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Auditor Report of Honeywell Automation India Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of Honeywell Automation India Limited (the "Company"), which comprise the Balance Sheet as at March 31,2015, and the Statement of Profit and Loss for the period January 1, 2014 to March 31,2015 (the "period")and Cash Flow Statement for the period then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the "Act") read with the General Circular 15/2013 dated September 13, 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 control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. 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 and other applicable authoritative pronouncements 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.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion, and to the best of our information and according to the explanations given to us, the accompanying 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 March 31,2015;

(b) in the case of the Statement of Profit and Loss, of the profit for the period ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

Report on Other Legal and Regulatory Requirements

7. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "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 a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. 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 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, 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 dealt with by this report comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

(e) On the basis of written representations received from the directors as on March 31,2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act or Section 164(2) of the Companies Act, 2013.

Annexure to Independent Auditors'' Report

Referred to in paragraph 7 of the Independent Auditors'' Report of even date to the members of Honeywell Automation India Limited on the financial statements as of and for the 15 months period ended March 31,2015

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 five 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 period and no material discrepancies have been noticed on such verification.

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the period.

ii. (a) The inventory has been physically verified by the Management during the period. In our opinion, the frequency of

verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. (a) The Company has not granted/taken any loans, secured or unsecured, to/from companies, firms or other parties

covered in the register maintained under Section 301 of the Act. Therefore, the provisions of Clause 4(iii)[(b),(c) and (d) /(f) and (g)] of the said Order are not applicable to the Company.

iv. Except for deficiencies noticed during the year with regard to purchase of inventories and for sale of goods and services in certain projects of the Company following the percentage of completion method for recognition of revenue in accordance with the Accounting Standard (AS) 7 - Construction Contracts, as stated in Note 41 to the financial statements, in respect of recording of costs incurred to correct projects, making appropriate estimates of costs to complete such projects and recognizing revenue on such projects under the percentage of completion method of accounting, for which the Management is in the process of taking remedial measures, 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 for the sale of goods and 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 neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. (a) According to the information and explanations given to us, we are of the opinion that the particulars of all

contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

vii. In our opinion, 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 of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, 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.

ix. (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 generally regular in depositing the 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, 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 wealth-tax and service-tax which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, customs duty and excise duty as at March 31,2015 which have not been deposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount (Rs. Lakhs)

Maharashtra Sales Tax Act, 1960 Central Sales Tax 103

Maharashtra Sales Tax Act, 1960 Central Sales Tax 696

Maharashtra Value Added Tax, Value Added Tax 1,955 2002

Uttar Pradesh Value Added Tax, Value Added Tax 33 2008

Gujarat Sales Tax Act, 1969 Central Sales Tax 39

Karnataka Value Added Tax Act, Central Sales Tax and 56 2003. Value Added Tax

West Bengal Value Added Tax Act, Value Added Tax 36 2003

Rajasthan Sales Tax Act, 1994 Central Sales Tax and 113 Value Added Tax

Kerala VAT Act, 2003 Central Sales Tax and 220 Value Added Tax.

Delhi Value Added Tax Act , 2004 Central Sales Tax and 358 Value Added Tax.

Jharkhand Value Added Tax Act , Value Added Tax 6 2005

Karnataka VAT Act, 2003 Central Sales Tax and 178 Value Added Tax.

Income Tax Act, 1961 Income Tax 311

Income Tax Act, 1961 Income Tax 5,978

The Central Excise Act, 1944 Excise duty, 2 including applicable penalty

The Customs Act, 1962 Penalty 6



Name of the statute Period to which the Form where the amount relates dispute is pending

Maharashtra Sales 2001- 02 Maharashtra Sales Tax Act, 1960 Tax Appellate Tribunal Maharashtra Sales 2006- 07 to Joint Commissioner Tax Act, 1960 2007-2008 of SalesTax (Appeals) and 2009-2010 Maharashtra Value 2008-09 to Joint Commissioner Added Tax, 2002 2009-2010 of Sales Tax (Appeals)

Uttar Pradesh Value 2009- 10 Joint Commissioner Added Tax, 2008 of SalesTax (Appeals)

