Mar 31, 2023
Report on the Audit of the Standalone Financial Statements
1. We have audited the accompanying Standalone Financial Statements of Akzo Nobel India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) 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 31 March 2023, and total comprehensive income (comprising profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditor''s Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period.
These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole and
in forming our opinion thereon, and we do not provide a separate opinion on these matters.
How our audit |
||
Key audit matter |
addressed the key audit matter |
|
A. Revenue recognition |
Our audit procedures |
|
including variable |
included the following: |
|
consideration |
⢠|
We assessed the |
[Refer to Notes 1(o) |
design and tested the |
|
(Significant accounting |
operating effectiveness |
|
policies) and 18 (Revenue |
of internal controls |
|
from operations) to the |
related to recognition |
|
Standalone Financial |
of revenue including |
|
Statements] |
variable consideration. |
|
The Company recognises |
⢠|
We tested sales |
revenue when control of |
transactions on |
|
the goods is transferred |
a sample basis, |
|
to the customer at an |
by comparing the |
|
amount that reflects the |
underlying sales |
|
net consideration, which |
invoices, sales |
|
the Company expects |
orders and dispatch |
|
to receive for those |
documents to assess |
|
goods from customers. |
whether revenue |
|
The sales arrangements |
was recognised |
|
are voluminous and in |
appropriately. |
|
determining the sales price, the Company |
⢠|
We assessed |
considers the effects of |
the underlying |
|
variable consideration, |
assumptions and |
|
which requires estimation, |
estimates used for |
|
leading to complexities |
determination of |
|
and application of |
variable consideration. |
|
significant effort and |
⢠|
We tested rebates |
judgment. |
and discount provided to the customers on a sample basis, comparing the same with underlying approvals and terms of the contracts and schemes offered to customers. |
|
⢠|
We assessed the adequacy of the disclosures made in the Standalone Financial Statements in respect of revenue recognition. |
How our audit |
|
Key audit matter |
addressed the key audit matter |
Considering these |
Based on the above |
significant judgements, |
procedures, we did not |
estimates and the risk |
identify any significant |
associated with revenue |
deviation to the |
recognition, the matter |
assessment made by the |
has been determined to |
management in respect |
be a key audit matter. |
of revenue recognition including variable consideration. |
B. Assessment of ongoing |
Our procedures included |
income tax and indirect |
the following: |
tax litigations |
⢠Obtained an |
[Refer to Notes 1(l) |
understanding of |
and 1(m) (Significant |
the process and |
accounting policies), |
controls designed |
Note 27(b) (Contingent |
and implemented |
liabilities), Note 6.2 [Non- |
by the management |
current tax assets (net)], |
and tested the |
Note 13 (Provisions) to |
design and operating |
the Standalone Financial |
effectiveness of |
Statements]. |
relevant controls; |
As at 31 March 2023, the |
⢠Obtained an |
Company is subjected to |
understanding of |
a number of significant |
the tax litigations |
income tax litigations |
through enquiry with |
relating to disallowance |
the management, |
of expenses, transfer |
including the |
pricing adjustments etc. |
significant |
and indirect tax litigations |
developments, |
relating to taxable |
additions and |
turnover, availability of |
settlements during the |
statutory forms etc. |
year and subsequent |
(together referred to as |
to the year-end; |
âtax litigationsâ). These matters are in appeal before various judicial forums. |
⢠Inspected demand notices received from the tax authorities and evaluated the |
The eventual outcome of |
Company''s response |
tax litigations is uncertain |
to those matters; |
and the positions taken by the management are based on the application of significant judgement and estimation. The assessment of the tax matters requires application and interpretation of tax laws and reference to applicable judicial pronouncements. |
⢠Obtained independent confirmations from the Company''s external tax experts including the status of the significant tax litigations, their views regarding the likely outcome and magnitude of the potential exposure; |
Key audit matter |
How our audit addressed the key audit matter |
Based on management |
⢠Involved specialists |
judgement and advice |
to evaluate the |
from external legal and tax |
management''s |
consultants and considering |
assessment on the |
the merits of the case, the |
likely outcome and |
Company has recognised |
potential magnitude |
provisions wherever required |
on complex or |
and for the balance matters, |
significant tax matters |
where the management |
as considered |
expects favourable outcome, the tax litigations have been |
necessary; and |
disclosed as contingent |
⢠Assessing the |
liabilities in the Standalone |
adequacy of |
Financial Statements unless |
the Company''s |
the possibility of outflow of |
disclosures in respect |
resources is considered to be remote. |
of litigations. |
We did not identify any |
|
We identified this matter as |
significant exceptions |
a key audit matter as the |
to the management''s |
ultimate outcome of matters |
assessment of the |
is uncertain and the positions |
ongoing tax litigations |
taken by the management are |
as a result of the above |
based on the application of significant judgement, related legal advice including those relating to interpretation of laws and regulations. |
procedures. |
5. The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the Standalone Financial Statements and our auditor''s report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged With Governance for the Standalone Financial Statements
6. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
7. In preparing the Standalone Financial Statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
8. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
9. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to Standalone Financial Statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
10. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
11. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
13. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
14. 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 purposes 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 those books, except that the backup of the books of account and other books and papers maintained in electronic mode has not been maintained on a daily basis on servers physically located in India.
(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2023, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023, from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our comments in paragraph 14(b) above that the back-up of the books of account and other books and papers maintained in electronic mode has not been maintained on a daily basis on servers physically located in India.
(g) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), 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 Standalone Financial Statements - Refer Note 27 to the Standalone Financial Statements;
ii. The Company was not required to recognise a provision as at 31 March 2023 under the applicable law or accounting standards, as it does not have any material foreseeable losses on long-term contract. The Company did not have any longterm derivative contracts as at 31 March 2023.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.
iv. (a) The management has represented that, to the
best of its knowledge and belief, as disclosed in the notes to the Standalone Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities [âIntermediary(ies)â], with the understanding, whether recorded in writing or otherwise, that the Intermediary(ies) shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 38 to the Standalone Financial Statements);
(b) The management has represented that, to the best of its knowledge and belief, as disclosed in the notes to the Standalone Financial Statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 38 to the Standalone Financial Statements); and
(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act, except for the delay in transferring the amount of final dividend for the year ended March 31,2022, to a separate bank account within the timeline specified in sub-section (4) of section 123 of the Act.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for books of account to have the feature of audit trail, edit log and related matters in
the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 1, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.
15. The Company has paid / provided for managerial
remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
Firm Registration Number: 012754N/N500016
Partner
Place: Gurugram Membership Number: 078571
Date: 23 May 2023 UDIN: 23078571BGXZHS6607
Mar 31, 2022
Opinion
1. We have audited the accompanying Standalone Financial Statements of Akzo Nobel India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2022, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) 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 31 March 2022, and total comprehensive income (comprising profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditor''s Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period.
