1. We have audited the attached Balance Sheet of Philips Electronics
India Limited (the Company) as at 31 December 2009, the Profit and
Loss Account and the Cash Flow Statement for the year ended on that
date, annexed thereto. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the 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
3. As required by the Companies (Auditors Report) Order, 2003 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.
4. Further to our comments in the Annexure referred to above, we
(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 the
(c) the Balance Sheet, Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
(d) in our opinion, Balance Sheet, Profit and Loss Account and the Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
(e) on the basis of written representations received from the directors
of the Company as at 31 December 2009 and taken on record by the Board
of Directors, we report that none of the directors is disqualified from
being appointed as a director of the Company in terms of clause (g) of
sub-section (I) 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 Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of Balance Sheet, of the state of affairs of the
Company as at 31 December 2009;
(ii) in the case of Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Annexure to the Auditors Report (Referred to in our report of even
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) The Company physically verifies its assets over a three year period
so as to cover all assets over a three year period, except for certain
assets which are verified on the basis of third party confirmations. 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 policy, the Company has physically verified
certain fixed assets during the year No material discrepancies were
noticed on such verification.
(c) Fixed assets disposed off during the year were not substantial and
therefore do not affect the going concern assumption.
(ii) (a) The inventory, excluding materials in transit, has been
physically verified by the management during the current year
Inventories with the third parties have either been physically verified
by the management or confirmed based on certificates/statements of
accounts received from such parties. In our opinion, the frequency of
such verification is reasonable.
(b) The procedures for the physical verification of inventories
followed by management are reasonable and adequate in relation to the
size of the Company and the nature of its business.
(c) The Company has maintained proper records of inventory.
Discrepancies identified on physical verification of inventories as
compared to book records were not material and have been properly dealt
with in the books of accounts.
(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.
(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 Companys specialized
requirements and similarly certain goods and services sold are for the
specialized requirement of the buyer 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 sale of goods and services. In our
opinion, and according to the information and explanations given to us,
there is no continuing failure to correct major weaknesses in the
internal control system.
(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 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, have been made at prices which are
reasonable having regard to the prevailing market prices at the
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with its 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(l)(d) of the Companies
Act, 1956 in respect of Electric Lamps and Fluorescent Tubes 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, 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, Customs duty, Excise
duty, Cess and other material statutory dues have generally been
regularly deposited with the appropriate authorities.There are no dues
on account of cess under Section 441A of the Companies Act, 1956 since
the date from which the aforesaid section comes into force has not yet
been notified by the Central Government. 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, Cess and other
material statutory dues were in arrears as at 31 December 2009 for a
period of more than six months from the date they became payable. As
explained to us, the Company did not have any dues on account of
Investor Education and Protection Fund during the year
(b) According to the information and explanations given to us, there
are no dues of Wealth tax and Customs duty which have not been
deposited on account of any dispute. The dues of Income tax, Sales tax,
Service tax and Excise duty as disclosed in Appendix I have not been
deposited by the Company on account of disputes.
(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
financial institutions. The Company did not have any outstanding
debentures during the year
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
(xiii) 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
(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 has not obtained any term loans during the year.
(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) As per information and explanations given to us, the Company
has not made any preferential allotment of shares.
(xix) The Company did not have any outstanding debentures 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 our audit.
Appendix I to Annexure to the Auditors Report
(Rs in Min)
Name of the
Statute/ Forum where dispute is pending
Period to which Nature of dues Appellate
the amount authority
upto Tribunal High Court
2008-09 - - -
2007-08 including interest _ _ -
3-7 years and penalty - 66.44 -
Above 7 years - 135.12 5.00
Finance Act 1994
2008-09 - - -
2007-08 including interest - - -
3-7 years 38.70 - -
Above 7 years - - -
Tax Act, 1956 and
2008-09 - - -
Sales tax including - - -
2007-08 interest and - - -
3-7 years applicable 104.70 10.10 41.80
Above 7 years 14.30 212.50 12.40
2008-09 - - -
2007-08 including interest - - -
and penalty 254.40 - -
3-7 years where applicable - - -
Above 7 years - - -
For B S R & Co.
Place : Gurgaon Partner
Date : March 30, 2010 Membership No.: 091765