Philai Engineering Corporation Limited Bhilai (C.G.) We have audited
the attached Balance Sheet of Bhilai Engineering Corporation Limited,
Bhilai (C.G.) as at 31st March 2009 and also Profit & Loss Account and
the Cash Flow Statement for the year ended on that date. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our Audit in accordance with Auditing standards generally
accepted 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 statements
presentation. We believe that our audit provides a reasonable basis of
our opinion.
1. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Section 227{4A) of the
Companies Act, 1956 we-annex hereto a statement on the matters
specified in paragraphs 4 and 5 of the said order.
2. Further to our comments in the Annexure referred to in paragraph
(1) above, we state 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
audit;
(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 books;
(c) The Balance Sheet, the Profit & Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
accounts.
(d) In our opinion, the Balance Sheet, the Profit & Loss Account and
Cash Flow Statement dealt with comply with the Accounting Standards
referred to in subsection (3C) of Section 211 of the Companies Act,
1956.
Subject to AS-15,Please refer point No.B(19) of notes on accounts,
schedule "I".
(e) In our opinion and based on information and explanations given to
us, none of the directors are disqualified as on 31st March, 2009 from
being appointed as director in terms of clause (g) of sub-section (1)
of Section 274 of the Companies Act, 1956
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, 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 Balance Sheet of the state of affairs of the Company
as at 31st March, 2009
ii) in the case of the Profit & Loss Account, of the profit for the
year ended on that date
and
iii) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure to the Auditors Report
(Annexure as Referred to in paragraph (1) of our report of even date on
the accounts of Bhilai Engineering Corporation Limited, Bhilai (C.G.)
for the year ended 31st March 2009).
i. In respect of its Fixed Assets:-
a) The company has maintained proper recoris showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b) As explained to us, the fixed assets have been physically verified
by the management during the year in a phased periodical manner, which
in our opinion is reasonable having regard to the size of the company
and nature of its assets. No material discrepancies were noticed on
such physical verification.
c) In our opinion the company has not disposed of substantial part of
the fixed assets during the year and the going concern status of the
company is not affected.
ii. In respect of its Inventories:-
a) As explained by the management, the Inventories have been physically
verified by the management during the year.
b) In our opinion and according to the information and explanation
given to us the procedures of physical verification of stocks followed
by the management were found to be reasonable and adequate in relation
to the size of the company and nature of business.
c) In our opinion and according to the information and explanations
given to us the company is maintaining proper records of inventory. The
discrepancies noticed on verification between physical stock and book
records were not significant and the same has been properly dealt with
in the books of account.
iii. In respect of the loans, secured and unsecured, granted or taken
by the company to/from companies, firms and other parties covered in
the register maintained u/s 301 of the Companies Act, 1956: -
a) The company has taken loan from 3 parties (companies & others)
covered in the register maintained u/s 301 of the Companies Act, 1956.
The maximum amount involved during the year was Rs. 619.80 lacs.
(P.Yr. Rs. 492.16 Lacs) and the year-end balance of loan taken was
Rs.409.96 lacs. (P. Yr. - Rs. 450.80 Lacs). The company has granted
loan to 2 parties (Companies / Firms) and Others covered in the
register maintained u/s 301 of the Companies Act, 1956. The maximum
amount involved during the year and the year-end balance of loan
granted was at Rs.18.55 lacs. (P.Yr. Rs. 519.17 Lacs).