These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole and
in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter |
How our audit addressed the key audit matter |
A. Revenue recognition |
Our audit procedures |
including variable consideration |
included the following: ⢠We assessed the design |
[Refer to Notes 1(o) |
and tested the operating |
(Significant accounting |
effectiveness of internal |
policies) and 18 (Revenue |
controls related to |
from operations) to the |
recognition of revenue |
Standalone Financial |
including variable |
Statements] |
consideration. |
The Company recognises revenues when control of the goods is transferred to the customer at an amount that reflects the net consideration, which |
⢠We tested sales transactions on a sample basis, by comparing the underlying sales invoices, sales orders and dispatch documents to assess |
the Company expects to receive for those |
whether revenue was |
goods from customers. |
recognised appropriately. |
The sales arrangements |
⢠Assessed the underlying |
are voluminous and in |
assumptions and |
determining the sales |
estimates used for |
price, the Company |
determination of variable |
considers the effects of variable consideration, |
consideration. |
which requires estimation, |
⢠We tested rebates and |
leading to complexities |
discount provided to the |
and application of |
customers on a sample |
significant effort and |
basis, comparing the |
judgment. |
same with underlying approvals and terms |
Considering these |
of the contracts and |
significant judgements, estimates and the risk associated with revenue |
schemes offered to customers. |
recognition, the matter |
⢠We assessed the |
has been determined to |
adequacy of the |
be a key audit matter. |
disclosures made in the Standalone Financial Statements in respect of revenue recognition. Based on the above procedures, we did not identify any significant deviation to the assessment made by the management in respect of revenue recognition including variable consideration. |
Key audit matter |
How our audit addressed the key audit matter |
B. Assessment of ongoing |
Our procedures included the |
income tax and indirect tax |
following: |
litigations |
⢠Obtained an |
[Refer to Notes 1(l) |
understanding of |
and 1(m) (Significant |
the process and |
accounting policies), |
controls designed and |
Note 27(b) (Contingent |
implemented by the |
liabilities), Note 6.2 [Non- |
management and tested |
current tax assets(net)], |
the design and operating |
Note 13 (Provisions) to |
effectiveness of relevant |
the Standalone Financial |
controls; |
Statements] |
⢠Obtained an |
As at 31 March 2022, the |
understanding of the tax |
Company is subjected to |
litigations through enquiry |
a number of significant |
with the management, |
income tax litigations |
including the significant |
relating to disallowance |
developments, additions |
of expenses, transfer |
and settlements during |
pricing adjustments etc. |
the year and subsequent |
and indirect tax litigations |
to the year end; |
relating to taxable turnover, availability of statutory forms etc. |
⢠Inspected demand notices received from the tax authorities and |
(together referred to as âtax litigationsâ). These matters are in appeal |
evaluated the Company''s response to those matters; |
before various judicial forums. |
⢠Obtained independent |
The eventual outcome of tax litigations is uncertain and the positions taken by the management are |
confirmations from the Company''s external tax experts including the status of the significant tax litigations, their views |
based on the application of significant judgement |
regarding the likely outcome and magnitude |
and estimation. The assessment of the |
of the potential exposure; |
tax matters requires |
⢠Involved specialists |
application and |
to evaluate the |
interpretation of tax |
management''s |
laws and reference |
assessment on the likely |
to applicable judicial |
outcome and potential |
pronouncements. |
magnitude on complex |
Based on management |
or significant tax matters |
judgement and the advice |
as considered necessary; |
from external legal and |
and |
tax consultants and considering the merits of |
⢠Assessing the adequacy of the Company''s |
the case, the Company has recognised provisions wherever required and for the balance matters, where the management |
disclosures in respect of litigations. |
Key audit matter |
How our audit addressed the key audit matter |
expects favourable |
We did not identify any |
outcome, the tax |
significant exceptions to the |
litigations have been |
management''s assessment |
disclosed as contingent |
of the ongoing tax litigations |
liabilities in the Standalone |
as a result of the above |
Financial Statements |
procedures. |
unless the possibility of |
|
outflow of resources is |
|
considered to be remote. |
|
We identified this matter |
|
as a key audit matter as |
|
the ultimate outcome of |
|
matters are uncertain and |
|
the positions taken by the |
|
management are based on |
|
the application of significant |
|
judgement, related legal |
|
advice including those |
|
relating to interpretation of |
|
laws and regulations. |
5. The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the Standalone Financial Statements and our auditor''s report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged With Governance for the Standalone Financial Statements
6. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
7. In preparing the Standalone Financial Statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
8. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
9. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of
the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to Standalone Financial Statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
10. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
11. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
13. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
14. 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 purposes 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 those books, except that the backup of the books of account and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.
(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our comments in paragraph 14(b) above that the back-up of the books of account and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.
(g) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Aâ.
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), 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 Standalone Financial Statements - Refer Note 27 to the Standalone Financial Statements;
ii. The Company was not required to recognise a provision as at 31 March 2022 under the applicable law or accounting standards, as it does not have any material foreseeable losses on long-term contracts. The Company did not have any longterm derivative contracts as at 31 March 2022.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.
iv. (a) The management has represented that, to the
best of its knowledge and belief, as disclosed in the notes to the Standalone Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 38 to the Standalone Financial Statements);
(b) The management has represented that, to the best of its knowledge and belief, as disclosed in the notes to the Standalone Financial Statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 38 to the Standalone Financial Statements); and
(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.
15. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Anurag Khandelwal
Partner
Place: Gurugram Membership Number: 078571
Date: 27 May 2022 UDIN: 22078571AJRYBK1896
Mar 31, 2019
Independent Auditorsâ Report
To
The Members of Akzo Nobel India Limited
Report on the audit of the Standalone Financial Statements
Opinion
1. We have audited the accompanying standalone financial statements of Akzo Nobel India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March,2019, and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) 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 31 March,2019, and total comprehensive income (comprising profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
4. Key audit matter is that matter that, in our professional judgment, was of most significance in our audit of the financial statements of the current period. This matter was addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.
Description of the Key Audit matter |
How our audit addressed the key audit matter |
Assessment of ongoing |
Our procedures on the |
income tax and indirect tax |
managementâs assessment |
litigations |
of these matters included: |
[Refer to Note 26 (b) |
- Understanding and |
(Contingent liabilities), Note |
evaluating process and |
9.1 [Current tax assets(net)], |
controls designed and |
Note 13 (Provisions), and |
implemented by the |
1(l) and 1(m) (Significant |
management including |
accounting policies) to the financial statements] |
testing of relevant controls; |
As at 31 March,2019, the |
- Gaining an |
Company is subjected to a |
understanding of the |
number of significant income |
tax related litigations |
tax litigations relating to |
through discussions |
disallowance of expenses, |
with the management, |
transfer pricing adjustments |
including the significant |
etc. and indirect tax litigations |
developments, additions |
relating to taxable turnover, |
and settlements during |
availability of statutory forms |
the year and subsequent |
etc. (together referred to as |
to 31 March,2019; |
âlitigationsâ). These matters |
- Inspecting demand |
are in appeal before various |
notices received from tax |
judicial forums. |
authorities and evaluating the Companyâs response to those matters; |
The eventual outcome of |
- Obtaining independent |
these litigations is uncertain |
confirmations from the |
and the positions taken by the |
Companyâs external tax |
management are based on |
experts including the |
the application of significant |
status of the significant |
judgment and estimation. |
litigations, their views |
The review of these matters |
regarding the likely |
requires application and |
outcome and magnitude |
interpretation of tax laws and |
of the potential |
reference to applicable judicial pronouncements. |
exposure; |
Based on management |
- Evaluating the |
judgment and the advice |
managementâs |
from external legal and tax |
assessment on the likely |
consultants and considering |
outcome and potential |
the merits of the case, the |
magnitude by involving |
Company has recognized |
auditorâs experts on |
provisions wherever required |
complex or significant |
and for the balance matters, |
matters as considered |
where the management expects favorable outcome, |
necessary; and |
these litigations have been |
- Assessing the adequacy of the Companyâs |
disclosed as contingent liabilities in the financial statements unless the possibility of outflow of resources is considered to be remote. |
disclosures. |
Description of the Key Audit matter |
How our audit addressed the key audit matter |
Given the uncertainty and |
We did not identify any |
application of significant |
significant exceptions to the |
judgment in this area in terms |
managementâs assessment |
of the eventual outcome of |
of the ongoing income tax |
litigations, we determined |
and indirect tax litigations |
this to be a key audit matter. |
as a result of the above procedures. |
Other information
5. The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditorâs report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance/conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the financial statements
6. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,
2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of 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.
7. In preparing the financial statements, the management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The management is also responsible for overseeing the Companyâs financial reporting process.
Auditorâs responsibilities for the audit of the financial statements
8. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
9. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)
(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
10. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
11. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
13. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
14. 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 purposes 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 those books, except that the backup of the books of account and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.
(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March,2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March,2019 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our comment in ParagrapRs,14(b) above that the back-up of the books of account and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.
(g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
(h) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 26(a) and 26(b) to the standalone financial statements.
ii. The Company has long term contracts including derivative contracts as at 31 March,2019 for which there were no material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March,2019.
iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended 31 March,2019.
Annexure A
Referred to in paragrapRs,14(g) of the Independent Auditorsâ Report of even date to the members of Akzo Nobel India Limited on the standalone financial statements for the year ended 31 March,2019
Report on the Internal Financial Controls with reference to standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls with reference to standalone financial statements of Akzo Nobel India Limited (âthe Companyâ) as of 31 March,2019, in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
6. A companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to financial statements
7. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31 March,2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Nature |
in Million Gross Net Book Book Value Value |
|
Two cases of leasehold land at Mysore and Mahad for which lease agreements are yet to be registered in the name of the Company including the one transferred as part of discontinued operations-refer Note 35(a) to the Financial Statements. |
188 |
186 |
One case of leasehold land at Thane location for which original title deed is not in possession of the Company. |
7 |
4 |
ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
Referred to in paragrapRs,13 of the Independent Auditorsâ Report of even date to the members of Akzo Nobel India Limited on the standalone financial statements as of and for the year ended 31 March,2019
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets (property, plant and equipment).
