AUDITORS REPORT
To the Members of Carrier Air conditioning & Refrigeration limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of Carrier Airconditioning
& Refrigeration Limited (the "Company"), which comprise the Balance Sheet as
at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the
year then ended, and a summary of significant accounting policies and other explanatory
information, which we have signed under reference to this report.
Managements Responsibility for the Financial Statements
2. The Companys Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position, financial performance
and cash flows of the Company in accordance with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956 of India (the
"Act"). This responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditors Responsibility
3. Our responsibility is to express an opinion on these financial statements based
on our audit. We conducted our audit in accordance with the Standards on Auditing and
other applicable authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence, about the
amounts and disclosures in the financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the
auditors consider internal control relevant to the Companys preparation and fair
presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of the accounting
estimates made by Management, as well as evaluating the overall presentation of the
financial statements.
5. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion, and to the best of our information and according to the
explanations given to us, the accompanying financial statements give the information
required by the Act in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at
March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for the year ended
on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditors Report) Order, 2003, as amended by
the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central
Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter
referred to as the "Order"), and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the Order.
8. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which, to the best of 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 the
Company so far as appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with
by this Report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this report comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Act;
(e) On the basis of written representations received from the directors as on March
31,2014, and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31,2014, from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Act.
For Price Waterhouse & Co., Bangalore Firm Registration Number: 007567S Chartered
Accountants
Amitesh Dutta
Partner
Membership Number 058507
Place: Gurgaon
Date: August 27, 2014
ANNEXURE TO INDEPENDENT AUDITORS REPORT
Referred to in paragraph 7 of the Independent Auditors Report of even date to the
members of Carrier Air conditioning & Refrigeration Limited on the financial
statements as of and for the year ended March 31,2014
i. (a) The Company is maintaining proper records showing full particulars, including
quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased
programme designed to cover all the items over a period of 3 years which, in our opinion,
is reasonable having regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been physically verified by
the Management during the year and no material discrepancies have been noticed on such
verification.
(c) In our opinion, and according to the information and explanations given to us, a
substantial part of fixed assets has not been disposed off by the Company during the year.
ii. (a) The inventory including certain stocks with third parties has been physically
verified by the Management during the year. In respect of certain other inventory lying
with third parties, these have substantially been confirmed by them. In our opinion, the
frequency of verification is reasonable.
(b) I n our opinion, the procedures of physical verification of inventory followed by
the Management are reasonable and adequate in relation to the size of the Company and the
nature of its business.
(c) On the basis of our examination of the inventory records, in our opinion, the
Company is maintaining proper records of inventory. The discrepancies noticed on physical
verification of inventory as compared to book records were not material.
iii. The Company has not granted/taken any loans, secured or unsecured, to / from
companies, firms or other parties covered in the register maintained under Section 301 of
the Act. Therefore, the provisions of Clause 4(iii)[(b),(c) and (d) /(f) and (g)] of the
said Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us,
having regard to the explanation that, except for certain items of inventory which are of
proprietary nature for which suitable alternative sources do not exist, there is an
adequate internal control system commensurate with the size of the Company and the nature
of its business for the purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and records of the
Company, and according to the information and explanations given to us, we have neither
come across nor have been informed of any continuing failure to correct major weaknesses
in the aforesaid internal control system.
v. (a) According to the information and explanations given to us, there have been no
contracts or arrangements that need to be entered in the register maintained under Section
301 of the Act.
(b) In our opinion, and according to the information and explanations given to us,
there are no transactions made in pursuance of such contracts or arrangements exceeding
the value of Rupees Five Lakhs in respect of any party during the year.
vi. The Company has not accepted any deposits from the public within the meaning of
Sections 58A and 58AA of the Act and the rules framed there under.
vii. In our opinion, the Company has an internal audit system commensurate with its
size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the Company in
respect of products where, pursuant to the rules made by the Central Government of India,
the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of
Section 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are accurate or complete.
ix. (a) According to the information and explanations given to us and the records of
the Company examined by us, in our opinion, the Company is regular in depositing the
undisputed statutory dues, including provident fund, investor education and protection
fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs
duty, excise duty and other material statutory dues, as applicable, with the appropriate
authorities.
