Container Corporation of India

We have audited the attached Balance Sheet of Container Corporation of
 India Limited as at 31st March,2009, and the Profit & Loss Account and
 also the Cash Flow Statement of the company for the year ended on that
 date annexed thereto, in which are incorporated the accounts of six
 regions audited by respective branch auditors appointed by the
 Comptroller and Auditor General of India, relied upon by us and the
 accounts of Northern Region, North Central Region and Corporate Office,
 New Delhi audited by us. These financial statements are the
 responsibility of the companys management. Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 We conducted our audit in accordance with auditing standards generally
 accepted in India. Those standards require that we plan and perform the
 audit to obtain reasonable assurance about whether the financial
 statements are free of material misstatement. An audit includes
 examining, on a test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 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 section 227 (4A) of the
 Companies Act, 1956, and on the basis of such examination of the books
 and records of the Company as we considered appropriate and the
 information and explanations given during the course of audit and after
 considering the reports of branch auditors, we enclose in the Annexure
 a statement on the matters specified in Paragraphs 4 and 5 of the said
 Order.
 
 1.  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 section 227 (4A)
 of the Companies Act, 1956, and on the basis of such examination of the
 books and records of the Company as we considered appropriate and the
 information and explanations given during the course of audit and after
 considering the reports of branch auditors, we enclose in the Annexure
 a statement on the matters specified in Paragraphs 4 and 5 of the said
 Order.
 
 2.  Attention is drawn to Note Nos. 2(d) and 5 of Schedule 11. The
 company has made provision for Income Tax for the year after
 considering tax deduction of Rs.110.78 crore under section 80IA of the
 Income Tax Act, 1961 in respect of new Inland Container Depots (Inland
 Ports) (Rs.29.17 crore) and Rail System(Rs.81.61 crore). The Assessing
 Officer disallowed the deduction claimed by the company u/s 80IA in
 earlier years. In appeal, the ITAT upheld the decision of CIT(A) in
 allowing deduction u/s 80IA in respect of Rail System, whereas for
 Inland Ports the claim has been disallowed and the company has filed
 appeals before the Honble Delhi High Court.
 
 3.  Further to our comments in the Annexure referred to in paragraph 1
 above, we report that:
 
 i) Sale/Lease Deeds in respect of Land & Buildings valuing Rs. 7.93
 Crore are yet to be executed in favour of the company (Note no. 2,
 Schedule 3).
 
 ii) Balances of Sundry Debtors, Loans & Advances, Deposits, Sundry
 Creditors (including Indian Railways) have not been
 confirmed/reconciled. (Note no. 13, Schedule 11).
 
 iii) We are unable to comment on the shortfall, if any, in the value of
 non-moving stock of stores & spare parts. (Note no. 21, Schedule 11).
 
 4.  We further report that:
 
 a) We have obtained all the information and explanations, which to the
 best of 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 the Company so far as appears from our examination of
 those books and proper returns adequate for the purpose of our audit
 have been received from the branch auditors in respect of the regions
 audited by them.
 
 c) The reports of the branch auditors on the accounts of regions
 audited by them have been received and considered by us in preparing
 this report after making such adjustments, as we considered necessary.
 
 d) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account.
 
 e) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with Accounting
 Standards referred to in sub-section (3C) of Section 211 of the
 Companies Act, 1956.
 
 f) In terms of Department of Company Affairs GSR 829 (E) dated 21st
 October 2003, Government Companies are exempt from applicability of
 provisions of Section 274 (1) (g) of the Companies Act, 1956.
 
 g) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts, subject to our
 comments in paragraphs 3 (i) above and without considering the
 observations made in paragraphs 3 (ii) and (iii) above, the effect of
 which could not be determined, read together with Significant
 Accounting Policies and Notes on Accounts, give the information
 required by the Companies Act, 1956, in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India-
 
 i) in the case of Balance Sheet, of the state of affairs of the company
 as at 31st March, 2009;
 
 ii) in the case of Profit & Loss Account, of the profit for the year
 ended on that date; and
 
 iii) in the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE ON THE
 ACCOUNTS OF CONTAINER CORPORATION OF INDIA LIMITED FOR THE YEAR ENDED
 31st MARCH, 2009
 
 (i) (a) The company has generally maintained proper records showing
 full particulars, including quantitative details and situation of its
 fixed assets.
 
 (b) As per the information and explanations given to us, fixed assets
 have been physically verified by the management during the year in
 phased manner, which in our opinion, is reasonable having regards to
 the size of the company and nature of Fixed Asset. The discrepancies
 noticed on such verification were not material.
 
 (c) The company has disposed/written off some of its fixed assets
 during the year. However, in our opinion this has not affected the
 going concern status of the company.
 
 (ii) (a) The inventory of the company consisting of stores and spare
 parts has been physically verified by the management on test check
 basis. In our opinion, the frequency of verification is reasonable.
 
 (b) The procedures of physical verification of inventories followed by
 the management are generally reasonable and adequate in relation to the
 size of the company and the nature of its business.
 
 (c) The company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 (iii) (a) According to the information and explanations given to us,
 the company has not granted any loans, secured or unsecured to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (b) Not applicable in view of para (a) above.
 
