To the Members of Ingersoll-Rand (India) Limited
Report on the Audit of the Indian Accounting Standards (Ind AS) Financial Statements
We have audited the accompanying Ind AS Financial Statements of Ingersoll-Rand (India)Limited ("the Company") which comprise the Balance Sheet as at 31 March 2018the Statement of Profit and Loss the Statement of Changes in Equity and the Statement ofCash Flows for the year then ended and a summary of the significant accounting policiesand other explanatory information (herein after referred to as "Ind AS FinancialStatements").
Management's Responsibility for the Ind AS 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 Ind AS Financial Statements that give a true and fair view of the state of affairsprofit (including other comprehensive income) changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Ind AS prescribed under section 133 of the Act.
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 of theaccounting records relevant to the preparation and presentation of the Ind AS FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Our responsibility is to express an opinion on these Ind AS Financial Statements basedon our audit.
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 of the Ind AS Financial Statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS Financial Statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the Ind AS Financial Statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS Financial Statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS Financial Statements.
We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS Financial Statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS Financial Statements give the information required bythe 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 31 March 2018 its profit (including other comprehensive income) changes in equityand its cash flows for the year ended on that date.
The comparative financial information of the Company for the year ended 31 March 2017included in these Ind AS Financial Statements are based on the previously issued statutoryfinancial statements prepared in accordance with Ind AS that are audited by thepredecessor auditor whose report dated 23 May 2017 expressed an unmodified opinion.
Our opinion is not modified in respect of this matter.
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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;
(d) In our opinion the aforesaid Ind AS Financial Statements comply with the IndianAccounting Standards prescribed under section 133 of the Act;
(e) On the basis of the written representations received from the directors as on 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 from being appointed as a director in terms of Section164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B"
(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 Ind AS Financial Statements Refer notes 12 and 25 to the Ind ASFinancial Statements;
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and
iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made since they do not pertain to the financial year ended 31 March 2018. Howeveramounts as appearing in the audited Ind AS Financial Statements for the year ended 31March 2017 have been disclosed.
for B S R & Co. LLP
Firm's registration number: 101248W/W-100022
Membership number: 063980
Date: 10 May 2018
Annexure - A to the Independent Auditors' Report
The Annexure referred to in paragraph 1 in Report on Other Legal and RegulatoryRequirements' of the Independent Auditor's Report to the members of Ingersoll-Rand (India)Limited ("the Company") on the Ind AS Financial Statements for the year ended 31March 2018. We report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) The Company has a regular programme of physical verification of its property plantand equipment by which all property plant and equipment are verified in a phased mannerover a period of three years. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the programme a part of property plant and equipment were verified during the yearand no material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties included in property plant and equipment are held in the name of the Company.
(ii) The inventory except goods-in-transit and stocks lying with third parties havebeen physically verified by the Management during the year. In our opinion the frequencyof such verification is reasonable. The discrepancies noticed on verification between thephysical stock and the book records were not material. For stocks lying with third partiesat the year-end written confirmations have been obtained by the Management.
(iii) The Company in the previous years granted unsecured loans to a company coveredin the register maintained under section 189 of the Companies Act 2013 (the Act').Further there are no Firms Limited Liability Partnerships or other parties covered inthe register maintained under section 189 of the Act.
(a) Since no loans have been granted/renewed during the year the provisions of clause3 (iii) (a) of the Companies (Auditor's Report) Order 2016 (the Order") arenot applicable to the Company.
(b) The loans granted are not yet due for payment. Accordingly paragraph 3(iii)(b) ofthe Order in respect of the receipt of the principal amounts of such loans is notapplicable to the Company. The interest on such loans has been received regularly duringthe year.
(c) There are no overdue amounts in relation to the principal and the interest on suchloans
(iv) According to the information and explanations given to us the Company has notgranted any loan or made any investment or provided any guarantee or security to theparties covered under section 185 of the Act. However the Company has complied withsection 186 of the Act with respect to loans given.
(v) According to the information and explanations given to us the Company has notaccepted any deposits. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 as amended prescribed by theCentral Government under section 148 of the Act and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However we have notmade a detailed examination of such 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 ofaccount in respect of undisputed statutory dues including Provident Fund Employee's StateInsurance Income tax Sales Tax Service Tax Duty of Customs Duty of Excise Valueadded tax Goods and Service Tax and any other material statutory dues have been regularlydeposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employee's State Insurance Income tax Sales taxService tax Duty of Customs Duty of excise Value added tax Goods and Service tax andother material statutory dues were in arrears as at 31 March 2018 for a period of morethan six months 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 and Duty of Customs Duty of Excise Value Added Taxand Goods and Service Tax which have not been deposited with the appropriate authoritieson account of any dispute other than those mentioned below:
|Name of the statute ||Nature of the dues ||Amount (INR in lacs) ||Period to which the amount relates ||Forum where the dispute is pending |
|Income Tax Act 1961 ||Tax ||228.83 (215.60)* ||AY 2003-04 and AY 2005- 06 ||The Honourable High Court of Karnataka |
|Income Tax Act 1961 ||Tax/Interest ||1158.10 ||AY 2004-05 ||Income Tax Appellate |
| || ||(514.50)* ||AY 2006- 07 ||Tribunal Bangalore |
| || || ||AY 2007-08 and || |
| || || ||2009-10 || |
|Income Tax Act 1961 ||Tax/Interest ||751.05 ||AY 2011-12 to ||Assessing Officer Income |
| || ||(724.68)* ||AY 2013-14 ||Tax |
|The Central Excise Act 1944 ||Excise duty ||67.06 ||2007-08 ||The Commissioner of Central |
| || || || ||Excise (Appeals) Bangalore |
|The Central Excise Act 1944 ||Excise duty ||2166.51 ||2008-2013 and ||The Customs Excise and |
| || ||(20.38)* ||2009-2013 ||Service Tax Appellate |
| || || || ||Tribunal (CESTAT) |
| || || || ||Ahmedabad |
|The Finance Act 1994 ||Service tax ||612.79 ||2008-2016 ||CESTAT Ahmedabad |
|The Finance Act 1994 ||Service tax ||244.35 ||2008-2016 and ||The Commissioner |
| || ||(41.64)* ||2012-2016 ||(Appeals) of Central Excise |
| || || || ||Ahmedabad |
|The Central Sales Tax Act 1956 ||Sales Tax ||275.77 ||2010-11 and ||The Gujarat Value Added Tax |
| || ||(175.34)* ||2011-12 ||Tribunal Ahmedabad |
|The Central Sales Tax Act 1956 ||Sales Tax ||206.52 ||2012-13 ||The Commissioner (Appeals) |
| || || || ||of Sales Tax Ahmedabad |
|The Central Sales Tax Act 1956 ||Sales Tax ||23.34 ||2013-14 ||The Commissioner of Sales |
| || || || ||Tax Ahmedabad |
* The amounts in parenthesis represent the payment made under protest.
(viii) According to the information and explanation given to us the Company did nothave any outstanding loans or borrowings from any financial institutions bank governmentor dues to debenture holders during the year. Accordingly paragraph 3(viii) of the orderis not applicable.
(ix) According to the information and explanations given to us the Company did notraise any money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly paragraph 3(ix) of the Order isnot applicable.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.
(xi) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with schedule V of the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Ind AS Financial Statements as required by theapplicable accounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
for B S R & Co. LLP
Firm's registration number: 101248W/W-100022
Membership number: 063980
Date: 10 May 2018