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Shriram Pistons & Rings Ltd.

BSE: 533021 Sector: Auto
NSE: SHRIPISTON ISIN Code: INE526E01018
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Shriram Pistons & Rings Ltd. (SHRIPISTON) - Auditors Report

Company auditors report

TO THE MEMBERS OF SHRIRAM PISTONS & RINGS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of SHRIRAM PISTONS& RINGS LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2015 the Statement of Profit and Loss the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated inSection134(5)of the Companies Act 2013 ("the Act") with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the 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 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; anddesign implementation and maintenance of adequate internal financial controls that wereoperating 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 standalone financial statementsbased on our audit.

We have taken in to 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 underSection143(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 the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the over all presentation 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 stand alone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2015 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2015 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in theAnnexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section143(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 purposes 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 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 stand alone financial statements comply with theAccounting Standards specified under Section133 of the Act read with Rule7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on March31 2015 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2015 from being appointed as a director in terms of Section164(2) of theAct.

(f) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule11 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 39 and 46 (i) to the financialstatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses- Refer Note 49 to the financialstatements.

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

Refer Note 50 to the financial statements.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 015125N)
Vijay Agarwal
Place : Gurgaon (Partner)
Date : May 16 2015 (Membership No. 094468)

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) The fixed assets were physicallyverified during the year by the Management in accordance with a regular programme ofverification which in our opinion provides for physical verification of all the fixedassets at reasonable intervals. According to the information and explanations given to usno material discrepancies were noticed on such verification.

(ii) In respect of its inventories:

(a) As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals other than for goods in transit for which subsequentreceipts have been verified in most of the cases.

(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) In our opinion and according to the information and explanations given to us theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the Register maintained under Section 189 of the CompaniesAct 2013.

(iv) In our opinion and according to the information and explanations given to usthere is an adequate internal control system commensurate with the size of the Company andthe nature of its business with regard to purchases of inventory and fixed assets and forthe sale of goods. During the course of our audit we have not observed any major weaknessin such internal control system.

(v) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 as amended with regard to the deposits accepted. According to the information andexplanations given to us no order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.

(vi) According to the information and explanations given to us Pursuant to theCompanies (Cost Records and Audit) Rules 2014 vide notification dated June 30 2014 theCentral Government has not prescribed the maintenance of cost records under Section 148(1)of the Companies Act 2013 for the business activities of the Company.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income-tax Sales Tax Wealth Tax ServiceTax Customs Duty Excise Duty Value Added Tax Cess and other material statutory duesapplicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Sales Tax Wealth Tax Service Tax Customs Duty ExciseDuty Value Added Tax Cess and other material statutory dues in arrears as at March 312015 for a period of more than six months from the date they became payable.

(c) There are no dues of wealth tax customs duty and Cess which have not beendeposited as at March 31 2015 on account of disputes. Details of dues of Income-taxSales Tax Service Tax Excise Duty and Value Added Tax which have not been deposited ason March 31 2015 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates Amount Involved* (Rs. in million)
Income Tax Act 1961 Income tax Appellate authority upto Commissioners' level 2003-04 2004-05 2011-12 & 2012-13 7.99
Appellate authority upto Commissioners' level 2010-11 0.32
Central Excise Act 1944 Excise Duty Custom Excise & Service Tax Appellate Tribunal (CESTAT) 2007-08 and 2008-09 93.93

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Name of Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates Amount Involved* (Rs. in million)
Finance Act 1994 Service Tax Custom Excise & Service Tax Appellate Tribunal (CESTAT) 2000-01 to 2004-05 42.21
Appellate authority upto Commissioners' level 2006-07 to 2010-11 2012-13 to 2014-15 2.52
Central Sales Tax Act 1956 Sales Tax Appellate Tribunal 2005-06 to 2007-08 14.73
Appellate authority upto Commissioners' level 2004-05 to 2012-13 44.95
Sales Tax Laws Sales Tax / Value Added Tax Appellate Tribunal 1995-96 2003-04 2005-06 2007-08 to 2011-12 0.86

*amount as per demand orders including interest and penalty wherever quantified in theorder.

The following matters which have been excluded from the table above have been decidedin favour of the Company but the department has preferred appeals at higher levels. Thedetails are given below:

Name of Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates Amount Involved* (Rs. in million)
Income Tax Act 1961 Income tax Income Tax Appellate Tribunal 2003-04 & 2010-11 8.81

*amount as per demand orders including interest and penalty wherever quantified in theorder.

(d) The Company has been regular in transferring amounts to the Investor Education andProtection Fund in accordance with the relevant provisions of the Companies Act 1956 (1of 1956) and Rules made thereunder within time.

(viii) The Company does not have accumulated losses at the end of the financial yearand the Company has not incurred cash losses during the financial year covered by ouraudit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to financial institutions and banks.The Company has not issued any debentures.

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

(xi) In our opinion and according to the information and explanations given to us theterm loans have been applied by the Company during the year for the purposes for whichthey were obtained.

(xii) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 015125N)
Vijay Agarwal
(Partner)
Place : Gurgaon (Membership No. 094468)
Date : May 16 2015