1. We have audited the attached Balance Sheet of SKF India Limied
(the Company) as a 31 December 2010, the Profit and Loss Account and
the Cash Row Statement of the Company for the year ended on that date,
annexed hereto. These financial statements are the responsibiliy 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 auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial staements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporing the amouns and
disclosures in the financial saemens. 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 (Audiors Repor) Order 2003 issued by
the Central Government of India in terms of sub-secion (4A) of section
227 of the Companies Ac, 1956, 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
(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
(c) the Balance Sheet, Profit and Loss Account and the Cash Flow
Statement deal with by this report are in agreement with the books of
(d) in our opinion, the Balance Sheet, Profit and Loss Account and the
Cash Flow Statement deal with by his report comply wih the accounting
standards referred to in sub-secion (3C) of section 211 of the
Companies Act, 1956;
(e) on the basis of written representations received from the Directors
of the Company as a 31 December 2010 and taken on record by the Board
of Directors, we report that none of the Directors are disqualified as
at 31 December 2010 from being appointed as a Director under clause (g)
of sub-section (1) of section 274 of the Companies Act 1956; and
(f) in our opinion, and to the best of our information and according to
the explanations given to us, the said financial statements, read with
the notes hereon, give the information required by the Act, in the
manner so required and give a true and fair view in conformiy wih the
accounting principles generally acceped in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 December 2010;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors Report (Referred to in our report of even date)
(i) (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 fixed assets are verified in a phased manner
over a period of three years. In our opinion, his periodicity of
physical verification is reasonable having regard to the size of the
Company and the naure of is assets. The discrepancies noticed on
verification between the physical fixed assets and the book records
were not material and were properly dealt in the books of account.
(c) Fixed assets disposed of during the year were not substantial, and
herefore, do not affect the going concern assumption.
(ii) (a) The invenory, excep goods-in-ransi, has been physically
verified by the managemen during the year. In our opinion, the frequency
of such verification is reasonable.
(b) The procedures for the physical verifictaion 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 the physical stocks and
the book records were no material and were properly dealt with in the
books of accounts.
(iii) The Company has neiher 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
cerain items of inventories and fixed assets are for the Companys
specialised requirements and similarly certain goods sold and services
rendered are for the specialised requirements of the buyers and
suitable alternative sources are no available to obtain comparable
quotation, here 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 and services. In our opinion and according to the information
and explanations given to us, here is no continuing failure to correct
major weaknesses in 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 secion 301 of the Companies Act, 1956 have been entered
in the register required to be mainained 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
relevant time, except for purchases of certain items of inventories,
fixed assets and services which are for the Companys specialised
requirements and similarly for sale of certain goods and rendering of
services which are for the specialised requirements of the buyers and
for which suitable alernative sources are not available to obtain
comparable quotations. However on the basis of information and
explanations provided, the same appear reasonable.
(vi) In our opinion, and according to the information and explanations
given to us, the Company has complied wih the provisions of Section
58A, Section 58AA or other
relevant provisions of the Companies Act, 1956 and the rules framed
here under/the directives issued by the Reserve Bank of India (as
applicable) with regard to deposits accepted from the public.
Accordingly, here have been no proceedings before the Company Law Board
or National Company Law Tribunal (as applicable) or Reserve Bank of
India or any Court or any other Tribunal in his matter and no order has
been passed by any of the aforesaid authorities.
(vii) In our opinion, the Company has an internal audit system
commensurate with the 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 secion 209(1) (d) of the Companies
Act, 1956 in respect of manufacture of bearings, and are of the opinion
that prima facie, the prescribed accounts and records have been made
and mainained. However, we have no made a detailed examination of the
(ix) (a) According to the information and explanations given to us and
on the basis of our examinaion of the records of the Company, amounts
deduced / accrued in the books of account in respect of undisputed
stautory dues including Provident Fund, Employees State Insurance,
Income tax, Sales tax, Wealh tax, Service tax, Cusoms duty, Excise
duty, Cess and other material stautory dues have generally been
regularly deposited during the year by the Company wih the appropriate
authorities. As explained to us, the Company did no have any dues on
account of Investor Education and Protection Fund.
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, Wealh tax, Service tax, Customs
duty, Excise duty, Cess and other material satutory dues were in
arrears as a 31 December 2010 for a period of more than six months from
the date they became payable.
There were no dues on account of cess under secion 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.
(b) According to the information and explanations given to us, the
following dues of Incometax/Sales tax/ Wealth tax/Service tax/Customs
duty/Excise duty/ Cess (as appropriate) have no been deposied by the
Company on account of disputes:
Name of the Statute Nature of the Amount Period to Forum where
Million) which the is pending
Income Tax Act,1961 Income Tax 5.1 AY 2006-2007 CIT(A)
Income Tax Act, 1961 Income Tax 9.3 AY 2007-2008 CIT(A)
Tamil Nadu Value
Added Tax Act Value Added Tax 1.2 2005 - 2006 Commercial
Tax Act, 1958 Sales Tax 1.1 2002 - 2003 Maharashtra
Delhi Sales Tax Act Sales Tax 1.3 2005-2006 Objection
Sales Tax Act Sales Tax 2.4 2006-2007 Commissi
Tax Sales Tax 0.3* 2003-2004 Karnataka
Added Tax Central Sales Tax 1.2* 2005-2006 Commissi
Tax Sales Tax 2.7* 2006-2007 Commissi
Tax Sales Tax 1.3* 2008-2009 Commissi
Added Tax VAT 1.4* 2006-2007 Joint
Act, 1944 Excise Duty 2.6 1999-2000 CESTAT
Act, 1944 Excise Duty 1.6 1997-1998 CESTAT
Act, 1944 Excise Duty 4.9* 1995 CESTAT
1994 Service tax 1.3 1997-2000 CESTAT
1994 Service Tax 14.3 2006-2008 CESTAT
1994 Service Tax 0.1 2008-2009 CESTAT
1994 Service Tax 0.7 2005-2006 Commissi
* Amount paid under protest
(x) The Company does nto 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) The Company did not have any outstanding dues to any financial
institution, banks or debenture holders during the year.
(xii) The Company has no granted any loans and advances on the basis of
security by way of pledge of shares, debenures and other securities.
(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 did not have any term loans outstanding during the
(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 shorterm
basis have no been used for longterm investment.
(xviii) The Company has no made any preferential allotment of shares to
companies/firms/parties coverted in the register maintained under
Section 301 of the Companies Act, 1956.
(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.
For B S R & Associates
Firm Regn. No.-116231W
Membership No.: 042070
February 23, 201