Mar 31, 2019
Report On The Audit Of Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Rane Brake Lining Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2019, the Statement of Profit and Loss (including Other Comprehensive Income) Statement of Changes in Equity and Cash Flows Statement for the year then ended, and notes to the financial statements including a summary of significant accounting policies and other explanatory information(herein after referred to as Standalone Financial Statements)
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 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 March 31, 2019, and its profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
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 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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our report.
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Boardâs Report including Annexures to Boardâs Report, Corporate Governance and Corporate Information, but does not include the standalone 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 Standalone Financial Statements
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 standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Board of Directors 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 the Board of Directors 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 Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
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 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.
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 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 Companies Act, 2013, 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 managementâs 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 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.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
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.
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.
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
1. 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 Companies Act, 2013, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable
2. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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.
c. The Balance Sheet, the Statement of Profit and Loss, including other comprehensive income, the Statement of Changes in Equity and the Cash Flow Statement 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, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 from being appointed as a director in terms of Section 164(2) of the Act.
f. 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 âAnnexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting
g. With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
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, 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 38 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
(iii) there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
(i) a. The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
b. We are informed that fixed assets have been physically verified by the Management at reasonable intervals and that no material discrepancies were noticed on such verification
c. According to the information and explanations given to us and based on the examination of the records of the company including confirmation received from banks in respect of title deeds deposited with them, wherever applicable, and also having regard to legal opinions received in two cases, we report that the title deeds of immovable properties are held in the name of the company.
(ii) We are informed that the physical verification of inventory has been conducted by the management at reasonable intervals and no material discrepancies were noticed on such verification
(iii) The Company has not granted any loans, secured or unsecured, to companies/firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly reporting under Clause 3(iii) of the Order is not applicable to the company.
(iv) According to the information and explanations given to us and based on the records of the company examined by us, the company has not made any investments, granted any loans or given any security or guarantee for which the provisions of section 185 and 186 of the Act are applicable.
(v) The company has not accepted any deposit from the public during the year. Accordingly reporting under Clause 3(iii) of the Order is not applicable to the company.
(vi) The Central Government has prescribed maintenance of cost records under section 148(1) of the Act in respect of certain products manufactured by the company. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) a. As per the information and explanations furnished to us, and according to our examination of the records of the Company, the Company has been regular in depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, goods and service tax, duty of customs, cess and other material statutory dues, as applicable to the Company with the appropriate authorities during the year and no undisputed amounts in respect of material statutory dues were in arrears as at March 31, 2019 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 based on the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise and value added tax that have not been deposited on account of any dispute as at March 31, 2019 are as follows:
Statute |
Nature of dues |
Amount (Rs. in Cr) |
Period to which the amount relates |
Forum where the dispute is pending |
Income Tax Act, 1961 |
Income Tax |
0.48 |
April 2001 to March 2002, April 2003 to March 2004 |
High Court of Judicature, Madras |
Income Tax Act, 1961 |
Income Tax |
0.34 |
April 2004 to March 2005 |
Income Tax Appellate Tribunal, Chennai |
Income Tax Act, 1961 |
Income Tax |
3.46 |
April 2006 to March 2008, April 2010 to March 2013, April 2014 to March 2017 |
Commissioner of income (Appeals), Chennai |
Central Sales Tax Act, 1956 |
Sales Tax |
0.34 |
April 2004 to March 2005, April 2008 to March 2012 |
Sales Tax Appellate Tribunal, Hyderabad |
Central Sales Tax Act, 1956 |
Sales Tax |
0.24 |
April 2008 to March 2009 and April 2011 to March 2012 |
Puducherry Value Added Tax Appellate Tribunal, Puducherry |
Central Sales Tax Act, 1956 |
Sales Tax |
0.08 |
April 2010 to March 2011 and April 2013 to March 2014 |
The Joint Commissioner of Sales Tax (Appeal), Pune |
Central Sales Tax Act, 1956 |
Sales Tax |
1.21 |
April 2013 to March 2015 |
The Value Added Tax Officer, Ward-204, Delhi |
Central Sales Tax Act, 1956 |
Sales Tax |
0.05 |
April 2014 to March 2016 |
The Commercial Tax Officer, Special Circle-III, Jaipur |
Puducherry Value Added Tax Act, 2007 |
Sales Tax |
0.01 |
April 2008 to March 2009 and April 2011 to March 2012 |
Puducherry Value Added Tax Appellate Tribunal, Puducherry |
Delhi Value Added Tax Act, 2004 |
Sales Tax |
3.49 |
April 2014 to March 2015 |
The Value Added Tax Officer, Ward-204, Delhi |
Excise Duty |
||||
Central Excise Act , 1944 |
(including interest and penalty) |
0.05 |
March 2009 to April 2010 |
Customs, Excise And Service Tax Appellate Tribunal, Chennai |
Service Tax |
||||
Finance Act, 1994 |
(including interest and penalty) |
3.80 |
April 2006 to June 2017 |
Customs, Excise And Service Tax Appellate Tribunal, Chennai |
(viii) I n our opinion and according to the information and explanations given to us and based on the records of the Company examined by us, the Company has not defaulted in repayment of loans to banks. The Company has neither taken any loans or borrowings from any financial institution or government during the year nor has it issued any debentures.
(ix) According to the information and explanations given to us and based on the records of the Company examined by us, no monies were raised by way of initial public offer or further public offer (including debt instruments) or by way of term loans during the year. Accordingly reporting under Clause 3(ix) of the Order is 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 generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instances of material fraud by the company or on the company by its officers or employees which has been, noticed or reported during the year, nor have we been informed of any such case by the management.
(xi) According to the information and explanations given to us and based on the records of the Company examined by us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company. Accordingly reporting under Clause 3(xii) of the Order is not applicable to the company.
(xiii) According to the information and explanations given to us and based on the records of the Company examined by us, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and the details thereof have been duly disclosed in Note 33 to the standalone financial statements as required by the applicable accounting standard.
(xiv) According to the information and explanations given to us and based the records of the Company examined by us, the company has not made any preferential allotment/private placement of shares or fully or partially convertible debentures during the year under review and hence the requirements of Section 42 of the Act are not Applicable.
(xv) According to the information and explanations given to us and based the records of the Company examined by us, the company has not entered into any non-cash transactions with directors or persons connected with the directors. Accordingly, the reporting requirements under clause 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us and the records of the Company examined by us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting requirement under clause 3(xvi) of the Order is not applicable.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Rane Brake Lining Limited (âthe Companyâ) as of March 31, 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
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. 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 Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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.
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 auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
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 over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 companyâs 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
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
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 March 31, 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.
For Varma & Varma
Chartered Accountants
FRN004532S
P R Prasanna Varma
Place : Chennai Partner
Date : May 22, 2019 M No.25854
Mar 31, 2018
INDEPENDENT AUDITORSâ REPORT
To The Members Rane Brake Lining Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone financial statements of Rane Brake Lining 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
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 standalone Ind AS financial statements that give a true and fair view of the State of Affairs (financial position), profit or loss (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 (Ind AS) prescribed 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
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 auditorâs 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 Companyâs 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 Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.