Gujarat Sales Tax 2008- 09 Deputy Commissioner Act, 1969 of Commercial Tax (Appeal )

Karnataka Value 2008- 09 to Joint Commissioner Added Tax Act,2003 2010-2011 of Sales Tax (Appeals) West Bengal Value 2007- 08 and Joint Commissioner Added Tax Act,2003 2010-11 of Sales Tax (Appeals) Rajasthan Sales 2006-07 to Deputy Commissioner of Tax Act, 1994 2011-12 Commercial Tax (Appeal) Kerala VAT Act, 2009- 10 to Deputy Commissioner of 2003 2012-2013 Commercial Tax (Appeal) Delhi Value Added 2007-08 and Deputy Commissioner of Tax Act , 2004 2010-2011 Sales Tax (Appeals) Jharkhand Value Added 2010- 11 Deputy Commissioner of Tax Act , 2005 Sales Tax (Appeals)

Karnataka VAT Act, 2009- 10 Deputy Commissioner of 2003 Sales Tax (Appeals)

Income Tax Act, 1998-1999 High Court 1961 2001-2002

Income Tax Act, 2002-2003 and Income Tax Appellant 1961 2007- 2009 to Tribunal 2009-2010 The Central Excise 2002- 03 Customs, Excise and Act,1944 Service Tax Appellate Tribunal

The Customs Act, 2006-07 Customs, Excise and 1962 Service Tax Appellate Tribunal

x. The Company has no accumulated losses as at the end of the financial period and it has not incurred any cash losses in the financial period ended on that date or in the immediately preceding financial year.

xi. As the Company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the balance sheet date, the provisions of Clause 4(xi) of the Order are not applicable to the Company.

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of Clause 4(xii) of the Order are not applicable to the Company.

xiii. As the provisions of any special statute applicable to chit fund/ nidhi/mutual benefit fund/ societies are not applicable to the Company, the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

xv. In our opinion, and 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 during the period. Accordingly, the provisions of Clause 4(xv) of the Order are not applicable to the Company.

xvi. The Company has not raised any term loans. Accordingly, the provisions of Clause 4(xvi) of the Order are not applicable to the Company.

xvii. The Company has not raised any funds on short term basis. Accordingly, the provisions of Clause 4(xvii) of the Order are not applicable to the Company.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the period. Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the Company.

xix. The Company has not issued any debentures during the period and does not have any debentures outstanding as at the beginning of the period and at the period end. Accordingly, the provisions of Clause 4(xix) of the Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the period. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

xxi. 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, except as stated in Note 41 of the financial statements in respect of certain instances of recording of costs to incorrect projects for which the Management has taken appropriate steps, resulting in a net reduction of profit before tax of Rs. 6,729 lakhs for which appropriate entries have been subsequently passed, we have neither come across any other instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

Place : Gurgaon Date : May 25, 2015 For Price Waterhouse & Co Bangalore LLP Firm Registration Number: 007567S/S-200012 Chartered Accountants

Amit Borkar Partner Membership Number: 109846


Dec 31, 2013

1. We have audited the accompanying financial statements of Honeywell Automation India Limited (the "Company"), which comprise the Balance Sheet as at December 31, 2013 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of ''the Companies Act, 1956'' of India (the "Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. 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 and other applicable authoritative pronouncements 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.

4. An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion, and to the best of our information and according to the explanations given to us, the accompanying 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 December 31,2013;

(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.

Report on Other Legal and Regulatory Requirements

7. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "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 a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. 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 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act;

(e) On the basis of written representations received from the directors as on December 31,2013 and taken on record by the Board of Directors, none of the directors is disqualified as on December 31,2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure to Independent Auditors1 Report

Referred to in paragraph 7 of the Independent Auditors'' Report of even date to the members of Honeywell Automation India Limited on the financial statements as of and for the year ended December 31,2013.

