We have audited the attached Balance Sheet of De Nora India Limited
(''the Company'') as at 31 December 2012, and also the Statement of
Profit and Loss and the Cash flow statement 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 for
As required by the Companies (Auditor''s Report) Order, 2003 (''the
Order'') 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.
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 purposes 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 those
c) the Balance Sheet, Statement of profit and Loss and Cash flow
statement dealt with by 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 sub-section (3C) of Section 211 of
e) on the basis of written representations received from the directors
as at 31 December 2012 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as at 31 December
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 accounts give the information
required by the Act, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 December 2012;
ii) in the case of the Statement of Profit and Loss, of the profit 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 - 31 December 2012
(Referred to in our report of even date)
i (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of three 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. In accordance with this
programme, certain fixed assets of the Company have been physically
verified during the year. No material discrepancies were noticed on
(c) The Company has not disposed off any fixed assets during the year.
ii (a) The inventory, except goods-in-transit, has been physically
verified by the management during the year. In our opinion, the
frequency of such verification is reasonable.
(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 is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
iii The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956 (''the
iv In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories are for the Company''s specialised
requirements and similarly certain items of inventories sold and
services rendered are for the specialised requirements of the buyers
for which suitable alternative sources are not available to obtain
comparable quotations, 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 the sale of goods and services. In our opinion and
according to the information and explanations given to us, we have not
observed any material weakness in the internal control system during
the course of the audit.
v (a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or 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 for purchase and sale of certain items of
inventories and sale of services which are 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 are of a specialised
nature for which suitable alternative sources are not available to
obtain comparable quotations. However, on the basis of information and
explanations provided, the same appear reasonable.
vi According to the information and explanations given to us, the
Company has not accepted any deposits from the public.
vii In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
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.
ix (a) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, the Company
has been generally regular in depositing amounts deducted/accrued in
the books of account in respect of undisputed statutory dues including
Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax,
Service Tax, Customs Duty, Excise Duty and other material statutory
dues with the appropriate authorities. As explained to us, the Company
did not have any dues on account of Wealth Tax and Investor Education
and Protection Fund.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty,
Excise Duty and other material statutory dues were in arrears as at 31
December 2012 for a period of more than six months from the date they
(b) According to the information and explanations given to us, there
are no dues of Income Tax, Sales Tax, Service Tax and Customs Duty,
which have not been deposited with the appropriate authorities on
account of disputes.
According to the information and explanations given to us, the
following dues of Excise Duty have not been deposited by the Company on
account of disputes:
Name Forum where
Nature of Amount which the
of the dispute is
the Dues Rs. amount
Statute pending relates
Central Excise 1,261,980 2003-2007 Additional
Excise duty on
205,610 2006-2007 Commissioner
Act, 1944 assessable of Central
value Excise, Goa
the Goa Value
x The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
xi In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers. The Company did not have any outstanding dues to any financial
institution or debentureholders during the year.
xii According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
xiii In our opinion and according to information and explanations given
to us, the Company is not a chit fund or a nidhi / mutual benefit fund
xiv According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
xv According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xvi The Company did not have any term loans outstanding during the
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
companies/firms/parties covered in the register maintained under
section 301 of the Act.
xix The Company did not have any outstanding deben- tures during the
xx The Company has not raised any money by public issues.
xxi According to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the course of
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