Opinion
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 (financial position) of the Company as at 31 March, 2018 and its Profit (financial performance including Other Comprehensive Income), its cash flows and the changes in equity for the year ended on that date.
Other Matters
The comparative financial information of the Company for the year ended 31 March 2017 and the transition date opening balance sheet as at 01 April 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006, audited by us and our report for the year ended 31 March 2017 and 31 March 2016, dated 17 May, 2017 and 23 May, 2016 respectively expressed an unmodified opinion on those standalone audited financial statements, which have been restated to comply with Ind AS. Adjustments to the said comparative financial information 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 modified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
1. 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 Aâ a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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;
(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 prescribed 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; and
(f) 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 âAnnexure Bâ.
(g) 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, 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 Ind AS financial statements - Refer Note 38 to the standalone Ind AS 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.
REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING REPORT ON âOTHER LEGAL AND REGULATORY REQUIREMENTSâ OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF RANE BRAKE LINING LIMITED 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. We are informed that fixed assets have been physically verified by the Management at reasonable intervals and that no material discrepancies were noticed on such verification.
c. According to the information and explanations given to us and based on the examination of the records of the company and also having regard to the confirmation received from banks in respect of title deeds deposited with them wherever applicable and also having regard to the legal opinion received in a case, we report that the title deeds of immovable properties are held in the name of the company.
(ii) We are informed that the physical verification of inventory has been conducted by the management at reasonable intervals and no material discrepancies were noticed on such verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies / firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013, and hence, the relative reporting requirements under Clause 4(iii) of the Order is not commented upon.
(iv) According to the information and explanations given to us and based on the records of the company examined by us, the company has not made any investments, granted any loans or given any security or guarantee for which the provisions of section 185 and 186 of the Act are applicable.
(v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposit from the public during the year.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) a. As per the information and explanations furnished to
us, and according to our examination of the records of the Company, the Company has been regular in depositing the undisputed statutory dues including provident fund, employees state insurance, income tax, goods and service tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable to the Company with the appropriate authorities during the year and no undisputed amounts in respect of material statutory dues were in arrears as at 31 March, 2018 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 based on the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise and value added tax that have not been deposited on account of any dispute as at 31 March, 2018 are as follows:
Statute |
Nature of dues |
Amount (Rs, in crores) |
Period to which the amount relates |
Forum where the dispute is pending |
Income Tax Act, 1961 |
Income Tax |
0.48 |
April 2000 to March 2002, April 2003 to March 2004 |
High Court of Judicature, Madras |
Income Tax Act, 1961 |
Income Tax |
0.74 |
April 2004 to March 2005, April 2006 to March 2008 |
Income Tax Appellate Tribunal, Chennai |
Income Tax Act, 1961 |
Income Tax |
2.60 |
April 2010 to March 2013, April 2014 to March 2015 |
Commissioner of income (Appeals), Chennai |
Central Sales Tax Act, 1956 |
Sales Tax |
0.33 |
April 2004 to March 2005, April 2008 to March 2011 |
Sales Tax Appellate Tribunal, Hyderabad |
Central Sales Tax Act, 1956 |
Sales Tax |
0.01 |
April 2011 to March 2012 |
Joint Commissioner (CT)- II, Hyderabad |
Central Sales Tax Act, 1956 |
Sales Tax |
0.24 |
April 2008 to March 2009 and April 2011 to March 2012 |
Puducherry Value Added Tax Appellate Tribunal, Puducherry |
Central Sales Tax Act, 1956 |
Sales Tax |
0.01 |
April 2010 to March 2011 |
The Joint Commissioner of Sales Tax (Appeal), Pune |
Statute |
Nature of dues |
Amount (Rs, in crores) |
Period to which the amount relates |
Forum where the dispute is pending |
Puducherry Value Added Tax Act, 2007 |
Sales Tax |
0.01 |
April 2008 to March 2009 and April 2011 to March 2012 |
Puducherry Value Added Tax Appellate Tribunal, Puducherry |
Kerala Value Added Tax, 2003 |
Sales Tax |
0.03 |
April 2010 to March 2012 |
The Deputy Commissioner (Appeals-I), Ernakulam |
Central Excise Act , 1944 |
Excise Duty (including interest and penalty) |
0.04 |
March 2009 to April 2010 |
Customs, Excise And Service Tax Appellate Tribunal, Chennai |
Finance Act, 1994 |
Service Tax (including interest and penalty |
0.70 |
August 2002 to March 2004, April 2006 to March 2008, April 2010 to March 2011 and April 2016 to March 2017 |
Customs, Excise And Service Tax Appellate Tribunal, Chennai |
Finance Act, 1994 |
Service Tax (including interest and penalty) |
0.20 |
July 2012 to March 2015, April 2015 to March 2017 |
Commissioner of Central Excise (Appeals), Chennai |
Finance Act, 1994 |
Service Tax (including interest and penalty) |
0.27 |
February 2009 to March 2011, April 2015 to January 2016 |
Commissioner of Central Excise (Appeals), Puducherry |
(viii) In our opinion and according to the information and explanations given to us and based on the records of the Company examined by us, the Company has not defaulted in repayment of loans to banks. The Company has neither taken any loans or borrowings from any financial institution or government during the year nor has it issued any debentures.
(ix) According to the information and explanations given to us and based on the records of the Company examined by us, no monies were raised by way of initial public offer or further public offer (including debt instruments) or by way of term loans during the year and hence relative reporting requirements under clause 3(ix) of the Order are not commented upon.
(x) During the course of our examination of the books and records of the company carried out in accordance with generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instances of material fraud by the company or on the company by its officers or employees which has been, noticed or reported during the year, nor have we been informed of any such case by the management.
(xi) According to the information and explanations given to us and based on the records of the Company examined by us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company. Accordingly, the reporting requirements under clause 3(xii) of the Order are not applicable.
(xiii) According to the information and explanations given to us and based on the records of the Company examined by us, transactions with the related parties are in compliance with
sections 177 and 188 of the Act where applicable and the details thereof have been duly disclosed in Note 33 to the standalone Ind AS financial statements as required by the applicable accounting standard.
(xiv) According to the information and explanations given to us and based on the records of the Company examined by us, the company has not made any preferential allotment / private placement of shares or fully or partially convertible debentures during the year under review and hence the requirements of Section 42 of the Act are not applicable.
(xv) According to the information and explanations given to us and based on the records of the Company examined by us, the company has not entered into any non-cash transactions with directors or persons connected with the directors. Accordingly, the reporting requirements under clause 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us and the records of the Company examined by us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting requirement under clause 3(xvi) of the Order is not applicable.