(b) According to the information and explanations given to us and the records of the
Company examined by us, there are no dues of wealth tax which have not been deposited on
account of any dispute. The particulars of dues of income tax, sales tax, service tax,
customs duty and excise duty as at March 31, 2014 which have not been deposited on account
of a dispute, are as follows:
| Name of the statute |
Nature of dues |
Amount (Rs. 000) |
Amount deposited under protest (Rs. 000) |
Period to which the amount relates |
Forum where the dispute is pending |
| Income Tax Act |
|
|
|
|
|
| Income Tax Act, 1961 |
Various business expenditures disallowed |
1,710 |
|
2001-02 |
Income Tax Appellate Tribunal |
| Income Tax Act, 1961 |
Demands raised by Income Tax Authorities |
6,321 |
|
2007-08 |
Assistant Commissioner of Income Tax |
| Income Tax Act, 1961 |
Demands raised by Income Tax Authorities on account of transfer pricing adjustment and
for leasehold improvements |
42,382 |
12,715 |
2009-10 |
Income Tax Appellate Tribunal |
| Income Tax Act, 1961 |
Demands raised by Income Tax Authorities on account of transfer pricing adjustment and
for Vehicle Purchase transaction |
32,089 |
|
2010-11 |
Income Tax Dispute Resolution Panel |
| Sales Tax Act |
|
|
|
|
|
| Delhi Sales Tax Act, 1975 & Delhi Value Added Tax Act, 2008 |
Demands raised by Sales tax Authorities |
15,614 |
4,941 |
1992-93 to 2008-09 |
Appellate Authority |
| Delhi Sales Tax Act, 1975 |
Demands raised by Sales tax Authorities |
2,594 |
1,202 |
1997-98 |
Delhi Sales Tax Tribunal |
| Delhi Value Added Tax Act, 2004 |
Demands raised by Sales tax Authorities |
11,896 |
- |
2009-10 |
Appellate Authority |
| The Uttar Pradesh Value Added Tax Act, 2008 |
Demand raised by check post Authority at Bareilly |
70 |
|
2008-09 |
Appellate Authority |
| The Uttar Pradesh Value Added Tax Act, 2008 |
Demand raised by Sales tax Authorities |
4,230 |
1,291 |
2010-11 & 2013-14 |
Appellate Authority |
| Uttar Pradesh Trade Tax Act, 1948 |
Demand due to non-submission of sales tax forms, tax charged on repaired compressors
,WCT certificates etc. |
36,579 |
6,917 |
1998-99 to 2002 -03 2005-06 to 2009-10 |
Appellate Authority |
| Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 |
Demand due to sales tax charged on Silvassa / Daman billing |
1,270 |
919 |
1999-00 |
Tribunal |
| Madhya Pradesh Vat Act, 2002 |
Demand raised by Sales tax Authorities on account of dispute in rate of tax |
2,049 |
763 |
2007- 08 2008- 09 2009- 10 |
Tribunal & Appellate Authority |
| Madhya Pradesh Vat Act, 2002 |
Demand raised by Sales tax Authorities on account of dispute in rate of tax |
1,550 |
388 |
2010-11 |
Appellate Authority |
| Rajasthan Sales Tax Act, 1994 |
Demands raised by Sales tax Authorities |
548 107 274 |
465 |
2003-04 1998-99, 1989-90 1997- 98, 1998- 99 |
Appellate Authority Rajasthan High Court Rajasthan Tax Tribunal |
| Gujarat Sales Tax Act, 1969 |
Demands raised by Sales tax Authorities |
5,837 |
3,506 |
1996-97 to 1998-99 |
Appellate Authority |
| Gujarat Sales Tax Act, 1969 |
Due to non submission of C forms and disallowance of Sec 5(2) sales and differential
tax on copper. |
2,519 |
469 |
2005-06 to 2008-09 |
Appellate Authority |
| Bombay Sales Tax Act, 1959 |
Demand due to Silvassa billing |
2,021 |
1,200 |
1996- 97 to 1997- 98 |
Appellate Authority |
| Bombay Sales Tax Act, 1959 |
Demands due to non submission of declaration forms |
90 |
|
2003-04 |
Appellate Authority |
| Maharashtra Value Added Tax Act, 2002 |
Demand due to VAT charged on Service Tax & Declarations pending |
1,200 6,495 6,191 |
229 3,100 |
2005- 06 2006- 07 2008-09 |
Appellate Authority |
| Tamil Nadu General Sales Tax Act, 1959 |
Demands raised by Sales tax Authorities |
6,165 |
1,916 |
1988- 89 1989- 90 2000-01 |
Appellate Authority |
| Tamil Nadu Value Added Tax Act, 2006 |
Demand by Puzhal Check Post Authority due to non acceptance of 5(2) transaction |
2,266 |
2,266 |
2011- 12 2012- 13 |
Appellate Authority |
| Tamilnadu Value Added Tax Act, 2006 |
Demands raised by Sales tax Authorities |
230 |
230 |
2012-13 |
Appellate Authority |
