wartsila india ltd Auditors report

WARTSILA INDIA LIMITED ANNUAL REPORT 2009 AUDITORS REPORT To The Members of WARTSILA INDIA LIMITED 1. We have audited the attached Balance Sheet of WARTSILA INDIA LIMITED (the Company) as at 31st December, 2009 and the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both 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 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 (Auditors Report) Order, 2003, (the Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in the paragraph 3 above, we report that: (i) we have obtained all information and explanations, which to the best of our knowledge and belief were necessary for the purpose 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 the 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 the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956; (v) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give 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 31st December, 2009; (b) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and; (c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. 5. On the basis of written representations received from the directors, as on 31st December, 2009, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st December, 2009 from being appointed as Director of the Company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956. For S.B. BILLIMORIA & CO. Chartered Accountants (Registration No. 101496W) SANJIV V. PILGAONKAR Partner Membership No.: 39826 Mumbai: 22nd March, 2010 Annexure to the Auditors Report (Referred to in paragraph 3 of our report of even date) 1. In respect of the Companys fixed assets: (a) TheCompany has maintained proper records showing full particulars, including quantitative details and location of its fixed assets. (b) The Companys fixed assets were physically verified by the management in accordance with a programme of verification, which provides physical verification of all fixed assets at intervals which in our opinion are reasonable. According to the information and explanation given to us no material discrepancies were noticed on such verification. (c) The fixed assets disposed off during the year, 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) As explained to us, inventories, excluding materials in transit have been physically verified during the year by the management, 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 inventory 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 explanation given to us, the Company has maintained proper records of its inventories. The discrepancies noticed between the physical stocks and the book records were not material in relation to the operation of the Company and the same have been properly dealt with in books of account. 3. According to the information and explanation given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of paragraph 4 (iii) (a) to (d) of the Order are not applicable to the Company. 4. According to the information and explanation given to us, 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. Therefore, the provisions of paragraph 4 (iii) (e) to (g) of the Order are not applicable to the Company. 5. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the Items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems. 6. To the best of our knowledge and belief and according to the explanations given to us, we are of the opinion that there are no contracts or arrangements, the particulars of which need to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956. 7. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the purview of Section 58A and 58AA of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of paragraph 4 (vi) of the Order are not applicable to the Company. 8. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business. 9. According to the information and explanations given to us, during the year, the Company has not manufactured any product covered by the rules made by the Central Government for maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 and therefore, no such records have been made and maintained during the year by the Company. 10. In respect of statutory and other dues: (a) In our opinion and according to the information and explanation given to us the Company has been regular in depositing undisputed statutory dues relating to provident fund, employees state insurance, income tax, sales tax, state value added tax and investor education and protection fund. The Company has been generally regular in depositing undisputed statutory dues relating to service tax. Undisputed amount payable in arrears, as at 31st December, 2009 for a period of more than six months from the date they became payable are as under: Name Nature of Period Amount Due of the dues (Rs. in date Statute thousands) Professional Profession tax April 2008 to 42 15th of Tax Laws June 2009 subsequent month Sales Tax Works Contract Details 724 Details Laws tax unavailable unavailable (b) According to the information and explanation given to us, (i) There were no disputed dues as regards Wealth tax and (ii) details of dues of income tax, sales tax, service tax, customs duty, excise duty and cess which have not been deposited on account of dispute are given below: Name Nature of Financial Forum where Amount of the dues year to which the dispute is (Rs. in Statute the matter pending thousands) pertains Income tax Income tax 2005-2006 Commissioner 15,129 Act, 1961 (including of Income Tax interest) (Appeals) Sales Tax Sales Tax 2001-2002 Deputy 52,245 Laws (including 2002-2003 Commissioner interest) 2003-2004 (Appeals), 2004-2005 Maharashtra Sales Tax Sales Tax 2004-2005 Assistant 9,280 Laws (including Commissioner, interest) New Delhi Sales Tax Sales Tax 1992-1993 Orissa High 7,916 Laws (including Court interest) Central Excise duty 1995-1996 Tribunal 1,274 Excise Act, 1944 1994-1995 Commissioner 2,400 of Central Excise Finance Act, Service Tax 2003-2004 Assistant 324,873 1994 (Including 2004-2005 Commissioner interest) 2005-2006 of Service tax 2007-2008 2008-2009 Finance Act, Service Tax 2005-2006 Commissioner 81,332 1994 of Central Excise Customs Custom duty 1993-1994 Bombay High 27,280 Act, 1962 (including Court interest) NMMC Cess Octroi duty 1997-1998 The District 4,499 Court, Thane 11. The Company does not have accumulated losses as at the year end. The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. 12. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. There were no amounts outstanding on account of debentures during the year. 13. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other investments. Therefore, the provisions of paragraph 4 (xii) of the Order are not applicable to the Company. 14. The Company is not a chit fund or a nidhi/mutual benefit society. Therefore, the provisions of paragraph 4 (xiii) of the Order are not applicable to the Company. 15. According to the information and explanations given to us, the Company is not dealing in shares, securities, debentures and other investments. Therefore, the provisions of paragraph 4 (xiv) of the Order are not applicable to the Company. 16. 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. 17. The Company has not taken any term loan during the year covered by our audit report. Therefore, the provisions of paragraph 4 (xvi) of the Order are not applicable to the Company. 18. In our opinion and according to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that, no funds raised on short term basis have been used for long term investment. 19. According to the information and explanations given to us, 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. 20. According to the information and explanations given to us, the Company has not issued any secured debentures during the period covered by our report. Accordingly, the provisions of paragraph 4 (xix) of the Order are not applicable to the Company. 21. According to the information and explanations given to us, the Company has not raised any money by public issue during the year. 22. 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 year. For S.B. BILLIMORIA & CO. Chartered Accountants (Registration No. 101496W) SANJIV V. PILGAONKAR Partner Membership No.: 39826 Mumbai: 22nd March, 2010