 (c) Not applicable in view of para (a) above.
 
 (d) Not applicable in view of para (a) above.
 
 (e) The company has not taken any loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 (f) Not applicable in view of para (e) above.
 
 (g) Not applicable in view of para (e) above.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the company and the nature of its business with regard
 to the purchase of stores and spare parts, fixed assets and for
 rendering services.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that there are no contracts or arrangements that
 need to be entered into the register maintained under section 301 of
 the Companies Act, 1956.
 
 (b) Not applicable in view of para (a) above.
 
 (vi) The company has not accepted any deposits from the public in terms
 of section 58A and 58AA and other relevant provisions of the Companies
 Act, 1956.
 
 (vii) In our opinion, the company has an internal audit system, which
 is generally commensurate with the size and nature of its business.
 
 (viii) As informed to us, the Central Government has not prescribed
 maintenance of cost records under section 209 (1) (d) of the Companies
 Act, 1956, in respect of the business of the company.
 
 (ix) (a) The company is generally regular in depositing with
 appropriate authorities undisputed statutory dues including provident
 fund, investor education and protection fund, employees state
 insurance, income tax, sales tax, wealth tax, service tax, custom duty,
 excise duty, cess and other material statutory dues applicable to it.
 According to the information and explanations given to us, the
 undisputed amounts payable in respect of outstanding statutory dues
 that were in arrears, as at 31st March,2009 for a period of more than
 six months from the date they became payable are given below:
 
 Name of the Statute              Nature of the Dues
 
 Customs Act, 1962               Custom Duty (Northern Region)
 
 Customs Act, 1962               Custom Duty (Northern Region)
 
 Finance Act,1994                Service Tax(NWR)
 
 Amount (Rs. in Crore)           Period to which the amount Relates
 
 0.90                                           Upto 2000-01
 
 0.02                                               2002-03
 
 0.10                                               2005-06
 
 In addition the company has made provision for property tax payable in
 respect of its assets at various locations amounting to Rs.11.51 Crore
 upto 31st March,2009, on estimated basis, pending commencement /
 completion of assessments by the appropriate authorities.
 
 (b) According to the information & explanations given to us, dues of
 income tax, sales tax, wealth tax, service tax, customs duty, excise
 duty and cess that have not been deposited on account of any dispute
 are given below:
 
 Name of the Statute/Authority          Nature of the Dues
 
 Finance Act, 1994                      Service Tax
 
 Finance Act, 1994                      Service Tax
 
 Sub-registrar, Vadodara                Additional Stamp Duty
 
 Delhi Value Added Tax, 2004            Penalty u/s 86(19)
 
 Sales Tax Act                          Sales Tax (NR)
 
 Sales Tax Act                          Sales Tax (NR)
 
 Sales Tax Act                          Sales Tax (SR)
 
 Building & Other Workers               Cess
 
 Welfare Cess Act, 1996
 
 
 Amount(Rs. in Crore)      Period to which the amount relates
 
 0.01                      01st May 2003 to 16th July 2003
 
 0.01                         January 2004 to March 2004
 
 0.20                                         2003-04
 
 0.31                               14th December 2005
 
 0.01                                     Year 1997-98
 
 0.08                                     Year 2000-01
 
 0.42                                     Year 2000-01
 
 0.42                                     Year 2008-09
 
 
 (x) The company has neither accumulated losses as at the end of the
 financial year nor has incurred any cash losses during the financial
 year covered by our audit and also in the immediately preceding
 financial year.
 
 (xi) The company has not defaulted in repayment of dues to financial
 institution or banks. The company has not issued any debentures.
 
 (xii) The company has not granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion, the company is not a chit fund or a nidhi mutual
 benefit fund/society.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the company is not dealing in shares, securities and other
 investments. The investments in the shares of joint ventures &
 subsidiary company are held by the company in its own name and are not
 traded. However, letter of allotment/Share Certificates in one joint
 venture Company costing Rs. 0.05 Crore are not available with the
 company. (Note to Schedule 4)
 
 (xv) The company has given counter indemnity to the guarantor (a joint
 venture partner) in relation to the guarantor providing payment
 guarantees to the banks for loans raised by the joint venture company,
 to the extent of 26% (the shareholding of the company in joint venture)
 of the loan and interest outstanding. As at 31st March,2009, the amount
 of such counter indemnity works out to Rs. 220.47 Crore. In our
 opinion, the terms and conditions thereof are not prima-facie
 prejudicial to the interests of the company.
 
 (xvi) The company has not taken any term loans during the year.
 
 (xvii) As the company has not raised any funds on short-term basis,
 this clause is not applicable.
 
 (xviii)The company has not made any preferential allotment of shares to
 parties or companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 (xix) The company has not issued any debentures during the year.
 
 (xx) As the company has not raised money by public issues during the
 year, this clause is not applicable.
 
 (xxi) As per the information and explanations given to us, no fraud on
 or by the company has been noticed or reported during the year.
 
                           For    Hingorani M. & Co.
                           Chartered Accountants
                           (Pardeep Kumar)
 Date : 17.07.2009          Partner
 Place : New Delhi           M. No. 085630