We have audited the attached balance sheet of Areva T&D India Limited
(formerly ALSTOM Limited) (the Company) as at December 31, 2005, the
profit and loss account and the cash flow statement for the period
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.
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
As required by the Companies (Auditor's 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 paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
(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
(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
(iii) The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
(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 written representations received from the directors
and taken on record by the Board of Directors, we report that none of
the directors is disqualified as on December 31, 2005 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956 on the said date;
(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 December 31, 2005;
(b) in the case of the profit and loss account, of the profit of the
Company for the period ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
period ended on that date.
For Deloitte Haskins & Sells
Place : New Delhi Partner
Date : February 25, 2006 Membership No. 22156
Annexure referred to in our report of even date:
1. 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) Some of the fixed assets were physically verified during the period
by the management in accordance with a programme of verification, which
in our opinion provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanations given to us no material discrepancies were noticed on such
c) The fixed assets disposed off during the period, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
2. In respect of its inventories:
a) Inventories including Stocks with subcontractors in certain
locations, have been physically verified by the management during the
period. In our opinion, the frequency of verification is reasonable.
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 were reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) On the basis of our examination of the inventory records, we are of
the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed between the book records and
physical stocks, on verification as at December 31, 2005 were not
material. In the case of certain manufacturing units in which ERP (SAP)
system is under stabilisation, consumption of material during the
period was computed based on the physical quantity of inventory held at
such units as at December 31, 2005. We have examined such computations
of consumption and other records maintained by the management to ensure
that the discrepancies between book stock and physical stock have been
properly dealt with in the books of account.
3. In respect of loans, secured or unsecured, granted or taken by the
Company to or from 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. At the period-end,
the outstanding balances of such loans granted aggregated to Rs 50,000
thousands and the maximum amounts involved during the period was Rs
(b) The rate of interest and other terms and conditions of such loans
are, in our opinion, prima facie not prejudicial to the interest of the
(c) The receipt of principal amounts and interest has during the period
been as per stipulations.
(d) The Company has not taken any loans, secured or unsecured from
Companies, firms, or other parties listed in the Register maintained
under section 301 of the Companies Act, 1956.
4. 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 and fixed assets and for
the sale of goods and services and we have not observed any continuing
failure to correct major weaknesses in such internal controls.
5. The transactions during the period with a Company under the same
management are exempt under section 297 and there are no transactions,
with parties covered under sub-section (6) of Section 299 and no entry
has been made in the register to be maintained u/s 301 of the Companies
6. The Company has not accepted any deposits from the public during the
7. The Company's internal audit during the current year was carried out
by the Company's internal audit department, internal auditors of the
holding company and certain locations were audited by external firms of
chartered accountants, which in our opinion have been commensurate with
the size and nature of its business.
8. We have broadly reviewed the books of account and records maintained
by the Company relating to the manufacture of power transformers,
electric fans and motors, pursuant to the order made by the Central
Government for the maintenance of cost records under section 209(1)(d)
of the Companies Act, 1956 and are of the opinion that prima facie the
prescribed accounts and records have been made and maintained. We have,
however, not made a detailed examination of the records with a view to
determining whether they are accurate or complete, as the examination
of the records are to be made by a Cost Auditor. To the best of our
knowledge and according to the information and explanations given to
us, the Central Government has not prescribed the maintenance of cost
records for any other product of the Company.
9. In respect of Statutory dues:
a) According to the information and explanations given to us, the
Company has generally been 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 any other material statutory
dues with the appropriate authorities during the period.
b) There were no undisputed amounts payable in respect of the above
statutory dues as at December 31, 2005 for a period of more than six
months from the date they became payable.
c) According to the information and explanations given to us, details
of disputed sales tax, income tax, customs duty, wealth tax, service
tax, excise duty and cess which have not been deposited as on December
31, 2005 are given in note no. 24(d) and 39.
10. The Company has no accumulated losses as at December 31, 2005 and
has not incurred any cash losses either during the current period of
nine months covered by our audit or the immediately preceding financial
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the payment of dues to
12. Based on our examination of documents and records, we are of the
opinion that the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures or other
13. The Company is not a chit fund or nidhi/mutual benefit
14. In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities and debentures and other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. The Company has not raised any term loans during the period.
17. According to the information and explanations given to us, and on
an overall examination of the balance sheet of the Company, funds
raised on short term basis have prima facie, not been used during the
period for long term investment.
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.
19. The Company has not issued any debentures.
20. The Company has not raised money through public issues during the
21. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the period.
For Deloitte Haskins & Sells
New Delhi Partner
February 25, 2006 Membership No. 22156