| 1. Report on the financial statements
We have audited the accompanying financial statements of Hella India
Lighting Limited ('the Company'), which comprise the Balance Sheet as
at 31 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.
2. 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 notified under the Companies Act, 1956 ("the
Act") read with the General Circular 15/2013 dated 13 September 2013 of
the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013. 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.
3. Auditor's Responsibility
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
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 the accounting policies used and the reasonableness of the
accounting estimates made by 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.
4. 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
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2014;
(b) in the case of the Statement of Profit and Loss, of the loss 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.
5. Emphasis of matter
Without qualifying our opinion, attention is invited to Note 2.35 of
the financial statements, which more fully explains the reasons for the
Company's inability to comply with the requirements of Clause 40 A of
the Listing Agreement with the Stock Exchange(s) relating to increasing
the public shareholding to a minimum of 25% by prescribed timelines and
the clarifications received from Securities and Exchange Board of India
in this regard.
6. Report on Other Legal and Regulatory Requirements
A. As required by the Companies (Auditor's Report) Order, 2003
('Order'), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we enclose in the Annexure,
a statement on the matters specified in paragraphs 4 and 5 of the said
Order.
B. As required by Section 227(3) of the Act, we report that:
(i) 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;
(ii) 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;
(iii) the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(iv) in our opinion, the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement comply with the Accounting Standards
referred to in the Companies Act, 1956 read with the General Circular
15/2013dated 13 September 2013 of the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013; and
(v) on the basis of written representations received from the directors
as on 31 March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(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 its fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of two years, except certain assets for which third party
confirmations are received. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the
Company and the nature of its fixed assets. In the current year, all
the fixed assets were verified by the management. As informed to us,
the discrepancies noticed on such verification were not material and
were properly dealt in books of account.
(c) Fixed assets disposed-off during the year were not substantial, and
therefore, do not affect the going concern assumption.
2. (a) Inventories, except goods-in-transit and stock lying with third
parties, have been physically verified by the management during the
year. In our opinion, the frequency of such verification is reasonable.
For stocks lying with third parties at the year-end, written
confirmations have been obtained.
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. According to the information and explanations given to us, we are of
the opinion that there are no companies, firms or other parties covered
in the register required under Section 301 of the Act, Accordingly,
paragraph 4(iii) of the Order is not applicable.
4. In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories and fixed assets are for the Company's
specialised requirements and similarly certain goods sold and services
are for the specialised requirements of the buyers and therefore
suitable alternative sources are not available to obtain comparable
quotations, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventories and fixed assets and with regard to the sale
of goods and services. We have not observed any major weakness in the
internal control system during the course of the audit.
5. In our opinion, and according to the information and explanations
given to us, there are no contracts and arrangements the particulars of
which need to be entered into the register maintained under Section 301
of the Act, Accordingly, paragraph 4(v) (b) of the Order is not
applicable.
6. The Company has not accepted any deposits from the public.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act, in respect of its products and are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained. However, we have not made a detailed examination
of such 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 records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Customs duty, Excise duty, Service tax,
Income-tax, Wealth tax and other material statutory dues have been
regularly deposited during the year by the Company with the appropriate
authorities except for Provident Fund, Employees' State Insurance and
Income tax, where there have been certain delays. As explained to us,
the Company did not have any dues on account of Investor Education and
Protection Fund.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees'
State Insurance, Income tax, Sales tax, Wealth tax, Service tax,
Customs duty, Excise duty and other material statutory dues were in
arrears as at 31 March 2014 for a period of more than six months from
the date they became payable
b) According to the information and explanations given to us, there are
no disputed dues of Customs duty, Employees' State Insurance, Sales
tax, Excise duty, Service tax, wealth tax and Cess. According to the
information and explanations given to us, the following dues of Income
tax have not been deposited by the Company on account of disputes
Name of the Nature of dues Amount* (Rs.) Assessment Year
Statute
Income tax Act, Disallowance for 3,119,228 2001-02
1961 foreign exchange
fluctuation
Income tax Act, Disallowance for 3,958,969 2004-05
1961 foreign exchange
fluctuation
Name of the Forum where the
Statute dispute is pending
Income tax Act, Hon'ble High
1961 Court of Delhi
Income tax Act, Hon'ble High
1961 Court of Delhi
* As per assessment orders. There is no demand, though the brought
forwarded losses have been reduced by the amount mentioned.
10. Asat 31st March 2014, the accumulated losses of the Company are not
more than fifty percent of its networth. The Company has not incurred
cash losses in the current year, How ever, there were cash Losses in
the immediately preceding financial year.
11. The Company did not have any outstanding dues to financial
institutions or banks or outstanding debentures during the year.
12. 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 and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi/ mutual benefit
fund / society.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. According to the information and explanations given to us, term
loans taken by the Company has been applied for the purpose for which
they were raised. However, loan amounting to Rs. 100,000,000 remained
unutilized as at 31st March 2014.
17. According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we report that
the Company has not used funds raised on short term basis for long term
investment.
18. As stated above, there are no companies/firms/parties covered in
the register required to be maintained under Section 301 of the Act,
Accordingly, the provision of clause 4(xviii)of the order are not
applicable.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. According to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the course of
our audit.
ForBSR&Co. LLP
Chartered Accountants
Firm Registration No.: 101248W
Sd/-
Jiten Chopra
Place of signature: Gurgaon Partner
Date: 27 May 2014 Membership No.: 092894 | 