REFERRED TO IN PARAGRAPH 2(f) UNDER THE HEADING âREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSâ OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF RANE BRAKE LINING LIMITED 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 Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Rane Brake Lining Limited (âthe Companyâ) as of 31 March, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
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. 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 Companies Act, 2013.
Auditorsâ Responsibility
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, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. 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.
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 auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
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 over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
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
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
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.
For VARMA & VARMA
Chartered Accountants
Firm Registration Number : 004532S
P R PRASANNA VARMA
Chennai Partner
13 April, 2018 Membership Number : 025854
Mar 31, 2017
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Rane Brake Lining Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2017, Profit and Loss Statement and 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 Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Actâ) 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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 specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement,
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 March 31, 2017 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, 2016 ("the Orderâ) issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act, we give in the "Annexure Aâ a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 Profit and Loss Statement and the Cash flow Statement 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, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the
Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act; and
(f) 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 Bâ.
(g) 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-23 to the standalone 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.
iv. The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 9th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation, we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management - Refer Note No. 40 to Financial Statements.
Referred to in Paragraph 1 under the heading "Report on Other Legal And Regulatory Requirementsâ of our Independent Audit Report of even date on the Standalone Financial Statements of Rane Brake Lining Limited for the year ended March 31, 2017.
(i) a. The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
b. We are informed that fixed assets have been physically verified by the Management at reasonable intervals and that no material discrepancies were noticed on such verification.
c. According to the information and explanations given to us and based on the examination of the records of the company and also having regard to the confirmation received from banks in respect of title deeds deposited with them wherever applicable and also legal opinion received in a case, we report that the title deeds of immovable properties are held in the name of the company.
(ii) We are informed that the physical verification of inventory has been conducted by the management at reasonable intervals and no material discrepancies were noticed on such verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies / firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013, and hence, the relative reporting requirements under Clause 4(iii) of the Order is not commented upon.
(iv) According to the information and explanations given to us and based on the records of the company examined by us, the company has not made any investments, granted any loans or given any security or guarantee for which the provisions of section 185 and 186 of the Act are applicable.
(v) The Company has not accepted any deposit from the public during the year In respect of deposits accepted by the Company in the earlier years and repaid during the current year, the company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder.
(vi) To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act for the company.
(vii) a. As per the information and explanations furnished to us, and according to our examination of the records of the Company, the Company has been 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 to the Company with the appropriate authorities during the year and no undisputed amounts in respect of material statutory dues were in arrears as at March 31, 2017 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 based on the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise and value added tax that have not been deposited on account of any dispute as at March 31, 2017 are as follows:
Statute |
Nature of dues |
Amount (Rs. in Cr) |
Period to which the amount relates |
Forum where the dispute is pending |
Income Tax Act, 1961 |
Income Tax |
1.20 |
April 2000 to March 2002, April 2004 to March 2005 and April 2006 to March 2007 |
Income Tax Appellate Tribunal, Chennai |
Income Tax Act, 1961 |
Income Tax |
0.02 |
April 2003 to March 2004 |
High Court of Judicature, Madras |
Income Tax Act, 1961 |
Income Tax |
0.44 |
April 2010 to March 2013 |
Commissioner of Income Tax (Appeals), Chennai |
Central Sales Tax Act, 1956 |
Sales Tax |
0.34 |
April 2004 to March 2005, April 2008 to March 2011 |
Sales Tax Appellate Tribunal, Hyderabad |
Statute |
Nature of dues |
Amount (Rs. in Cr) |
Period to which the amount relates |
Forum where the dispute is pending |
Central Sales Tax Act, 1956 |
Sales Tax |
0.01 |
April 2011 to March 2012 |
Joint Commissioner (CT)- II, Hyderabad |
Puducherry Value Added Tax Act, 2007 |
Sales Tax |
0.01 |
April 2008 to March 2009 and April 2011 to March 2012 |
Puducherry Value Added Tax Appellate Tribunal, Puducherry |
Central Sales Tax Act, 1956 |
Sales Tax |
0.24 |
April 2008 to March 2009 and April 2011 to March 2012 |
Puducherry Value Added Tax Appellate Tribunal, Puducherry |
Kerala Value Added Tax, 2003 |
Sales Tax |
0.01 |
April 2010 to March 2011 |
The Deputy Commissioner (Appeals-I), Ernakulam |
Maharashtra Value Added Tax Act, 2002 |
Sales Tax |
0.03 |
April 2008 to March 2009 |
The Joint Commissioner of Sales Tax (Appeal), Pune |
Central Sales Tax Act, 1956 |
Sales Tax |
0.13 |
April 2008 to March 2009 and The Joint Commissioner of Sales April 2010 to March 2011 Tax (Appeal], Pune |
|
Central Excise Act , 1944 |
Excise Duty (including interest and penalty) |
0.86 |
April 2001 to March 2005, March 2009 to April 2010 and December 2011 |
Customs, Excise And Service Tax Appellate Tribunal, Chennai |
Finance Act, 1994 |
Service Tax (including interest and penalty |
0.82 |
September 2004 to May 2008, April 2010 to March 2011 and August 2012 |
Customs, Excise And Service Tax Appellate Tribunal, Chennai |
Finance Act, 1994 |
Service Tax (including interest and penalty) |
0.73 |
April 2013 to March 2016 |
Commissioner of Central Excise (Appeals), Chennai |
viii. I n our opinion and according to the information and explanations given to us and based on the records of the Company examined by us, the Company has not defaulted in repayment of loans to banks and government. The Company has neither taken any loans or borrowings from any financial institution nor has issued any debentures.
ix. According to the information and explanations given to us and based on the records of the Company examined by us, no monies were raised by way of initial public offer or further public offer (including debt instruments) or by way of term loans during the year and hence relative reporting requirements under clause 3(ix) of the Order are not commented upon.
x. During the course of our examination of the books and records of the company carried out in accordance with generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instances of material fraud by the company or on the company by its officers or employees which has been, noticed or reported during the year, nor have we been informed of any such case by the management.
xi. According to the information and explanations given to us and based on the records of the Company examined by us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. The Company is not a Nidhi Company. Accordingly, the reporting requirements under clause 3(xii) of the Order are not applicable.
xiii. According to the information and explanations given to us and based on the records of the Company examined by us, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and the details thereof have been duly disclosed in Note 38 to the standalone financial statements as required by the applicable accounting standard.
xiv. According to the information and explanations given to us and based the records of the Company examined by us, the company has not made any preferential allotment / private placement of shares or fully or partially convertible debentures during the year under review and hence the requirements of Section 42 of the Act are not Applicable.
xv. According to the information and explanations given to us and based the records of the Company examined by us, the company has not entered into any non-cash transactions with directors or persons connected with the directors. Accordingly, the reporting requirements under clause 3(xv) of the Order is not applicable.
xvi. According to the information and explanations given to us and the records of the Company examined by us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting requirement under clause 3(xvi) of the Order is not applicable.
