1. We have audited the attached Balance Sheet of Ircon International
Limited as at 31st March, 2010, Profit & Loss Account and Cash flow
statement for the year ended on that date, annexed thereto in which are
incorporated the accounts of Algeria, Mozambique, Ethiopia,
Afghanistan, Sri Lanka, Northern Region, Western, Eastern, Southern,
Kanpur & Jammu & Kashmir Regions of the Company audited by the Branch
Statutory Auditors duly appointed and whose reports have been
considered by us in framing our report.
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 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis of our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Government of India in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure, a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. We draw attention to Notes to Accounts (Schedule R) & Significant
Accounting Policies (Schedule Q)
a) Nofe No. 12.b): Carrying balances at exchange rate prevalent at the
time of settlement of dues in 1995 with Government of India and not
translating at rates prevalent on 31.03.2010 is not in conformity with
AS-11. As a result, other current assets is lower by Rs.80.86 million,
provisions is lower by Rs.38.21 million and profit is lower by Rs.
5. Further to our comments in annexure referred to in para 3 above and
subject to clause (a) of para 4, 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
b) In our opinion, the Company has kept proper books of accounts as
required by law so far as appears from our examination of those books.
c) The Balance Sheet and Profit & Loss Account dealt with by this
report are in agreement with the books of accounts.
d) In our opinion, the Balance Sheet, Profit and 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 except otherwise stated .
e) Being a Government Company, pursuant to the Gazette notification No.
GSR 829(E) dated 21.10.2003 issued by Government of India, provisions
of clause(g) of sub-section (1) of section 274 of the Companies Act,
1956, are not applicable to the company.
f) In our opinion and according to the best of our information and
according to the explanations given to us, the said accounts read with
Significant Accounting Policies (Schedule-Q) and Notes on Accounts
(Schedule-R) give the information required by the Companies Act, 1956,
in the manner so required and gives 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 31.03.2010;
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 TO THE AUDITORS REPORT (Referred to in paragraph (3) thereof)
i. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b. The fixed assets were physically verified by the management during
the year. There is a regular programme of verification, which in our
opinion, is reasonable having regard to the size of the Company and
nature of its business. No material discrepancies were noticed on such
c. During the year no substantial disposal of fixed assets of the
Company has taken place which would have affected its going concern
ii. a. The inventory has been physically verified by the management
at reasonable intervals during the year. In our opinion, the frequency
of verification is reasonable.
b. In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the company and nature of its business.
c. On the basis of our examination of records of inventory, we are of
the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on comparison of physical
verification results with the book records are not material and have
been properly dealt with in the books of account.
iii. According to the information and explanation given to us by the
management and records produced, the Company has neither granted nor
taken any loans, secured or unsecured to/from companies, firms or other
parties covered in the register maintained under section 301 of the
Companies Act, 1956. Thus, the requirements under para 4(iii) (b) to
(d) of the Companies (Auditors Report) Order 2003 are not applicable
to the Company.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business, for purchase of inventory and fixed assets and for the sale
of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weakness in the
v. According to the information and explanations given to us by the
management and records produced, there are no transactions that need to
be entered into the register pursuant to Section 301 of the Companies
vi. According to the information and explanations given to us, and as
per our examination of records.the Company has not accepted any
deposits from public and therefore, the directives issued by the
Reserve Bank of India and the provisions of Section 58A and 58AA or any
other relevant provision of the Companies Act, 1956, and rules framed
there under, are not applicable.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of the business.
viii. The Central Government has not prescribed the maintenance of cost
records under section 209(1 )(d) of the Companies Act, 1956, in respect
of the Company.
ix. a. The company is generally regular in depositing undisputed
statutory dues with appropriate Authority including provident fund,
income tax, sales tax, wealth-tax, service-tax, custom duty, excise
duty, cess and other statutory dues applicable with the appropriate
authorities. The investor Education & Protection Fund and Employees
State Insurance are not applicable to the company. According to the
information and explanation given to us, there are no undisputed
statutory dues which were outstanding as on 31-03-2010 for a period
over six months from the date the same become payable.
b. According to information and explanation given to us, and as per our
examination of records of the Company following are the particulars of
dues on account of sales tax, income tax, custom duty, wealth tax,
excise duty and cess matters that have not been deposited on account of
dispute as on 31.3.2010.
