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Johnson Controls-Hitachi Air Condition. India Ltd.

BSE: 523398 Sector: Engineering
NSE: JCHAC ISIN Code: INE782A01015
BSE LIVE 15:40 | 23 Aug 1993.60 -16.25
(-0.81%)
OPEN

1980.00

HIGH

2019.85

LOW

1965.00

NSE 15:56 | 23 Aug 2007.65 8.20
(0.41%)
OPEN

1987.05

HIGH

2020.00

LOW

1970.10

OPEN 1980.00
PREVIOUS CLOSE 2009.85
VOLUME 365
52-Week high 2300.00
52-Week low 1157.00
P/E 73.59
Mkt Cap.(Rs cr) 5,421
Buy Price 1993.60
Buy Qty 100.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1980.00
CLOSE 2009.85
VOLUME 365
52-Week high 2300.00
52-Week low 1157.00
P/E 73.59
Mkt Cap.(Rs cr) 5,421
Buy Price 1993.60
Buy Qty 100.00
Sell Price 0.00
Sell Qty 0.00

Johnson Controls-Hitachi Air Condition. India Ltd. (JCHAC) - Auditors Report

Company auditors report

To the Members of Hitachi Home & Life Solutions (India) Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Hitachi Home & LifeSolutions (India) Limited ("the Company") which comprise the Balance Sheetas at March 31 2016 the Statement of Profit and Loss and Cash Flow Statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing issued by the Institute of Chartered Accountants of Indiaas specified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2016 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 ("theOrder") issued by the Central Government of India in terms of sub- section (11) ofsection 143 of the Act we give in the Annexure 1 a statement on the matters specified inparagraphs 3 and 4 of the Order.

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 bestof 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 theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;

(e) On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of section 164 (2) ofthe Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report;

(g) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements – Refer Note 32 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration number: 324982E/E300003

per Arpit K. Patel

Partner

Membership Number: 34032

Place of Signature : Delhi

Date : May 30 2016

Annexure 1 referred to in Paragraph 1 of Report on Other Legal and RegulatoryRequirements of our report of even date of Hitachi Home & Life Solutions (India)Limited for year ended 31 March 2016.

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) Fixed assets have been physically verified by the management during the year and nomaterial discrepancies were identified on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment/ fixed assets areheld in the name of the company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them during the year and no material discrepancies were noticed in respect ofsuch confirmations.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii)(a)(b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to usprovisions of section 186 of the Companies Act 2013 in respect of loans and advancesgiven investments made and guarantees and securities given have been complied with bythe company and there are no loans in respect of which provisions of section 185 of theCompanies Act 2013 are applicable and hence not commented upon.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture or service of airconditioners and are of the opinion that prima facie the specified accounts and recordshave been made and maintained. We have not however made a detailed examination of thesame.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees’ state insurance income-taxsales-tax service tax customs duty excise duty value added tax cess and othermaterial statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees’ state insurance income-tax service tax sales-tax duty of custom duty of excise value added tax cess and othermaterial statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.

(c) According to the records of the Company the dues outstanding of income-taxsales-tax service tax duty of custom duty of excise value added tax and cess onaccount of any dispute are as follows:

Name of the statute Nature of dues Amount ( Rs in lacs) Period to which the amount relates Forum where dispute is pending
Sales Tax Act (Central & States) Demand raised in assessments at various locations 401.85 2000-01 to 2013-14 Deputy Commissioner Appeals / Joint Commissioner Appeals
Finance Act 1994 (Service tax) Demand on claiming service tax credit on warranty services 581.67 2006-07 to 2012-13 CESTAT (Appeals) Ahmedabad
Demand on claiming service tax credit on advertisement expenses including interest and penalty 118.36 2005-06 to 2010-11 CESTAT (Appeals) Ahmedabad
Demand raised on Consulting Engineers Services including interest and penalty 48.64 2000-01 to 2003-04 CESTAT (Appeals) Ahmedabad
Demand raised on Service Tax credit taken on Sales Promotion Event Management Foreign Tour etc 797.84 March-2012 to Oct 2014 CESTAT (Appeals) Ahmedabad
Demand raised on Commission including interest and penalty 8.76 2004-05 CESTAT Ahmedabad
Cenvat Credit transferred to Excise 25.00 Dec-2009 to July-2013 CESTAT Ahmedabad
Central Excise Act 1944 Cenvat Credit taken on Inputs 20.23 2009 to 2011 Commissioner (A) - Ahmedabad
Demand of excess excise duty collected 2.51 2008-09 Commissioner Appeals Chandigarh
Assessable value dispute 32.74 2005-06 to 2009-10 CESTAT Delhi

(viii) Based on our audit procedures and as per the information and explanations givenby the management we are of the opinion that the Company has not defaulted in repaymentof dues to banks. The Company did not have any outstanding dues in respect of a financialinstitution debentures or government during the year.

(ix) According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer / further public offer / debtinstruments and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud / materialfraud on the company by the officers and employees of the Company has been noticed orreported during the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.Therefore the provisions of clause 3(xvi) of the order are not applicable to the Companyand hence not commented upon.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration number: 324982E/E300003

per Arpit K. Patel

Partner

Membership Number: 34032

Place of Signature : Delhi

Date : May 30 2016

Annexure 2 to the Independent Auditor’s report of even date on the financialstatements of Hitachi Home & Life Solutions (India) Limited

We have audited the internal financial controls over financial reporting of HitachiHome & Life Solutions (India) Limited ("the Company") as of March 31 2016in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration number: 324982E/E300003

per Arpit K. Patel

Partner

Membership Number: 34032

Place of Signature : Delhi

Date : May 30 2016