For VARMA & VARMA
Chartered Accountants
Firm Registration Number : 004532S
P R PRASANNA VARMA
Place : Chennai Partner
Date : May 17, 2017 Membership Number : 025854
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Rane Brake Lining Limited (''the Company''), which comprise the Balance
Sheet as at March 31, 2016 the Profit and Loss Statement and the Cash
flow Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013("the Act") with respect to
the preparation of these 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 of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgements
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
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. 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 March 31, 2016 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, 2016 ("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,
a statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
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;
(c) The Balance Sheet, the Profit and Loss Statement and the Cash flow
Statement 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, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
from being appointed as a director in terms of Section 164(2) of the
Act; and
(f) With respect to the adequacy of internal financial controls over
financial reporting of the Company and the operating effectiveness of
such controls refer to our separate report in Annexure ''B''.
(g) 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-23 to the
standalone 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.
Referred to in Paragraph 1 under the heading "Report on Other Legal and
Regulatory Requirements" of our Independent Audit Report of even date
on the Standalone Financial Statements of Rane Brake Lining Limited for
the year ended March 31, 2016
(i) a. The company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. We are informed that fixed assets have been physically verified by
the Management at reasonable intervals and that no material
discrepancies were noticed on such verification.
c. According to the information and explanations given to us and based
on the examination of the records of the company and also having regard
to the confirmation received from banks in respect of title deeds
deposited with them wherever applicable and also legal opinion received
in a case, we report that the title deeds of immovable properties are
held in the name of the company.
(ii) We are informed that the physical verification of inventory has
been conducted by the management at reasonable intervals and no
material discrepancies were noticed on such verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies/firms or other parties covered in the register maintained
under section 189 of the Companies Act, 2013. In respect of an interest
free unsecured loan given to a party in the earlier years(and repaid
during the year); we report that:
a. Since no fresh loan was granted or renewed during the year, the
reporting requirements of clause 3(iii) (a) of the Order are not
commented upon;
b. In our opinion, the party has been regular in repayment of the
principal amount as per the revised terms; and
c. Since the loan has been repaid in full during the year, there are
no overdue amounts as at the year end.
(iv) According to the information and explanations given to us and
based on the records of the company examined by us, the company has not
made any investments, granted any loans or given any security for which
the provisions of section 185 and 186 of the Act are applicable.
(v) The company has not accepted any deposit from the public during the
year. In respect of deposits accepted by the company in the earlier
years, the company has complied with the directives issued by the
Reserve Bank of India and the provisions of Section 73 to 76 or any
other relevant provisions of the Act and the rules framed thereunder.
(vi) To the best of our knowledge and according to the information and
explanations given to us, the Central Government has not prescribed the
maintenance of cost records under Section 148(1) of the Act for the
company.
(vii) a. As per the information and explanations furnished to us, and
according to our examination of the records of the Company, the Company
has been 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 to the Company with the
appropriate authorities during the year and no undisputed amounts in
respect of material statutory dues were in arrears as at March 31, 2016
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 based
on the records of the Company examined by us, the particulars of dues
of income tax, sales tax, service tax, duty of customs, duty of excise
and value added tax that have not been deposited on account of any
dispute as at March 31, 2016 are as follows:
Amount Period to
which the
amount Forum where the
dispute is
Statute Nature of
dues (Rs.in
Cr) relates pending
Income Tax
Act, 1961 Income Tax 1.20 April 2000 to
March 2002, Income Tax Appellate
April 2004 to
March 2005
and Tribunal, Chennai
April 2006 to
March 2007
Income Tax
Act, 1961 Income Tax 0.02 April 2003 to
March 2004 High Court of
Judicature, Madras
Amount Period to
which the
amount Forum where the
dispute is
Statute Nature of
dues (Rs.in
Cr) relates pending
Income Tax
Act, 1961 Income Tax 1.74 April 2010 to
March 2012 Commissioner of
Income Tax
(Appeals), Chennai
Central
Sales Tax
Act, 1956 Sales Tax 0.15 April 2005 to
March 2007 The Appellate Deputy
Commissioner of
Commercial Taxes,
Chennai
Central
Sales Tax
Act, 1956 Sales Tax 0.37 April 2004 to
March 2005, Sales Tax Appellate
Tribunal,
April 2008 to
March 2011 Hyderabad
Puducherry
Value
Added Sales Tax 0.01 April 2008 to
March 2010
and Puducherry Value
Added
Tax Act,
2007 April 2011 to
March 2012 Tax Appellate
Tribunal,
Puducherry
Central
Sales Tax
Act, 1956 Sales Tax 0.36 April 2008 to
March 2010
and Puducherry Value
Added
April 2011 to
March 2012 Tax Appellate
Tribunal, Puducherry
Kerala
Value
Added Tax, Sales Tax 0.01 April 2010 to
March 2011 The Deputy
Commissioner
2003 (Appeals-I),
Ernakulam
Maharashtra
Value Added
Sales Tax 0.03 April 2008 to
March 2009 The
Joint
Commissioner of
Tax Act,
2002 Sales Tax
(Appeal), Pune
Central
Sales Tax
Act, 1956 Sales Tax 0.16 April 2008 to
March 2009
and The Joint
Commissioner of
April 2010 to
March 2011 Sales Tax (Appeal),
Pune
Central
Excise Act ,
1944 Interest and 0.03 December 2011 Commissioner
of Central
penalty Excise (Appeals),
Chennai
Central
Excise Act ,
1944 Excise Duty 0.80 April 2001 to
March 2005, Customs, Excise
And Service
(including March 2009 to
April 2010 Tax Appellate
Tribunal,
interest and
Chennai
penalty)
Finance
Act, 1994 Service Tax 1.12 August 2002 to
March 2004, Customs, Excise
And Service
(including September 2004
to May 2008 Tax Appellate
Tribunal,
interest and and April
2010 to March
2011 Chennai
penalty)
Finance
Act, 1994 Service Tax 0.74 August 2012,
April 2013 to Commissioner of
Central
(including March 2015 Excise (Appeals),
Chennai
interest and
penalty)
(viii) In our opinion and according to the information and explanations
given to us and based on the records of the Company examined by us, the
Company has not defaulted in repayment of loans to the banks and
government. The Company has neither taken any loans or borrowings from
any financial institution nor has issued any debentures.
(ix) According to the information and explanations given to us and
based on the records of the Company examined by us, no monies were
raised by way of initial public offer or further public offer
(including debt instruments) or by way of term loans during the year
and hence relative reporting requirement under clause 3(ix) of the
Order are not commented upon.
(x) During the course of our examination of the books and records of
the company carried out in accordance with generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any instances of material
fraud by the company or on the company by its officers or employees
which has been, noticed or reported during the year, nor have we been
informed of any such case by the management.