(b) The fixed assets (property, plant and equipment) are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets (property, plant and equipment) has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 3 on fixed assets (property, plant and equipment) to the financial statements, are held in the name of the Company, except :
iv. The Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 and 186 of the Companies Act, 2013. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of the investments made by it.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods and service tax which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax, duty of customs and duty of excise, value added tax as at 31 March,2019 which have not been deposited on account of a dispute, are as follows:
Name of the Statute |
Nature of the dues |
Amount |
Amount paid under protest |
Assessment year for which the matter has been disputed |
(Rs, in million) Forum |
Income Tax Act, 1961 |
Income tax |
95 |
85 |
2008-09 to 2011-12 |
Commissioner of Income Tax (Appeals) |
Income Tax Act, 1961 |
Income tax |
1,932 |
928 |
2008-09, 2009-10, 2011-12 to 2014-15 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income tax |
499 |
- |
1994-95,1996-97,199899,2006-07 & 2007-08 |
Calcutta High Court |
The Central Excise Act, 1944 |
Excise Duty |
2 |
2006-07 & 2007-08 |
Additional Commissioner/Joint Commissioner |
|
The Central Excise Act, 1944 |
Excise Duty |
13 |
2000-01, 2002-03, 2004-05 & 2005-06 |
Commissioner (Appeals) |
|
The Central Excise Act, 1944 |
Excise Duty |
77 |
1991-92 to 1999-2000, 2004- 05 to 2009-10 & 2012-13 |
Customs Excise And Service Tax Appellate Tribunal |
|
The Central Excise Act, 1944 |
Excise Duty |
1 |
2004-06 |
Karnataka High Court |
|
Service Tax |
Service Tax |
26 |
- |
2012-13, 2013-14, 2014-15 & 2016-17 |
Customs Excise And Service Tax Appellate Tribunal |
Service Tax |
Service Tax |
1 |
- |
2013-14 to 2014-15 |
Commissioner Appeals |
Sales Tax Act |
Sales Tax |
354 |
53 |
1982-83 to 2000-01, 200203 to 2015-16 and 2017-18 |
Additional Commissioner/ Joint Commissioner/ Deputy Commissioner/ Assistant Commissioner/ Commercial Tax Inspector |
Sales Tax Act |
Sales Tax |
37 |
11 |
2005-06 to 2008-09 and 2010-11 to 2015-16 |
Appellate and Provisional Board/ Commissioner Appeal/Additional Commissioner (Appeals) |
Sales Tax Act |
Sales Tax |
22 |
5 |
2004-05 to 2006-07, 2008-09 to 2011-12 |
Sales Tax Tribunal |
Sales Tax Act |
Sales Tax |
78 |
6 |
2005-06, 2006-07, 200910, 2010-11 and 2012-13 |
Madhya Pradesh High Court, Allahabad High Court and Madras High Court |
opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax and other material statutory dues, as applicable, with the appropriate authorities. Also refer Note 26(c) to the financial statements regarding managementâs assessment on certain matters relating to provident fund.
viii. According to the records of the Company examined by us and information and explanation given to us, the Company has not defaulted in repayment of borrowings to Government as at the balance sheet date. The Company does not have any loans or borrowings from any financial institution or bank, nor has it issued any debentures as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (IndAS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse
Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Anurag Khandelwal
Place: Gurugram Partner
Date: 3 May 2019 Membership Number 078571
Mar 31, 2018
To
The Members of Akzo Nobel India Limited
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying standalone financial statements of Akzo Nobel India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,
2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made there under including 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 there under.
5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. 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 standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 31 March 2018, and its total comprehensive income (comprising profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor''s Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
10. 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 purposes 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 those books, except that the backup of the books of account and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our comment in Paragraph 10(b) above that the back up of the books of account and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.
(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.
(h) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at 31 March 2018 on its financial position in its standalone Ind AS financial statements - Refer Note 27(a).
ii. The Company has long term contracts including derivative contracts as at 31 March 2018 for which there were no material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2018.
iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended 31 March 2018.
Annexure A
Referred to in paragraph 10(g) of the Independent Auditorsâ Report of even date to the members of Akzo Nobel India Limited on the standalone financial statements for the year ended 31 March 2018
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of Akzo Nobel India Limited (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Nature |
H In Million Gross Net Book Book Value Value |
|
Two cases of leasehold land at Mysore and Mahad for which lease agreements are yet to be registered in the name of the Company including the one transferred as part of discontinued operations-refer Note 36A to the Financial Statements. |
187.5 |
185.5 |
One case of leasehold land at Thane location for which original title deed is not in possession of the Company. |
7.1 |
4.2 |
ii. The physical verification of inventory (excluding goods in transit) have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
Referred to in paragraph 9 of the Independent Auditorsâ Report of even date to the members of Akzo Nobel India Limited on the standalone financial statements as of and for the year ended 31 March 2018
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 3 on fixed assets to the financial statements, are held in the name of the Company, except :
iv. The Company has not granted any loans, or provided any guarantees or security to the parties covered under Section 185 and 186 of the Companies Act, 2013. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of the investments made by it.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
Name of the Statute |
Nature of the dues |
Amount |
Amount paid under protest |
Assessment year for which the matter has been disputed |
Forum |
Income Tax Act, 1961 |
Income tax |
91 |
84 |
2008-09, 2009-10 |
Commissioner of Income Tax (Appeals) |
Income Tax Act, 1961 |
Income tax |
1,581 |
673 |
2004-05, 2007-08 to 2012-13 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income tax |
869 |
44 |
1994-95, 1996-97, 1998-99, 1999-00, 2002-03, 2003-04, 2005-06 to 2007-08 |
High Court |
The Central Excise Act, 1944 |
Excise Duty |
2 |
- |
2006-07, 2007-08 |
Additional Commissioner/Joint Commissioner |
The Central Excise Act, 1944 |
Excise Duty |
13 |
- |
2000-01, 2002-03, 2004-05, 2005-06 |
Commissioner (Appeals) |
The Central Excise Act, 1944 |
Excise Duty |
95 |
1991-92 to 1996-2000, 200405 to 2009-10, 2011-12, 2012-13 |
Customs Excise and Service Tax Appellate Tribunal |
|
The Central Excise Act, 1944 |
Excise Duty |
1 |
- |
2004-06 |
High Court |
Service Tax |
Service Tax |
26 |
- |
2012-13, 2013-14, 2014-15, 2016-17 |
Customs Excise and Service Tax Appellate Tribunal |
Service Tax |
Service Tax |
1 |
- |
2013-14 to 2014-15 |
Commissioner Appeals |
Sales Tax Act |
Sales Tax |
345 |
38 |
2000-01, 2002-03 to 2015-16, 2017-18 |
Additional Commissioner/ Joint Commissioner/ Deputy Commissioner/ Assistant Commissioner/Commercial Tax Inspector |
Sales Tax Act |
Sales Tax |
25 |
7 |
2005-06 to 2008-09, 2010-11 to 2015-16 |
Appellate and Revisional Board/ Commissioner Appeal/Additional Commissioner (Appeals) |
Sales Tax Act |
Sales Tax |
22 |
5 |
2004-05 to 2006-07, 2008-09 to 2011-12 |
Sales Tax Tribunal |
Sales Tax Act |
Sales Tax |
78 |
4 |
2005-06, 2006-07, 2009-10 , 2010-11, 2012-13 |
High Court |
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax with effect from 1 July 2017 and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods and service tax which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax, duty of customs and duty of excise duty, value added tax as at 31 March 2018 which have not been deposited on account of a dispute, are as follows:
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of borrowings to Government as at the balance sheet date. The Company does not have any loans or borrowings from any financial institution or bank, nor has it issued any debentures as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors or persons connected with it. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/ N500016
Chartered Accountants
Anurag Khandelwal
Place: Gurugram Partner
Date : 10 May 2018 Membership Number 078571
Mar 31, 2017
To
The Members of Akzo Nobel India Limited
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying standalone financial statements of Akzo Nobel India Limited (âthe Companyâ), which comprise the Balance Sheet as
at 31 March 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Act'') with respect to the preparation of these standalone Ind AS financial statements to give
a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made there under including 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 there under.
5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. 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 standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 31 March 2017, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other Matter
9. The comparative financial information of the Company for the year ended 31 March 2016 and the transition date opening balance sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended 31 March 2016 and 31 March 2015 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by the predecessor auditor who expressed an unmodified opinion vide reports dated 13 May 2016 and 28 May 2015 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditor''s Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (âthe Order''), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B
a statement on the matters specified in paragraphs 3 and 4 of the Order.
11. 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 purposes 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 those books, except that the backup of the books of account and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our comment in Paragraph 11 (b) above that the backup of the books of account and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.
(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.
(h) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i The Company has disclosed the impact, if any, of pending litigations as at 31 March 2017 on its financial position in its standalone Ind AS financial statements -Refer Note 27(a).
ii. The Company has long term contracts including derivative contracts as at 31 March 2017 for which there were no material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2017.
iv. The disclosure requirement as envisaged in Notification G.S.R 308(E) dated 30 March 2017 is not applicable to the Company -Refer Note 38.
Referred to in paragraph 11(g) of the Independent Auditorsâ Report of even date to the members of Akzo Nobel India Limited on the standalone financial statements for the year ended 31 March 2017
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of Akzo Nobel India Limited (âthe Company'') as of 31 March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Note'') and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Referred to in paragraph 10 of the Independent Auditorsâ Report of even date to the members of Akzo Nobel India Limited on the standalone financial statements as of and for the year ended 31 March 2017
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period
of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 3 on Property, Plant and Equipment to the financial statements, are held in the name of the Company, except for two cases of leasehold land having gross book value of Rs,187.5 million and net book value of H 185.9 million for which lease agreements are yet to be registered in the name of the Company and one leasehold land having gross book value of H 7.1 million and net book value of H 4.2 million for which original agreement is not in possession of the Company.
ii. The physical verification of inventory, excluding stocks with third parties, and goods in transit has been conducted at reasonable intervals by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186 of the Act. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products.