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 five 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) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

ii. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. (a) The Company has not granted/taken any loans, secured or unsecured, to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Therefore, the provisions of Clause 4(iii)[(b),(c) and (d) /(f) and (g)] of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanation that, except for certain items of inventory which are of special nature for which suitable alternative sources do not exist, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and 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 neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

Referred to in paragraph 7 of the Independent Auditors'' Report of even date to the members of Honeywell Automation India Limited on the financial statements as of and for the year ended December 31,2013.

vi. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

vii. In our opinion, 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 of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, 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.

ix. (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 generally regular in depositing undisputed statutory dues in respect of sales tax, Income tax, professional tax and employees'' state insurance, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, investor education and protection fund, wealth tax, service tax, customs duty, excise duty and other material 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 wealth-tax, service-tax, which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, customs duty and excise duty as at December 31, 2013 which have not been deposited on account of a dispute, are as follows

Name of the statute Nature of dues Amount* Period to which the (Rs. Lakhs) amount relates

Income Tax Act, 1961 Income Tax 697 2005-2006

Income Tax Act, 1961 Income Tax 2,850 2008-2009

Maharashtra Sales CST 103 2001-02 Tax Act, 1960

Maharastra Sales CST 148 2002-03 Tax Act, 1960

Maharashtra Sales Tax Act, 1960 CST 16 2006-07

Maharastra Sales CST 112 2007-08 Tax Act, 1960

Maharashtra Value MVAT 114 2008-09 Added Tax, 2002

Gujarat Sales CST 39 2008-09 Tax Act, 1969

Kerala VAT act 2003 VAT 81 2012-13

Rajasthan Sales VAT & CST 78 2006 to 2011 Tax Act, 1994

West Bengal Value VAT 260 2007-08 to Added Tax Act, 2003 2010-11

Uttar Pradesh VAT 91 2007-08

Utter Pradesh VAT 143 2009-10

The Central Excise Excise duty, including 2 2002-03 Act, 1944 applicable penalty

The Customs Penalty 6 2006-07 Act, 1962



Name of the Status Forum where the dispute is pending

Income Tax Act, 1961 ITAT

Income Tax Act, 1961 ITAT

Magarastra Sales Tax Maharashtra Sales Tax Act, 1960 Appellate Tribunal.

Maharastra Sales Tax Joint Commissioner of Sales Act, 1960 Tax (Appeals)

Maharastra Sales Tax Joint Commissioner of Sales Act, 1960 Tax (Appeals)

Maharastra Sales Tax Joint Commissioner of Sales Act, 1960 Tax (Appeals)

Maharastrs Value Deputy Commissioner of Sales Tax (Appeals) Added Tax Act, 2002

Gujarat Sales Tax Act, Deputy Commissioner of 1969 Commercial Tax (Appeal IV)

Kerala VAT act 2003 Deputy Commissioner of Sales Tax (Appeals)

Rajasthan Sales Tax Deputy Commissioner of Sales Act, 1994 Tax (Appeals)

West Bengal Value Added Joint Commissioner of Sales Tax Act, 2003 Tax (Appeals)

Uttar Pradesh Joint Commissioner of Sales Tax (Appeals)

Uttar Pradesh Joint Commissioner of Sales Tax (Appeals)

The Central Excise Customs, Excise and Service Tax Appellate Act, 1944 Tribunal

The Customs Act, 1962 Customs, Excise and Service Tax Appellate Tribunal

* Net of amount paid under protest or otherwise

Referred to in paragraph 7 of the Independent Auditors'' Report of even date to the members of Honeywell Automation India Limited on the financial statements as of and for the year ended December 31,2013.

x. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

xi. As the Company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the balance sheet date, the provisions of Clause 4(xi) of the Order are not applicable to the Company.

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of Clause 4(xii) of the Order are not applicable to the Company.

xiii. As the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the Company, the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

xv. In our opinion, and 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 during the year. Accordingly, the provisions of Clause 4(xv) of the Order are not applicable to the Company.

xvi. The Company has not raised any term loans. Accordingly, the provisions of Clause 4(xvi) of the Order are not applicable to the Company.

xvii. The Company has not raised any loans on short term basis. Accordingly, the provisions of Clause 4(xvii) of the Order are not applicable to the Company.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the Company.

xix. The Company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning of the year and at the year end. Accordingly, the provisions of Clause 4(xix) of the Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

xxi. 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 on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For Price Waterhouse & Co., Bangalore

Firm Registration Number: FRN: 007567S

Chartered Accountants

Jeetendra Mirchandani

Place: Gurgaon Partner

Date : February 5,2014 Membership Number: 48125


Dec 31, 2012

1. We have audited the attached Balance Sheet of Honeywell Automation India Limited (the "Company") as at December 31, 2012, and the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of ''The Companies Act, 1956'' of India (the ''Act'') 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 a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 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 dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on December 31, 2012 and taken on record by the Board of Directors, none of the directors is disqualified as on December 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, 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 December 31, 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.