(xi) According to the information and explanations given to us and
based on the records of the Company examined by us, managerial
remuneration has been paid or provided in accordance with the requisite
approvals mandated by the provisions of Section 197 read with Schedule
V to the Act, having regard to the fact stated in note No.40.
(xii) The Company is not a Nidhi Company. Accordingly, the reporting
requirements under clause 3 (xii) of the Order are not applicable.
(xiii) According to the information and explanations given to us and
based on the records of the Company examined by us, transactions with
the related parties are in compliance with sections 177 and 188 of the
Act where applicable and the details thereon have been duly disclosed
in Note-38 to the standalone financial statements as required by the
applicable accounting standard.
(xiv) According to the information and explanations given to us and
based on the records of the Company examined by us, the company has not
made any preferential allotment/private placement of shares or fully or
partially convertible debentures during the year under review and hence
the requirements of Section 42 of the Act are not applicable.
(xv) According to the information and explanation given to us and based
on the records of the company examined by us, the company has not
entered into any non-cash transactions with directors or persons
connected with the directors. Accordingly, the reporting requirement
under clause 3 (xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us and the
records of the Company examined by us, the company is not required to
be registered under section 45-IA of the Reserve Bank of India Act,
1934. Accordingly, the reporting requirement under clause 3 (xvi) of
the Order is not applicable.
For Varma & Varma
Chartered Accountants
Firm Registration Number : 004532S
P R PRASANNA VARMA
Place: Chennai Partner
Date : May 23, 2016 Membership Number : 025854
Mar 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of Rane Brake
Lining Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2014, the Profit and Loss Statement and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The 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 13th 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 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Profit and Loss Statement, 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 & Regulatory Requirements
1. 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.
2. As required by section 227 (3) of the Act, we report that:
a. we have obtained all the information and explanation 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, Profit and Loss Statement, 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 Statement, and
Cash Flow Statement comply with the notified under the Act read with
the General Circular 15/2013 dated 13th September 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, 2014, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
1. a. The company is maintaining records showing full particulars,
including quantitative details of fixed assets.
b. The fixed assets of the company have been physically verified
during the year by the management, in accordance with a phased
programme designed to cover all the assets over a period of 3 years,
which in our opinion is reasonable having regard to the size of the
company and the nature of assets. According to the information and
explanations given to us, no material discrepancies have been noticed
on such verification.
c. There has not been disposal of any substantial portion of fixed
assets of the company during the year, which would affect the status of
the company as a going concern.
2. a. According to the explanation given to us, the inventories of the
company at all its locations have been physically verified by the
management, at reasonable intervals.
b. In our opinion and according to the explanations given to us, the
procedures followed by the management with regard to physical
verification of inventories are reasonable and adequate in relation to
the size of the company and nature of its business.
c. In our opinion, the company is maintaining proper records of
inventory. The discrepancies noted on physical verification as compared
to the books and records maintained by the company were not material
and have been properly dealt with in the books of account by the
management.
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 Companies Act 1956, except an interest free
unsecured loan, given to a party covered in the register maintained
under section 301 of the Act. The maximum amount involved during the
year and the year end balance of the loan is Rs.0.75 crores.
b. In our opinion, the terms and conditions of such loan are not prima
facie prejudicial to the interest of the company considering the
purpose for which the above loan has been given.
c. Having regard to the revised terms, in our opinion, no principal
amount is due for repayment in respect of the above loan as at the
Balance Sheet date.
d. The company has not taken any loans, secured or unsecured, from
companies, firms and other parties covered in the register maintained
under section 301 of the Companies Act, 1956, except for public
deposits accepted from 9 parties. The maximum involved during the year
is Rs.0.91 crores and the year end balance of the loan is Rs.0.61
crores.
e. The rate of interest and other terms and conditions of such loans
taken are, in our opinion, not prejudicial to the interest of the
company.
f. The company is regular in payment of principal and interest on the
above said loans.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased / services availed are of special nature and suitable
alternatives sources are not readily available for obtaining comparable
quotations, the internal control systems for the purchase of inventory
and fixed assets and for the sale of goods and services are generally
commensurate with the size of the company and nature of its business.
There are no major weaknesses in internal control of a continuing
nature.
5. a. According to the information and explanations provided by the
management, we are of the opinion that the particulars of 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, in respect of each of such transactions made in pursuance
to contracts and arrangements that exceed value of Rupees Five Lakhs in
respect of the above parties during the year, the prices / rates are
comparable with similar transactions entered into with other parties or
no comparable market prices are available as the related goods/services
are proprietary in nature.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Section
58A, 58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules 1975 and other rules framed there under
with regard to deposits accepted from public.
7. The company has an adequate internal audit system which is
commensurate with the size of the Company and nature of its business.
8. We have broadly reviewed the Cost records maintained by the company
pursuant to the Companies (Cost Accounting Record) Rules, 2011
prescribed by the Central Govt u/s 209(1)(d) of the Companies Act, and
are of the opinion that prima facie the prescribed cost records have
been maintained. We have, however, not made a detailed examination of
the cost records with a view to determine whether they are accurate and
complete.
9. a. According to the information and explanations given to us, the
company has been generally regular in depositing 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 to it with the appropriate authorities during the year.
According to the information and explanations given to us, there were
no undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection fund, Employees'' State Insurance, Income-Tax,
Wealth tax, Service tax, Sales tax, Excise duty, Customs duty and other
statutory dues which were outstanding at the year end 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 as per
our verification of records of the company, there are no disputed
amounts of tax/duty that have not been deposited with appropriate
authorities as at March 31, 2014, on account of a dispute, except as
follows;
Name of the
statute Nature of
dues Amount Period to which Forum where
the
(Rs. in the amount dispute is
pending
crores) relates
Income Tax
Act, 1961 Income Tax 10.67 April 2000 to
March 2002, Commissioner
of Income
April 2004 to
March 2007 Tax(Appeals),
Chennai
& April 2009
to March 2011
Income Tax
Act, 1961 Income Tax 0.02 April 2003 to High Court
of Judicature,
March 2004 Madras
Central
Excise Excise Duty 0.05 April 2003 to
March 2004 Commissioner
of Central
Act , 1944 (including
interest & April 2009 to Excise
(Appeals),
Chennai
and penalty) March 2010
Central
Excise Excise Duty 0.68 April 2001 to
March 2005 Customs,
Excise And
Act , 1944 (including
interest Service Tax
Appellate
and penalty) Tribunal,
Chennai
Finance Act,
1994 Service Tax 0.50 April 2006 to
May 2008, Commissioner
of Central
(including
interest April 2010 to
March 2011 Excise
(Appeals),
Chennai
and
penalty) & August 2012
Finance Act,
1994 Service Tax 1.28 August 2002 to
April 2008 Customs,
Excise And
(including
interest Service Tax
Appellate
and penalty) Tribunal,
Chennai
Central
Sales Tax Sales Tax 0.03 April 2004 to
March 2005 Sales Tax
Appellate
Act, 1956 Tribunal,
Hyderabad
Central
Sales Tax Sales Tax 0.15 April 2005 to
March 2007 The Appellate
Deputy
Act, 1956 Commissioner
of
Commercial
Taxes, Chennai
Central Sales
Tax Sales Tax 0.09 April 2008 to
March 2010 The Appellate
Deputy
Act, 1956 Commissioner
of Commercial
Taxes, Hyderabad
Name of the
statute Nature of
dues Amount Period to which Forum where
the
(Rs. in the amount dispute is
pending
crores) relates
Central
Sales Tax Sales Tax 0.12 April 2008 to
March 2009 The Joint
Commissioner
Act, 1956 of Sales Tax
(Appeal), Pune
Maharashtra
Value Sales Tax 0.03 April 2008 to
March 2009 The Joint
Commissioner
Added Tax
Act, 2002 of Sales
Tax (Appeal), Pune
Maharashtra
Value Sales Tax 0.27 April 2009 to
March 2010 The Deputy
Commissioner
Added Tax
Act, 2002 of Sales Tax, Pune
Kerala Value Sales Tax 0.01 April 2010 to
March 2011 The Deputy
Commissioner
Added Tax,
2003 (Appeals-I),
Ernakulam
10. 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.