We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of duty of customs which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax, duty of excise, value added tax as at 31 March 2017 which have not been deposited on account of a dispute, are as follows:
(Rs, in million)
Name of the Statute |
Nature of the dues |
Amount |
Amount paid under protest |
Assessment year for which the matter has been disputed |
Forum |
Income Tax Act, 1961 |
Income tax |
91 |
84 |
2008-09, 2009-10 |
Commissioner of Income Tax (Appeals) |
Income Tax Act, 1961 |
Income tax |
1,062 |
358 |
2004-05, 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-2013 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income tax |
608 |
260 |
1994-95, 1998-99, 2002-03, 2003-04, 2005-06 |
High Court |
The Central Excise Act, 1944 |
Excise Duty |
2 |
- |
2006-07 & 2007-08 |
Additional Commissioner/Joint Commissioner |
13 |
- |
2000-01, 2002-03, 2004-05, 2005-06 |
Commissioner (Appeals) |
||
73 |
- |
1991-92 to 1996-97, 2004- 05 to 2008-09 |
Customs Excise And Service Tax Appellate Tribunal |
||
Service Tax |
Service Tax |
25 |
- |
2012-13, 2013-14, 2014-15 |
Commissioner/Additional Commissioner/ Assistant Commissioner |
Sales Tax Act |
Sales Tax |
317 |
34 |
2000-01, 2002-03 to 2015-16 |
Additional Commissioner/Joint Commissioner/ Deputy Commissioner/ Assistant Commissioner/ Commercial Tax Inspector |
176 |
5 |
1976-77, 1979-80, 1980-81, 1982-83 to 1999-00, 2005- 06, to 2012-13 & 2015-16 |
Senior Joint Commissioner of Commerce and Trade, Appellate and Revisional Board/ Additional Commissioner (Appeals) |
||
18 |
6 |
2004-05 to 2006-07, 2008-09 to 2011-12 |
Customs Excise and Service Tax Appellate Tribunal |
||
12 |
- |
2005-06, 2006-07, 2012-13 |
High Court |
||
2,397 |
747 |
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
ix. The Company has not raised any money by way of initial public offer, follow-on public offer (including debt instruments) and term loans during the year. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management.
xi. The Company has paid and provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (AS) 24, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
xiv. Matters specified in clauses (xiv), (xv) and (xvi) of paragraph 3 of the CARO, 2016 do not apply to the Company.
For Price Waterhouse
Chartered Accountants LLP
Firm Registration No. : 012754N/N500016
Chartered Accountants
Anurag Khandelwal
Place: Mumbai Partner
Date : 18 May 2017 Membership No. : 078571
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Akzo Nobel India Limited ('the Company'), which comprise the Balance
Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash
Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management's responsibility for the 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 standalone 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.
Auditor's responsibility
Our responsibility is to express an opinion on these standalone
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
thereunder.
We conducted our audit in accordance with the Standards on Auditing
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 standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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 31 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 Act, 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, to the extent
applicable, 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
purposes of our audit;
b) i n 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
those books;
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 the written representations received from the
directors as on 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
f) with respect to the 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 5.1 to the
financial statements;
ii. The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses; and
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Auditor's report (Referred to in our report of even
date)
(i) (a) According to the information and explanations given to us, the
Company has maintained proper records showing full particulars, includ
-ing quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets of the Company are physically
verified by the management in accordance with a phased programme
designed to cover all items of fixed assets over a period of three
years which, in our opinion, is reasonable having regard to the size of
the Company and nature of its fixed assets. In accordance with the
programme, all fixed assets at Company's manufacturing locations have
been physically verified by the management during the year. As informed
to us, no material discrepancies were noticed on such verification.
(ii) (a) According to the information and explanations given to us,
physical verification except in case of goods in transit and stocks
lying with third parties has been conducted by management at reasonable intervals during the year in respect of inventories of raw materials,
stores and spare parts, work-in-process and finished goods in the
Company's possession. For stocks lying with third parties, as at 31
March 2015 confirmations or statements of account have been obtained.
In our opinion, the frequency of physical verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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) According to the information and explanations given to us and on
the basis of our examination of the records of inventories, we are of
the opinion that the Company is maintaining proper records of inventories.
As informed to us, the discrepancies noticed on verification between the physical stocks and the book records were not material.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 1 89 of the Act during the year ended 31 March 2015.
Thus, paragraph 3(iii) of the Order is not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventories and fixed assets and with regard to sale of
goods and rendering of services. Further, on the basis of our
examination of the books and records of the Company, and according to
the information and explanations given to us, we have not observed any
major weakness in the internal control system during the course of the
audit.
(v) As per the information and explanations given to us, the Company
has not accepted any deposits as mentioned in the directives issued by
the Reserve Bank of India and the provisions of sections 73 to 76 or
any other relevant provisions of the Companies Act, 2013 and the rules
framed thereunder.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government, the maintenance of cost records has been prescribed
under section under sub-section (1 ) to Section 148 of the Companies
Act, 2013, in respect of any of the activities of 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 such records with a view to determine whether they are
accurate or complete.
(vii) (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, Income-tax, Sales tax, Value
Added Tax, Wealth tax, Service tax, duty of Excise, duty of customs,
Employees' State Insurance, Cess and other material statutory dues have
generally been regularly deposited during the year by the Company with
the appropriate authorities though there has been a slight delay in few
cases.
According to the information and explanations given to us, there are no
undisputed amounts payable in respect of Provident Fund, Income-tax,
Sales-tax, Service tax, Value Added Tax, duty of Customs, duty of
Excise, Wealth tax, Employees' State Insurance, Cess and other material
statutory dues were in arrears as at 31 March 2015 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, Value Added tax, Service tax,
duty of Customs, duty of Excise, Cess and Wealth tax which have not
been deposited with the appropriate authorities on account of any
dispute, except for the following:
Name of the Statute Nature of the dues Amounts Amount paid
involved under protest
Income tax Act,1961 Income Tax 161 121
775 717
Finance Act, 1994 Service tax 27 1
Central Excise Ac,1944 Excise duty 2 -
13 -
73 -
Sales Tax Act Sales tax 247 17
277 22
17 3
12 0
(Rs million)
Name of the Statute Period to which the Forum where dispute
amount relates is pending
Income Tax Act 1961 2008- 09, 2010-11 First Appellate level
1996-97, 1997-98, 1999- Tribunal
00, 2002-03 to 2007-08,
2009- 10, 2010-11
Finance Act 1994 2004-05, 2005-06, First Appellate level
2007-08 to 2014-15
Central Excise Ac 1944 2006-07, 2007-08 First Appellate level
2001-02, 2002-03, Second Appellate level
2004-05, 2005-06
1991-92 to 1996-97, Tribunal
2004-05 to 2008-09
Sales Tax Act 2000-01,2003-04 to First Appellate level
2012-13
1976-77, 1979-80, 1980- Second Appellate level
81, 1982-83 to 1999-00,
2004-05 to 2011-12
2004- 05 to 2006-07, Tribunal
2009-10
2005- 06, 2006-07, High Court
2012-13
c) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
(viii) 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.
(ix) In our opinion, and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
bankers. The Company did not have any outstanding dues to any financial
institutions or debenture holders during the year.
(x) 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.
(xi) In our opinion and according to the information and explanations
given to us, the Company did not have any term loans outstanding during
the year.
(xii) According to the information and explanations given to us, no
material frauds on or by the Company have been noticed or reported
during the course of our audit.
For B S R & Associates LLP
Chartered Accountants
Firm Registration No.: 116231W / W-100024
Rakesh Dewan
28 May 2015 Partner
Gurgaon Membership No. 092212
Mar 31, 2014
We have audited the accompanying finanicial statements of Akzo Nobel
India Limited ("the Company"), which comprise the Balance Sheet as at
31 March 2014, 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.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these finanicial
statements that give a true and fair view of the finanicial position,
finanicial performance and cash flows of the Company in accordance with
the Accounting Standards notifed under Companies Act, 1956 ("the Act"),
read with the General Circular 15/2003 dated 13 September 2013 of the
Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal controls relevant to the
preparation and presentation of the finanicial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
3. Auditors'' Responsibility
Our responsibility is to express an opinion on these finanicial
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 finanicial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the finanicial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the finanicial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal controls relevant to the Company''s preparation and
fair presentation of the finanicial 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 finanicial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our audit opinion.
4. Opinion
In our opinion, and to the best of our information and according to the
explanations given to us, the finanicial 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 March 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 the Cash Flow Statement, of the cash flows for the
year ended on that date.
