dues were in arrears as at 31st March, 2012 for a period of
more than six months from the date they became payable.
(b) According to the information and explanations given to us, the
following dues have not been deposited by the Company on account of
Name of the Nature of dues Financial Year Amount Forum where
Statute (Rs In
Crores) dispute is
Sales Tax Assessment F.Y. 1994-95
to 1995-96, 16.55 First
Dues F.Y. 1997-98,
to 2001-02, 0.79 Second
F.Y. 2003-04, level
F.Y 1991-92, 13.02 Tribunal
F.Y.1997-98, 0.96 High court
F.Y. 1992-93, 0.22 Supreme Court
Total (A) 31.54
relating F.Y. 1986-87, 0.53 First
Act, 1944 to Excise
duty F.Y. 1992-93
to 1993-94, 0.28 Tribunal
F.Y. 1969-73, 0.09 High Court
Total (B) 0.90
Income Tax IT matters
under A.Y. 2004-05 0.51 Assessing
dispute A.Y. 2003-04 0.52 First
to AY 1999-2000 0.27 Tribunal
Total (C) 1.30
(A) (B) (C) 33.74
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the current
financial year and in the immediately preceeding financial year.
11. In our opinion, and according to the information and explanations
given to us, the Company has not defaulted during the year in repayment
of dues to its bankers or to any financial institution. The Company did
not have any outstanding debentures or any outstanding loans from
financial institutions during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion, and according to the information and explanations
given to us, the Company is not a chit fund, nidhi, mutual benefit fund
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
15. The Company has given certain guarantees on behalf of its dealers
and subsidiaries as mentioned in note 25 (a) of Notes to Accounts. In
our opinion based on the information and explanations received, the
terms and conditions of these guarantees are not prejudicial to the
interest of the Company.
16. The Company did not have any term loans outstanding during the
17. According to the information and explanations given to us, and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that funds raised on short term basis have not been used
for long term investment.
18. The Company has not made any preferential allotment of shares to
company, firms or parties covered in the register maintained under
Section 301 of the Act during the year.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issues during the
21. As per the information and explanation given to us, no material
fraud on or by the Company has been noticed or reported during the
course of our audit.
For Shah & Co. For B S R & Associates
Chartered Accountants Chartered Accountants
Firm Registration No.: 109430W Firm Registration No.: 116231W
Ashish Shah Natrajh Ramakrishna
Membership No.: 103750 Membership No.: 32815
8th May, 2012