1. We have audited the attached Balance Sheet of Western India
Shipyard Ltd. as at 31st March, 2012, the Profit and Loss Account for
the year ended on that date and the Cash Flow Statement for the year
ended on that date, both annexed thereto. These financial statements
are the responsibility of the Company''s Management.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. These 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
3. As required by the Companies (Auditor''s Report) Amendment Order,
2004 issued by the Central Government of India in terms of Section 227
(4A) of the Companies Act, 1956, we annex hereto a statement on the
matters specified in Paragraphs 4 & 5 of the said Order.
4. Further to our comments in the Annexure referred to in para (1)
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
(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 the
(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 materially comply with the Mandatory Accounting
Standards referred to in Sub-section (3C) of Section 211 of the
Companies Act, 1956.
(e) On the basis of written representation received from the Directors
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that none of the Directors are disqualified as on 31st March,
2012 from being appointed as Directors in terms of clause (g) of
Sub-section (1) of Section 274 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 read together with the
notes to accounts give the information required by the Companies Act,
1956, in the manner so required subject to the comments in paragraph
(f) above , 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 the affairs of
Company as at 31st March, 2012.
ii) in the case of Profit & Loss Account, of the profit of the Company
for the year ended on that date.
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITOR''S REPORT
(Referred to in Paragraph (1) of our Report of even date)
1. i) As informed to us, the Company has maintained proper records
showing full particulars including quantitative details and situation
of fixed assets and it needs to be updated.
ii) As informed to us, all the assets have not been physically verified
by the management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its business. No material
discrepancies were noticed on such verification.
(iii) As explained to us, no substantial part of the fixed assets have
not been disposed off during the year.
2. i) As informed to us, the Management has physically verified the
inventory during the year. In our opinion, the frequency of
verification is reasonable.
ii) As explained to us, the procedure 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.
(iii) On the basis of our examination of the records of inventory, we
are of the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book stocks were not material.
3. a. According to the information and explanation provided to us the
Company had taken loans from the companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
b. In our opinion the rate of interest and other terms and conditions
of loans taken by the Company are prima- facie not prejudicial to the
interest of the Company.
c. According to the information and explanation given to us, the
payment of principal amount and interest are regular wherever
d. According to the information and explanation given to us, there is
no over due amount pending for repayment.
4. According to the information and explanation given to us the
Company has not granted any loans to companies/ parties etc. covered
under register maintained under Section 301 of the Companies Act, 1956.
5. 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 with regard to purchase of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, no major
weakness has been noticed in the internal controls.
6. Transactions that need to be entered in the register maintained
under Section 301 of the Companies Act, 1956:
a) Based upon the audit procedures applied by us and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements referred to in Section 301
of the Companies Act, 1956, have been entered in the register required
to be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 500,000/- in
respect of any party during the year, have been made at prices which
are reasonable, having regard to prevailing market prices at the
7. According to the information and explanations given to us, the
Company has not accepted any deposits from the public under the
provisions of Sections 58A and 58AA of the Companies Act, 1956 or any
other relevant provisions of the Act.
8. In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
9. As explained to us, the Central Government has not prescribed for
the maintenance of cost records under Section 209 (1) (d) of the
Companies Act, 1956 in respect of Company''s product and activity.
10. a) According to the records of the Company, the Company has
deposited Provident Fund, Employees State Insurance and other
undisputed statutory dues with the appropriate authorities.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax including VAT, Service Tax, Customs duty, Excise duty, cess and
other statutory dues were outstanding, as at the last day of financial
year for a period of more than six months from the date they became
payable other than TDS and VAT amounting to Rs. 2,05,89,448/-. However,
Rs. 12,38,478/- has been paid subsequently.
c) Dues against the Company as per Sales Tax and Service Tax assessment
are contested by the Company. Details are as under;
Nature of Name of the Financial Amount Forum where
Dues Statute Year (Rs) dispute is
1. Sales The Goa Sales 1995-96 1,43,821 Commissioner
Tax Tax Act 1996-97 41,26,399 (Sales Tax)
2. Value The Goa Value 2005-06 2,20,77,259
Added Added Tax Act Commissioner
Tax 2006-07 2,15,79,204 VAT
3. Service Central Excise 2001-02 1,88,11,550 Bombay High
Tax and Customs Act 2002-03 2,53,09,680 Court
4. Income The Income Tax 2005-06 5,67,138 ITAT
11. As per records of the Company, the accumulated losses of the
Company exceed fifty percent of its net worth. However, the Company
has not incurred cash losses during the current financial year.
12. The Company has been regular in repayment of dues to Bank &
Financial Institutions other than the delay in quarter ending March,
2012 to ICICI Bank Ltd. for Rs.1,92,85,714/- and IFCI Ltd. for Rs.
13. As informed to us, the Company had given Rs. 575.63 lacs to
certain companies under escrow agreements against which the original
share certificates of the face value of Rs. 169.39 lacs (Market Value
on the Balance Sheet date is Rs. 569.16 lacs) had been deposited with
14. As informed to us, the Company has not given any guarantee for
loans taken by others from Bank or Financial Institutions.
15. As informed to us, the term loans have been applied forthe purpose
For which they were raised.
16. As per the records, the Company has not made any preferential
allotment of shares to parties and companies mentioned in the register
maintained under Section 301 of the Companies Act, 1956 during the
17. As per the records of the Company, the Company has not raised any
money by way of public issues during the year under audit.
18. As per information and explanations given by the Management, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
19. Other clauses to the said Order are considered to be not
applicable to the Company.
For V.V. Kale & Co.
Firm Regd No-000897N
Vijay V. Kale
Place: Mumbai Partner
Date : May 25, 2012 M. No- 080821