Report on the Financial Statements
We have audited the accompanying financial statements of ELANTAS Beck
India Limited (the Company), which comprise the Balance Sheet as at
31 December 2014, the Statement of Profit and Loss and the Cash flow
statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards notified under the Companies Act, 1956 (the
Act) read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control 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.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements 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
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 December 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
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 Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
As required by Section 227(3) of the Act, we report that:
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, the Statement of Profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956 read with the General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013; and
e) on the basis of written representations received from the Directors
of the Company as on 31 December 2014, and taken on record by the Board
of Directors, we report that none of the Directors is disqualified as
on 31 December 2014 from being appointed as a Director in terms of
sub-section (2) of Section 164 of the Companies Act 2013.
Annexure to the Independent Auditors'' Report - 31 December 2014
With reference to the Annexure referred to in the Independent Auditors''
Report to the Members of ELANTAS Beck India Limited (''the Company'') on
the financial statements for the year ended 31 December 2014, we report
1. (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 two 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.
(c) Fixed assets disposed off 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, has been physically verified by the management during
the year. In our opinion, the frequency of such verification is
reasonable. For stocks lying with third parties at the year-end,
written confirmations have been obtained.
(b) The procedures for 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 and have been appropriately dealt
with in the books of accounts.
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 maintained under Section 301 of the Companies Act, 1956 /
section 189 of the Companies Act, 2013 (as applicable).
4. 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 specialized
requirements and sale of certain goods are for the specialized
requirements of the customers and 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 & services. We have
not observed any major weakness in the internal control system during
the course of the audit.
5. In our opinion, and according to the information and explanations
given to us, there are no contracts or arrangements, the particulars of
which need to be entered into the register maintained under section 301
of the Companies Act, 1956 / Section 189 of the Companies Act, 2013 (as
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 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 Companies
Act, 1956 / Section 128 (1) read with Section 148 (1) of the Companies
Act, 2013 in respect of Company''s products 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
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, Service
Tax, Customs Duty, Excise Duty, Wealth Tax and other material statutory
dues have been 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, Income tax, Sales tax, Wealth tax, Service tax,
Customs duty, Excise duty, Investor Education and Protection Fund and
other material statutory dues were in arrears as at 31 December 2014
for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Income-tax, Sales tax, Wealth tax, Service tax, Customs
Duty and Excise duty other than the dues listed in Appendix I, which
have not been deposited by the Company on account of disputes.
10. 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.
11. The Company did not have any outstanding dues to any financial
institution, banks or debenture holders during the year.
12. The Company has not granted any loans or 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 or a nidhi / mutual benefit
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
15. 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.
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 the 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
companies, firms or other parties covered in the register maintained
under Section 301 of the Companies Act 1956.
19. The Company did not have any outstanding debentures during the
20. The Company has not raised any money by public issues during the
21. 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 our audit.
Appendix I to the Independent Auditors'' Report
Sr. Name of the Nature of the Dues Dues Amount
no. Statute Amount paid
1 Central Excise Demand of duty on copper 0.93 -
Act, 1944 scrap
Denial of Modvat Credit on 0.93 -
certified copy of Bill of
Education cess on exports 0.21 -
Modvat on repacking activity 49.56 -
Valuation under CAS - 4 0.86 -
Appellate Tribunal, Mumbai
Duty on notional resins 34.42 -
2 Sales Tax Rate of sales tax on Wire 84.51 1.50
Enamels & Varnishes
Non submission of forms at 34.48 6.66
the time of assessment
3 Finance CENVAT credit claimed on 75.05 -
Act, 1994 the basis of letters
Service tax credit on outward 42.21 -
CENVAT on Service Tax paid 11.79 -
on Commission on Exports
Sr. Name of the Period to Forum where
no. Statute which the dispute is pending
1 Central Excise 2004 Asst Commissioner, Ankleshwar
1990-1994 Central Excise and Service Tax
Appellate Tribunal , Pune
1997 Additional Commissioner, Surat
2004 Dy Commissioner, Pune
1994-1997 Dy Commissioner, Pune
2007 Central Excise and Service Tax
1982-86 Central Excise and Service Tax
Appellate Tribunal, Mumbai
2 Sales Tax 2002-2003 Sales Tax Officer, Delhi
1995-1997, Commissioner of Sales Tax,
2003-2004 Sales Tax Officer, Delhi
2005-06 Dy Commissioner of Sales Tax,
2008-09 Dy Commissioner of Sales Tax,
2006-07 Dy Commissioner of Sales Tax,
2009-10 Dy Commissioner of Sales Tax,
3 Finance 2005-2008 Deputy Commissioner of Excise
Act, 1994 and Service Tax -
Large Taxpayer Units, Mumbai
2005-2008 Deputy Commissioner of Excise
and Service Tax -
Large Taxpayer Units, Mumbai
2004-2013 CIT (Appeals), Mumbai
For B S R & Co. LLP
Firm Registration No: 101248W/W-100022
24 February 2015 Membership No: 046476