5. Report on Other Legal and Regulatory Requirements i. 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
specifed in paragraphs 4 and 5 of the Order.
ii. 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, Statement of profit and Loss and
Cash Flow Statement comply with the Accounting Standards notifed under
the Companies Act, 1956, 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 31 March 2014, and taken on record by the Board of Directors,
none of the directors is disqualifed as on 31 March 2014 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to in para 5 of the Independent Auditors'' Report to
the Members of Akzo Nobel India Limited on the finanicial statement for
the year ended 31 March 2014
(i) (a) According to the information and explanations given to us, the
Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets are physically verifed by the
management in accordance with a phased programme designed to cover all
items of fixed assets over a period of three years, which, in our
opinion, is reasonable having regard to the size of the Company and
nature of its fixed assets. In accordance with this programme, certain
categories of fixed assets at certain locations have been physically
verifed by the management during the year. As informed to us,
discrepancies noticed on such verifcation, were not material and have
been properly dealt with in the books of accounts.
(c) The Company did not dispose off any substantial part of its fixed
assets during the current year. Accordingly, paragraph 4(i)(c) of the
order is not applicable.
(ii) (a) According to the information and explanations given to us,
physical verifcation has been conducted by management at reasonable
intervals during the year in respect of inventories of raw materials,
stores and spare parts, work-in-process and fnished goods in the
Company''s possession. The existence of stocks lying with third parties
as at 31 March 2014 has been evidenced based on confirmations or
statements of account. In our opinion, the frequency of physical
verifcation is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verifcation 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) According to the information and explanations given to us and on
the basis of our examination of the records of inventories, we are of
the opinion that the Company is maintaining proper records of
inventories. As informed to us, the discrepancies noticed on physical
verifcation of inventories as compared to book records were not
material and have been properly dealt with in the books of account.
(iii) According to the information and explanations given to us, 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. Accordingly,
paragraphs 4(iii)(b) to (g) of the Order are not applicable.
(iv) In our opinion, and according to the information and explanations
given to us, 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 the sale
of goods and rendering of services. Further, on the basis of our
examination and according to the information and explanations given to
us, we have neither come across nor have been informed of any major
weaknesses in the aforesaid internal control system.
(v) (a) 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 have been entered in the register required to
be maintained under that section.
(b) According to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956,
and exceeding Rs. 5 lacs in respect of any party during the year, have
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year
within the meaning of Sections 58A and 58AA or other relevant
provisions of the Companies Act, 1956 and the rules framed.
(vii) In our opinion and according to the information and explanations
given to us, the Company has an internal audit system commensurate with
its size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government, the maintenance of cost records has been prescribed
under section 209(1)(d) of the Companies Act, 1956 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 such records with a view to determine whether they are
accurate or complete.
(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, Investor Education and
Protection Fund, Employees'' State Insurance, Income tax, Sales- tax,
Wealth tax, Service tax, Customs duty, Excise duty and other material
statutory dues to the extent applicable have generally been regularly
deposited during the year by the Company with the appropriate
authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection Fund, Employees'' State Insurance, Income tax,
Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other
material statutory dues to the extent applicable, were in arrears as at
31 March 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 and the
records of the Company examined by us, there are no dues of Income tax,
Sales tax, Wealth tax, Service tax, Customs duty and Excise duty which
have not been deposited with the appropriate authorities on account of
any dispute, except as mentioned below:
(Amounts in Rs. million)
Name of the Statute Nature of the dues Amounts Amounts paid
involved *# under protest
Income Tax Act, 1961 Income tax 1,213 959
Finance Act, 1994 Service tax 3 -
Central Excise
Act, 1944 Excise duty 94 -
Central Sales Tax
Act, 1956 Sales tax 227 14
Uttar Pradesh Trade
Tax Act, 1948 Sales tax / VAT 38 4
Rajasthan Sales Tax
Act, 1994 Sales tax / VAT 2 -
Delhi Sales Tax
Act, 1975 Sales tax / VAT 10 -
The Madhya Pradesh
General Sales Tax
Act, 1958 Sales tax / VAT 32 7
Maharashtra Value
Added Tax Act, 2005 Sales tax / VAT 84 6
West Bengal Sales Tax
Act, 1994 Sales tax / VAT 9 -
West Bengal Value Added
Tax Act, 2003 Sales tax / VAT 13 3
Bihar Sales Tax Act,
1959 Sales tax / VAT 31 5
The Kerala General
Sales Tax Act, 1963 Sales tax / VAT 3 -
Kerala Value Added
Tax Rules, 2005 Sales tax / VAT - 1
Andhra Pradesh Value
Added Tax Act, 2005 Sales tax / VAT 8 -
Orissa Sales Tax Act,
1947 Sales tax / VAT 17 17
Tamil Nadu Value
Added Tax Act, 2006 Sales Tax / VAT 1 1
Karnataka Value Added
Tax Act, 2003 Sales tax / VAT 1 -
Uttar Pradesh Value
Added Tax Act, 2008 Sales tax / VAT 4 4
Gujarat Value Added
Tax Act, 2003 Sales tax / VAT 3 1
Assam Value Added
Tax Act, 2003 Sales tax / VAT 12 -
Name of the Statue Period to which the
amount relates Forum where dispute
is pending
Income Tax Act, 1961 1994-95 to 1997-98,
1999-00 to 2010-11 Commissioner of Income
Tax (Appeals) / Income
Tax Appel-
(Assessment years) late Tribunal / Calcutta
High Court / Bombay
High Court
Finance Act, 1994 2004-05, 2005-06,
2007-08 and 2009-10 Commissioner of Central
Excise (Appeals) Large Tax
Payers Unit / Customs
Excise and Service Tax
Appellate Tribunal
Central Excise Act,
1944 1991-92 to 1996-97,
1998-99, 2000-01 to Customs Excise and Service
Tax Appellate Tribunal /
Joint
2002-03, 2004-05 to
2009-10 Commissioner Large Tax
Payers Unit/ Commissioner of
Central Excise (Appeals)
Central Sales Tax
Act, 1956 1982-83 to 1994-95,
1996-97 to 1999-00, Sales Tax officer / Sales
Tax Revision Board / Deputy
2002-03 to 2010-11 Commissioner / Deputy
Commissioner (Appeals) /
Appellate Tribunal
Uttar Pradesh Trade
Tax Act, 1948 1976-77, 1979-80,
1980-81, 1986-87
to 1989- Sales Tax officer /
Commercial Tax Officer /
Senior Joint
90, 1992-93, 2000-01,
2003-04, 2005-06 to Commissioner Sales Tax,
Corporate Division / Sales
2009-10 Tax Revision Board /
Deputy Commissioner / Deputy
Commissioner (Appeals) /
Additional Commissioner /
Rajasthan Sales Tax
Act, 1994 1998-99 Additional Commissioner
(Appeals) / Appellate
Tribunal / High
Delhi Sales Tax
Act, 1975 1983-84, 1985-86 to
1987-88, 1989-1990, Courts
2002-03 to 2004-05,
2012-13
The Madhya Pradesh
General Sales Tax
Act, 1958 2003-04 to 2005-06
Maharashtra Value Added
Tax Act, 2005 2004-05, 2005-06,
2008-09 to 2010-11
West Bengal Sales
Tax Act, 1994 2004-05
West Bengal Value
Added Tax Act, 2003 2008-09, 2009-10 to 2010-11
Bihar Sales Tax
Act, 1959 1992-93 to 1999-00, 2004-05
The Kerala General
Sales Tax Act, 1963 2002-03, 2005-06, 2006-07,
2008-09
Kerala Value Added
Tax Rules, 2005 2006-07 to 2011-12
Andhra Pradesh Value
Added Tax Act, 2005 2008-09, 2010-11 to 2011-12
Orissa Sales
Tax Act, 1947 1995-96 to 1999-00
Tamil Nadu Value
Added Tax Act, 2006 2012-13
Karnataka Value
Added Tax Act, 2003 2007-08, 2012-13
Uttar Pradesh Value
Added Tax Act, 2008 2008-09
Gujarat Value Added
Tax Act, 2003 2009-10
Assam Value Added
Tax Act, 2003 2010-11
* Including disputed dues aggregating to Rs. 36 million in respect of
sales tax disputes, which have been stayed by the respective
authorities.
# Excluding the demands, the proceedings of which have been set aside
or remanded for reassessment by the appropriate authorities.
(x) The Company does not have any accumulated losses at the end of the
finanicial year and has not incurred cash losses during the finanicial year
and in the immediately preceding finanicial year.
(xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to its bankers. The
Company did not have any outstanding dues to any finanicial institutions
or debenture-holders during the year.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) 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 guarantees for loans taken by others from
banks or finanicial institutions during the year.
(xvi) According to the information and explanations given to us, 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 investments.
