We have audited the accompanying financial statements of Hindustan
Everest Tools Limited, (the company) which comprise the Balance Sheet
as at 31st March, 2014 and the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
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 conduct 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
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 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 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, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating to 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 31st March, 2014;
b. In the case of Statement of Profit and Loss, of the profit for the
year ended on that date; and
c. In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Report on the other legal and regulatory requirements
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
statements on the matters specified in the paragraphs 4 and 5 of the
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 purpose of our
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
c. The Balance Sheet, Statement of Profit and Loss, and 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 Cash Flow Statement 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, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2014, from
being appointed as a director in terms of clause (g) of sub- section
(1) of section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 1 of our report of even date on the
other legal and regulatory requirements (Re: Hindustan Everest Tools
(i) a. The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
b. As per information given to us, the process of physical
verification of fixed assets by the management was initiated but not
completed during the year. In our opinion, the frequency of physical
verification is reasonable having regard to the size of the company and
nature of its assets. Discrepancy in physical and book quantity if any
shall be reconciled and adjusted on completion of physical
c. The company has not disposed off substantial part of fixed assets
during the year.
(ii) a. As explained to us inventories were physically verified during
the year by the management at reasonable intervals.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification 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 explanation
given to us, the company is maintaining proper records of inventory and
no material discrepancies were noticed on physical verification.
(iii) a. According to the information and explanations given to us, the
company has taken interest free unsecured loans including in previous
year from four parties (Maximum balance Rs. 4,97,05,466 and year end
balance was Rs. 4,35,13,404) listed in the register maintained under
section 301of the Companies Act'' 1956.
b. Other terms & condition of such loan are prima facie not
prejudicial to the interest of the company.
c. As informed to us, the company has not granted any loan to parties
covered in the register maintained under section 301 of the Companies''
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not noticed any
continuing failure to correct major weakness in internal control
(v) a. In our opinion and according to the information and explanations
provided by the management, we are of the opinion that the particulars
of contract or arrangements that need to be entered into the register
maintained under section 301 of the Companies Act''1956 have been so
b. In our opinion and according to the information and explanations
given to us, there is no transaction of purchase and sale of goods,
materials and services made exceeding the value of Rs. five lakhs from
any party covered under section 301 of the Companies'' Act 1956.
(vi) In our opinion and according to the information and explanations
given to us, the company has not received any public deposit during the
(vii) In our opinion the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
company pursuant to the Companies (Cost Accounting Records) Rules 2011
prescribed by the Central Government under section 209 (1)(d) of the
Companies Act 1956 and are of the opinion that prima facie ,the
prescribed cost records have been made and maintained. We have
however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
(ix) a. According to the records of the company, the company is
generally regular in depositing undisputed statutory dues including
provident fund, investor education and protection fund, employees''
state insurance, income-tax, sales-tax, services tax, wealth tax,
custom duty, excise duty, cess and other statutory dues applicable to
it with the appropriate authorities though there have been some delays.
There are no significant undisputed outstanding statutory dues as at
the yearend for a period of more than six months from the date they
became payable except service tax Rs.43,878.
b. According to the records of the company , there are no dues
outstanding of sales tax, income tax, service tax, custom tax, wealth
tax, excise duty and cess on account of any dispute.
(x) The company has no accumulated loss at the end of the financial
year and has not incurred any cash loss during the year. However, it
has incurred cash loss in immediately preceding financial year.
(xi) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has not defaulted in repayment of dues to financial institution
and banks. We have been informed that the company has not issued any
debenture during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced 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.
(xiii) 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.
(xiv) The company does not deal or trade in shares, securities,
debentures and other securities.
(xv) According to the information and explanations given to us, the
company has not given any guarantees in favour of banks / financial
institution for loans taken by others.
(xvi) According to the information and explanations given to us, term
loan taken by the company during the year has been utilized for the
purpose for which loan was obtained.
(xvii) According to the information and explanation given to us, on an
overall basis, fund raised on short term during the year has not been
used for long term investment.
(xviii) The company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Companies'' Act, 1956.
(xix) The company did not have any outstanding debentures during the
year. Accordingly clause 4(xix) of the Order is not applicable.
(xx) The company has not raised any money through a public issue during
the year. Accordingly clause 4(xx) of the Order is not applicable.
(xxi) Based on our examination of the books and records of the company,
carried out in accordance with the generally accepted auditing practice
in India and according to the information and explanations given to us,
no fraud on or by the company, was noticed or reported during the year.
For SINGHI & CO.
Firm Reg. No.302049E
Place: New Delhi
Date: 29th May, 2014