Referred to in paragraph 3 of the Auditors'' Report of even date to the members of Honeywell Automation India Limited on the financial statements as of and for the year ended December 31, 2012.

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 five 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) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

ii. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. (a) The Company has not granted/taken any loans, secured or unsecured, to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Therefore, the provisions of Clause 4(iii)[(b),(c) and (d) /(f) and (g)] of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanation that, except for certain items of inventory which are of special nature for which suitable alternative sources do not exist, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and 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 neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

vii. In our opinion, 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 of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, 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.

ix. (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 generally regular in depositing undisputed statutory dues in respect of Income tax, employees'' state insurance and sales tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, wealth tax, service tax, customs duty, excise duty 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 wealth-tax, service-tax, which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, customs duty and excise duty as at December 31, 2012 which have not been deposited on account of a dispute, are as follows

Name of the statute Nature of dues Amount* (Rs in lakhs)

The Central Excise Excise duty, including 3 Act, 1944 applicable penalty

The Customs Act, Penalty 8 1962

Maharashtra Sales Sales Tax / Value Added 103 Tax Act, 1960 Tax, including applicable interest

Maharashtra Sales Sales Tax / Value Added 148 Tax Act, 1960 Tax, including applicable interest

Maharashtra Value Value Added Tax & 16 Added Tax, 2002 Central Sales Tax

Maharashtra Value Value Added Tax & 112 Added Tax, 2002 Central Sales Tax

Maharashtra Value Value Added Tax & 321 Added Tax, 2002 Central Sales Tax

Uttar Pradesh Value Added Tax & 11 Central Sales Tax

Uttar Pradesh Value Added Tax & 91 Central Sales Tax

Uttar Pradesh Value Added Tax & 132 Central Sales Tax

Gujarat Sales Tax Sales Tax / Value Added 36 Act, 1969 Tax, including applicable interest

West Bengal Value Value Added Tax 19 Added Tax Act, 2003

Rajasthan Sales Tax Sales Tax / Value Added 45 Act, 1994 Tax, including applicable interest

Income-tax Act, 1961 Income-tax including 2,273 applicable interest

Income-tax Act, 1961 Income-tax including 472 applicable interest

Name of the Statute Financial Year to which Forum where the dispute is the amount relates pending

The Central Excise Act,1944 2002-03 Customs, Excise and Service Tax Appellate Tribunal

The Customs Act, 1962 2006-07 Customs, Excise and Service Tax Appellate Tribunal

Maharashtra Sales Tax Act, 1960 2000-01 to Maharashtra Sales 2001-02 Tax Appellate Tribunal

Maharashtra Sales Tax Act, 1960 2002-03 Joint Commissioner of Sales Tax (Appeals)

Maharashtra value Added Tax,2002 2006-07 Joint Commissioner of Sales Tax (Appeals)

Maharashtra Value Added Tax, 2002 2007-08 Joint Commissioner of Sales Tax (Appeals)

Maharashtra Value Added Tax, 2002 2008-09 Deputy Commissioner of Sales Tax (Appeals)

Uttar Pradesh 2005-06 Joint Commissioner of Sales Tax (Appeals)

Uttar Pradesh 2007-08 Joint Commissioner of Sales Tax (Appeals)

Uttar Pradesh 2009-10 Joint Commissioner of Sales Tax (Appeals)

Gujarat Sales Tax Act,1969 2000-01 & Assistant Commissioner of 2001-02 Sales Tax (Appeals)

West Bengal Value Added Tax Act, 2003 2005-06 to Assistant Commissioner of 2006-07 Sales Tax (Appeals)

Rajasthan Sales Tax Act, 1994 2006-07 to Deputy commissioner of Sales 2008-09 tax (appeals)

Income-tax Act, 1961 2005-2006 Income Tax Appellate Tribunal

Income-tax Act, 1961 2007-2008 Income Tax Appellate Tribunal

* Net of amounts paid under protest or otherwise

x. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

xi. As the Company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the balance sheet date, the provisions of Clause 4(xi) of the Order are not applicable to the Company.