(xviii) The Company has not made any preferential allotment of shares
to companies/firms/parties covered in the register maintained under
Section 301 of the Companies Act, 1956 during the year.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) Based on the audit procedures performed and according to the
information and explanations given to us, no significant fraud on or by
the Company has been noticed or reported during the year.
For B S R & Associates LLP
Chartered Accountants
ICAI Firm Registration No: 116231W
Rakesh Dewan
Gurgaon Partner
16 May 2014 Membership No: 092212
Mar 31, 2013
1. Report on the Financial Statements
We have audited the accompanying financial statements of Akzo Nobel
India Limited ("the Company"), which comprise the Balance Sheet as
at 31 March 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.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of 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"). This responsibility includes
the design, implementation and maintenance of internal controls
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.
3. 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 controls 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 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.
4. 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 March 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 Statement, of the cash flows for the
year ended on that date.
5. Report on Other Legal and Regulatory Requirements
i. 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.
ii. 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, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
sub section (3C) of section 211 of the Companies Act, 1956; and
e. on the basis of written representations received from the directors
as on 31 March 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2013 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
(i) (a) According to the information and explanations given to us, the
Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets are physically verified by the
management in accordance with a phased programme designed to cover all
items of fixed assets over a period of three years, which, in our
opinion, is reasonable having regard to the size of the Company and
nature of its fixed assets. In accordance with this programme, certain
categories of fixed assets at certain locations have been physically
verified by the management during the year and no material
discrepancies were noticed on such verification, which have been
properly dealt with in the books of account.
(c) The Company did not dispose off any substantial part of its fixed
assets during the current year. Accordingly, paragraph 40(c) of the
order is not applicable.
(ii) (a) According to the information and explanations given to us,
physical verification has been conducted by management at reasonable
intervals during the year in respect of inventories of raw materials,
stores and spare parts, work-in-process and finished goods in the
Company''s possession. The existence of stocks lying with third parties
as at 31 March 2013 has been evidenced based on confirmations or
statements of account received in most cases. In our opinion, the
frequency of physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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) According to the information and explanations given to us and on
the basis of our examination of the records of inventories, we are of
the opinion that the Company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) According to the information and explanations given to us, 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. Accordingly,
paragraphs 4(iii)(b) to (g) of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, 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 the sale
of goods and rendering of services. Further, on the basis of our
examination and according to the information and explanations given to
us, we have neither come across nor have been informed of any major
weaknesses in the aforesaid internal control system.
(v) (a) 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 have been entered in the register required to
be maintained under that section.
(b) According to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956,
and exceeding Rs 5 lacs in respect of any party during the year, have
been made at prices which are reasonable having regard to prevailing
market prices at the relevant time.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year
within the meaning of Sections 58A and 58AA or other relevant
provisions of the Companies Act, 1956 and the rules framed thereunder.
(vii) In our opinion and according to the information and explanations
given to us, the Company has an internal audit system commensurate with
its size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government, the maintenance of cost records has been prescribed
under section 209(1) (d) of the Companies Act, 1956 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 such records with a view to determine whether they are
accurate or complete.
(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, Investor Education and
Protection Fund, Employees'' State Insurance, Income tax, Sales tax,
Wealth tax, Service tax, Customs duty, Excise duty, Cess and other
material statutory dues to the extent applicable have generally been
regularly deposited during the year by the Company with the appropriate
authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection Fund, Employees'' State Insurance, Income tax,
Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and
other material statutory dues to the extent applicable, were in arrears
as at 31 March 2013 for a period of more than six months from the date
they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of Income tax,
Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and Cess
which have not been deposited with the appropriate authorities on
account of any dispute, except as mentioned below:
Name of the Statute Nature of the dues Amounts Amounts paid
involved*# under protest
Income Tax Act, 1961 Income tax 1,048 957
Finance Act, 1994 Service tax 2 -
Central Excise
Act, 1944 Excise duty 94 -
Central Sales
Tax, 1956 Sales tax 204 14
Uttar Pradesh Trade
Tax Act, 1948 Sales tax/VAT 38 4
Name of th eStatute Period to which the
amount relates Forum where dispute
is pending
Income Tax Act 1961 1994-95 to 1997-98,
1999-00 to 2008-09 Income Tax Appellate
Tribunal/Commissioner
of Income Tax
(Assessment years) (Appeals)/Calcutta High
Court/Bombay High Court
Finance Act 1994 2004-05, 2005-06,
2007-08 and 2009-10 Commissioner of Central
Excise (Appeals) Large
Tax Payers Unit/ Central
Excise and Service Tax
Appellate Tribunal
Central Excise Act
1944 1991-92 to 1996-97,
1998-99, 2000-01 to Customs, Excise and
Service Tax Appellate
Tribunal/Joint
2002-03, 2004-05
to 2009-10 Commissioner Large Tax
Payers Unit/Commissioner
of Central Excise
(Appeals)
Central Excise Act
1956 1982-83 to 1994-95,
1996-97 to 1999-00, Sales Tax Officer/Sales
Tax Revision Board/
Deputy Commissioner/
2002-03 to 2007-08 Deputy Commissioner
(Appeals)/Appellate
Tribunal
Uttar Pradesh Trade
Tax Act 1948 1976-77, 1979-80,
1980-81, 1986-87 to Sales Tax Officer/Sales
Tax Revision Board/
Deputy Commissioner/
1989-90, 1992-93,
2000-01, 2003-04, Deputy Commissioner
(Appeals)/ Additional
Commissioner/
2005-06 to 2009-10. Additional Commissioner
(Appeals)/Appellate
Tribunal/High Courts/
Senior Joint Commissioner
Sales Tax, Corporate
Division/ Commercial Tax
Officer
(x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year and in the immediately preceding financial year.
(xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to its bankers. The
Company did not have any outstanding dues to any financial institutions
or debenture-holders during the year.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) 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 guarantees for loans taken by others from
banks or financial institutions during the year.
(xvi) According to the information and explanations given to us, 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 investments.
(xviii) The Company has not made any preferential allotment of shares
to companies/firms/parties covered in the register maintained under
Section 301 of the Companies Act, 1956 during the year.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) According to the information and explanations given to us, the
Company noticed certain forged documents allegedly authorising a third
party to transfer title in an immovable property of the Company. The
above property is owned by the Company and carried in the books at an
insignificant value. The Company has taken remedial steps by informing
the related land registration authorities and is further investigating
into the matter. The Company does not expect any adverse effect on the
financial statements in this regard. Based on the audit procedures
performed and according to the information and explanations given to
us, no other fraud on or by the Company has been noticed or reported
during the year.
For B S R & Associates
Chartered Accountants
Firm Registration No: 116231
Kaushal Kishore
Gurgaon Partner
20 May 2013 Membership No: 090075
Mar 31, 2012
1 We have audited the attached Balance Sheet of Akzo Nobel India
Limited ('the Company') as at 31 March 2012 and also the Statement of
Profit and Loss and the Cash Flow Statement of the Company for the year
ended on that date, annexed thereto. These financial statements are the
responsibility of the Company's 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 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
our opinion.
3 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 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 report
that:
(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
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 the Cash Flow
Statement, dealt with by this report, are in agreement with the books
of account;
(d) in our opinion, the Balance Sheet, Statement of Profit and Loss 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, to the extent applicable;
(e) on the basis of written representations received from the Directors
of the Company as on 31 March 2012 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31 March 2012 from being appointed as a Director in terms of 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 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 the Balance Sheet, of the state of affairs of the
Company as at 31 March 2012;
(ii) in the case of the Statement of Profit and Loss, 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 referred to in paragraph 3 of the Auditors' Report to the
members of Akzo Nobel India Limited on the accounts for the year ended
31 March 2012
(i) (a) According to the information and explanations given to us, the
Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets are physically verified by the
management in accordance with a phased programme designed to cover all
items of fixed assets over a period of three years, which, in our
opinion, is reasonable having regard to the size of the Company and
nature of its fixed assets. In accordance with this programme, certain
categories of fixed assets at certain locations have been physically
verified by the management during the year and no material
discrepancies were noticed on such verification, which have been
properly dealt with in the books of account.
(c) The Company did not dispose of any substantial part of its fixed
assets during the current year.
(ii) (a) According to the information and explanations given to us,
physical verification has been conducted by the management at
reasonable intervals during the year in respect of inventory of raw
materials, stores and spare parts, work-in-process and finished goods
in the Company's possession. The existence of stocks lying with third
parties as at 31 March 2012 has been evidenced based on confirmations
or statements of account received in most cases. In our opinion, the
frequency of physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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) According to the information and explanations given to us and on
the basis of our examination of the records of inventories, we are of
the opinion that the Company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) According to the information and explanations given to us, 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. Accordingly,
paragraphs 4(iii)(b) to (g) of the Order are not applicable. In the
previous year, a loan was granted to a party covered in the register
maintained under section 301 of the Companies Act, 1956, which has been
merged with the Company pursuant to a Scheme of Amalgamation (Refer to
Note 2 of the financial statements).
