WALCHANDNAGAR Auditors Report

We have audited the accompanying financial statements of Walchandnagar
Industries Limited ("the Company"), which comprise the Balance Sheet as
at September 30, 2014, the Statement of Profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.

Management''s responsibility for the Financial statements

Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub- section (3C) of section
211 of the Companies Act, 1956 ("the Act") which continue to applicable
in respect of Section 133 of the Companies Act, 2013 in terms of
General Circular 15/2013 dated September 13, 2013 of the Ministry of
Corporate Affairs and in accordance with the accounting principles
generally accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and fair presentation of the financial statements that are
free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.

An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgement, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud and error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the management, as
well as evaluating the overall presentation of the financial
statements.

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion. opinion

In our opinion and to the best of our information and according to the
explanations given to us, the financial statements 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:

(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at September 30, 2014;

(b) in the case of the Statement of Profit and Loss, of the loss 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.

Report on other Legal and Regulatory Requirements

1. 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 Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.

2. As required by section 227(3) of the Act, 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 purpose 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 and proper returns adequate for the purpose of our audit
have been received from divisions at Zambia and Ethiopia not visited by
us. The divisions'' overseas Auditors'' Reports have been forwarded to us
and appropriately dealt with;

(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account and with the audited returns from the divisions at Zambia and
Ethiopia;

(d) in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956 read
with the General Circular 15/2013 dated September 13, 2013 of the
Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013; and

(e) on the basis of written representations received from the directors
as on September 30, 2014, and taken on record by the Board of
Directors, none of the directors is disqualified as on September 30,
2014, from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.

(Referred to in paragraph 1 under the heading "Report on Other Legal
and Regulatory Requirements" of our Report of even date on the
financial statements for the year ended September 30, 2014 of
Walchandnagar Industries Limited)

(i) 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) The Company has a programme for physical verification of the fixed
assets, which in our opinion is reasonable having regard to the nature
of the business. Accordingly, the fixed assets have been physically
verified by the Management at the end of the year and no material
discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year were not substantial.
According to the information and explanations given to us, we are of
the opinion that the disposal of the Fixed Assets has not affected the
going concern status of the Company.

(ii) In respect of its inventories :

(a) The Management has conducted physical verification of the inventory
at reasonable intervals other than material lying with sub-contractors,
which have been confirmed by majority of them.

(b) The procedures 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.

(c) The Company has maintained proper records of inventory and no
material discrepancies were noticed on physical verification as
compared to the book records.

(iii) The Company has not granted/ taken any secured or unsecured loans
to/ from companies, firms or other parties covered in the Register
maintained under section 301 of the Companies Act, 1956. Therefore,
sub-clauses (b), (c),

(d) , (e), (f) and (g) of clause (iii) of the said Order are not
applicable.

(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to 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
internal controls.

(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into
the register maintained under section 301 of the Companies Act, 1956
have been so entered.

(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the registers maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5 Lakhs in respect
of any party during the year have been made at price which are
reasonable having regard to prevailing market prices at the relevant
time.

(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of section
58A and 58AA and any other relevant provisions of the Companies Act,
1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
to the deposits accepted from the public. As informed to us, no order
has been passed by the Company Law Board, National Company Law Tribunal
or Reserve Bank of India or any other court or any other tribunal.

(vii) In our opinion, Company has an internal audit system commensurate
with size and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that, prima facie, the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the Company is generally
regular in depositing with appropriate authorities 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 and Cess and other material statutory
dues applicable to it.

According to the information and explanations given to us, there are no
undisputed outstanding dues in respect of the above items in arrears as
at September 30, 2014 for a period of more than six months from the
date they became payable.

(b) According to the information and explanations given to us, the
disputed statutory dues on accounts

of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise
Duty, Municipal Tax and Cess that have not been deposited on account of
matters pending before appropriate authority are as follows:


Name of the Nature of Amount Period to
Statute Dues (Rsin Lakhs) which the
amount
relates

Central Denial of 266.19 March,
Excise Act, exemption (Net of 2000 to
1944 availed under CENVAT March,
notification reversal 2004
No. 6/2002, and
for supply payment)
of biomass
sbased boilers.

Central Excise duty 82.73 June, 1983
Excise Act, demand (Net of to April,
1944 on bought CENVAT 2005
out items reversal
supplied for and
centrifugals, payments)
which have
already suffered
duty at
manufacturers
end.

Maharashtra NA Tax (20 86.61 1982 to
Land Lakhs paid 2003
Revenue under protest)
Code

NA Tax 16.18 1982 to
2003

NA Tax 58.58 1994 to
2003

Pune Municipal 325.07 2008-09 to
Municipal Taxes - 2011-12
Corporation Determination
of Annual
Rateable Value

Central Sales The 159.83 2005-06
Tax Act, exemption
1956 from tax
for transit
sale under
section 6(2)
(b)is denied.
30 Lakhs paid
under protest).


Service Tax Demand on 362.65 2006-10
value addition
of bought out
items.
28.76 Lakhs
paid under
protest).

Employees EPF - Demand 50.68 2006-07
Provident from EPF
Fund authorities

Central Excise Duty 2.47 Sept-09 to
Excise Act, on bought out Jan-11
1944 components
supplied for
Centrifugals



Name of the Statue Forum where dispute is pending

Central Excise Act,1944 CESTAT, Mumbai

Central Excise Act,1944 Supreme Court

Maharashtra Land Revenue Code Collector of Pune

SDO, Baramati

SDO, Baramati

Pune Municipal Corporation Court of Small Causes , Pune

Central Sales Tax Act,1956 Joint Commissioner of Sales
Tax (Appeal), Pune

Service Tax Employees Provident
Fund CESTAT, Kolkata

Employees Provident Fund Mumbai High Court

Central Excise Act,1944 CESTAT, Mumbai

(x) The Company does not have any accumulated losses as at the end of
the financial year.The Company has incurred cash losses in the
financial year covered by our audit and in the immediately preceding
financial year.

(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
the financial institutions or banks or debenture holders during the
year.

(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.

(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi/ mutual benefit
fund/ society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditor''s Report) Order, 2003 are not applicable to the
Company.

(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.

(xv) 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.

(xvi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purposes for which they were raised.

(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we are of
the opinion that funds raised on short- term basis have not been used
for long-term investment.

(xviii) According to the information and explanations given to us,
during the period covered by our audit report, the Company has not made
any preferential allotment of shares to the parties and companies
covered under the register maintained under section 301 of the
Companies Act, 1956.

(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company has not issued any
debentures.

(xx) According to the information and explanations given to us, during
the period covered by our audit report, the Company has not raised any
money by public issue.

(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.


For K. s. Aiyar & Co.,
Chartered Accountants
Firm''s Registration No.: 100186W

satish K. Kelkar
Place: Mumbai Partner
Date: November 29, 2014 Membership No.: 38934

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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