We have audited the accompanying financial statements of ELANTAS Beck
India Limited (the Company), which comprise the Balance Sheet as at
31 December 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibilityforthe Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (the Act) with respect
to 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 principles
generally accepted in India, including the Accounting Standards
specified under 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 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.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whetherthe financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the 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 financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, 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 on the financial
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 India, of the state of affairs of the Company as
at 31 December 2015 and its profit and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015 (the
Order) issued by the Government of India in terms of sub-section (11)
of section 143 of the Act, we give in the Annexure a statement on the
matters specified in the paragraph 3 and 4 of the order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(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
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31 December 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 December 2015
from being appointed as a director in terms of Section 164 (2) of the
(f) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements- Refer Note 27 to the
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses-Refer Note 42 to the financial statements;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Annexure to the Independent Auditors'' Report - 31 December 2015
With reference to the Annexure referred to in paragraph 1 in Report on
Other Legal and Regulatory Requirements of the Independent Auditors''
Report to the Members of the Company on the financial statements for
the year ended 31 December 2015, we report that:
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 the fixed assets are physically verified in a
phased manner over a period of two years. In our opinion, the
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.
2. (a) The inventory, except goods-in-transit and stock lying with
third parties has been physically verified by 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 physical stock and the
book records were not material and have been appropriately dealt with
in the books of accounts.
3. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act, 2013.
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 similarly certain goods sold by the Company are for
the specialized requirements of the buyers 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. The
activities of the Company does not involve sale of services. We have
not observed any major weaknesses in the internal control system during
the course of the audit.
5. The Company has not accepted any deposits in accordance with the
provisions of sections 73 to 76 of the Act and rules framed there
6. 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 128(1) read with Section
148(1) of the Companies Act, 2013 in respect of the 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 same.
7. (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,
Income-tax, Sales-tax, Wealth tax. Service tax. Duty of Customs, Duty
of Excise, Value Added tax and other statutory dues have generally been
regularly deposited during the year by the Company with the appropriate
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. Duty
of Customs, Duty of Excise, Value Added tax and other statutory dues
were in arrears, as at 31 December 2015, 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, Duty of
Customs, Duty of Excise and Value Added tax other than the dues listed
in Appendix I, which have not been deposited with the appropriate
authorities on account of any disputes.
(c) The Company has transferred amounts required to be transferred to
the Investor Education and Protection Fund within prescribed time.
8. 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.
9. According to the information and explanations given to us, the
Company does not have any dues to its bankers. The Company did not have
any dues to financial institutions or any debentures outstanding during
10. In our opinion and 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.
11. The Company did not have any term loans outstanding during the
12. 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.
For BSR & Co.LLP
Firm Registration No: 101248W/W-100022
Place: Mumbai Partner
Date : 23 February 2016 Membership No: 046476