11. According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to any banks or
financial institution.
12. In our opinion and according to the information and explanations
given to us, and based on the documents and records produced to us, the
company has not granted any loans or advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the nature of activities of the company does not attract
any special statute applicable to chit fund and nidhi/ mutual benefit
fund/ societies.
14. In our opinion, the company is not dealing or trading in shares,
securities, debentures or other investments, and accordingly, the
relative reporting requirements of the order are not applicable to the
company.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from bank
or financial institutions.
16. According to the information and explanations given to us, the
term loans have been applied, for the purpose for which they were
obtained.
17. According to the information and explanations given to us and on
an overall verification of the attached balance sheet of the company,
we report that the funds raised by the company on short-term basis have
not been used to finance long-term assets.
18. During the year, the company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under section 301 of the Companies Act.
19. The company has not issued any debentures during the year and
accordingly the reporting requirement under clause 4 (xix) of the Order
is not applicable to the company.
20. The company has not raised any money by public issues during the
year and accordingly the reporting requirement under clause 4 (xx) of
the Order is not applicable to the company.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the Generally Accepted
Auditing Practice in India, and according to the information and
explanation given to us, we have neither come across any instances of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such cases by the management.
For Varma & Varma
Chartered Accountants
Firm Registration Number : 004532S
P R PRASANNA VARMA
Place: Chennai Partner
Date : May 21, 2014 Membership Number : 025854
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Rane Brake
Lining Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, the Profit and Loss Statement and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 (" the Act").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.
Auditor''s 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 judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Profit and Loss Statement, 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 & Regulatory Requirements
1. 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.
2. As required by section 227 (3) of the Act, we report that:
a. we have obtained all the information and explanation 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, Profit and Loss Statement 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 Statement and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31,
2013, from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
1. a. The company is maintaining records showing full particulars,
including quantitative details of fixed assets.
b. The fixed assets of the company have been physically verified
during the year by the management, in accordance with a phased
programme designed to cover all the assets over a period of 3 years,
which in our opinion is reasonable having regard to the size of the
company and the nature of assets. According to the information and
explanations given to us, no material discrepancies have been noticed
on such verification.
c. There has not been disposal of any substantial portion of fixed
assets of the company during the year, which would affect the status of
the company as a going concern.
2. a. According to the explanation given to us, the inventories of
the company at all its locations have been physically verified by the
management, at reasonable intervals.
b. In our opinion and according to the explanations given to us, the
procedures followed by the management with regard to physical
verification of inventories are reasonable and adequate in relation to
the size of the company and nature of its business.
c. In our opinion, the company is maintaining proper records of
inventory. As per the information and explanation furnished to us, no
material discrepancies were found on such physical verification as
compared to the books and records maintained by the company.
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 Companies Act, 1956, except an interest free
unsecured loan given to a party covered in the register maintained
under section 301 of the Act. The maximum amount involved during the
year and the year end balance of the loan is Rs. 0.75 crores.
b. In our opinion, the terms and conditions of such loan are not prima
facie prejudicial to the interest of the company considering the
purpose for which the above loan has been given.
c. Having regard to the revised terms, in our opinion, no amount is
due for repayment in respect of the above loan as at the Balance Sheet
date.
d. In respect of the above loan, there is no principal overdue amount
as at the Balance Sheet date.
e. The company has not taken any loans, secured or unsecured, from
companies, firms and other parties covered in the register maintained
under section 301 of the Companies Act, 1956, except public deposits
accepted from the directors and their relatives. Such deposits have
been accepted from 8 parties and maximum involved during the year is
Rs. 1.14 crores and the year end balance of the loan is Rs. 0.91
crores.
f. The rate of interest and other terms and conditions of such loans
taken are, in our opinion, not prejudicial to the interest of the
company.
g. The company is regular in payment of principal and interest on the
above said loans.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased / services availed are of special nature and suitable
alternatives sources are not readily available for obtaining comparable
quotations, the internal control systems for the purchase of inventory
and fixed assets and for the sale of goods and services are generally
commensurate with the size of the company and nature of its business.
There are no major weaknesses in internal control of a continuing
nature.
5. a. According to the information and explanations provided by the
management, we are of the opinion that the particulars of 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, in respect of each of such transactions made in pursuance
to contracts and arrangements that exceed value of Rupees Five Lakhs
with the above parties during the year, the prices / rates are
comparable with similar transactions entered into with other parties or
no comparable market prices are available as the related goods /
services are proprietary in nature.
6. In our opinion and according to the information and explanations
given to us, the company has complied with the provisions of Section
58A, 58AA or any other relevant provisions of the Act and the Companies
(Acceptance of Deposits) Rules 1975 with regard to deposits accepted
from public. According to the information and explanation given to us,
no order has been passed by the Company Law Board, or the National
Company Law Tribunal or the Reserve Bank of India or any Court or any
other Tribunal in this regard.
7. The company has an adequate internal audit system which is
commensurate with the size of the Company and nature of its business.
8. We have broadly reviewed the Cost records maintained by the company
pursuant to the Companies (Cost Accounting Record) Rules, 2011
prescribed by the Central Government u/s 209(1 )(d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed cost
records have been maintained. We have, however, not made a detailed
examination of the cost records with a view to determine ''whether they
are accurate and complete.
9. a. According to the information and explanations given to us, the
company has been generally regular in depositing 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 to it with the appropriate authorities during the year.
