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Schaeffler India Ltd.

BSE: 505790 Sector: Engineering
NSE: SCHAEFFLER ISIN Code: INE513A01014
BSE 00:00 | 16 Aug 5324.55 -68.65
(-1.27%)
OPEN

5488.00

HIGH

5499.00

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5311.05

NSE 00:00 | 16 Aug 5309.30 -69.40
(-1.29%)
OPEN

5330.05

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OPEN 5488.00
PREVIOUS CLOSE 5393.20
VOLUME 72
52-Week high 5960.00
52-Week low 4136.05
P/E 34.86
Mkt Cap.(Rs cr) 8,849
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5488.00
CLOSE 5393.20
VOLUME 72
52-Week high 5960.00
52-Week low 4136.05
P/E 34.86
Mkt Cap.(Rs cr) 8,849
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

To the Members of Schaeffler India Limited

(formerly known as FAG Bearings India Limited)

Report on the Indian Accounting Standards (Ind AS) Financial Statements

We have audited the accompanying Ind AS financial statements of Schaeffler IndiaLimited (formerly known as FAG Bearings India Limited) (‘the Company') whichcomprise the Balance Sheet as at 31 December 2017 and the Statement of Profit and Loss(including Other Comprehensive Income) the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and a summary of significant accountingpolicies and other explanatory information.

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 financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 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; the selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

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 depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd 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 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.

Opinion

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 including the Ind AS of the financialposition of the Company as at 31 December 2017 and its financial performance includingother comprehensive income its cash flows and the changes in equity for the year ended onthat 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 ofthe Act we give in the Annexure ‘A' a statement on the matters specified inparagraphs 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 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 the Statement of Profit and Loss the Cash Flow Statement andthe Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards notified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) On the basis of the written representations received from the directors as on 31December 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 December 2017 from being appointed as a director in terms ofSection 164(2) of the 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 ‘B' to this report; and

(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 note 34 to the Ind AS financialstatements.

ii. The Company has made provisions as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - refer note 37 to the Ind AS 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 Registration Number: 101248W/W-100022
Vijay Mathur
Partner
New Delhi: February 7 2018 Membership No.: 046476

Annexure ‘A' to the Independent Auditors' Report

December 31 2017 (Referred to in our report of even date)

(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.

(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 fixed assets are held in the name of the Company.

(ii) The inventory except goods-in-transit and stocks lying with certain thirdparties has been physically verified by the management during the year. For stocks lyingwith third parties at the year-end written confirmations have been obtained. In ouropinion the frequency of such verification is reasonable. No material discrepancies werenoticed on such physical verification.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under Section 189 of the Companies Act 2013. Accordinglyparagraph 3(iii) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to usthere are no loans guarantees or securities in respect of which provisions of Section 185of the Companies Act 2013 are applicable. Further in our opinion and according to theinformation and explanations given to us provisions of Section 186 of the Companies Act2013 in respect of loans given have been complied with by the Company.

(v) The Company has not accepted any deposits to which the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 apply. Accordingly paragraph 3(v) of the Order isnot applicable 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 for the year ended 31December 2017 and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. However we have not made a detailed examination of therecords.

(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 Employees' StateInsurance Income-tax Sales-tax Wealth tax Service tax Customs duty Excise dutyValue added tax Goods and services tax and other material statutory dues have beenregularly deposited during the year by the Company with the appropriate authorities.

(b) 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 Goods and servicestax and other material statutory dues were in arrears as at 31 December 2017 for a periodof more than six months from the date they became payable.

(c) 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 statute Nature of dues Amount Period Forum where dispute is pending
(INR in million)
State and Central Sales Tax Act Duty and interest 9.9 2009-10 Commissioner (Appeals)
0.1 2006-07 Dy. Commissioner Sales Tax
1.2 2012-13 Dy. Commissioner Sales Tax
2.0 2013-14 2014-15 Dy. Commissioner Sales Tax
Income Tax Act 1961 Tax and interest 11.6 2004-05 2005-06 2007-08 Income Tax Appellate Tribunal

Above amounts are net of amounts paid under protest for sales-tax aggregating to INR20.5 million and for Income-tax aggregating to INR 292.3 million.

(viii) In our opinion and according to the information and explanations given to usthe Company does not have any loans or borrowing from financial institutions or banks orGovernment or dues to debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable to the Company.

(ix) According to the information and explanations given to us the Company has notraised any money by way of initial public offer / further public offer / debt instrumentsand term loans. Accordingly paragraph 3(ix) of the Order is not applicable to theCompany.

(x) In our opinion and according to the information and explanations given to us wereport that no fraud by the Company or on the Company by its Officers and employees hasbeen noticed or reported during the year.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has been paid /provided in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V to the Companies Act 2013.

(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 to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with Section 177 and Section 188 of the Companies Act 2013 where applicableand details of such transactions have been disclosed in the notes to the Ind AS financialstatements as required by the applicable accounting standards.

(xiv) According to the information and explanations given 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 under review. Accordingly paragraph 3(xiv) of the Order is not applicable to theCompany.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with them asreferred to in Section 192 of the Companies Act 2013. Accordingly paragraph 3(xv) of theOrder is not applicable to the Company.

(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.Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm Registration Number: 101248W/W-100022
Vijay Mathur
Partner
New Delhi: February 7 2018 Membership No.: 046476

Annexure ‘B' to the Independent Auditors' Report

Report on the Internal Financial Controls under clause (i) of sub-section 3 of Section143 of the Companies Act 2013 (‘the Act')

We have audited the internal financial controls over financial reporting of SchaefflerIndia Limited (formerly known as FAG Bearings India Limited) (‘the Company') as at 31December 2017 in conjunction with our audit of the Ind AS financial statements of theCompany for the year ended 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 issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively 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 Ind AS 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 process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 31 December 2017 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 B S R & Co. LLP
Chartered Accountants
Firm Registration Number: 101248W/W-100022
Vijay Mathur
Partner
New Delhi: February 7 2018 Membership No.: 046476