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Larsen and Toubro
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Auditor's Report (Larsen and Toubro) Year End : Mar '13
We have audited the accompanying financial statements of Larsen &
 Toubro Limited (the Company), which comprise the balance sheet as at
 March 31, 2013, and the statement of profit and loss and the cash flow
 statement for the year then ended, and a summary of significant
 accounting policies and other explanatory information.
 
 Managements responsibility for the financial statements
 
 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 (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
 
 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 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.
 
 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 auditor
 considers 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. 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.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 In our opinion and to the best of bur information and according to the
 explanations given to us, the 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, 2013;
 
 (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
 
 1.  As required by the Companies (Auditors Report) Order, 2003 (the
 Order) issued by the central government of India in terms of
 sub-section (4A) of section 227 of the Act, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 2.  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 comply with the Accounting Standards referred
 to in sub-section (3C) of section 211 of the Companies Act, 1956; and -
 
 e.  on the basis of written representations received from the directors
 as on March 31, 2013, and taken on record by the board of directors,
 none of the directors is disqualified as on March 31, 2013, from being
 appointed as a director in terms of clause (g) of sub-section (1) of
 section 274 of the Companies Act, 1956.
 
 Annexure to the Auditors report
 
 (Referred to in paragraph (1) of our report of even date)
 
 1 (a) The Company is maintaining proper records to show full
 particulars including quantitative details and situation of all fixed
 assets.
 
 (b) We are informed that the Company has formulated a programme of
 physical verification of all the fixed assets over a period of three
 years which, in our opinion, is reasonable having regard to the size of
 the Company and nature of its assets. Accordingly, the physical
 verification of the fixed assets has been carried out by management
 during the year and no material discrepancies were noticed on such
 verification.
 
 (c) The Company has not disposed off any substantial part of its fixed
 assets so as to affect its going concern status.
 
 2 (a) As explained to us, inventories have been physically verified by
 management at reasonable intervals during the year. In our opinion, the
 frequency of such verification is reasonable.
 
 (b) As per the information given to us, the procedures of physical
 verification of inventory followed by management are, in our opinion,
 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.
 
 3 (a) According to the information and explanations given to us, the
 Company has not granted any loans, secured or unsecured, to companies,
 firms and other parties covered in the register maintained under
 section 301 of the Companies Act, 1956. Accordingly, paragraphs
 4(iiiXb), (c) and (d) of the Order are not applicable,
 
 (b) According to the information and explanations given to us, the
 Company has not taken any loans, secured or unsecured from companies,
 firms and other parties covered in the register maintained under
 section 301 of the Companies Act, 1956. Accordingly, paragraphs
 4(iii)(f) and (g) of the Order are not applicable.
 
 4 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 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 systems.  .
 
 5 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 in the register maintained under section 301 of the Companies
 Act, 1956; accordingly paragraph 4(v) (b) of the Order is not
 applicable.
 
 6 The Company had accepted deposits from the public and in our opinion
 and according to the information and explanations given to us, the
 directives issued by the Reserve Bank of India and the provisions of
 section 58A and 58AA and the relevant provisions of the Companies Act,
 1956 and rules framed thereunder, where applicable, have been complied
 with. We are informed that 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. As of the date of the balance sheet, the
 Company has no fixed deposits other than unclaimed matured deposits.
 
 7 In our opinion, the Company has an internal audit system commensurate
 with its size and the nature of its business.
 
 8 We have broadly reviewed the books of account and records maintained
 by the Company pursuant to the rules prescribed by the central
 government for the maintenance of cost records under section 209(1)(d)
 of the Companies Act, 1956 in respect of all its manufacturing and
 construction activities and are of the opinion that prima facie the
 prescribed accounts and records have been made and maintained. The
 contents of these accounts and records have not been examined by us.
 