(iv) In our opinion and according to the information and explanations
given to us, 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 the sale
of goods and rendering of services. Further, on the basis of our
examination and according to the information and explanations given to
us, we have neither come across nor have been informed of any major
weaknesses in the aforesaid internal control system.
(v) (a) 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, 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 or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956, and exceeding Rs 5 lakhs in respect of any
party during the year, have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year
within the meaning of sections 58A and 58AA or other relevant
provisions of the Companies Act, 1956 and the rules framed thereunder.
(vii) In our opinion and according to the information and explanations
given to us, the Company has an internal audit system commensurate with
its size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government, the maintenance of cost records has been prescribed
under section 209(1)(d) of the Companies Act, 1956 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 such records with a view to determine whether they are
accurate or complete.
(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, Investor Education and
Protection 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 during
the year by the Company with the appropriate authorities, though there
have been delays in a few cases.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection 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 March 2012 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of Income Tax,
Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess
which have not been deposited with the appropriate authorities on
account of any dispute, except as mentioned below:
(Amount in Rs million)
Name of Nature of Amount Amount
the statute the dues involved*# paid
under
protest
Income Tax Act, 1961 Income 1,528 1,423
Tax
Finance Act, 1994 Service Tax 1 -
Central Excise Act, Excise 87 -
1944 Duty
7 -
Central Sales Tax Act, Sales Tax 209 15
1956
Uttar Pradesh Trade Sales Tax 41 3
Tax Act, 1948
West Bengal Sales Sales Tax 17 -
Tax Act, 1994
Delhi Sales Tax Sales Tax 8 -
Act, 1975
The Kerala General Sales Tax 3 -
Sales Tax Act, 1963
Rajasthan Sales Tax Sales Tax 2 -
Act, 1994
Bihar Sales Tax Sales Tax 28 5
Act, 1959
The Madhya Pradesh Sales Tax 32 7
General Sales Tax
Act, 1958
Orissa Sales Tax Sales Tax 17 17
Act, 1947
Bombay Sales Tax Sales Tax 35 -
Act, 1959
Karnataka Value Sales Tax 1 -
Added Tax Act, 2003
Name of Period to which the Forum where
the statute amount relates dispute is pending
Income Tax Act,1961 1994-95 to 1997-98, High Court/Income
1999-00 to 2008-09 Tax Appellate Tribunal/
(Assessment years) Commissioner of Income
Tax (Appeal)/Dispute
Resolution Panel
Finance Act,1994 2004-05, 2005-06, Assistant Commissioner of
2007-08 Central Excise and
Service Tax, Chief
Commissioner of Central
Excise (Appeals)
Central Excise
Act,1944 1991-92, 1992-93 to Customs, Excise and
1996-97, 1998-99, Appellate Tribunal, Joint
2000-01 to 2002-03, Commissioner Large Tax
2004-05 to 2009-10 Payers Unit
2004-05 and 2005-06 Commissioner (Appeals)
Central Excise and
Customs
Central Sales
Tax Act, 1956 1982-83 to 1999-00, Sales Tax Officer/Sales
Tax
2002-03 to 2007-08 Revision Board/Deputy
Commissioner/Deputy
Commissioner (Appeal)/
Appellate Tribunal
Uttar Pradesh Trade
Tax Act, 1946 1976-77,1979-80,1980- Sales Tax Officer/Sales
Tax
81,1986-87,1987- Revision Board/Deputy
88,1988-89,1989- Commissioner/Deputy
90,1992-93,2000- Commissioner (Appeal)/
01,2003-04, 2004- Additional Commissioner/
05,2005-06, 2006-07, Appellate Tribunal/
2007-08, 2008-09, High Court
2009-10
West Bengal Sales
Tax Act,1994 1995-96, 2004-05
Delhi Sales Tax]
Act 1975 1983-84, 1985-86 to
1987-88, 1989-90,
2002-03 to 2004-05
The Keralal General
Sales Tax act, 1963 2002-03, 2005-06,
2006-07, 2008-09
Rajasthan Sales Tax
Act, 1994 1998-99
Bihar Sales Tax
Act, 1959 1992-93 to 1999-00,
2004-05
The Madhya Pradesh
General Sales Tax
Act, 1958 2003-04 to 2005-06
Orissa Sales Tax
Act,1947 1995-96 to
1999-00
Bombay Sales Tax
Act, 1959 2004-05
Karnataka Value
Added Tax Act, 2003 2012-13 Commercial Tax Officer
*Including disputed dues aggregating Rs 36 million in respect of sales
tax disputes, which have been stayed by the respective authorities.
#Excluding the demands the proceedings of which have been set aside or
remanded for reassessment by the appropriate authorities.
(x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year and in the immediately preceding financial year.
(xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to its bankers. The
Company did not have any outstanding dues to any financial institutions
or debenture-holders during the year.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) 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 guarantees for loans taken by others from
banks or financial institutions during the year.
(xvi) According to the information and explanations given to us, 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 investments.
(xviii) The Company has not made any preferential allotment of shares
to companies/firms/parties covered in the register maintained under
section 301 of the Companies Act, 1956, during the year.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) Based on the audit procedures performed and according to the
information and explanations given to us, no significant fraud on or by
the Company has been noticed or reported during the year.
For B S R & Associates
Chartered Accountants
Firm Registration No: 116231W
Kaushal Kishore
Partner
Gurgaon Membership No: 090075
21 May 2012
Mar 31, 2011
1 We have audited the attached Balance Sheet of Akzo Nobel India
Limited (formerly ICI India Limited) (the Company) as at 31 March
2011 and also the Profit and Loss Account and the Cash Flow Statement
of the Company 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 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
our opinion.
3 As required by the Companies (Auditors Report) Order, 2003 (the
Order), 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 report
that:
(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
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, Profit and Loss Account and the Cash Flow
Statement, dealt with by this report, are in agreement with the books
of account;
(d) in our opinion, the 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, to the extent applicable;
(e) on the basis of written representations received from the directors
of the Company as on 31 March 2011 and taken on record by the Board of
directors, we report that none of the directors is disqualified as on
31 March 2011 from being appointed as a director in terms of 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 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 the Balance Sheet, of the state of affairs of the
Company as at 31 March 2011;
(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 referred to in paragraph 3 of the Auditors Report to the
Members of Akzo Nobel India limited (formerly ICI India limited) on the
accounts for the year ended 31 March 2011
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the fixed assets are physically verified by the
management in accordance with a phased programme designed to cover all
items of fixed assets over a period of three years, which, in our
opinion, is reasonable having regard to the size of the Company and
nature of its fixed assets. In accordance with this programme, certain
categories of fixed assets at certain locations have been physically
verified by the management during the year and no material
discrepancies were noticed on such verification, which have been
properly dealt with in the books of account.
(c) The Company did not dispose off any substantial part of its fixed
assets during the current year.
(ii) (a) According to the information and explanations given to us,
physical verification has been conducted by management at reasonable
intervals during the year in respect of inventory of raw materials,
stores and spare parts, work-in-process and finished goods in the
Companys possession. The existence of stocks lying with third parties
as at 31 March 2011 has been evidenced based on confirmations or
statements of account received in most cases. In our opinion, the
frequency of physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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 inventories, we
are of the opinion that the Company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has granted loan to a company covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount outstanding during the year was Rs.190 million and the year-end
balance of such loan was Rs. 110 million.
(b) In our opinion, the rate of interest and other terms and conditions
on which loan has been granted to the company listed in the register
maintained under section 301 of the Companies Act, 1956 is not, prima
facie, prejudicial to the interest of the Company.
(c) In the case of loan granted to the company listed in the register
maintained under section 301, the borrower has been regular in repaying
the principal amounts as stipulated and in the payment of interest.
(d) There is no overdue amount of more than Rupees one lakh in respect
of loan granted to the company listed in the register maintained under
section 301.
(e) The Company has not taken any loans, secured or unsecured, 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, 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 the sale
of goods. Further, on the basis of our examination and according to the
information and explanations given to us, we have neither come across
nor have been informed of any major weaknesses in the aforesaid
internal control system.
(v) (a) 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 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 or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956, and exceeding Rs 5 lacs in respect of any
party during the year, have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year
within the meaning of Sections 58A and 58AA or other relevant
provisions of the Companies Act, 1956 and the rules framed there under.
(vii) In our opinion and according to the information and explanations
given to us, the Company has an internal audit system commensurate with
its size and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government, the maintenance of cost records has been prescribed
under section 209(1)(d) of the Companies Act, 1956 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 such records with a view to determine whether they are
accurate or complete.
