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.
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
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 policies generally accepted in
(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
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
Statements 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 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
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
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
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
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
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
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
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,
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.
Sl. Name of the Nature of dues Year to which
No Statute relates
1. Service tax Disallowance of Service Tax
availed. and 2006-07
2. Service tax Disallowance of Service Tax
3. Service tax Disallowance of Service Tax
4. Service tax Disallowance of Service Tax
5. Excise Duty Disallowance of CENVAT
credit on 2001-02 to
capital goods and
non-reversal of 2004-05
6. Excise Duty Non-reversal of CENVAT
7. Excise Duty Short reversal of CENVAT
on Capital 2006-07
8. Local Area Local Area Development Tax 2003-04
Development Assessment demand and
Name Amount Forum where dispute
due (Rs.) is pending
Service tax 11,49,084 CESTAT
Service tax 27,142 Commissioner of Central
Service tax 1,49,985 Office of the Superintendent
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.,
Registration No.: 000511S
P S KUMAR
28th May 2013 Membership No.:15590