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India Nippon Electricals
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« Mar 12
Auditor's Report (India Nippon Electricals) Year End : Mar '13
Report on the Financial Statements
 
 We have audited the accompanying financial statements of India Nippon
 Electricals Limited (the Company) which comprises the Balance Sheet as
 at March 31, 2013, and 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 flow of the company in accordance with
 the Accounting Standards referred to in sub-section (3C) of section 211
 of the Companies Act 1956 (the Act). 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.
 
 Auditor''s Responsibility
 
 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 judgement, including the assessment of
 the risks of material misstatements 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.
 An audit also includes evaluating the appropriateness of accounting
 policies uses 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.
 
 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 policies generally accepted in
 India:
 
 (a) in the case of the Balance Sheet, of the affairs of the Company as
 at March 31, 2013;
 
 (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 Statements, of the 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, 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.
 
 2.  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 purpose of our
 audit
 
 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
 books
 
 c.  The Balance Sheet, Statement of Profit and Loss, and Cash Flow
 Statements dealt with by this Report are in agreement with the books of
 account.
 
 d.  In our opinion, the Balance Sheet, Statement of profit and loss,
 and Cash Flow Statement comply with the Accounting Standards referred
 to in subsection (3C) of Section 211 of the Companies Act 1956;
 
 e.  On the basis of written representations received from the directors
 as on March 31, 2013 and taken on record by the Board of Directors,
 none of the directors is disqualified as on March 31, 2013, from being
 appointed as a director in terms of clause(g) of sub-section (1) of
 section 274 of the Companies Act 1956.
 
 1. The provisions of the following clauses of Companies (Auditor''s
 Report) Order, 2003 as amended are not applicable to the company for
 the year.
 
 a.  Clause 4(vi) with regard to acceptance of deposits from the public
 since the company has not accepted any deposits.
 
 b.  Clause 4(x) with regard to accumulated losses since the company''s
 net-worth is positive and the company has not incurred cash losses
 during the year.
 
 c.  Clause 4 (xii) with regard to the loans granted against pledge of
 securities since no loans have been granted by the company.
 
 d.  Clause 4 (xiii) with regard to the special statutes applicable to
 the chit funds and nidhis since the company has not carried on such
 business.
 
 e.  Clause 4 (xiv) with regard to trading in securities since the
 company did not carry on such activities.
 
 f.  Clause 4(xv) with regard to guarantee given for loans taken by
 others from bank or financial institutions as the company has not given
 any guarantees.
 
 g.  Clause 4(xvi) with regard to term loans and applications of funds
 obtained since the company has not obtained any such loans.
 
 h. Clause 4(xvii) with regard to funds obtained on short term basis
 used for long term investment since the company has not raised such
 fund during the year.
 
 i. Clause 4(xviii) with regard to the preferential allotment of shares
 to specified parties since no allotment of shares was made during the
 year.
 
 j.  Clause 4(xix) with regard to securities to be created in respect of
 debentures since no debentures were issued during the year;
 
 k. Clause 4(xx) with regard to money raised by public issue since no
 money was raised by public issue during the year.
 
 2.  The company has maintained proper records showing full particulars
 including quantitative details and the situation of fixed assets. The
 company has a regular programme of physical verification of its fixed
 assets at reasonable intervals. In accordance with this programme, the
 fixed assets were verified during the year and no material
 discrepancies were noticed on such verification.
 
 3.  The company has not during the year disposed off substantial part
 of the fixed assets, which would give rise to the question of
 impairment of the status of the company as a going concern.
 
 4.  The management has conducted physical verification of inventory at
 reasonable intervals.
 
 5.  The procedure of physical verification of inventories followed by
 the management is reasonable and adequate in relation to the size of
 the company and the nature of its business.
 
 6.  On the basis of the examination of the records of the inventory, we
 are of the opinion that the company is maintaining proper records of
 inventory. The discrepancies noticed on verification between the
 physical stock and the book records were not material and have been
 properly dealt with in the books of accounts.
 
 7.  The company has made an unsecured, inter- corporate deposit with a
 company in which a director of the company is interested as director.
 The amount involved is Rs.3 crores which was the opening balance and
 also the maximum amount of deposit during the year. In our opinion the
 rate of interest and other terms and conditions are prima facie not
 prejudicial to the interest of the company. This deposit has been
 returned to the company during the year and interest was paid
 regularly.
 