According to the information and explanations given to us, there were
no undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection fund, Employees'' State Insurance Income Tax,
Wealth tax, Service tax, Sales tax, Excise duty, Customs Duty and other
statutory dues which were outstanding at the yearend 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 as per
our verification of records of the company, there are no disputed
amounts of tax / duty that have not been deposited with appropriate
authorities as at March 31, 2013, on account of a dispute, except as
follows:
Name of the
statute Nature of dues Amount
(Rs. in crores)
Income Tax Act, 1961 Income Tax 0.46
Income Tax Act, 1961 Income Tax 0.25
Income Tax Act, 1961 Income Tax 0.02
Income Tax Act, 1961 Income Tax 6.06
Income Tax Act, 1961 Income Tax 0.17
Income Tax Act, 1961 Income Tax 0.40
Income Tax Act, 1961 Income Tax 0.58
Central Sales Tax Sales Tax 0.03
Act, 1956
Central Sales Sales Tax 0.08
Tax Act, 1956
Central Sales Sales Tax 0.03
Tax Act, 1956
Name Period to which Forum where the
the amount dispute is pending
relates
Income Tax Act, 1961 April 2000 to Commissioner of Income
March 2001 Tax (Appeals),
Chennai
Income Tax Act, 1961 April 2001 to Commissioner of Income
March 2002 Tax (Appeals), Chennai
Income Tax Act, 1961 April 2003 to High Court of Judicature,
March 2004 Madras
Income Tax Act, 1961 April 2004 to Commissioner of Income
March 2005 Tax (Appeals), Chennai
Income Tax Act, 1961 April 2005 to Commissioner of Income
March 2006 Tax (Appeals), Chennai
Income Tax Act, 1961 April 2006 to Commissioner of Income
March 2007 Tax (Appeals), Chennai
Income Tax Act, 1961 April 2009 to Commissioner of Income
March 2010 Tax (Appeals), Chennai
Income Tax Act, 1961 April 2004 to Sales Tax Appellate
March 2005 Tribunal, Hyderabad
Income Tax Act, 1961 April 2005 to The Appellate Deputy
March 2006 Commissioner of Commercial
Taxes, Hyderabad
Income Tax Act, 1961 April 2008 to The Appellate Deputy
March 2009 Commissioner of Commercial
Taxes, Hyderabad
10. 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.
11. According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to any banks or
financial institution.
12. In our opinion and according to the information and explanations
given to us, and based on the documents and records produced to us, the
company has not granted any loans or advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the nature of activities of the company does not attract
any special statute applicable to chit fund and nidhi / mutual benefit
fund / societies.
14. In our opinion, the company is not dealing or trading in shares,
securities, debentures or other investments and accordingly, the
relative reporting requirements of the order are not applicable to the
company.
15. According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from bank
or financial institutions.
16. According to the information and explanations given to us, the
term loans have been applied, for the purpose for which they were
obtained.
17. According to the information and explanations given to us and on
an overall verification of the attached balance sheet of the company,
we report that the funds raised by the company on short-term basis have
not been used to finance long-term assets.
18. During the year, the company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under section 301 of the Companies Act.
19. The company does not have any outstanding debentures as at the
year-end.
20. The company has not raised any money by way of 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 Practice in India, and according to the information and
explanation given to us, we have neither come across any instances of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such cases by the management.
For Varma & Varma
Chartered Accountants
Firm Registration
Number: 004532S
P R Prasanna Varma
Place: Chennai Partner
Date : May 20, 2013 Membership Number: 025854
Mar 31, 2012
1. We have audited the attached Balance Sheet of Rane Brake Lining
Limited (the "Company") as at March 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. Long term foreign currency monetary liability aggregating 10,951,645
USD is being stated at Rs. 512,027,070 at previously reported exchange
rates as per the related currency swap agreements instead of being
reinstated at the exchange rates prevailing at the year end as required
by Accounting Standard (AS) 11 The Effects of Changes in Foreign
Exchange Rates resulting in non recognition of exchange differences
arising there from in the Statement of profit and loss. Had the
aforesaid foreign currency monetary liability been reinstated as at the
rates prevailing on March 31,2012, the reported "Profit for the year
would have been lower by Rs.46,287,793, Reserves and Surplus would have
been lower by Rs.46,287,793 and the reported Earnings per share for the
year ended March 31,2012 (including and excluding extraordinary items)
would have been lower by Rs.5.85 per share and Term Loan (including
repayable within one year under Other Current Liabilities) as at March
31, 2012 would have been higher by Rs. 46,287,793.
5. 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, except for the effect of the matter referred in
paragraph 4 above 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) Except for the effect of the matter referred in paragraph 4 above,
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 March 31, 2012 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 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, except for the effect of
the matter referred in paragraph 4 above, 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 March 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.
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 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 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 granted interest free unsecured loans, to one
party covered in the register maintained under Section 301 of the Act.
The maximum amount involved during the year and the year-end balance of
such loans aggregated to Rs.7, 500,000 and Rs.7, 500,000, respectively.
(b) In our opinion, the terms and conditions of such loans are not
prima facie prejudicial to the interest of the Company.
(c) No amount is due for repayment in respect of the above loan as at
the balance sheet date.
(d) In respect of the aforesaid loans, there is no overdue amount more
than Rupees One Lakh.
(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 Act.
4. 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 inventory and fixed assets and for the sale of goods.
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, no major weakness have been noticed or reported.
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, in respect of the transactions made in pursuance to
contracts and arrangements that exceeds in the value of Rupees Five
Lakhs in respect of certain parties during the year, no comparable
market prices are available as the related goods/ services are
proprietary in nature.
6. In our opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Act and the
"Companies (Acceptance of Deposits) Rules, 1975, with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the Company in respect of the aforesaid
deposits.
