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Schaeffler India Ltd.

BSE: 505790 Sector: Engineering
NSE: SCHAEFFLER ISIN Code: INE513A01014
BSE LIVE 15:40 | 15 Dec 5188.40 111.20
(2.19%)
OPEN

5121.60

HIGH

5194.50

LOW

5095.60

NSE 15:31 | 15 Dec 5200.80 105.45
(2.07%)
OPEN

5146.65

HIGH

5212.45

LOW

5080.05

OPEN 5121.60
PREVIOUS CLOSE 5077.20
VOLUME 747
52-Week high 5311.65
52-Week low 3780.00
P/E 38.08
Mkt Cap.(Rs cr) 8,623
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5121.60
CLOSE 5077.20
VOLUME 747
52-Week high 5311.65
52-Week low 3780.00
P/E 38.08
Mkt Cap.(Rs cr) 8,623
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Schaeffler India Ltd. (SCHAEFFLER) - Auditors Report

Company auditors report

Report on the Financial Statements

We have audited the accompanying financial statements of FAG Bearings India Limited('the Company') which comprise the Balance Sheet as at December 31 2015 the Statementof Profit and Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ('the Act') with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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 accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company's Directors as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner 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 atDecember 31 2015 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 42 to the financial statements in respect of accounting forforward contracts. The Company has adopted and applied the principles of hedge accountingas set out in Accounting Standard (AS)-30 'Financial Instruments: Recognition andMeasurement' issued by Institute of Chartered Accountants of India to forward contracts inrespect of highly probable transactions or firm commitments. Consequently the Company hasrecorded M 8.6 million representing marked to market gain in the hedging reserve as atDecember 31 2015 (M 203 million marked to market loss as at December 31 2014). Ouropinion is not qualified in respect of this matter.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2015 ('the Order') issued bythe Central Government of India in terms of sub-section (11) of Section 143 of the Act wegive in the Annexure a statement on the matters specified in paragraphs 3 and 4 of theOrder 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 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 appears from our examination of those books;

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

(d) in our opinion the aforesaid financial statements comply with the AccountingStandards notified 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 onDecember 31 2015 taken on record by the Board of Directors none of the Directors isdisqualified as on December 31 2015 from being appointed as a Director in terms ofSection 164(2) of the Act; and

(f) 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 30 to the financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - refer note 42 to the financial statements.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For B S R & Co. LLP

Chartered Accountants

Firm's Reg. No. 101248W / W-100022

Vijay Mathur

Partner

Membership No. 046476

Mumbai: February 12 2016

With reference to the Annexure referred to in our report of even date we report that:

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

(b) The Company has a programme of physical verification of its fixed assets by whichall fixed assets are verified in a phased manner over a period of two years. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. Accordingly a part of the fixed assets werephysically verified by the management in the current year and no material discrepancieswere noticed on such verification.

(ii) (a) The inventory except goods-in-transit and stocks lying with certain thirdparties has been physically verified by the management during the year. In our opinionthe frequency of such verification is reasonable. For stocks lying with third parties atthe year-end written confirmations have been obtained.

(b) The procedures for the physical verification of inventories followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticedon verification between the physical stocks and the book records were not material.

(iii) According to the information and explanations given to us we are of the opinionthat there are no companies firms or other parties covered in the register required underSection 189 of the Companies Act 2013. Accordingly paragraph (iii) of the Order is notapplicable.

(iv) In our opinion and according to the information and explanations given to us andhaving regard to the explanation that purchases of certain items of inventories and fixedassets are for the Company's specialised requirements and similarly certain goods sold andservices rendered are for the specialised requirements of the buyers and suitablealternative sources are not available to obtain comparable quotations there is anadequate internal control system commensurate with the size of the Company and the natureof its business with regard to purchase of inventories and fixed assets and with regard tothe sale of goods and services. We have not observed any major weakness in the internalcontrol system during the course of the audit.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the rules framed there under. Accordingly paragraph (v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148(1) of the Companies Act 2013 in respect of bearings and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.However we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the

Company amounts deducted / accrued in the books of account in respect of undisputedstatutory dues including Provident Fund Employees' State Insurance Income-taxSales-tax Wealth tax Service tax Customs duty Excise duty Value added tax and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Sales-taxWealth tax Service tax Customs duty Excise duty Value added tax and other materialstatutory dues were in arrears as at December 31 2015 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome tax Sales tax Service tax Wealth tax Excise duty Customs duty and Value AddedTax which have not been deposited with the appropriate authorities on account of anydispute other than those mentioned below:

Name of the statute Nature of the dues Amount (Rs. in million) Period Forum where the dispute is pending
State and Central Duty and interest 9.9 2009-10 Commissioner Appeals
Sales Tax Act 1.4 2009-10 Dy. Commissioner Sales Tax
0.3 2006-07 Dy. Commissioner Sales Tax
Central Excise Act 1944 Duty interest and penalty 12.4 2003-04 2004-05 2006- 07 2007- 08 High Court

 

Name of the statute Nature of the dues Amount (Rs. in million) Period Forum where the dispute is pending
Central Excise Act 1944 Duty interest and penalty 13.1 2003-04 2004-05 2006-07 2007-08 2009-10 Commissioner Appeals
0.9 2004-05 Appellate Tribunal
The Income Tax Act 1961 Tax and interest 94.2 2000-01 to 2010-11 Income Tax - Appellate Tribunal and Commissioner of Income Tax (Appeals)

The above are net of amounts paid under protest for Sales tax M 19.0 and for Income taxM 3485.4

(c) According to the information and explanations given to us there has been no delayin transferring amounts which were required to be transferred to the Investor Educationand Protection Fund in accordance with the relevant provisions of the Companies Act 1956(1 of 1956) and rules there under.

(viii) The Company does not have any accumulated losses at the end of the financialyear and has not incurred cash losses in the financial year or in the immediatelypreceding financial year.

(ix) In our opinion and according to the information and explanations given to us theCompany did not have any outstanding dues to any financial institution banks or debentureholders during the year.

(x) According to the information and explanations given to us the Company has notgiven any guarantee for loans taken by others from banks or financial institutions.

(xi) The Company did not have any term loans outstanding during the year.

(xii) According to the information and explanations given to us no fraud on or by theCompany has been noticed or reported during the course of our audit.

For B S R & Co. LLP

Chartered Accountants

Firm's Reg. No. 101248W / W-100022

Vijay Mathur

Partner

Membership No. 046476

Mumbai: February 12 2016