1. We have audited the attached Balance Sheet of ATLAS COPCO (INDIA)
LIMITED (the Company) as at 31st December, 2010, the Profit and Loss
Account and the Cash Flow Statement of the Company for the year ended
on that date, both annexed thereto. These financial statements are the
responsibility of the Companys Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books; >
(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required 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 at 31st December,2010;
(ii) in the case of the Profit and LossAccount, 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 of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31 st December, 2010 taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st December,
2010 from being appointed as a director in terms of Section 274(1 )(g)
of the Companies Act, 1956.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN
DATE TO THE MEMBERS OF ATLAS COPCO (INDIA) LIMITED ON THE ACCOUNTS FOR
THE YEAR ENDED 31ST DECEMBER, 2010.
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) The fixed assets have not been physically verified by the
management during the year but the company has a system of verifying
the fixed assets once in every three years. In our opinion, the
frequency of physical verification of fixed assets is reasonable having
regard to the size of the Company and the nature of the assets.
(c) The fixed assets disposed off during the year are not substantial
and hence it has not affected the going concern assumption.
(ii) (a) Inventories have been physically verified during the year by
the management except for stocks with third parties in respect of which
confirmations have been received in some cases. In our opinion, the
frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory 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 physical stocks and book
stocks were not material having regard to the size of operations of the
Company and have been properly dealt with in the books of accounts.
(iii) (a) The Company has not granted or taken any loans, secured or
unsecured to /from companies, firms or other parties covered in the
registermaintained undersection 301 oftheCompaniesAct, 1956.
Sub-clauses (b), (c), (d), (f) and (g) are not applicable.
(iv) In our opinion and according to the information and explanations
given to us and having regard to the explanation that most of the items
purchased are of a special nature and comparable alternative quotations
are not available, 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 inventory and fixed assets and for
the sale of goods and services. Whilst there is no continuing failure
to correct major weaknesses in internal control system, the internal
controls overfinancial reporting have been strengthened by the
(v) (a) Based upon the audit procedures performed and according to the
information and explanations given to us, contracts or arrangements
thatneed to beentered into the register maintained in pursuance of
section 301 ofthe Companies Act, 1956 have been so entered.
(b) The transactions made in pursuance of such contracts or
arrangements and exceeding the value of rupees five lakhs with any
party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public to which
the provisions of section 58A, 58AA or any other relevant provisions
ofthe Companies Act, 1956 and the rules framed there under apply.
(vii) The Company has an internal audit system commensurate with its
size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company relating to the manufacture of power driven pumps pursuant to
the notification of the Central Government for the maintenance of cost
records under section 209(1 )(d) of the Companies Act, 1956 and, on the
basis ofthe information received, are ofthe opinion that prima facie
the prescribed accounts and records have been maintained / are being
made up. We have not, however, made a detailed examination of the
records with a view to determining whether they are accurate or
complete. To the best of our knowledge and according to the information
given to us, the Central Government has not prescribed the maintenance
of cost records under Section 209 (1) (d) of the Companies Act 1956 for
any other products ofthe Company.
(ix) (a) According to the records of the Company, apart from the
certain instances of delays in payment of Income tax deducted at
source, Service tax and Excise duty, the Company has been generally
regular in depositing undisputed statutory dues including Provident
Fund, Employees State Insurance, Investor Education and Protection
Fund, Income tax, Sales tax, Wealth tax, Service tax, Custom Duty,
Excise Duty, cess and other statutory dues with the appropriate
authorities. Based on our audit procedures and according to the
information and explanations given to us, there are no arrears of
statutory dues which has remained outstanding as at 31 st December,
2010 for a period of more than six months from the date they became
payable except for Service tax amounting to Rs. 10,364,532, which has
since been paid subsequent to the Balance Sheet date.
(b) According to the information and explanations given to us and
records ofthe company, the details ofthe dues of sales tax/income tax/
custom duty/ wealth tax/ service tax/ excise duty/ cess, which have not
been deposited on account of any dispute, are given below:
the dues Amounts Involved Forum where dispute Is pending
(dues to the extent
Sales Tax 12,280 Maharashtra Sales Tax Tribunal
22,981 Commissioner, Appeals
Sales Tax Penalty 1,042 Commissioner (Appeals), Chennai
Service Tax 3,125 Deputy Commissioner Central Excise
1,457 In process of filing appeal
6,756 Assistant Commissioner of
Excise Duty 2,553 Deputy Commissioner Central Excise
but excluding interest)
4,780 Customs Excise and Service Tax
Appellate Tribunal (CESTAT), Mumbai
1,500 Commissioner Central Excise
300 Assistant Commissioner, Central
A.Y. 1997-98 521 Commissioner of Income Tax(Appeals)
A.Y. 2000-01 15,099 Income Tax Tribunal
A.Y. 2002-03 29,461 Commissioner of Income Tax(Appeals)
A.Y. 2003-04 9,597 Commissioner of Income Tax(Appeals)
A.Y. 2006-07 120,777 Income Tax Tribunal
(x) The Company does not have any accumulated losses as at 31st
December, 2010. The Company has not incurred any cash losses during
thefinancial year covered by our audit and the immediately preceding
(xi) Based on our audit procedures and according to the information and
explanations given by the management, the Company has not defaulted in
repayment of dues to banks. There are no dues to financial institutions
or debenture holders.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
(xiii) The Company is not a chit fund, nidhi/ mutual benefit fund and
therefore the requirements pertaining to such class of companies are
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments.
(xv) The Company has not given any guarantee for loans taken by others
from banks or financial institutions.
(xvi) The term loans taken by the Company during the year have been
applied forthe purpose for which they were raised.
(xvii) 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 the funds raised on short-term basis have not been
used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the Register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures during the year and
therefore the question of creating security or charge in respect
thereof does notarise.
(xx) The Company has not made any public issue during the year and
therefore the question of disclosing the end use of money does not
(xxi) Based upon the audit procedures performed and according to the
information and explanations given and representations made by the
management, we report that no fraud on or by the Company had been
noticed or reported during the year.
For Deloitte Haskins & Sells
(Registration No. 117365W)
Date: 25th April, 2011 G. Shankar
Place: Pune Partner
(Membership No.: 27023)