7. In our opinion, the Company has an internal audit system
commensurate with its size and the 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 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 and excise
duty as at March 31, 2012, which have not been deposited on account of
a dispute, are as follows:
Name of Nature of dues Amount Period to which Forum where
the statute
(Rs.) the amount relates dispute is
pending
Finance
Act, 1994 Service Tax
(including 24,09,774 August 2002 to Customs,
Excise and
interest and
penalty) March 2004 Service Tax
Appellate
Tribunal,
Chennai
Finance Act,
1994 Service Tax
(including 16,69,756 September 2004 to Customs,
Excise And
interest
and penalty) September 2006 Service Tax
Appellate
Tribunal,
Chennai
Finance Act,
1994 Service Tax
(including 74,10,847 May 2008 to Commissioner
of Central
interest and
penalty) September 2008 Excise
(Appeals),
Chennai
Uttar
Pradesh
Trade Sales Tax 91,875 April 2007 to Joint
Commissioner
Tax Act,1948 June 2007 (Appeal),
Kanpur
Central
Sales Tax Sales Tax 2,84,999 April 2004 to Sales Tax
Appellate
Act, 1956 March 2005 Tribunal,
Hyderabad
Central
Sales Tax Sales Tax 7,63,347 April 2005 to The Appellate
Deputy
Act, 1956 March 2006 Commissioner
of
Commercial
Taxes,
Hyderabad
Andhra
Pradesh Sales Tax 4,41,711 April 2006 to The Appellate
Deputy
Value Added
Tax March 2010 Commissioner
of
Act, 2005 Commercial
Taxes,
Hyderabad
Central
Excise Excise Duty 1,52,816 April 2003 to Commissioner
of Central
Act,1944 March 2004 Excise
(Appeals),
Chennai
Central
Excise Excise Duty
(including 61,75,344 April 2001 to Customs,
Excise And
Act, 1944 interest
and penalty) March 2005 Service Tax
Appellate
Tribunal,
Chennai
Income Tax
Act, 1961 Income Tax 95,94,808 April 1998 to Commissioner
March 1999 of Income Tax
(Appeals),
Chennai
Income Tax
Act, 1961 Income Tax 45,58,320 April 2000 to Commissioner
March 2001 of Income Tax
(Appeals),
Chennai
Income Tax
Act, 1961 Income Tax 25,42,902 April 2001 to Commissioner
March 2002 of Income Tax
(Appeals),
Chennai
Income Tax
Act, 1961 Income Tax 1,74,517 April 2003 to High Court of
March 2004 Judicature,
Madras
Income Tax
Act, 1961 Income Tax 9,32,61,694 April 2004 to Commissioner
of
March 2005 Income Tax
(Appeals),
Chennai
Income Tax
Act, 1961 Income Tax 16,66,627 April 2005 to Commissioner
March 2006 of Income Tax
(Appeals),
Chennai
Income Tax
Act, 1961 Income Tax 39,73,384 April 2006 to Commissioner
March 2007 of Income Tax
(Appeals),
Chennai
Income Tax
Act, 1961 Income Tax 1,30,33,140 April 2007 to Commissioner
of
March 2008 Income Tax
(Appeals),
Chennai
10. The Company has no accumulated losses.
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. In our opinion, and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained having regard to the
explanation that certain loan funds were temporarily placed in short
term fixed deposits pending utilisation for the stated purpose.
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 during the year; and does
not have any debentures outstanding as at the year end.
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 any such case by the Management.
For Price Waterhouse & Co.
Firm Registration Number: 007567S
Chartered Accountants
Subramanian Vivek
Place: Chennai Partner
Date : May 23, 2012 Membership Number : 100332
Mar 31, 2011
1. We have audited the attached Balance Sheet of RANE BRAKE LINING
LIMITED (the "Company") as at March 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
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
(together the "Order"), issued by the Government of India in terms of
Section 227 (4A) 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 set out 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, in all material
respects, with the applicable accounting standards referred to in
Section 211 (3C) of the Act;
(e) on the basis of written representations received from the directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 2011 from being appointed as a director in
terms of Section 274 (1) (g) 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 also 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 March 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.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of the Auditors Report of even date to the
members of RANE BRAKE LINING LIMITED on the financial statements for
the year ended March 31, 2011)
(i) (a) The Company has maintained proper records to show full
particulars including quantitative details and situation of its 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 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 physical verification was carried out by
the management and no material discrepancies between the book records
and the physical inventory have been noticed.
(c) No substantial part of fixed assets of the Company has been
disposed of during the year.
(ii) (a) The inventories of the Company at all its location have been
physically verified by the management during the year. In our opinion,
the frequency of verification is reasonable. In respect of inventories
lying with third parties confirmation has been obtained from the
sub-contractors.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and nature of its business.
(c) The Company has maintained proper records in respect of inventories
and the discrepancies between the physical inventories and the book
records, which have been properly dealt with in the books of account,
were not material.
(iii) (a) The Company has granted an interest free unsecured loan to a
party covered in the register maintained under Section 301 of the Act.
The maximum amount involved during the year and the year-end balance of
such loan aggregates to Rs.5,000 thousands. In our opinion, the terms
and conditions of such loan are not prima facie prejudicial to the
interest of the Company. No amount is due for repayment in respect
of the above loan as at the balance sheet date.
(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.
(iv) In our opinion, 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. We have not observed any major weaknesses in the
aforesaid internal control system during the course of our audit.
(v) (a) In our opinion, 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) With regard to transactions made in pursuance of such contracts or
arrangements there are no comparable market prices as the related
goods/services are considered to be of special nature as explained by
the management of the Company.
(vi) In our opinion, the Company has complied
with the provisions of Sections 58A and 58AA of the Act and the rules
framed thereunder with regard to the deposits accepted from the public
and no Order under the aforesaid Sections has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal on the Company.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) On the basis of the records produced, we are of the opinion
that, prima facie, the cost records and accounts prescribed by the
Government of India under Section 209 (1)(d) of the Act have been
maintained. However, we are not required to and have not carried out
any detailed examination of such accounts and records.
(ix) (a) The Company has generally been regular in depositing
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
in India.
(b) According to the records produced, at the year end there were no
dues of income tax, sales tax, wealth tax, service tax, customs duty,
excise duty and cess which have not been deposited on account of any
dispute except as follows
Name of the Nature of Amount Forum where
statute dues (Rs. 000) the dispute
is pending
Tamilnadu General Sales 1,770 Assistant
Sales Tax Act, 1959 Tax Commissioner
Central Sales Sales 1,406 Assistant
Tax Act, 1956 Tax Commissioner
Central Sales Sales 1,167 Appellate
Tax Act,1956 Tax Deputy
Commissioner
Andhra Pradesh Sales 442 Appellate
Value Added Tax Tax Deputy
Act, 2005 Commissioner
Uttar Pradesh Trade Sales 92 Appellate Joint
Tax Act, 1948 Tax Commissioner
Central Excise Act, Excise 12,398 CESTAT
1944 Duty
Finance Act, 1994 Service 12,774 CESTAT
Tax
Income Tax Act, Income 48,776 Commissioner
1961 Tax of Income Tax
(Appeals)
(x) The Company has no accumulated losses as at March 31,2011 and it
has not incurred
any cash losses during the financial year ended on that date or in the
immediately preceding financial year.
(xi) According to the records produced, the Company has not defaulted
in repayment of its dues to any financial institution or bank as at the
Balance Sheet date.
(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.
(xiii) The Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
(xiv) On the basis of review of utilisation of funds on an overall
basis, in our opinion, the term loans taken by the Company were applied
for the purposes for which the loans were obtained.
(xv) On the basis of review of utilisation of funds on an overall
basis, in our opinion, the funds raised on a short term basis have not
been used for long term investment.
(xvi) The Company has not made any preferential allotment of shares
during the year to parties and companies covered in the register
maintained under Section 301 of the Act.
(xvii) The Company has not issued any debentures during the year.
(xviii) During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, 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.
(xix) Clauses (xiii), (xiv), and (xx) of the aforesaid Order are not
applicable to the Company.
For Price Waterhouse & Co.
Firm Registration Number: 007567S
Chartered Accountants
S Datta
Partner
(Membership No. F14128)
Place : Chennai
Date : May 23, 2011
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