1. We have audited the attached Balance Sheet of ALSTOM Projects India
Limited ('the Company') as at March 31, 2007 and also the Profit and
Loss account and the Cash Flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company's 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 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 (Auditor's Report) Order, 2003 (as
amended)( the Order) 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
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i. 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;
ii. 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;
iii. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit and 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;
v. On the basis of the written representations received from the
directors, as on March 31, 2007, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2007 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
vi. 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;
(a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2007;
(b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
(c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
For S.R. Batliboi & Co.
Chartered Accountants
per Raj Agrawal
Partner
Membership No.: 82028
New Delhi
April 30, 2007
Annexure referred to in paragraph 3 of our report of even date
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Part of the fixed assets have been physically verified by the
management during the year in accordance with a phased programme of
verification which, in our opinion, 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) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(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) As informed, the Company has not granted any loans, secured
or unsecured to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly, clauses 4 (iii)(b) (c) and (d) of the Order are not
applicable to the Company.
(6) As informed, 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 Companies Act, 1956.
Accordingly, clauses 4 (iii)(f) and (g) of the Order are not applicable
to the Company.
(iv) Part of the Company's purchases of inventory and fixed assets are
stated to be of unique and specialized nature, and hence, in such
cases, the comparison of prices with the market rates or with purchases
from other parties can not be made. Read with the above, 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, 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 internal control system in respect of these areas.
(v) According to the information and explanations provided by the
management, we are of the opinion that there are no particulars of
contracts or arrangements that need to be entered into the register
maintained under section 301 of the Companies Act, 1956.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) To the best of our knowledge and as explained, the Central
Government has not prescribed maintenance of cost records under clause
(d) of sub-section (1) of Section 209 of the Companies Act, 1956 for
the products of the Company.
(ix) (a) 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 applicable to it, have generally been
regularly deposited with the appropriate authorities though there has
been a slight delay in a few cases.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, custom duty, excise
duty and cess on account of any dispute, are as follows:
Name of the Nature of dues Amount in
statute Rs. '000
Divisible contracts assessed as 15,321
indivisible
Local & Central Divisible contracts declared 3,603
Sales Tax Act as indivisible
Penalty imposed by sales tax 1,752
authorities
Total 20,676
Period to which Forum where
the amount relates dispute is pending
1984-1992 First/Second appellate
authority
1992-1997 Pending in High Court
2004-2005 Pending in High Court
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on the audit procedures applied by us, and according to the
information and explanations provided by the management, the Company
has no dues towards banks, financial institutions or debenture holders,
and hence, provisions of clause 4(xi) of the Order are not applicable
to the Company.
(xii) According to the information and explanations given to us and
based on the documents and records produced 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.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the Company.
(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 to the
Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiary from a
bank, the terms and conditions whereof in our opinion are not
prima-facie prejudicial to the interest of the Company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us, the
Company has not raised funds on short term basis. Therefore, the
provisions of clause 4(xiii) of the Order are not applicable to the
Company.
(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 Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, which have
been, relied upon by us, we report that no fraud on or by the Company
has been noticed or reported during the course of our audit.
For S.R. Batliboi & Co.
Chartered Accountants
per Raj Agrawal
Partner
Membership No.: 82028
New Delhi
April 30, 2007