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of Clause 4(xii) of the Order are not applicable to the Company.

xiii. As the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the Company, the provisions of Clause 4(xiii) of the Order are not applicable to the Company.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company.

xv. In our opinion, and 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 during the year. Accordingly, the provisions of Clause 4(xv) of the Order are not applicable to the Company.

xvi. The Company has not raised any term loans. Accordingly, the provisions of Clause 4(xvi) of the Order are not applicable to the Company.

xvii. The Company has not raised any loans on short term basis. Accordingly, the provisions of Clause 4(xvii) of the Order are not applicable to the Company.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the Company.

xix. The Company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning of the year and at the year end. Accordingly, the provisions of Clause 4(xix) of the Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

xxi. 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 on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For Price Waterhouse & Co., Bangalore

Firm Registration Number: FRN: 007567S

Chartered Accountants

Jeetendra Mirchandani

Place : Pune Partner

Date : February 6, 2013 Membership Number: 48125


Dec 31, 2011

1. We have audited the attached Balance Sheet of Honeywell Automation India Limited (the "Company") as at December 31, 2011, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956' of India (the 'Act') 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 a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 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 Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on December 31, 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on December 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, 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 December 31, 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.

Referred to in paragraph 3 of the Auditors' Report of even date to the members of Honeywell Automation India Limited on the financial statements for the year ended December 31, 2011

1. (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 five 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 between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(c) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(d) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) 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 Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and 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 neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. 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 of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, 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.

9. (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 generally regular in depositing the 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 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, the particulars of dues of income-tax, sales-tax, customs duty, excise duty and cess as at December 31, 2011 which have not been deposited on account of a dispute, are as follows:

Name of the statute Nature of dues Amount* Financial Year to which Forum where the dispute is pending (Rs.'OOO) the amount relates

The Central Excise Excise duty, including 1,899 2002-03 Customs, Excise and Service Tax Act, 1944 applicable penalty Appellate Tribunal

The Customs Act, Penalty 753 2006-07 Customs, Excise and Service Tax 1962 Appellate Tribunal

Maha rashtra Sales Sales Tax / Value Added Tax, 15,097 1999-00 to 2001-02 Maharashtra Sales Tax Tax Act, 1960 including applicable interest Appellate Tribunal

Maha rashtra Sales Sales Tax 9,974 2005-06 Deputy Commissioner of Sales Tax Tax Act, 1960 (MVAT)

Maha rashtra Value Value Added Tax & Central 10,483 2007-08 Joint Commissioner of Sales Tax Added Tax, 2002 Sales Tax (Appeals)

Karnataka Value Value Added Tax 11,034 2006-07 and 2007-08 JCCT (Appeal), Karnataka Added Tax,2003

Gujarat Sales Tax Sales Tax / Value Added Tax, 900 2000-01 and 2001-02 Assistant Commissioner of Sales Tax Act, 1969 including applicable interest (Appeals)

West Bengal Value Value Added Tax 1,925 2005-06 to 2006-07 Assistant Commissioner of Sales Tax Added Tax Act, 2003 (Appeals)

Rajasthan Sales Tax Entry Tax 867 2002-2003 High Court, Rajasthan Act, 1994 4,130 2008-2009

Income- tax Act, 1961 Income- tax including 281,481 2005-2006 Income Tax Appellate Tribunal applicable interest

Income- tax Act, 1961 Income- tax including 137,066 2006-2007 Commissioner of Income Tax (Appeals) applicable interest

* Net of amounts paid under protest or otherwise

10. The Company has no accumulated losses as at December 31, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. 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 dues to any financial institution or bank or debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and 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 during the year.

16. The Company has not obtained any term loans.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issues during the year.

21. 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 fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For Price Waterhouse & Co.