 9 (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
 generally regular in depositing 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 as applicable with
 the appropriate authorities. According to the information and
 explanations given to us, there were no undisputed amounts payable in
 respect of 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 statutory dues
 outstanding as at March 31,2013 for a period of more than six months
 from the date they became payable except for tax deducted at source on
 works contract aggregating to Rs. 0.02 crore which has since been paid.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of sales tax,
 excise duty, service tax, customs duty and income tax as at March
 31,2013 which have not been deposited on account of a dispute pending
 are as under .
 
 Name of the 
 statute          Nature of the disputed dues                 Amount 
                                                              Rs. crore*
 
 Central Sales 
 Tax Act,         Non-submission of forms and other matters      0.87
 Local Sales 
 Tax Acts and 
 Works Contract   Non-submission of forms, dispute related to
                  sales-in-transit,                              6.10 
 Tax Act          rejection of exemption certificates, rate 
                  of tax dispute and other matters 
 
                  Non-submission of forms, additional 
                  demand for pending                           956.03 
                  forms, rate of tax dispute, disallowance 
                  of branch transfer, sub-contractors 
                  turnover, interest demand on road permit, 
                  disallowance of exemptions on sale of 
                  assets, transit sale and other matters
 
                  Non-submission of forms, disallowance of
                  transit sales, high                          143.19
                  seas sales, classification dispute and 
                  other matters 
 
                  Non-submission of forms and  disallowance 
                  of exemption                                  12.81
                  certificates
 
                  Non-submission of forms, dispute related
                  to sales-in-transit                            0.99 
                  and other matters
 
                  Non-submission of forms, labour and 
                  service charges, sub-                        290.62
                  contractors turnover, pumping and freight
                  charges, inter- state sales turnover, 
                  arbitrary demand raised, TDS disallowed,
                  rate dispute, classification dispute, 
                  disallowance of works contract tax and 
                  other matters
 
                  Inter-state sales, classification 
                  dispute and disallowance of                  298.38
                  deemed sales in course of imports and 
                  taxability of sub- contractors turnover
 
                  Taxability of sub-contractor turnover, 
                  rate of tax for declared                     197.89
                  goods, inter-state sales, non-submission 
                  of forms and high seas sales
 
 Name of the 
 Statute          Period to which the amount 
                  relates                      Forum where disputes
                                               are pending
 
 Central Sales 
 Tax Act,
 Local Sales
 Tax Acts and
 Works Contract
 Tax Act          1991-92,1992-93, 1996-97 
                  to 2000-01, 2005-06 to       Commercial Tax Officer
                  2008-09
 
                  1991 -92,1992-93,1996-97,
                  1997-98,1999-00 to           Assistant Commissioner
                  2008-09,2010-11 and 2011-12 (Appeals)
 
                  1989-90,1991-92 to 2011-12   Deputy Commissioner
                                              (Appeals)
 
                  1993-94,1996-97,1997-98, 
                  2001-02 to 2009-10           Joint Commissioner
                                              (Appeals)
 
                  2001-02, 2003-04 to 
                  2008-09,2010-11 and 2011-12  Additional Commissioner
                                              (Appeals)
 
                  1994-95,2001 -02,2002-03 
                  and 2005-06 to 2008-09       Commissioner (Appeals)
 
                  1987-88, 1989-90 to 2011-12  Sales Tax Tribunal
 
                  1986-87,1987-88,1998-99
                  to 2011-12                   High Court
 
                  1991-92,1995-96,1997-98 
                  and 1999-00 to 2006-07       Supreme Court
 
 Name of the 
 statute          Nature of the disputed dues                 Amount 
                                                              Rs. crore*
 
 
 The Central 
 Excise           Demand of excise duty on steel price 
                  variation claims,                                0.86 
 Act, 1944, 
 Service Tax      changes in assessable value due to
                  reduction in billing 
 under Finance 
 Act,             schedule quantity and demand on 
                  fabrication of tanks,
 1994 and Customs platforms and ladders
 Act, 1962        interest on excise duty demand for 
                  duty paid on trading                             0.02
                  registration in place of manufacturing 
                  registration and demand for custom 
                  duty on software
 
