aditya birla nuvo ltdmerged Auditors report


To the Members of Aditya Birla Nuvo Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Aditya Birla Nuvo Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, 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, in which are incorporated the branchs financial statements for the year ended on that date audited by the branch auditors of the Companys branch at Veraval.

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

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 standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companys management and Board of Directors, as well as evaluating the overall presentation of the standalone financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, 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 (Auditors report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of accounts required bylaw have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branch not visited by us;

(c) The reports on the accounts of the branch office of the Company audited under section 143 (8) of the Act by branch auditors has been sent to us and have been properly dealt by us in preparing this report;

(d) 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 and with the audited financial statements received from branch not visited by us;

(e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(f) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;

(h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone financial statements - Refer Note 46(iv)(b) to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts Refer Note 46(iv)(a) to the standalone financial statements;

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

Other Matter

The accompanying standalone financial statements include total assets of 828.51 Crores as at March 31, 2016, and total revenues of 928.30 Crores for the year ended on that date, in respect of a branch, which has been audited by one of us jointly with other branch auditors, which financial statements, other financial information and auditors reports have been furnished to us. Our opinion, in so far as it relates amounts and disclosures included in respect of the branch is based solely on such report. Our opinion is not modified in respect of this matter.

For and on behalf of For and on behalf of
KHIMJI KUNVERJI & CO. S R B C & CO LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration Number: 105146W ICAI Firm Registration Number: 324982E/E300003
per Shivji K. Vikamsey per Vijay Maniar
Partner Partner
Membership Number: 2242 Membership Number: 36738
Mumbai Mumbai
Date: May 20, 2016 Date: May 20, 2016

Annexure 1 referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements "of our report of even date Re: Aditya Birla Nuvo Limited (the Company)

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

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the title deeds of immovable properties, other than self-constructed buildings, included in fixed assets are held in the name of the Company except mentioned below:

No. of Cases Asset Category Gross Block Net Block Remarks
1 Leasehold Land 1.33 1.33 Titles deeds pending to be registered in the name of the Company.
2 Buildings 22.99 19.04
3 Freehold land 7.05 7.05 Title deeds are in the names of the entities which got merged with the Company in the past.

As explained to us, steps are being taken to complete the name transfer formalities.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them and no material discrepancies were noticed in respect of such confirmations.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act, related to the manufacture or service of Companys products to which said rules are applicable, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:

Name of the Statute Nature of the Dues Period Forum where dispute is pending Amount ( in Crores)
Income Tax Act, 1961 Tax Demand AY 2006-07, AY 2009-10 to AY 2012-13 Commissioner (Appeals) 121.87
AY 2010-11 & AY 2011-12 ITAT 0.99
Customs Act, 1962 Tax Demand, Interest and Penalty 1975-76, 1976-77, 1986-87 & 2001-02 High Court 0.39
2003-04, 2007-08 2009-10, 2013-14 CESTAT 0.49
2013-14 Commissioner (Appeals) 0.76
2004-05, 2005-06, 2008-09 Assessing authorities 0.16
Central Excise Act, 1944 Excise Duty, Interest and Penalty 1977-78, 1986-87 High Court 0.06
1985-86, 1991-92, 1995-96 & 2004-05, 2008-09 CESTAT 0.30
1994-95, 1996-97 & 1998-99, 2005-2006 to 2011-12 Commissioner (Appeals) 0.89
1997-98 to 2000-01 Commissioner/Deputy Commissioner 0.05
Sales Tax Act Entry Tax 2013-14 to 2015-16 High Court 15.99
Sales Tax, Value 1999-00, 2004-05 High Court 0.09
Added Tax, Central 2007-08, 2008-09 Appellate Tribunal 0.99
Sales Tax, Non-Submission of forms, Purchase Tax, 1995-96 to 2012-13 Commissioner (Appeals)/Divisional Boards 16.01
Trade Tax including Interest 2007-08, 2011-12 Assessing authorities 3.01
Finance Act, 1994 (Service Tax) Service Tax including Interest and Penalty 2002-03, 2003-04, 2006-07 to 2010-11 CESTAT 4.61
2006-07, 2007-08, 2012-13 Commissioner (Appeals) 1.80
Gujarat Green Cess Act, 2011 Cess on generation of electricity through captive power generation plants 2011-12 to 2014-15 Supreme Court of India 2.29

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a financial institution, bank or government or debenture holders.

(ix) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained other than temporary deployment Idle/surplus funds which have been invested in liquid assets.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and hence not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For and on behalf of For and on behalf of
KHIMJI KUNVERJI & CO. S R B C & CO LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration Number: 105146W ICAI Firm Registration Number: 324982E/E300003
per Shivji K. Vikamsey per Vijay Maniar
Partner Partner
Membership Number: 2242 Membership Number: 36738
Mumbai Mumbai
Date: May 20, 2016 Date: May 20, 2016

Annexure 2 to the Independent Auditors Report of even date on the Standalone Financial Statements of Aditya Birla Nuvo Limited.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Aditya Birla Nuvo Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their report referred to in the Other Matters paragraph below is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companys 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.

Other Matter

Our report under Section 143(3) (i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Company, insofar as it relates to one branch which is audited by one of us jointly with other auditors, is based on their corresponding report.

For and on behalf of For and on behalf of
KHIMJI KUNVERJI & CO. S R B C & CO LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration Number: 105146W ICAI Firm Registration Number: 324982E/E300003
per Shivji K. Vikamsey per Vijay Maniar
Partner Partner
Membership Number: 2242 Membership Number: 36738
Mumbai Mumbai
Date: May 20, 2016 Date: May 20, 2016