We have audited the accompanying financial statements of HOV Services
Limited (the Company), which comprise the Balance Sheet as at
December 31, 2012, the Statement of Profit and Loss and the Cash Flow
Statement of the Company for the year then ended and a summary of the
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s 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). This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
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 the
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 judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the 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. 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.
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
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at December 31, 2012;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company 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.
1. As required by the Companies (Auditor''s Report) Order, 2003(the
Order) 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 purposes of our
(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
(c) The Balance Sheet, Statement of Profit and Loss, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Act.
(e) On the basis of the written representations received from the
directors as on 31st December 2012 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st December,
2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Act.
ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE TO THE
MEMBERS OF THE HOV SERVICES LIMITED
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us during the course of
audit, we state that:
1. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b) The Company has carried out physical verification of all its fixed
assets during the year. In our opinion, the frequency of verification
is reasonable considering the size of the Company and the nature of its
assets. No material discrepancies were noticed on such verification.
c) During the year, no substantial part of fixed assets has been
disposed off by the Company.
2. The Company does not have any inventory. Therefore, the provisions
of clause 4 (ii) of the Order are not applicable to the Company.
3. The Company has not granted or taken any loans, secured or
unsecured, to / from companies, firms of other parties covered in the
register maintained under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanation that purchase of certain
items of fixed assets and sale of services are of a special nature for
which suitable alternative source do not exist for obtaining comparable
quotations, there is an adequate internal control system commensurate
with the size of the Company and nature of its business for the
purchase of fixed assets and for the sale of services. The activities
of the Company do not involve purchase of inventory and sale of goods.
Further, on the basis of our examination of the books and records of
the Company and according to the information and explanations given to
us, we have neither come across nor have been informed of any
continuing failure to correct major weaknesses in the aforesaid
internal control system.
5. According to the information and explanations provided by the
management, we are of the opinion that there are no contracts or
arrangements that need to be entered into the register required to be
maintained under Section 301 of the Act.
6. The Company has not accepted any public deposits within the meaning
of Section 58A and 58AA or any other relevant provisions of the Act and
rules framed there under.
7. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
8. According to the information and explanations given to us, the
Central Government has not prescribed the maintenance of cost records
under clause (d) of sub section (1) of Section 209 of the Act for the
services rendered by the Company.
9. a) The Company is regular in depositing undisputed statutory dues
including Provident Fund, Employees'' State Insurance, Investor
Education and Protection Fund, Income Tax, Wealth Tax, Service Tax,
Sales Tax, Customs Duty, Excise Duty, Cess and other statutory dues
applicable to the Company with appropriate authorities. As explained to
us, no undisputed amounts payable in respect of the aforesaid statutory
dues were outstanding as at the last day of the financial year for a
period of more than six months from the date they became payable.
b) According to the records of the Company, there are no dues of Income
Tax, Sales Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty and
Cess which have not been deposited on account of any dispute except the
Nature of Nature of Period To Amount in Forum Where
Statutes Dues Which It
Relates Rs. Disputed
Income Tax Income Tax Assessment
Year 2,905,432 Commissioner of
Act, 1961 2009-10 Tax (Appeals)-1,
10. The Company has no accumulated losses at the end of the financial
year and has not incurred cash losses in the current year and in the
immediately preceding financial period.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
12. During the year, 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. In our opinion, the Company is not a chit fund or a nidhi /mutual
benefit fund/ society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the Company.
14. In our opinion, the Company is not dealing in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Order are not applicable to the Company.
15. In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
guarantees for loans taken by others from banks and financial
institutions, are not, prima facie prejudicial to the interest of the
16. Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
17. The Company has not raised any funds on short term basis.
Therefore, the provisions of clause 4(xvii) of the Order are not
applicable to the Company.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act or in the recent past.
19. The Company has not issued any debentures during the year or in
the recent past.
20. The Company has not raised any money by public issue during the
year or in the recent past.
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 and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For LODHA & COMPANY
Firm Registration No. 301051E
February 27, 2013 Membership No. 38323