1. We have audited the attached Balance Sheet of Hindustan Petroleum
Corporation Limited as at March 31, 2011, and also the Profit and Loss
Account and the Cash Flow Statement of the Company for the year ended
on that date annexed thereto in which are incorporated Accounts of the
Branch audited by the Branch Auditor. 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. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. 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 as
amended by Companies (Auditor''s Report) (Amendment) Order, 2004
(together ‘the Order''), issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Companies Act, 1956, we
give in the Annexure, a statement on the matters specifed in paragraph
4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
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 purpose of the
audit;
(b) In our opinion, proper books of account, as required by law, have
been kept by the Company, so far as it appears from our examination of
these books, and proper returns, adequate for the purposes of our
audit, have been received from the branch not visited by us;
(c) The Branch Auditors'' report, made available to us, has been
appropriately dealt with while preparing our report;
(d) The balance sheet, Profit and loss account and cash fow statement
dealt with by this report are in agreement with the books of account
and with the audited returns from the branch;
(e) The balance sheet, Profit and loss account and cash fow 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;
(f) Disclosure in terms of clause (g) of sub-section (1) of Section 274
of the Companies Act, 1956 is not required for Government Companies as
per Notifcation No. GSR 829(E) dated October 21, 2003 issued by the
Department of Company Affairs.
(g) In our opinion, and to the best of our information and according to
the explanations given to us,the said accounts read together with 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 the balance sheet, of the state of affairs of the
Company as at March 31, 2011;
(ii) in the case of the Profit and loss account, of the Profit for the
year ended on that date; and
(iii) in the case of the cash fow statement, of the cash fows for the
year ended on that date.
Annexure to the Auditors'' Report
(Referred to in Paragraph 3 of our Report of even date)
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fxed assets
except for items likes pipes, valves, meters, instruments and other
similar items peculiar to a continuous process industry.
(b) As explained to us, the Company, having regard to the size and
nature of its business, has adopted a practice of carrying out physical
verifcation of its fxed assets, except LPG cylinders and fxed assets of
the erstwhile Kosan Gas Company Undertaking, not handed over, on a
staggered basis, over a period of five years in the case of furniture,
fxtures and Office equipment and over a period of three years in the
case of Plant and Machinery and other assets. We were informed that
discrepancies noticed on such verifcation were not material as compared
to the book records and have been properly dealt with in the books of
account. The existence of fxed assets situated at the residence of
employees has, however, been ascertained on a self-declaration basis.
(c) Fixed Assets disposed off during the year were not substantial and,
therefore, do not affect the going concern assumption.
2. (a) As explained to us, the inventories were physically verifed
during the year by the Management at reasonable intervals. In the case
of materials lying with third parties, certificates confrming stocks
held have been received from them.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verifcation 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 explanations
given to us, the Company has maintained proper records of inventory.
We were informed that discrepancies noticed on physical verifcation, as
compared to the book records, were not material and have been properly
dealt with in the books of account.
3. Based on the audit procedures applied by us and according to the
information and explanations given to us, the Company has neither
granted nor taken loans, secured or unsecured to or from companies,
frms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Consequently, sub clauses (b), (c),
(d), (e), (f) and (g) of sub-para (iii) of para 4 of the Order are not
applicable.
4. In our opinion and according to the information and explanations
given to us, and having regard to the explanations that some of the
items are of a specialized nature, in respect of which suitable
alternative sources do not exist for obtaining comparative quotations,
there are adequate internal control procedures commensurate with the
size of the Company and nature of its business for the purchase of
inventory and fxed assets and for the sale of goods and services.
5. In our opinion and according to the information and explanations
given to us, there are no contracts and arrangements referred to in
Section 301 of the Companies Act, 1956 entered into during the year
that need to be entered in the register maintained under that Section.
Accordingly, sub clause (b) of sub-para (v) of para 4 of the Order is
not applicable to the Company for the current year.
6. In our opinion, and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of Section 58A and Section
58AA or any other relevant provisions of the Companies Act, 1956, and
the rules framed there under with regard to deposits accepted from the
public. We have been informed that no order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India.
7. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government, the maintenance of cost records has been prescribed
under Section 209 (1) (d) of the Companies Act, 1956. We are of the
opinion that prima facie the prescribed accounts and records have been
maintained and are being made. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.
9. (a) According to the information and explanations given to us and
on the basis of our examination of the books of account, the Company
has, during the year, been generally regular in depositing with the
appropriate authorities, undisputed statutory dues, including Provident
Fund, Investor Education and Protection Fund, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other
material statutory dues.
(b) According to the information and explanations given to us and on
the basis of our examination of the books of account, no undisputed
amounts payable in respect of Income Tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess were in arrears, as at
March 31, 2011, for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us, dues
relating to Income tax, Sales tax, Custom duty, Service tax, Excise
duty which have not been deposited on account of disputes with the
related authorities, have been refected in the table below:
STATUTE FORUM WHERE AMOUNT IN RS./ PERIOD TO WHICH
DISPUTE IS
PENDING CRORES THE AMOUNT RELATES
Income Tax CIT (Appeals) 0.54 Various Years pertaining to
2009 to 2011
0.54
Central
Excise CESTAT 489.08 Various Years pertaining to
1992 to 2009
Commissioner Appeal 2.78 Various Years pertaining to
1998 to 2009
High Court 0.25 Pertaining to 2004
RA 0.21 Various Years pertaining to
1999 to 2006
492.31
Customs CCEA 1.99 Various Years pertaining to
2003 to 2005
CESTAT 64.72 Various Years pertaining to
1992 to 2006
Total 66.71
Service Tax CCEA 0.05 Various Years pertaining to
2004 to 2006
CESTAT 127.22 Various Years pertaining to
2002 to 2009
127.26
Sales Tax Board of revenue 0.03 Various Years pertaining to
1985 to 1987
Rajasthan Kar Board 2.22 Various Years pertaining to
1999 to 2001
STAT 789.15 Various Years pertaining to
1985 to 2008
High Court 480.18 Various Years pertaining to
1979 to 2007
Supreme Court 158.94 Various Years pertaining to
2002 to 2004
Commissioner/DCCT/
ADC/ 6183.58 Various Years pertaining to
1976 to 2009
JCCT/ACCT
7614.09
Grand Total 8300.91
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year and
in the financial year immediately preceding such financial year.
11. According to the information and explanations given to us, and
based on checks carried out by us, the Company has not defaulted in
repayment of dues to financial institutions, banks or debenture holders.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. In our opinion and according to information and explanations given
to us, the Company is not a chit fund or a nidhi/mutual benefit fund/
society. Therefore the provisions of sub-para (xiii) of para 4 of the
Order are not applicable to the Company.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Therefore the provisions of sub-para (xiv) of para 4
of the Order are not applicable to the Company.
15. In our opinion and according to information and explanations
provided to us, the Company has not given guarantees for loans taken by
others from banks and financial institutions.
16. In our opinion and according to information and explanations given
to us, the term loans taken during the year, prima facie, have been
applied for the purpose for which they were raised.
17. According to the information and explanations given to us, and
based on our overall examination of Balance Sheet and considering
investment in Oil Bonds issued by the Government of India towards
under-recoveries on sale of sensitive petroleum products as short term
application of funds, funds raised on short- term basis have, prima
facie, not been used for making long-term investments.
18. According to the information and explanations given to us, during
the year the Company has not made any preferential allotment of shares
to parties and companies covered in the Register maintained under
Section 301 of the Companies Act, 1956.
19. The Company has created necessary securities or charge as per the
debenture trust deed in respect of debentures issued and outstanding at
the year end.
20. The Company has not raised any money by way of public issue during
the financial year.
21. According to the information and explanations given to us and
based on audit procedures performed and representations obtained from
the management, we report that no material fraud on or by the Company,
has been noticed or reported during the year under audit.
For V. Sankar Aiyar & Co. For Om Agarwal & Co.
Chartered Accountants Chartered Accountants
Firm No. : 109208w Firm No. : 000971c
G. Sankar Thalendra Sharma
Partner Partner
Membership No.46050 Membership No. 079236
Place: New Delhi
Date: 26th May 2011
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