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Sterlite Industries (India) | Auditor's Report > Metals - Non Ferrous > Auditor's Report from Sterlite Industries (India) - BSE: 500900, NSE: STER
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Explore Sterlite Ind connections « Mar 10
Auditor's Report (Sterlite Industries (India)) Year End : Mar '11
1.  We have audited the attached Balance Sheet of STERLITE INDUSTRIES
 (INDIA) LIMITED (the Company), as at 31st March, 2011, the Profit
 and Loss Account and also the Cash Flow Statement of the Company for
 the year ended on that date annexed thereto. 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 from 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, issued
 by the Central Government of India in terms of sub- section (4A) of
 Section 227 of the Companies Act 1956, we enclose in the Annexure a
 statement on the matters specified in the paragraphs 4 and 5 of the
 said order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 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;
 
 c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C) of Section 211 of the
 Companies Act, 1956. Additionally, the Company has chosen to early
 adopt Accounting Standard 30, Financial Instruments: Recognition and
 Measurement and limited revisions arising out from the Announcement of
 the Institute of Chartered Accountants of India on 29th March, 2008 as
 stated in Note 6 of Schedule 21;
 
 e) On the basis of the written representations received from the
 directors as on 31st March, 2011 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 31st March, 2011 from being appointed as a director in terms of Section
 274(1) (g) of the Companies Act, 1956;
 
 f) In our opinion and to the best of our information and according to
 the explanations given to us, the said 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 the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2011;
 
 (ii) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 ANNEXURE TO AUDITORS REPORT (Referred to in paragraph 3 of our report
 of even date)
 
 (i) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 (b) The Company has a programme of physical verification of its fixed
 assets in a three year period which, in our opinion, is reasonable
 having regard to the size of the Company and the nature of its assets.
 In accordance with such programme, the fixed assets were physically
 verified by the Management during the year and no material
 discrepancies were noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has not made any substantial disposal of fixed
 assets during the year and going concern status of the Company is not
 affected.
 
 (ii) In respect of its inventories:
 
 (a) As explained to us, inventory has been physically verified during
 the year by the management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion, and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iii) In respect of loans, secured or unsecured, granted by the Company
 to companies, firms or other parties covered in the Register maintained
 under Section 301 of the Companies Act,1956, according to the
 information and explanations given to us:
 
 (a) The Company has granted loans to two parties during the year. At
 the year-end, the outstanding balances of such loans aggregated Rs.
 12,120.01 Crore and the maximum amount involved during the year was 
 15,081.50 Crore.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 of such loans are, prima facie not prejudicial to the interest of the
 Company.
 
 (c) The loans given were not due for repayment at year end. In respect
 of payment of interest, these parties have been generally regular in
 payment. In respect of one of these parties, interest amounting to Rs.
 81.40 Crore was due and outstanding at year end.
 
 (d) The loans given were not due for repayment, therefore the question
 of overdue principal amount does not arise. There was no overdue
 interest at the year end except from one party amounting to Rs. 81.40
 Crore and reasonable steps have been taken by the Company for the
 recovery of the same.
 
 (e) 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, hence requirement of
 clauses 4(iii)(f) and (g) of the Companies (Auditors Report) Order,
 2003 are not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchases 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 such internal control
 system.
 
 (v) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to in Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of 5 lakhs in respect
 of any party, the transactions have been made at prices which appear
 reasonable as per information available with the Company.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposit from the public
 and hence directives issued by the Reserve Bank of India and the
 provisions of Section 58A and 58AA of the Companies Act, 1956 and rules
 framed there under are not applicable for the year under audit.
 
 (vii) In our opinion, the Company has an adequate internal audit system
 commensurate with the size and nature of its business.
 
 (viii) The Central Government has prescribed maintenance of cost
 records under Section 209 (1) (d) of the Companies Act, 1956 in respect
 of manufacture of copper, sulphuric Acid and generation of electricity.
 We have broadly reviewed the accounts and records maintained by the
 Company in this connection and are of the opinion that prima facie, the
 prescribed accounts and records have been maintained and are being
 made. We have, however, not made a detailed examination of the records
 with a view to determining whether they are accurate or complete.
 
 (ix) According to the information and explanations given to us, and the
 records of the Company examined by us:
 
 a) The Company has generally been 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 and any other material statutory dues applicable to it.
 
 Further, since the Central Government has till date not prescribed the
 amount of cess payable under section 441A of the Companies Act, 1956,
 we are not in a position to comment upon the regularity or otherwise of
 the Company in depositing the same.
 
 b) There were no undisputed amounts payable in respect of Income Tax,
 Sales Tax, Wealth Tax, Excise Duty and other material statutory dues in
 arrears as at 31st March, 2011 for a period of more than six months
 from the date they became payable, except ` 1.01 Crore in respect of
 Investor Education and Protection Fund, which is held in abeyance due
 to pending legal case and ` 3.96 Crore in respect of Custom Duty, which
 is pending further appeal by the Company.
 
 c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
 Custom Duty and Excise Duty which have not been deposited as on 31st
 March, 2011 on account of disputes are given below:
 
                       Nature of 
 Statute                             Forum where Dispute is pending
                       Dues
 
