We have audited the attached Balance Sheet of HEG Limited as at 31st
March, 2011 and also the Profit & Loss Account and the Cash Flow
Statement of the Company for the year 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 have 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As required by the Companies (Auditors'' Report) Order, 2003 as amended
by Companies (Auditor''s Report) (Amendment) Order, 2004 (Collectively
the Order) issued by the Central Government of India in terms of
Section 227 (4A) of the Companies Act, 1956 and on the basis of such
checks as we considered appropriate and according to the information
and explanations given to us, 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
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 Balance Sheet, Profit & Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Profit & 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.
e) On the basis of written representations received from the directors
as on 31st March, 2011 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2011 from being appointed as a director in terms of clause (g) of sub
section (1) of section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said Accounts read with the
Accounting policies and Notes thereon, 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:
i) In the case of Balance Sheet, of the state of affairs of the Company
as at 31st March, 2011;
ii) In the case of Profit and Loss Account, of the Profit for the year
ended on that date; and
iii) In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure to Auditors'' Report
(Annexure referred to in our report of even date)
1. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) Verification of the fixed assets is being conducted based on a
programme by the management designed to cover all assets over a period
of three years, which, in our opinion, is reasonable having regard to
the size of the Company and nature of its business. Discrepancies
noticed on such verification as compared to book records were not
material and have been properly adjusted in the books of account.
c) No Substantial part of the fixed assets was disposed off during the
year.
2. a) The inventory has been physically verified during the year
by the management at all its locations, except stocks lying with third
parties and in transit which have been verified with reference to
correspondence of third parties or subsequent receipts of goods. In our
opinion, the frequency of such verification is reasonable.
b) The procedures for the physical verification of inventory followed
by the management are, in our opinion, reasonable and adequate in
relation to the size of the Company and nature of its business.
c) In our opinion, the Company is maintaining proper records of
inventory. The discrepancies noticed on physical verification of
inventory as compared to book records were not material and have been
properly dealt with in the books of account.
3. a) The Company has not granted any loans, secured or
unsecured, to companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly
clauses 4 (iii) (b) to (d) of the Order are not applicable.
b) The Company has not taken any loan, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly clauses 4
(iii) (f) and (g) of the Order are not applicable.
4. In our opinion, and according to the information and explanations
given to us during the course of audit, there are adequate internal
control systems commensurate with 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. Further, on the basis of our
examination of the books & records of the Company, carried out in
accordance with the generally accepted auditing practices in India, we
have neither come across nor have we been informed of any instance of
major weaknesses in the aforesaid internal control systems.
5. a) Based upon the audit procedures applied by us and
according to the information and explanations given to us, we are of
the opinion that the particulars of contracts and arrangements referred
to in section 301 of the Act have been entered in the register required
to be maintained under that section.
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 register maintained under Section 301 of
the Act and aggregating during the year to Rupees five lacs or more in
respect of each party have been made at prices which are reasonable
having regard to market prices for such transactions, prevailing at the
relevant time, where such market prices are available.
6. The Company has not accepted any deposits from the public within
the meaning of sections 58A and 58AA or any other relevant provisions
of the Companies Act, 1956 including the Companies (Acceptance of
Deposit) Rules, 1975.
7. In our opinion, the Company has an internal audit system
commensurate with its size & nature of its business.
8. We have broadly reviewed the Cost Accounting records, maintained by
the Company pursuant to the Rules prescribed by the Central Government
for the maintenance of cost records under clause (d) of sub-section (1)
of section 209 of the Act, and are of the opinion that, prima facie,
the prescribed accounts and records have been made and maintained. We
are, however, not required to make a detailed examination of such books
and records.
9. a) According to the examination of records of the Company,
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 been generally regularly
deposited with the appropriate authorities during the year. There are
no such dues outstanding for more than six months from the date they
became payable as on the date of balance sheet.
b) According to the information and explanations given to us and as per
the books and records examined by us, there
are no dues of custom duty, service tax, wealth tax, and cess that have
not been deposited on account of any dispute except the
following dues of income tax, sales tax and excise duty along with the
forum where the dispute is pending :
(Rs. in Lacs)
Name of the
Statute Nature of
Dues Year to which
amount pertains Forum Amount
Income Tax
Act,1961 Income Tax 2007-08 CIT (Appeals),
Bhopal 110.00
2003-04,
2004-05 High Court,
Jabalpur 516.00
Central
Excise Act,
1944 Excise Duty 1999-2003,
2002-03,
2004-06, Tribunal,
New Delhi 592.00
2004-07,
2005-06,
2006-07,
2007-08
2004-05 High Court,
Jabalpur 1.42
Central
Sales Tax
Act, 1956 Central Sales
Tax 2002-03,
2003-04 Tribunal, Bhopal 49.17
Madhya
Pradesh
Parvesh Entry Tax 2007-08 CIT (Appeals),
Bhopal 181.99
Kar Adhi
niyam, 1976 2005-06,
2006-07 CIT (Appeals),
Raipur 14.00
2002-03,
2003-04,
2006-07 Tribunal, Bhopal 75.87
1997-98 High Court,
Jabalpur 9.94
Chattisgarh Local Sales
Tax 2005-06 CIT (Appeals),
Raipur 42.63
Commercial
Tax 1992-93 Tribunal, Raipur 1.12
10. There are no accumulated losses of the Company as at the end of the
financial year. There are no cash losses during the financial year and
in the immediately preceding financial year.
11. According to the information and explanations given to us and as
per the books and records examined by us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders.
12. 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 securities.
13. The Company does not fall within the category of Chit fund / Nidhi
/ Mutual Benefit fund / Society and hence the related reporting
requirements of the Order are not applicable.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments and hence the related reporting requirements of the
Order are not applicable.
15. The Company has given a guarantee jointly with another company to a
financial institution for loans taken by others from that financial
institution, the terms and conditions of which are not, prima facie,
prejudicial to the interest of the Company.
16. In our opinion, and according to the information and explanations
given to us, the term loans raised during the year by the Company have
been applied for the purpose for which the said loans were obtained,
where such end use has been stipulated by the lender.
17. According to the information and explanations given to us and
as per the books and records examined by us, as on the date of balance
sheet, the funds raised by the Company on short term basis have not
been applied for long term investment.
18. The Company has not made any preferential allotment of shares,
during the year, to companies and other parties covered in the register
maintained under section 301 of the Companies Act, 1956.
19. The Company has created necessary securities and other charges for
the debentures issued in the current financial year.
20. The Company has not raised any money through public issues during
the year.
21. During the course of our examination of the books and records of
the Company carried out in accordance with the generally accepted
auditing practices in India, we have neither come across any instance
of fraud on or by the Company, noticed and reported during the year,
nor have we been informed of such case by the management.
For Doogar & Associates For S. S. Kothari Mehta & Co.
Chartered Accountants Chartered Accountants
Firm Regn. No. 000561N Firm Regn. No. 000756N
Mukesh Goyal Arun K. Tulsian
Partner Partner
Membership No. 081810 Membership No. 089907
Place: Noida (U.P.)
Dated: 29th April, 2011
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