VA TECH WABAG LIMITED
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
To
The Members of
VA Tech Wabag Limited
1. We have audited the attached Balance Sheet of VA TECH WABAG LIMITED,
(the `Company`) as at 31 March 2012, and also the Statement of Profit and
Loss and the Cash Flow Statement for the year ended on that date annexed
thereto (collectively referred as the `financial statements`). 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 the 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 (the
`Order`) (as amended), issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Companies Act, 1956 (the `Act`),
we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the Order.
4. Without qualifying our opinion, we draw your attention to note 33 (a) of
the notes to accounts of the financial statements attached.
Consequent to Section 80-IA being amended by Finance Act, 2009 denying the
benefit of deduction under this Section to business in the nature of work
contracts, with retrospective effect from April, 2000, the Company based on
a legal opinion, believes that this amendment will not impact its
eligibility to claim deduction under the said section. Based on the legal
opinion, the Company has filed a writ petition in the High Court,
challenging the constitutional validity of the retrospective amendment.
The ultimate outcome of the matter cannot be presently determined and no
provision for any liability that may result has been made in the financial
statements by the company for the period from 01 April 2001 to 31 March
2009. However, such liability on account of possible denial of deduction
prospectively from 01 April 2009 has been fully provided as current tax.
Pursuant to this, the estimated tax liability for the period from 01 April
2001 to 31 March 2009 amounting to Rs. 2,422 lakhs and interest thereupon
from 01 April 2001 to 31 March 2012 amounting to Rs. 1,672 lakhs have been
disclosed as contingent liabilities as at 31 March 2012.
5. Further to our comments in the Annexure referred to 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 financial statements dealt with by this report are in agreement with
the books of account;
d. On the basis of written representations received from the directors, as
on 31 March 2012 and taken on record by the Board of Directors, we report
that none of the directors is disqualified as on 31 March 2012 from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act;
e. In our opinion and to the best of our information and according to the
explanations given to us, the finan*cial statements dealt with by this
report comply with the accounting standards referred to in sub-section (3C)
of section 211 of the Act and 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, in the case of:
i) The Balance Sheet, of the state of affairs of the Company as at 31 March
2012;
ii) The Statement of Profit and Loss, of the profit for the year ended on
that date; and
iii) The Cash Flow Statement, of the cash flows for the year ended on that
date.
For Walker, Chandiok & Co
Chartered Accountants
Firm Registration No: 001076N
Per Sumesh E S
Partner
Membership No. 206931
Place: Chennai
Date : 24 May 2012
Annexure to the Auditors` Report of even date to the members of VA TECH
WABAG LIMITED, on the financial statements for the year ended 31 March 2012
Based on the audit procedures performed for the purpose of reporting a true
and fair view on the financial statements of the Company and taking into
consideration the information and explanations given to us and the books of
account and other records examined by us in the normal course of audit, we
report that:
i) a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over a
period of three years. In our opinion, this periodicity of physical
verification 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) In our opinion, a substantial part of fixed assets has not been disposed
off during the year.
ii) a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable.
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) The Company has not granted any loan, secured or unsecured to
companies, firms or other parties covered in the register maintained under
section301 of the Act. Accordingly, the provisions of clauses 4(iii)(b) to
(d) of the Order are not applicable.
e) The Company has not taken any loan, secured or unsecured from companies,
firms or other parties covered in the register maintained under section301
of the Act. Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g)
of the Order are not applicable.
iv) In our opinion, 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) a) In our opinion, the particulars of all contracts or arrangements that
need to be entered into the register maintained under section 301 of the
Act have been so entered.
b) Owing to the unique and specialized nature of the items involved and in
the absence of any comparable prices, we are unable to comment as to
whether the transactions made in pursuance of such contracts or
arrangements have been made at prevailing market prices at the relevant
time.
vi) The Company has not accepted any deposits from the public within the
meaning of sections 58A and 58AA of the Act and the Companies (Acceptance
of Deposits) Rules, 1975. Accordingly, the provisions of clause 4(vi) of
the Order are not applicable.
vii) In our opinion, the Company has an internal audit system commensurate
with its size and the nature of its business.
viii) To the best of our knowledge and belief, the Central Government has
not prescribed maintenance of cost records under clause (d) of sub-section
(1) of section 209 of the Act, in respect of Company`s products.
Accordingly, the provisions of clause 4(viii) of the Order are not
applicable.
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, as applicable, have generally been regularly
deposited with the appropriate authorities, though there has been a slight
delay in a few cases. No undisputed amounts payable in respect thereof were
outstanding at the year-end for a period of more than six months from the
date they became payable.
b) The dues outstanding in respect of sales-tax, income-tax, custom duty,
wealth-tax, excise duty, cess on account of any dispute, are as follows:
Name of statute Nature of dues Amount in Period Forum where
Rs. dispute is
pending
Rajasthan VAT Tax & Penalty 2,887,662 2004-05 to Deputy Comissioner,
Act, 2003 2006-07 Appeals
Rajasthan Tax & Penalty 3,804,355 2003-04 to Various Forums
Sales Tax 2009-10
Act, 1994
Karnataka Tax & Penalty 1,731,861 2007-08 to Deputy Commissioner
Value Added Tax 2008-09
Jharkhand VAT Tax 7,804,747 2004-05 Commissioner of
Act, 2005 Commercial Taxes
Kerala Value Tax & Penalty 4,161,767 2007-08 Appellate Tribunal
Added Tax
Central Sales Tax & Penalty 20,236,721 2006-07 To Various Forums
Tax Act, 1956 2008-09
read with
the West
Bengal VAT
Act, 2003
x) In our opinion, the Company has no accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and the
immediately preceding financial year.
xi) In our opinion, the Company has not defaulted in repayment of dues to a
financial institution or a bank or debenture holders during the year.
Annexure to the Auditors` Report of even date to the members of VA TECH
WABAG LIMITED, on the financial statements for the year ended 31 March 2012
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, the provisions of clause 4(xii) of the Order are not
applicable.
xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Accordingly, the provisions of clause 4(xiii) of the
Order are not applicable.
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.
xv) In our opinion, the terms and conditions on which the Company has given
guarantee for loans taken by others from banks or financial institutions
are not, prima facie, prejudicial to the interest of the Company.
xvi) The Company did not have any term loans outstanding during the year.
Accordingly, the provisions of clause 4(xvi) of the Order are not
applicable
xvii) In our opinion, no funds raised on short-term basis have been used
for long-term investment.
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 Act. Accordingly, the provisions of clause 4(xviii) of the Order are
not applicable.
xix) The Company has neither issued nor had any outstanding debentures
during the year. Accordingly, the provisions of clause 4(xix) of the Order
are not applicable.
xx) We have verified that the end use of money raised by public issues is
as disclosed in the notes to the financial statements covered by our audit
report.
xxi) No fraud on or by the Company has been noticed or reported during the
year covered by our audit.
For Walker, Chandiok & Co
Chartered Accountants Firm
Registration No: 001076N
Per Sumesh E S
Partner
Membership No. 206931
Place: Chennai
Date : 24 May 2012 |