Nature of the Amount (in Period for Forum where
dues Rs. Million) which pending
Sales Tax 10.61 1988-90 ACIT Delhi
VAT 203.07 2007-09 Commissioner
Sales Tax 0.81 1982-83,
1987-88 & DC (Appeal)
Custom Duty 58.12 1989-90 Dy Commissio
Sales Tax 19.90 1995-96 Maharashtra
Sales Tax 15.27 1996-97 Tribunal,
Sales Tax 0.03 1995-96 Tamil Nadu
Sales Tax 0.26 2000-2001 Appellate
Sales Tax 0.31 2001-2001
Sales Tax/VAT 2.31 1998-1999 Addl
Sales Tax/VAT 0.11 1999-2000 Addl
Royalty 0.19 1984-85 and
1985-86 High Court,
Sales Tax 9.94 2002-03 Commissioner
Sales Tax 0.35 1993-94 High Court, M.P.
Sales Tax 0.05 1998-99 Addl. Commissioned
Raipur & Korba,
Sales Tax 8.63 1997-2002 Asst Commissioner
Sales Tax 7.13 2003-04 &
2004-05 Tax, Behala
Sales Tax 1.7.5 1987-88 to
1994-95 Bihar Sales Tax
Sales Tax 360.03 2001-02 to
2005-06 Dy Commissioner
of Sales Tax
Sales Tax 11.93 2006-07 Dy Commissioner
Provident Fund 17.54 2003-04 to
2006-07 Provident Fund
Sales Tax 2.12 1997-98 Revenue Board,
Sales Tax 114.64 2001-05 Dy Commissioner,
Sales Tax 7.32 2009-10 Dy Commissioner
Cess 83.50 2001-02 Spl Secretary.
UPVAT 4.96 2009-10
Entry Tax 0.71 2007-08 Jt. Commissioner
Sales Tax 14.52 2006-07 Jhansi
Entry Tax 3.41 2006-07
Entry Tax 0.l6 2005-06
Entry Tax 0.33 2009-10 Dy Commissioner
Sales Tax 0.14 2005-06
Sales Tax 2.80 2002-03 High Court/
Sales Tax 1.84 2003-04
Sales Tax 4.07 2004-05
x. The company has no cash losses during the financial year covered by
our audit and in the immediately preceding financial year nor are there
any accumulated losses in this period.
xi. The Company is a debt free company, so the question of default by
the Company in repayment of dues to financial institution, bank or
debenture holder does not arise.
xii. According to the information and explanations given to us and as
per our examination of records, the company has not granted loans and
advances on the pledge of shares, debentures and other securities.
xiii. In our opinion, the Company is neither a chit fund nor a nidhi
mutual benep fund/society, so the provisions of clause 4(xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
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 Companies (Auditors Report) Order
2003, are not applicable to the Company.
xv. In our opinion, the terms and conditions on which the Company has
given guarantees for loans taken by others from banks or financial
institutions are not prejudicial to the interest of the Company.
xvi. The Company is a debt free Company, so the question of use by the
Company of term loan for the purpose for which it was given, does not
xvii. As the Company is a debt free company, the use of short-term
funds for long-term investment does not arise.
xviii. According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the
xix. According to the information and explanations given to us, during
the year under audit, the Company has not issued any debentures.
xx. The Company has not raised any money by way of public issue during
xxi. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For Wahi & Gupta
Membership No. 16020
Place; New Delhi
Date: 6th August 2010