(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, Investor Education and
Protection 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 during
the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection 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 March 2011 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of Income tax,
Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and Cess
which have not been deposited with the appropriate authorities on
account of any dispute, except as mentioned below:
Name of the Nature of Amount Amount Period to which Forum where
Statute the dues involved paid the amount dispute is
*# under relates pending
protest
Income Tax Income Tax 1,437 1,435 1989-90, High Court/
Act, 1961 1994-95 to 2007- Tax
Appellate
Tribunal/
08 (Assessment Commissio-
year) ner of
Income
Tax Appeal
Central Excise duty 84 - 1991-92 to Customs,
Excise Act, Excise and
1944 2005-06 Appellate
Tribunal
7 - 2004-05 and Commissio-
ner Appeals
2005-06 Central
Excise and
Customs
Central Sales tax 198 14 1982-83 to Sales Tax
Sales Tax 1999-00, Officer/
Act, 1956 2002-03 to 2005- Sales Tax
06,2007-08 Revision
Board /
Deputy
Commissio-
ner/ Deputy
Commissio-
ner Appeal/
Appellate
Tribunal
Uttar Sales tax 37 - 1976-77,1979- Sales Tax
Pradesh 80, 1980-81, Officer/
Trade Tax 1986-87 to 1989- Sales Tax
Act, 1948 90, 1992-93, Revision
2000-01, 2003- Board /
04 to 2005-06, Deputy
2007-08 Commissio-
ner/ Deputy
Commissio-
ner Appeal/
Additional
Commissio-
ner/
Appellate
Tribunal/
High Court
West Bengal Sales tax 17 - 1995-96,2004-
Tax Act, 1994 05
Delhi Sales Sales tax 8 - 1983-84,1985-
Act, 1975 86 to 1987-88,
1989-90, 2002-
03 to 2004-05
The Kerala Sales tax 2 - 2005-06,2006-
General 07,2008-09
Sales Tax
Act, 1963
Rajasthan Sales tax 2 - 1998-99
Sales
Tax Act, 1994
Bihar Sales Sales tax 34 5 1992-93 to
Tax Act, 1959 1999-00, 2004-
05, 2006-07
The Madhya Sales tax 38 7 2003-04 to
Pradesh 2007-08
General
Sales Tax
Act, 1958
Orissa Sales Sales tax 17 17 1995-96 to
Tax Act, 1947 1999-00
Bombay Sales Sales tax 35 - 2004-05
Tax Act, 1959
* Including disputed dues aggregating Rs. 36 million in respect of
sales tax disputes, which have been stayed by the respective
authorities.
# Excluding the demands the proceedings of which have been set aside or
remanded for reassessment by the appropriate authorities.
(x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year and in the immediately preceding financial year.
(xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to its bankers. The
Company did not have any outstanding dues to any financial institutions
or debenture-holders during the year.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) 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 guarantees for loans taken by others from
banks or financial institutions during the year.
(xvi) According to the information and explanations given to us, 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 investments.
(xviii) The Company has not made any preferential allotment of shares
to companies/firms/parties covered in the register maintained under
Section 301 of the Companies Act, 1956 during the year.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi) Based on the audit procedures performed and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the year.
For B S R & Associates
Chartered Accountants
Firm Registration No: 116231W
Kaushal Kishore
Partner
Membership No: 090075
Place : Gurgaon
Date : 11 May 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Akzo Nobel India
Limited (formerly ICI India Limited) (the Company) as at 31 March
2010 and also the Profit and Loss Account and the Cash Flow Statement
of the Company 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 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
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 (the
Order), 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
report that:
(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
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, Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the 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, to the extent applicable;
(e) on the basis of written representations received from the directors
of the Company as on 31 March 2010 and taken on record by the Board of
directors, we report that none of the directors is disqualified as on
31 March 2010 from being appointed as a director in terms of 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 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 the Balance Sheet, of the state of affairs of the
Company as at 31 March 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 referred to in paragraph 3 of the Auditors Report to the
Members of Akzo Nobel India Limited (Formerly ICI India Limited) on the
accounts for the year ended 31 March 2010
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us, the fixed assets are physically verified by the
management in accordance with a phased programme designed to cover all
items of fixed assets over a period of three years, which, in our
opinion, is reasonable having regard to the size of the Company and
nature of its fixed assets. In accordance with this programme, certain
categories of fixed assets at certain locations have been physically
verified by the management during the year and no material
discrepancies were noticed on such verification.
(c) The Company did not dispose off any substantia] part of its fixed
assets during the current year.
(ii) (a) According to the information and explanations given to us,
physical verification has been conducted by management at reasonable
intervals during the year in respect of inventory of raw materials,
stores and spare parts, work-in-process and finished goods in the
Companys possession. The existence of stocks lying with third parties
as at 31 March 2010 has been evidenced based on confirmations or
statements of account received in most cases. In our opinion, the
frequency of physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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 inventories, we
are of the opinion that the Company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) According to the information and explanations given to us, 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. Accordingly,
paragraphs 4(iii)(b) to (g) of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, 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 the sale
of goods and services. Further, on the basis of our examination and
according to the information and explanations given to us, we have
neither come across nor have been informed of any incidence of major
weaknesses in the aforesaid internal control system.
(v) (a) 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 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 or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956, and exceeding Rs 5 lacs in respect of any
party during the year. have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year
within the meaning of Sections 58A and 58AA or other relevant
provisions of the Companies Act, 1956 and the rules framed there under.
(vii) In our opinion and according to the information and explanations
given to us, the Company has an internal audit system commensurate with
its size and the nature of its business.
(viii)We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government, the maintenance of cost records has been prescribed
under section 209(1 )(d) of the Companies Act, 1956 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 such records with a view to determine whether they are
accurate or complete.
(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, Investor Education and
Protection 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 during
the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection 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 March 2010 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of Income tax,
Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and Cess
which have not been deposited with the appropriate authorities on
account of any dispute, except as mentioned below:
Name of the Statute Nature of the Amount of Amount paid Period to
which
dues dispute# under protest the amount
relates_
Income Tax Act. 1961 Income Tax 1,250 1,248 1989-90,
1994-95 to
2007-08
(Asse
ssment
year)
Central Excise
Act. 1944 Excise duty 49 - 991-92 t
o 2005-06
7 - 2004-05
and 2005-06
Central Sales
Tax Act, 1956 Sales tax 86 14 1982-83 to
2007-08
Uttar Pradesh
Trade Tax Act, Sales tax 61 - 1976-77
,1979-80,
1948 1980-81,
1986-87to
1989-90.
1992-93.
2000-01,
2003-04,
2004-05
West Bengal
Sales Tax Act, Sales tax 142 - 1995-96,
1997-98,
1994 1998-99,
1999-00,
2002-03,
2003-04
Delhi Sales Tax,
Act 1975 Sales tax 8 - 1983-84,
1985-86, to
1987-88,
1989-90,
2002-03 to
2004-05
The Madhya Pradesh Sales tax 2 - 2006-07
VAT Act, 2003
The Kerala
General Sales Sales tax 2 - 2000-01
to 2003-04,
Tax Act, 1963 2005-06,
2006-07
Rajasthan Sales
Tax Act, 1994 Sales tax 2 1998-99,
2006-07
Bihar Sales
Tax Act, 1959 Sales tax 40 5 1992-93 to
1999-00,
2004-05,
2006-07
The Madhya Pradesh
General Sales tax 31 7 1982-83 to
1999-00,
2003-04,
Sales Tax Act, 1958 2005-06
Orissa Sales
Tax Act, 1947 Sales tax 17 17 1995-96 to
1999-00
Andhra Pradesh
General Sales tax 5 - 2000-01
to 2002-03
Sales Tax Act,
1957
Name of Statute Forum where dispute is pending
Income tax Act, 1961 High Court/ Income Tax Appellate Tribunal/
Commissioner of Income Tax Appeal
Central Excise Act, 1944 Customs.
Excise and Appellate Tribunal
Commissioner Appeals of Central Excise and
Customs
Central sales tax act Sales Tax Officer/ Sales Tax Revision Board /
Deputy Commissioner/ Deputy Commissioner
(Appeals)/ Appellate Tribunal
Uttar Pradesh Trade Sales Tax Officer/ Sales Tax Revision Board /
Tax Act 1948 Deputy Commissioner/ Deputy Commissioner
(Appeals)/Additional Commissioner/Appellate
Tribunal/ High Court
* Including disputed dues aggregating Rs. 36 million which have been
stayed by the respective authorities.
# Excluding the demands the proceedings of which have been set aside or
remanded for reassessment by the appropriate authorities.
(x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year and in the immediately preceding financial year.
(xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to its bankers. The
Company did not have any outstanding dues to any financial institutions
or debenture-holders during the year.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) 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 guarantees for loans taken by others from
banks or financial institutions during the year.
(xvi)According to the information and explanations given to us, 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 investments.
(xviii) The Company has not made any preferential allotment of shares
to companies/firms/parties covered in the register maintained under
Section 301 of the Companies Act, 1956 during the year.
(xix)The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by way of public issue during
the year.
(xxi)Based on the audit procedures performed and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the year.
For B S R & Associates
Chartered Accountants
Firm Registration No: 116231W
KAUSHAL KISHORE
Gurgaon Partner
14 May 2010 Membership No.: 090075