                                     Income Tax Appellate Tribunal
 
                                     Income Tax Appellate Tribunal
 Income-Tax 
 Act, 1961             Income Tax
                                     Commissioner of Income Tax
                                     (Appeals)
 
                                     Income Tax Appellate Tribunal
 
                                     Custom Excise Service-Tax Appellate
                                     Tribunal
 
 Service-Tax Under 
 Finance Act, 1994    Service Tax    Commissioner Central Excise 
                                       (Appeals)
 
                                     Custom Excise Service Tax Appellate
                                     Tribunal
 
                                     Custom Excise Service Tax Appellate
                                     Tribunal
 
 Central Excise 
 Act, 1944            Excise Duty    High Court
 
                                     Commissioner Central Excise 
                                     (Appeals)
 
 Tamilnadu General 
 Sales-Tax            Sales-Tax      High Court
 Act, 1959
 
 Central Sales Tax 
 Act, 1956            Sales-Tax      High Court
 
                                     Deputy Commissioner of Commercial
 Tamilnadu VAT 
 Act, 2007            Sales-Tax      Tax (Appeals)
 
 Tamil Nadu Tax and 
 Consumption or       Generation     High Court
 Sale of Electricity 
 Act, 2003            Tax
 
                      Custom         Custom Excise Service Tax Appellate
 Customs Act, 1962    Duty           Tribunal
 
                                     Total
 
 
 
 Statue                       Period to which   Amount involved
                              amount relates       (` in Crore)
 
 Income-Tax Act, 1961          1989-90 to            11. 26
                               1998-1999
 
                               2002-2003               0.10
 
                               2000-2001               0.83
 
                               2003-2004              30.36
 
                               2002-2003 to           15.73
                               2006-2007
 
 Service-Tax Under Finance 
 Act, 1994                     2005-2006 to            0.05
                               2006-2007
 
                               2006-2007 to            2.79
                               2008-2009
 
                               1993-1994 to           38.23
                               2007-2008
 
 Central Excise Act, 1944      1995-1996 &             0.04
                               1996-1997 
 
                               2001-2002 &             0.12
                               2008-2009
 
 Tamilnadu General Sales-Tax
 Act, 1959                     1997-1998 &             2.05
                               1998-1999
 
 Central Sales Tax Act, 1956   1996-1997 to            2.21
                               2000-2001
 
 Tamilnadu VAT Act, 2007       2006-2007               3.01
 
 Tamil Nadu Tax and Consumption or
 Sale of Electricity Act, 2003 2003-2004 to           14.81
                               2008-2009
 
 Customs Act, 1962             2004-2005               6.23
 
 Total                                               127.82
 
 (x) The Company does not have accumulated losses at the end of
 financial year. It has not incurred any cash losses during the
 financial year covered by the audit and in the immediately preceding
 financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 financial institutions, banks or debenture holders.
 
 (xii) 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, debenture and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund, a nidhi or a
 mutual benefit fund/ society. Therefore, the provisions of Clause 4
 (xiii) of the Companies (Auditors Report) Order 2003 are not
 applicable.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the Company is not a dealer or trader in shares,
 securities, debentures & other investments. The Company has maintained
 proper records of transactions and contracts in respect of shares,
 securities, debentures and other investments and timely entries have
 been made therein. All shares, securities, debentures and other
 investments have been held by the Company in its own name.
 
 (xv) According to the information and explanations given by the
 management, the Company has given guarantees for loans taken by others
 from banks and financial institutions as mentioned in note 31(e) of
 Schedule 21. The guarantees outstanding as at year end are for
 subsidiary companies and an associate company, which according to the
 information and explanations given to us, are prima facie not
 prejudicial to the interest of the Company.
 
 (xvi) According to the information and explanations given to us, no
 term loans were raised during the year by the Company therefore
 question of utilization for stated purpose does not arise.
 
 (xvii) On the basis of review of utilization of funds, which is based
 on overall examination of the Balance Sheet of the Company as at 31st
 March, 2011, related information as made available to us and as
 represented to us by the Management, we are of the opinion that funds
 raised on short-term basis have not prima facie been used during the
 year for long-term investment.
 
 (xviii) During the year 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.
 
 (xix) The Company has not issued any secured debentures during the year
 under audit.
 
 (xx) We have verified the end use of moneys raised by right issues of
 equity shares and American Depository Shares (ADS) represented by
 equity shares and the same has been disclosed in note no. 17 (i) and
 (ii) respectively, of Schedule 21 to notes forming part of the
 accounts.
 
 (xxi) According to the information and explanations given by the
 management, we report that no material fraud on or by the Company has
 been noticed or reported during the course of our audit.
 
 For CHATURVEDI & SHAH        For DELOITTE HASKINS & SELLS
 
 Chartered Accountants               Chartered Accountants
 
 (Registration No.: 101720W)   (Registration No.: 117366W)
 
 R. KORIA                                 SHYAMAK R. TATA
 
 Partner                                          Partner
 
 Membership No. 35629                Membership No. 38320
 
 MUMBAI, 25th APRIL, 2011
 
 
 
Source : Dion Global Solutions Limited
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