1. We have audited the attached Balance Sheet of Greaves Cotton
Limited, (the Company) as at 31 March 2011, and also the Profit and
Loss Account and the Cash Flow Statement for the nine months period
ended on that date annexed there-to (collectively referred as the
financial statements). 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.
2. We conducted our audit in accordance with the 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.
3. As required by the Companies (Auditors Report) Order,
2003 (the Order) (as amended), issued by the Central Government of
India in terms of sub-section (4A) of section 227 of the Companies Act,
1956 (the Act), we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to
above, 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 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 purposes of our audit have been received from the branch not
visited by us. The Branch Auditors Report have been forwarded to us
and have been appropriately dealt with;
c. The financial statements dealt with by this report are in agreement
with the books of account and with the audited returns from the branch;
d. On the basis of written representations received from the
directors, as at 31 March 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as at
31 March 2011 from being appointed as a director in terms of clause (g)
of sub-section (1) of section 274 of the Act;
e. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements dealt with by
this report comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Act and the Rules framed there
under and 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, in the case of:
i) the Balance Sheet, of the state of affairs of the Company as at 31
March 2011;
ii) the Profit and Loss Account, of the profit for the nine months
period ended on that date; and
iii) the Cash Flow Statement, of the cash flows for the nine months
period ended on that date.
ANNEXURE TO THE AUDITORS REPORT
of even date to the members of Greaves Cotton Limited, on the financial
statements for the nine months period ended 31 March 2011 (the
period)
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over
a period of three years. In our opinion, this periodicity of physical
verification 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) In our opinion, a substantial part of fixed assets has not been
disposed off during the period.
(ii) (a) The inventory has been physically verified during the period
by the management. In our opinion, the frequency of verification is
reasonable.
(b) 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) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has not granted any loan, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly, the provisions of clauses
4(iii)(b) to (d) of the Order are not applicable.
(b) 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 Act. Accordingly, the provisions of clauses
4(iii)(f) and 4(iii)(g) of the Order are not applicable.
(iv) In our opinion, 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 and fixed assets and for the
sale of goods and services. During the course of our audit, no major
weakness has been noticed in the aforesaid internal control system.
(v) (a) In our opinion, the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Act have been so entered.
(b) In our opinion, the transactions made in pursuance of such
contracts or arrangements and exceeding the value of rupees five lakhs
in respect of any party during the period have been made at prices
which are reasonable having regard to prevailing market prices at the
relevant time.
(vi) In our opinion, the Company has complied with the provisions of
sections 58A and 58AA and other relevant provisions of the Act and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. No order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal in this regard.
(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 pursuant to the Rules made by the Central Government under
section 209 (1)(d) of the Act for the maintenance of cost records in
respect of Companys products and are of the opinion that, prima facie,
the prescribed accounts and records have been made and maintained.
However, we have not made a detailed examination of the records with a
view to determine whether they are accurate or complete.
(ix) (a) 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, cess and other material statutory dues,
as applicable, with the appropriate authorities. Further, no undisputed
amounts payable in respect thereof were outstanding at the period end
for a period of more than six months from the date they become payable.
(b) The dues outstanding in respect of sales tax, income tax, customs
duty, wealth tax, excise duty, cess on account of any dispute, are as
follows:
Name of the statute Nature of dues Amount Period to which
(Rs. crore) the amount
relates
(financial year)
Central Sales Tax Non submission of 0.02 1992-93
Act, 1956 and Local forms, interest and
Sales Tax Acts other matters
0.34 1996-97
2002-03
2005-06
2007-08
0.20 2001-02
1.31 1999-00
1994-95
2000-01
2001-02
2002-03
2004-05
0.05 2002-03
0.42 2003-04
&
2004-05
0.77 1991-92
1999-00
2000-01
0.44 1992-93
1997-98
1998-99
0.09 2003-04
0.40 2008-09
to
2010-11
Central Excise Act, Disallowance of 0.03 1996-97
1944 exemption
Central Excise Penalty for 0.62 1993-94
Rules, 1944 incorrect valuation to
1996-97
Central Excise Act, Disallowance of 0.25 1991-92
1944 input credit and 1996-97
penalty
Income Tax Act, Minimum 2.84 2003-04
1961 Alternate Tax
Name of the statute Forum where dispute is pending
Central Sales Tax Additional Commissioner (Appeals)
Act, 1956 and Loacl
Sales Tax Acts
Additional Commissioner (Appeals)
Revision Board
Appellate Tribunal
High Court
Revision Board
Assessing Officer
Revision Board
Joint Commissioner of Sales Tax
(Appeals)
Supreme Court
Deputy Commissioner (Appeals)
Commissioner of Central Excise (Appeals)
High Court
Commissioner (Appeals)
(x) In our opinion, the Company has no accumulated losses at the end of
the financial year and it has not incurred cash losses in the current
period and the immediately preceding financial year.
(xi) In our opinion, the Company has not defaulted in repayment of dues
to a financial institution or a bank during the period. The Company has
no dues payable to debenture holders during the period.
(xii) In our opinion, the Company has not granted any loans and
advances on the basis of security by way of pledge of
shares, debentures and other securities. Accordingly, the provisions of
clause 4(xii) of the Order are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Accordingly, the provisions of clause 4(xiii) of
the Order are not applicable.
(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.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xvi) In our opinion, the Company has applied the term loans for the
purpose for which the loans were obtained.
(xvii) In our opinion, no funds raised on short-term basis have been
used for long-term investment.
(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 Act. Accordingly, the provisions of clause 4(xviii) of the
Order are not applicable.
(xix) The Company has neither issued nor had any outstanding debentures
during the period. Accordingly, the provisions of clause 4(xix) of the
Order are not applicable.
(xx) The Company has not raised any money by public issues during the
period. Accordingly, the provisions of clause 4(xx) of the Order are
not applicable.
(xxi) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For Walker, Chandiok & Co
Chartered Accountants
Firm Registration No: 001076N
per Khushroo B. Panthaky
Partner
Membership No. F-42423
Place : Mumbai
Date : 29 April 2011
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