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Moneycontrol.com India | Auditor's Report > Metals - Non Ferrous > Auditor's Report from Hindustan Zinc - BSE: 500188, NSE: HINDZINC

Hindustan Zinc

BSE: 500188  |  NSE: HINDZINC  |  ISIN: INE267A01017  |  Metals - Non Ferrous

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Auditor's Report Year End : Mar '09
1.  We have audited the attached balance sheet of Hindustan Zinc
 Limited (the Company) as at 31 March 2009, the profi t and loss account
 and 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.
 
 2.  We conducted our audit in accordance with generally accepted
 auditing standards 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 (Auditor’s Report) Order, 2003, issued
 by the Central Government of India in terms of sub-section (4A) of
 Section 227 of the Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 4.  We draw attention to Note 15 on Schedule 18, relating to long-term
 investment in equity shares of a power company being classified as an
 intangible asset (Schedule 4) and amortised. This treatment is in
 preference to requirements of Accounting Standard 30 ‘Financial
 Instruments: Recognition and Measurement’, Accounting Standard 26
 ‘Intangible Assets’; and Schedule XIV of the Companies Act, 1956. This
 has resulted in profit for the year being lower by Rs 4.67 crores
 (2008: Rs 4.67 crores), investments being lower by Rs 98.41 crores
 (2008: Rs 98.41 crores), fixed assets being higher by Rs 60.70 crores
 (2008: Rs 65.37 crores) and reserves and surplus being lower by Rs
 37.71 crores (2008: Rs 33.04 crores).
 
 5.  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 purposes of
 our audit;
 
 b.  in our opinion, proper books of accounts as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 c.  the Balance Sheet, the Profi t and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 d.  in our opinion, the Balance Sheet, the Profit and Loss Account and
 the 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 except for Paragraph 4 above. Additionally, the
 Company has chosen to early adopt Accounting Standard 30, Financial
 Instruments: Recognition and Measurement arising from the Announcement
 of the Institute of Chartered Accountants of India on 29th March, 2008
 as stated in Note 16 on Schedule 18;
 
 e.  in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with notes 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 31 March 2009;
 
 ii.  in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 iii. in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 6 On the basis of written representations received from the Directors,
 as on 31 March 2009, and taken on record by the Board of Directors, we
 report that none of the Directors is disqualified as on 31 March 2009
 from being appointed as a Director in terms of Section 274(1)(g) of the
 Companies Act, 1956.
 
 Annexure to Auditors Report
 
 (Referred to in paragraph 3 of Auditors’ Report of even date)
 
 In our opinion and according to the information and explanation given
 to us, the nature of the Companys business/ activities during the year
 are such that clauses, (iii), (v), (vi), (x), (xii), (xiii), (xiv),
 (xv), (xvi), (x viii), (xix), (x x) of Companies (Auditors’ Report)
 Order 2003, are not applicable to the Company and we state that.
 
 1.  In respect of its fixed Assets:
 
 i.  The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 ii.  The Company has a phased program of physical verification of its
 fixed assets in a three year period which, in our opinion, is
 reasonable having regard to the size of the Company and the nature of
 its assets. In accordance with such program, the management has
 physically verified the fixed assets and no material discrepancies were
 noticed on such verification.
 
 iii. In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 off by the Company during the year.
 
 2.  In respect of its inventories:
 
 i.  Inventory has been physically verified by the management during the
 year.
 
 ii.  In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management are reasonable and adequate in relation to
 the size of Company and the nature of its business.
 
 iii. In our opinion, the Company has maintained proper records of its
 inventories. The discrepancies were noticed on verification between the
 physical stock and the book records were not material having regard to
 the size of the operation of the Company.
 
 3.  There is an adequate internal control system commensurate with the
 size of the Company and nature of its business for the purchase of
 inventory and fixed assets and for the sale of goods. Further, on the
 basis of our examination of books and records of the Company we have
 neither come across nor have been informed of any continuing failure to
 correct major weakness in the aforesaid internal control procedure.
 
 4.  In our opinion, the Company has an adequate internal audit system
 commensurate with the size of the Company and the nature of its
 business.
 
 5.  We have broadly reviewed the books of account and records
 maintained by the Company relating to the manufacture of Zinc, Lead and
 Sulphuric Acid, pursuant to the order made by the Central Government
 for the maintenance of cost records under Section 209(1) (d) of the
 Companies Act, 1956, and are of the opinion that prima facie the
 prescribed accounts and records have been made and maintained. We have,
 however, not made a detailed examination of the records with a view to
 determining whether they are accurate or complete.
 
 6.  According to the information and explanations given to us, and the
 records of the Company examined by us:
 
 i.  The Company has been regular in depositing with 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.
 
 ii.  Disputed sales tax, excise duty, and Income-tax dues aggregating
 to Rs 20.66 crores, Rs 43.26 crores and Rs 342.09 crores respectively,
 have not been deposited since the matters are pending with the relevant
 forum as per annexure ‘A’ attached.
 
 7.  The Company has not defaulted in repayment of dues to financial
 institutions and banks.
 
 8.  On an overall examination of the balance sheet of the Company,
 funds raised on short term basis have, prima facie, not been used
 during the year for long term investment.
 
 9.  To the best of our knowledge and belief and according to the
 information and explanation given to us, no significant fraud on or by
 the Company was noticed or reported during the year.
 
                                   For Deloitte Haskins & Sells 
                                          Chartered Accountants
 
                                                 Shyamak R Tata
                                                        Partner
                                                   M. No. 38320
 Place: Mumbai
 Date: 22 April 2009
Source : Religare Technova

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