| Tamilnadu Value Added Tax Act, 2006 |
Demand by Roving Squad due to non acceptance of 5(2) Transaction |
1,260 |
283 |
2013-14 |
Appellate Authority |
| Kerala General Sales Tax Act, 1963 |
Demands raised by Sales tax Authorities |
153 249 |
70 75 |
1998-99 2005-06 |
Appellate Authority |
| Kerala General Sales Tax Act, 1963 |
Demands raised by Sales tax Authorities |
295 |
- |
2000-01 |
Tribunal |
| Kerala General Sales Tax Act, 1963 |
Demands raised by Sales tax Authorities |
4,578 |
- |
2002-03 |
Tribunal |
| Kerala General Sales Tax Act, 1963 |
Demands raised by Sales tax Authorities |
3,429 |
- |
2003-04 |
Tribunal |
| Kerala General Sales Tax Act, 1963 |
Demands raised by Sales tax Authorities |
2,527 |
- |
2004-05 |
Tribunal |
| Kerala Value Added Tax Act, 2003 |
Demands raised, by Sales tax Authorities |
1,605 |
1,605 |
2012-13 |
Appellate Authority |
| Kerala Value Added Tax Act, 2003 |
Demand on account of detention of consignment at Cochin Checkpost |
728 |
728 |
2013-14 |
Appellate Authority |
| Jharkhand Sales Tax Act |
Demand due to non submission of declaration forms etc. |
327 |
|
1995- 96 1996- 97 1997- 98 |
Appellate Authority |
| Bihar Finance Act, 1981 |
Demand due to non submission of forms |
2,740 |
67 |
2000- 01 2001- 02 |
Tribunal |
| Bihar Value Added Tax Act, 2005 |
Demands raised by Sales tax Authorities on account of enhancement of turnover |
3,677 |
|
2007-08 |
Appellate Authority |
| Haryana General Sales Tax Act, 1973 |
Demands raised by Sales tax Authorities |
3,163 |
3,163 |
1995- 96 1996- 97 1998-99 |
High Court |
| Haryana Value Added Tax, 2003 |
Demand due to non submission of declaration forms |
5,402 |
|
2008-09 |
High Court |
| Haryana Value Added Tax, 2003 |
Demands raised by Sales tax Authorities |
10,235 |
10,235 |
2012-13 |
Tribunal |
| Andhra Pradesh General Sales Tax Act, 1957 |
Demands raised by Sales tax Authorities |
2,177 |
|
2002-03 To 2004-05 |
Appellate Authority |
| Andhra Pradesh General Sales Tax Act, 1957 |
Demands raised by Sales tax Authorities |
11,685 |
6,336 |
2002-03 To 2004-05 |
Tribunal |
| Andhra Pradesh Value Added Tax Act, 2005 |
Demands raised by Sales tax Authorities |
12,118 |
1,515 |
2005-06 To 2008-09 |
Appellate Authority |
| West Bengal Value Added Tax Act, 2003 |
Demands raised by Sales tax Authorities |
1,202 |
- |
2006- 07 2007- 08 |
Appellate Authority |
| Karnataka Sales Tax Act, 1957 |
Consignment detained at Tumkur Checkpost |
489 |
489 |
2003-04 |
Tribunal |
| Central Sales Tax Act, 1956 and Goa, Daman and Diu (Sales Tax) Act, 1964 |
Demand due to non submission of sales tax forms and misuse of form C purchase |
74,022 |
|
2002- 03 2003- 04 2004- 05 |
Appellate Authority |
| Central Excise Duty |
|
|
|
|
|
| Central Excise Act, 1944 |
Additional duty on goods / stock transferred from factory to depot |
21,694 |
|
1998-2003 |
Customs, Excise and Service Tax Appellate Tribunal |
| Central Excise Act, 1944 |
Additional duty due to difference in MRP and transaction value for split air
conditioners. |
3,228 |
|
2000-01 |
Commissioner (Central Excise) |
| Central Excise Act, 1944 |
Demands raised by Excise Authorities for Mould & Dies supplied to Job worker
without reversal of duty. |
628 |
|
2001-02 |
High Court, Mumbai |
| Central Excise Act, 1944 |
Show Cause Notice for interest on Duty reversed on Input cleared as such |
483 |
|
2002-07 |
Commissioner (Central Excise) |
| Central Excise Act, 1944 |
Demand for refund amount on Stock Transfer of non MRP goods from Factory to Branches |
1,319 |
|
2006-07 |
Customs, Excise and Service Tax Appellate Tribunal |
| Central Excise Act, 1944 |
Demand on import of power pack and supply along with bus air conditioning systems,
without payment of excise duty (clandestine removal) |
2,640 |
|
1996-01 |
Commissioner Appeal (Central Excise), Bangalore |
| Customs Duty |
|
|
|
|
|
| Customs Act, 1962 |
Show Cause Notice for imposing redemption fine, confiscation, penalty etc |
2,500 |
|
1998-00 |
Commissioner-Customs |
| Customs Act, 1962 |
Show Cause Notice for demanding additional duty on imported filters. |
75 |
|
1999-00 |
Asst. Commissioner Customs |