 8.  The company has not taken any loans from companies, firms or other
 parties covered in the register maintained under section 301 of the
 Companies Act, 1956.
 
 9.  In our opinion and according to the information given to us, there
 is adequate internal control procedure commensurate with the size of
 the company and the nature of its business with regard to purchase of
 inventory, fixed assets and with regard to the sale of goods. During
 the course of our audit, no major weakness has been noticed in the
 internal controls.
 
 10. Based on the audit procedures applied by us and according to the
 information and explanation provided by the management, we are of the
 opinion that the transactions that need to be entered into the register
 maintained under section 301 have been so entered.
 
 11. In our opinion and according to the information and explanation
 given to us, the transactions made in the pursuance of the contracts or
 arrangements entered in the register maintained under section 301 and
 exceeding the value of Five lakh rupees in respect of any party during
 the year have been made at the prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 12. In our opinion, the company has an internal audit system
 commensurate with the size and the nature of the business.
 
 13. On the basis of the records, we are of the opinion that prima facie
 cost records and accounts prescribed by the Central Government of India
 under section 209(1) (d) of the Companies Act, 1956 have been
 maintained. However, we are not required to and have not carried out
 any detailed examination of such accounts and records.
 
 14. According to the records of the company, the company is regular in
 depositing with appropriate authorities undisputed statutory dues
 including Provident Fund, Investors'' Education and Protection Fund,
 Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
 Tax, Custom Duty, Excise Duty. There were no arrears as on 31st March,
 2013.
 
 15. Based on the audit procedures and on the information and
 explanations given by the management, we furnish below the details of
 dues of sales Tax / Service Tax / Excise Duty / Cess / Local area
 Development Tax, which have not been deposited on account of disputes.
 
                                                   Financial 
 Sl.  Name of the  Nature of dues                  Year to which 
 No   Statute                                      relates
 
 1.  Service tax   Disallowance of Service Tax 
                   credit                         2005-06
                   availed.                       and 2006-07
 
 2.  Service tax   Disallowance of Service Tax 
                   credit                         2006-07
                   availed.
 
 3.  Service tax   Disallowance of Service Tax 
                   credit                         2007-08
                   availed.
 
 4.  Service tax   Disallowance of Service Tax
                   credit                         2011-12
                   availed.
 
 5.  Excise Duty   Disallowance of CENVAT
                   credit on                      2001-02 to
                   capital goods and
                   non-reversal of                2004-05 
                   CENVAT credit.
 
 6.  Excise Duty   Non-reversal of CENVAT 
                   credit.                        2005-06
 
 7.  Excise Duty   Short reversal of CENVAT 
                   on Capital                     2006-07
                   Goods.
 
 8.  Local Area    Local Area Development Tax     2003-04 
     Development   Assessment demand and
     Tax                                          2004-05
 
 Name              Amount      Forum where dispute
                   due (Rs.)     is pending
 
 Service tax       11,49,084    CESTAT
 
 Service tax          27,142    Commissioner of Central 
                                Excise (Appeals).
 
 Service tax        1,49,985    Office of the Superintendent
                                Central Excise
 
 Service tax       14,41,089    Additional Commissioner Central Excise
 
 Excise Duty        1,26,601    Assistant Commissioner of Central Excise
 
 Excise Duty        2,39,367    Joint Commissioner Central Excise
 
 Excise Duty        1,47,653    Deputy Commissioner Central Excise
 
 Local Area           41,300    Joint Excise Taxation Commissioner.
 
 16. Based on our verification and according to the information and
 explanations given by the management, the Company did not have any dues
 to financial institutions nor were there any borrowings from banks. The
 Company has not issued any debentures during the year.
 
 17. Based upon the audit procedures performed and information and
 explanations given by the management, we report that no fraud on or by
 the company has been noticed or reported during the year.
 
                                       For BRAHMAYYA & CO.,
 
                                       Chartered Accountants,
 
                                       Registration No.: 000511S
 
                                       P S KUMAR
 
 Chennai                               Partner
 
 28th May 2013                         Membership No.:15590
Source : Dion Global Solutions Limited
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