                  Demand of excise duty on site 
                  fabricated steel structure,                    131.76
                  export rebate disallowance, valuation
                  dispute, excise duty on concrete mix 
                  made at site, non-maintenance of proper 
                  records, demand of service tax on 
                  various services and other matters 
 
                  Dispute on site mix concrete and PSC grinder     0.27
 
                  Demand of service tax on lumpsum turnkey 
                  jobs and other                                 220.02 
                  matters
 
                  Demand of service tax including penalty 
                  and interest on                                151.59 
                  lumpsum turnkey jobs and demand of penalty
                  on late payment of service tax
 
                  Export rebate claim and service tax on
                  commercial                                       7.00
                  construction service
 
 Income-tax 
 Act, 1961        Dispute regarding tax not deducted on bank
                  guarantee                                        2.20
                  charges, interest charges and purchase of 
                  software
 
                  Dispute regarding tax deducted at source 
                  at lower rate on                                 0.03
                  maintenance charges
 
                  Difference in rate of tax deducted at source     2.23
 
 Name of the 
 Statute          Period to which the amount 
                  relates                      Forum where disputes
                                               are pending
 
 The Central 
 Excise Act,
 1994, Service
 Tax under
 Finance Act,
 1994 and 
 Cutoms Act,
 1962             1989-90 to 2011-12           Additional Commissioner
 
                  2006-07 and 2012-13          Commissioner (Appeals)
 
                  1991-92,2001-02,2003-04 to
                  2009-10, and 2011-12         CESTAT
 
                  1997-98                      Supreme Court
 
                  2003-04 to 2011-12           Commissioner (Appeals)
 
                  1991-92,2001-02, 2003-04 
                  to 2009-10 and 2011-12       CESTAT
 
                  2003-04,2006-07 to 2008-09   High Court
 
 Income-tax
 Act 1961         2010-11 and 2011-12          Assessing Officer
 
                  2005-06                      Commissioner (Appeals)
 
                  2007-08 and 2008-09          Director of Income Tax 
                                              (International Taxation)
 
 *Net of pre-deposit paid in getting the stay/appeal admitted
 
 10 The Company has no accumulated losses as at March 31, 2013 and it
 has not incurred cash losses in the financial year ended on that date
 or in the immediately preceding financial year.
 
 11 According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 12 According to the information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 13 The provisions of any special statute applicable to chit
 fund/nidhi/mutual benefit fund/societies are not applicable to the
 Company.
 
 14 In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in securities. The
 Company has invested surplus funds in marketable securities and mutual
 funds. According to the information and explanations given to us,
 proper records have been maintained of the transactions and contracts
 and timely entries have been made therein. The investments in
 marketable securities and mutual funds have been held by the Company in
 its own name.
 
 15 In our opinion and according to the information and explanations
 given to us, the terms and conditions of guarantees given by the
 Company for loans taken by subsidiary companies from banks or financial
 institutions are not prima facie prejudicial to the interests of the
 Company.
 
 16 In our opinion and according to the information and explanations
 given to us, on an overall basis the term loans have been applied for
 the purposes for which they were obtained.
 
 17 According to the information and explanations given to us and on an
 overall examination of the balance sheet of the Company, we report that
 no funds raised on short term basis have been used for long term
 investments.
 
 18 The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Companies Act, 1956 during the year.
 
 19 According to the information and explanations given to us and the
 records examined by us, security or charge has been created in respect
 of the debentures issued.
 
 20 The Company has not raised any money by public issues during the
 year.
 
 21 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 instances of material
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by management. 
 
                                                      SHARP & TANNAN
 
                                               Chartered Accountants 
 
                                     Firms Registration No. 109982W 
 
                                                      by the hand of
 
                                                     MIUND P. PHADKE
 
                                                             Partner
 
 Mumbai, May 22, 2013                            Membership No.33013
Source : Dion Global Solutions Limited
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