| Service Tax |
|
|
|
|
|
| Finance Act, 1994 |
Show Cause Notice demanding Service tax on overseas commission income |
208,364 |
|
2006-2010 |
Customs, Excise and Service Tax Appellate Tribunal |
| Finance Act, 1994 |
Show cause Notice demanding the Service tax on overseas commission income |
56,507 |
|
2010-13 |
Commissioner (Central Excise & Service Tax) |
| Finance Act, 1994 |
Show Cause Notice for recovery of Cenvat credit taken on AMC Service, Booking
Commission, Service Commission and Warranty Service |
1,018,437 |
65,000 |
2005-2012 |
Customs, Excise and Service Tax Appellate Tribunal |
| Finance Act, 1994 |
Show Cause Notice for recovery of Cenvat credit taken on AMC Service, Booking
Commission, Service Commission and Warranty Service |
119,054 |
|
2012-2013 |
Commissioner (Central Excise & Service Tax) |
| Finance Act, 1994 |
Show Cause Notice for reversal of Service Tax credit taken on various input services |
52,307 |
3,000 |
2006-2012 |
Customs, Excise and Service Tax Appellate Tribunal |
| Finance Act, 1994 |
Show Cause Notice for reversal of Service Tax credit taken on various input services |
96 |
|
2013 |
Commissioner of Service Tax |
| Finance Act, 1994 |
Levy of service tax on exempted services of installation / commissioning |
854 |
|
1997-02 |
Commissioner (Appeals) |
| Finance Act, 1994 |
Show Cause Notice for amount reimbursed for Storage and disallowance of service tax
credit on bills |
2,871 |
|
2008- 09 2009- 10 |
Commissioner of Service Tax |
x. The Company has no accumulated losses as at the end of the financial year and it has
not incurred any cash losses in the financial year ended on that date or in the
immediately preceding financial year.
xi. As the Company does not have any borrowings from any financial institution or bank
nor has it issued any debentures as at the balance sheet date, the provisions of Clause
4(xi) of the Order are not applicable to the Company.
xii. The Company has not granted any loans and advances on the basis of security by way
of pledge of shares, debentures and other securities. Therefore, the provisions of Clause
4(xii) of the Order are not applicable to the Company.
xiii. As the provisions of any special statute applicable to chit fund/ nidhi/ mutual
benefit fund/ societies are not applicable to the Company, the provisions of Clause
4(xiii) of the Order are not applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the
Order are not applicable to the Company.
xv. In our opinion, and according to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from banks or financial
institutions during the year. Accordingly, the provisions of Clause 4(xv) of the Order are
not applicable to the Company.
xvi. The Company has not raised any term loans. Accordingly, the provisions of Clause
4(xvi) of the Order are not applicable to the Company.
xvii. The Company has not raised any funds on short term basis. Accordingly, the
provisions of Clause 4(xvii) of the Order are not applicable to the Company.
xviii. The Company has not made any preferential allotment of shares to parties and
companies covered in the register maintained under Section 301 of the Act during the year.
Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the
Company.
xix. The Company has not issued any debentures during the year and does not have any
debentures outstanding as at the beginning of the year and at the year end. Accordingly,
the provisions of Clause 4(xix) of the Order are not applicable to the Company.
xx. The Company has not raised any money by public issues during the year. Accordingly,
the provisions of Clause 4(xx) of the Order are not applicable to the Company.
xxi. During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanations given to us, we have neither come across any
instance of material fraud on or by the Company, noticed or reported during the year, nor
have we been informed of any such case by the Management.
For Price Waterhouse & Co.,
Bangalore
Firm Registration Number: 007567S
Chartered Accountants
Amitesh Dutta
Partner
Membership Number: 058507
Place: Gurgaon
Date: August 27, 2014
+91-9892691696
