Annual Report 2006-2007 - Gammon India

GAMMON INDIA LIMITED
AuDITOr’s rEpOrT
TO
ThE BOArD Of DIrEcTOrs Of GAMMON INDIA LIMITED
ON ThE cONsOLIDATED fINANcIAL sTATEMENTs
We have audited the attached Consolidated Balance Sheet of GAMMON INDIA LIMITED (‘GIL’) Group, as at
31 st March, 2007, and also the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement
for the year ended on that date annexed thereto. These financial statements are the responsibility of the GIL’s
management and have been prepared by the management on the basis of separate financial statements and
other financial information regarding components. Our responsibility is to express an opinion on these financial
statements based on our audit.
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.
We did not audit the financial statements of:
(a) Certain subsidiaries whose financial statements reflect total assets of Rs. 984.17 Crores as at 31 st March, 2007,
total revenue of Rs. 423.55 Crores and cash flows of Rs. 62.41 Crores for the year then ended; and,
(b) Certain joint ventures whose financial statements reflect total assets of Rs. 308.69 Crores as at 31 st March, 2007,
the total revenue of Rs. 30.45 Crores and cash flows amounting to Rs. 3.61 Crores for the year then ended,
the Company’s share of such assets, revenues and cash flows being Rs. 130.71 Crores, Rs. 12.85 Crores and
Rs. 1.62 Crores respectively.
The abovementioned financial statements have been audited by other auditors whose reports have been furnished
to us, and our opinion is based solely on the report of other auditors.
We report that the consolidated financial statements have been prepared by the GIL’s management in accordance
with the requirements of Accounting Standards (AS) 21 “Consolidated Financial Statements”, Accounting Standards
(AS) 23 “Accounting for Investments in Associates in Consolidated Financial Statements” and Accounting Standard
(AS) 27 “Financial Reporting of Interests in Joint Ventures” issued by the Institute of Chartered Accountants of
India.
Without qualifying our report, we invite attention to Note B-19(b) of Schedule 18 of the financial statements regarding
the Early Completion Bonus accrued by two subsidiary companies in earlier years and included in sundry debtors
as at 31 st March, 2007. The outcome of the matter cannot be presently determined and hence no provision for any
liability has been made in the financial statements.
Based on our audit and on consideration of reports of other auditors on separate financial statements and on the
other financial information of the components, and to the best of our information and according to the explanations
given to us, we are of the opinion that the attached consolidated financial statements read with Note no. B-34(a)
relating to the joint venture in Oman of Rs. 13.29 Crores, Note no. B-12 relating to the change in method of
charging depreciation on the assets of Oman branch and its consequent effect resulting in the profits for the year
being higher by Rs. 5.53 Crores, Note no. B-13 relating to variation and escalation claims of certain road projects
and its inclusion in the works in progress and the other notes thereon give a true and fair view in conformity with
the accounting principles generally accepted in India:
(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the GIL Group as at 31 st March, 2007;
80