Report on the Standalone Financial Statements
We have audited the accompanying financial statements of Eimco Elecon
(India) Limited (the Company), which comprise the Balance Sheet as at
March 31,2015, the Statement of Profit and Loss, 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 Standalone 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 whether the 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 31st March, 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 Central Government of India in terms of
sub-section (11) of section 143 of the Companies Act 2013, we give in
the Annexure, a statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable.
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
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 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 written representations received from the directors
as on 31st March, 2015 taken on record by the Board of Directors, none
of the directors is disqualified as on 31st March, 2015 from being
appointed as a director in terms of section 164(2) of the Act.
f. With respect to 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 24.1 to the
(ii) The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
(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 AUDITOR''S REPORT
RE: Eimco Elecon (India) Ltd.
(Referred to in paragraph 1 under the heading Report on Other Legal
and Regulatory Requirements of our report of even date)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. No material discrepancies were noticed
on such verification.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
(b) The procedures of 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) On the basis of our examination of the records of the Company, we
are of the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) (a) During the year, the Company has not given any loan secured
or unsecured to a companies, firms or other parties covered in the
register maintained under section 189 of the Companies Act. Hence
clause (iii) (a) & (b) of paragraph 3 of the Order are not applicable
to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control system 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 and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit and hence the
provisions of Section 73 to 76 or any other relevant provisions of the
Companies Act and the Companies (Acceptance of Deposits) Rules, 2014
with regard to the deposits accepted are not applicable to the Company.
Therefore, the provisions of Clause (v) of paragraph 3 of the Order are
not applicable to the Company. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or the National Company Law Tribunal or the Reserve Bank of India
or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the
company pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 148(1) of the Companies Act,
2013 and are of the opinion that prima facie the prescribed accounts
and records have been made and maintained.
(vii) In respect of Statutory dues:
(a) According to the records of the Company, the Company is regular in
depositing with appropriate authorities 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,Cess and any other statutory dues applicable to it. According
to the information and explanations given to us, no undisputed amounts
payable in respect of the aforesaid statutory dues were outstanding as
at 31st March, 2015 for a period of more than six months from the date
they became payable.
(b) The disputed Statutory dues aggregating to Rs. 1136.52 Lacs, that
have not been deposited on account of disputed statutory matters
pending before appropriate authorities are as under:
Sr. Name of Nature of Amount Period to Forum
No. the the Dues (Rs. In which the where
Statute Lacs) amount dispute is
1. Income Tax Income Tax/ 49.47 Various Appellate
Act 1961 Penalties years Authority
2. Central Excise Duty 1057.10 Various years Appellate
Excise Act, and Service from 2006-07 Authority
1944 Tax to 2013-14
3. VAT VAT 29.95 Various years Commiss-
from 2008-09 onerate
to 2010-11 level
(c) The company has regularly transferred the amount to investor
education and protection fund in accordance with the relevant
provisions of the Companies Act, 1956 (1 of 1956) and rules made there
(viii) The Company does not have any accumulated losses. The Company
has not incurred cash losses during the financial year covered by our
audit and in the immediately preceding financial year.
(ix) The Company does not have any borrowings from any financial
institution or bank nor it has issued any debentures during the year
under audit. Therefore, the provisions of clause (ix) of paragraph 3 of
the Order are not applicable to the Company.
(x) In our opinion and according to the explanations given to us by the
Company, the Company has given corporate guarantee amounting to Rs.
2,773.77 lacs for loans taken by its associate from banks. The terms
and other conditions, in our opinion, are not prime facie prejudicial
to the interest of Company.
(xi) The Company has not raised any term loans during the year covered
under audit. Accordingly, the provisions of Clause (xi) of paragraph 3
of the Order are not applicable to the Company.
(xii) Based on the audit procedures performed and representation
obtained from management we report that, no case of fraud on or by the
Company has been noticed or reported for the year under audit.
For TALATI & TALATI
(Firm Reg. No. 110758W)
(UMESH H. TALATI)
Place : Ahmedabad Partner
Date : 1st May, 2015 Mem. No. 34834