Firm Registration Number: 007567S

Chartered Accountants

Jeetendra Mirchandani

Place : Mumbai Partner

Date : February 9, 2012 Membership No. 48125


Dec 31, 2009

1. We have audited the attached Balance Sheet of Honeywell Automation India Limited(the "Company"), as at December 31, 2009, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) 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 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 in paragraph 3 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 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 Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on December 31,2009 and taken on record by the Board of Directors, none of the directors is disqualified as on December 31,2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act 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 December 31,2009;

(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.

[Referred to in paragraph 3 of the Auditors Report of even date to the members of Honeywell Automation India Limited on the financial statements for the year ended December 31, 2009]

1. (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 five 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 between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) 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 Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and 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 neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. 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 of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act 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.

9. (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 (generally) regular in depositing the 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 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, the particulars of dues of income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess as at December 31, 2009 which have not been deposited on account of a dispute, are as follows :

Name of the statute Nature of dues Amount* (Rs.OOO)

The Central Excise Excise duty, including 1,899 Act, 1944 applicable penalty

The Customs Act, Penalty 753 1962

Maharashtra Sales Sales Tax / Value Added Tax, 20,737 Tax Act, 1960 including applicable interest

Maharashtra Sales Sales Tax, including applicable 18,724 Tax Act, 1960 interest

Maharashtra Sales Sales Tax / Value Added Tax, 25,922 Tax Act, 1960 including applicable interest

Maharashtra Sales Sales Tax 4,642 Tax Act, 1960

Gujarat Sales Sales Tax / Value Added Tax, 900 Tax Act, 1969 including applicable interest

Uttar Pradesh State Inter-State Works Contract Tax 15,466 Trade Tax Act, 1948 and Uttar Pradesh Value Added Tax Act, 2008

West Bengal Value Value Added Tax 1,925 Added Tax Act, 2003

Kerala Value Added Inter-State Works Contract Tax 25,816 Tax Act, 2003

Rajashtan Sales Tax Entry Tax 867 Act, 1994 4,130

Income-tax Act, 1961 Penalty 53,481

Income-tax Act, 1961 Income-tax including applicable 33,542 interest

Name of the Statue Financial Year to which Forum where the dispute is pending the amount relates

The Central Excise Act, 1944 2002-03 Customs, Excise and Service Tax Appellate Tribunal

The Customs Act, 1962 2006-07 Customs, Excise and Service Tax Appellate Tribunal

Maharashtra Sales Tax Act, 1960 1999-00 to Maharashtra Sales Tax 2001 -02 Appellate Tribunal

Maharashtra Sales Tax Act, 1960 2002-03 Deputy Commissioner of Sales Tax (Appeals)

Maharashtra Sales Tax Act, 1960 2004-05 Joint Commissioner of Sales Tax (Appeals)

Maharashtra Sales Tax Act, 1960 2005-06 Deputy Commissioner of Sales Tax (MVAT)

Gujarat Sales Tax Act, 1969 2000-01 Assistant Commissioner of Sales Tax and 2001 -02 (Appeals)

Uttar Pradesh State Trade Tax Act, 1948 and Uttar Pradesh Value Added Tax

Act, 2008 2004-05 to Joint Commissioner of Sales Tax 2007-08 (Appeals)

West Bengal Value Added Tax Act, 2003 2005-06 to Assistant Commissioner of Sales Tax 2006-07 (Appeals)

Kerala Value Added Tax Act, 2003 2009-2010 Deputy Commissioner of Sales Tax (Appeals)

Rajashtan Sales Tax Act, 1994 2002-2003 High Court, Rajasthan 2008-2009

Income-tax Act, 1961 1998-99, Commissioner of Income Tax (Appeals).

1999-00 and Stay against the outstanding demand 2001 -02 has been granted to the Company Income -tax Act, 1961 2004-05 Commissioner of Income Tax (Appeals)

"Net of amounts paid under protest or otherwise

10. The Company has no accumulated losses as at December 31,2009 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. 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 dues to any financial institution or bank or debenture holders as at the Balance Sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and 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 during the year.

16. The Company has not obtained any term loans.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issues during the year.

21. 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 fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

Jeetendra Mirchandani Partner

Membership No. F 48125

For and on behalf of Place : Mumbai Price Waterhouse & Co.

Date : February 1, 2010 Chartered Accountants



 
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