| Report on the financial statements
We have audited the accompanying financial statements of Alfa Laval
(India) Limited("the Company"), which comprise the Balance Sheet as
at 31 December 2014 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 flows 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") which as per a clarification
issued by the Ministry of Corporate Affairs continue to apply under
section 133 of the Companies Act, 2013 (which has superseded section
211 (3C) of the Companies Act, 1956 w.e.f. 12 Sepetmber 2013). 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.
Auditors' 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 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 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,
but not for the purpose of expressing an opinion on the effectiveness
of the entity's internal control. An audit also includes evaluating the
appropriateness of accounting policies used 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 principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 December, 2014;
(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 Cash Flow Statement, of the cash flows for the year
ended on that date.
Emphasis of Matter
We draw attention to note 40 of the financial statements which more
fully explains the details of loans advanced to Tranter India Private
Limited and the compliance thereof with section 185 of the Companies
Act, 2013. In absence of authoritative interpretation by either the
Ministry of Corporate Affairs or the Institute of Chartered Accountants
of India, the said compliance in supported by a legal opinion obtained
by the Company. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
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.
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
Statement dealt with by this report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
notified under the Act read with the General Circular 15/2013 dated 13
September 2013 of the Ministry of Corporate Affairs in respect of
section 133 of the Companies Act, 2013; and
e) on the basis of written representations received from the Directors
as on December 31, 2014, and taken on record by the Board of Directors,
we report that none of the directors of the Company is disqualified as
at 31 December,2014, from being appointed as a director in terms of
sub-section (2) of section 164 of the Companies Act 2013.
Annexure to the Independent Auditors' Report-31 December 2014
We report as follows:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(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 two years. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the
Company and the nature of its assets. 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, except goods-in-transit, has been physically
verified by the Management during the year.
In our opinion, the frequency of such verification is reasonable. For
stocks lying with third parties at the year-end, written confirmations
have been obtained.
(b) The procedures for the 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) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material and were 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 /
section 189 of the Companies Act 2013 (as applicable). Also, refer Note
40 to the financial statements.
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 and fixed assets are for the Company's
specialized requirements and similarly certain goods sold and services
rendered are for the specialized requirements of the buyers for which
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 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 Companies Act 1956 / section 189 of
the Companies Act, 2013(as applicable) 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 period 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 and
fixed assets and purchase of services which are for the Company's
specialised requirements and similarly for sale of certain goods and
services for the specialised requirements of the buyers and for which
suitable alternative sources are not available to obtain comparable
quotations. However, on the basis of information and explanations
provided, the same appear reasonable.
(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(1 )(d) of the Companies
Act, 1956 / section 128 (1) read with Section 148 (1)of the Companies
Act, 2013 in respect of the products manufactured by the Company 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) 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 Employees' State Insurance, Income Tax,
Provident fund, Customs duty, Sales tax, Service tax, Excise duty,
Investor Education and Protection Fund, Wealth tax and other material
statutory dues, have generally been regularly deposited during the
period by the Company with the appropriate authorities.
According to the information and explanations given to us no undisputed
amounts payable in respect of Employees' State Insurance, Income tax,
Provident fund, Customs duty, Sales tax, Service tax, Excise duty,
Wealth tax,Investor Education and Protection Fund and other material
statutory dues were in arrears as at 31 December 2014 for a period of
more than six months from the date they became payable.
(b) According to the information and explanations given to us there are
no dues of Income tax, Sales tax, Service tax, Customs duty, Excise
duty and Wealth tax which have not been deposited by the Company on
account of disputes except for the following :
Name of Nature of Amount(Rs.) Period to which Forum where
the Statute the Dues the amount dispute is
relates pending
Bihar Sales Tax 11,613,850 FY 1992-93 to Tribunal of
Finance 1998-99 Commercial
Act, 1981 Taxes, Bihar
Central Central 162,619,234* FY 2002-03, Joint
Sales Sales 2003-04, Commissioner
Tax Act, Tax 2004- 05, of Sales Tax
1956 2005- 06, (Appeals)
2006- 07,
and
2008-09
2009-10
Central Central 10,876,839* FY 2002-03 Maharashtra
Sales Sales Tax Sales Tax
Tax Act, Tribunal
1956
Central - Excise 4,016,681* FY 1992-97 Commissioner
Excise Duty of Central
Act, 1944 -Interest Excise
and (Appeals)
penalty 4,519,138
Central Excise Duty 80,327,315 FY 2011-12 CESTAT,
Excise -Interest Mumbai
Act, 1944 and
penalty 115,690,000
Central -Excise 31,056,855 FY 2012-13 Commissioner
Excise Duty of Central
Act, 1944 -Interest Excise
and
penalty 22,459,657
Finance - Interest 2005-2008 CESTAT,
Act, and Mumbai
1994 penalty 1,788,260
Income Tax Income 133,806,320 AY 2010-11 Income Tax
Act, 1961 Tax Appellate
Tribunal
Income Income 12,644,910 AY 2009-10 Income Tax
Tax Tax Appellate
Act, 1961 Tribunal
Income Tax Income 1,660,741 AY 2007-08 Income Tax
Tax Tax Appellate
Act, 1961 Tribunal
Name of Nature of Amount(Rs.) Period to which Forum where
the the Dues the amount dispute is
Statute relates pending
Income Income 6,095,409 AY 2006-07 Income Tax
Tax Tax Appellate
Act, 1961 Tribunal
Income Income 7,818,921 AY 2005-06 Income Tax
Tax Tax Appellate
Act, 1961 Tribunal
(*) Net of amount paid under protest amounting to Rs. 71,114,222.
(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) The Company did not have any dues to any financial institutions,
banks or debenture holders during the year.
xii) The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures 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
fund/ society.
xiv) According to the information and explanations given to us the
Company is not dealing or trading in shares, securities, debentures and
other investments.
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
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) The Company has not made any preferential allotment of shares to
companies/firms/other parties covered in the register maintained under
Section 301 of the Companies Act 1956 / Section 189 of the Companies
Act, 2013 (as applicable).
xix) The Company did not have any outstanding debentures during the
year.
xx) The Company has not raised any money by public issues. -
xxi) According to the information and explanations given to us no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For B S R &Associates LLP
Chartered Accountants
Firm's Registration
Number: 116231W/W-100024
Shiraz Vastani
Partner
Membership Number:103334
Place : Pune
Date : March 18,2015
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