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions on
which loan has been taken from/granted to companies, firms or other
parties listed in the register maintained u/s 301 of the Companies Act,
1956, are prima facie not prejudicial to the interest of the company.
c) According to the information and explanations given to us, the
principal and interest thereon are repayable on call.
d) In respect of aforesaid loans there is no overdue amount
iv. in our opinion and according to the information and explanation
given to us during the course of our audit, there are adequate internal
control procedures commensurate with the size of the company and the
nature of its business with regard to the purchases of stores, raw
materials, plant & machinery, equipments and other assets and for the
sale of goods.
v. In respect of the transaction covered u/s 301 of the Companies Act
1956: -
a) To the best of our knowledge and belief and according to the
information and explanations given to us, we are of the opinion that
the transactions that need to be entered into the regjster maintained
u/s 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information given to us the
transactions made in pursuance of the contracts or arrangements entered
in the register maintained u/s 301 of the Companies Act,) 1956
aggregating during the year to Rs.5, 00,000/- or more in respect of any
party were made at prices iwhich are reasonable having regard to
prevailing market prices at the relevant time where such market prices
are available.
c) In our opinion and according to the explanations given to us, the
company has not accepted deposits within the meaning of the provisions
of section 58A and 58AA of the Companies Act, 1956 and the rules made
there under.
vi. In our opinion, the company has an adequate internal audit system
commensurate with the size and nature of its business.
vii. As explained to us, the Company has maintained cost records for
its Fertilizer Division, Steel Casting & foundry unit of Engineering
Division under section 209(l)(d) of Companies Act. However, we are not
required to and have not carried out any detailed examination of such
accounts and records.
viii. In respect of statutory dues:-
a) According to the information and explanations given to us,
undisputed statutory dues including Provident Fund, Employees State
Insurance, Income Tax, Sales Tax, CESS, Wealth Tax, Customs Duty and
other dues have generally been regularly deposited with the appropriate
authorities. According to the information and explanations given to us
no undisputed amounts payable in respect of the aforesaid dues were
outstanding as at 31st March 2009 for a period of more than six months
from the date of becoming payable.
b) The disputed statutory dues that have not been deposited on account
of matters pending before appropriate authorities are as under:
S. Nature of Forum where dispute is pending Period Amount
No. Dues (Rs in
Lacs)
1. Excise Duty Dy. Commissioner, Raipur 1992-93 0.04
2. Excise Duty Dy. Commissioner, Raipur 1993-94 2.63
3. Excise Duty Dy. Commissioner Raipur 1995-96 9.88
4. Sales tax Dy. Assistant Commissioner ST Appeals 1994-95 2.99
5. Excise Duty Additional Commissioner Raipur 1995-96 4.45
6. Sales Tax Dy. Assistant Commissioner ST Appeals 1996-97 2.74
7. Sales tax Dy. Assistant Commissioner ST Appeals 1997-98 6.88
8. Sales tax Dy. Assistant Commissioner ST Appeals 2002-03 1.81
9. Others Rajasthan State mines & minerals 2003-04 8.18
10. Excise Duty Commissioner, Raipur 2006-07 15.00
11. Service Tax Commissioner, Raipur 2007-08 9.35
12. Service Tax Commissioner (Appeal) Raipur 2008-09 0.09
13. Cenvat Commissioner (Appeal) Raipur 2008-09 45.26
14. Cenvat Cestat, New Delhi 2007-08 11.74
15. Cenvat Cestat, New Delhi 2006-07 6.86
16. Excise duty High Court, Bilaspur 1998-99 11.57
17. Excise duty High Court, Bilaspur 2004-05 1.78
18. Entry Tax High Court, Bilaspur 2005-06 2.59
19. Entry Tax High Court, Bilaspur 2006-07 4.65
20. Entry Tax High Court, Bilaspur 2007-08 11.99
21. Entry Tax High Court, Bilaspur 2008-09 12.77
Total 165.25
ix) The company does not have accumulated losses and has not incurred
ary cash loss during the financial year and in the immediately
preceding financial year
x) Based on our audit procedures and on the information and explanation
gven by the management the company has not defaulted in repayment of
dues to banks and financial institutions. The company has not issued
any debenture during the year.
xi) In our opinion and according to the information and explanation
given to us no loans or advances have been granted by the company on
the basis of security by way of pledge of shares, debentures or other
securities.
xii) In our opinion, the company is not a chit fund or a nidhi/mutual
benefit fund/society. Accordingly, clause 4
(xiii) of the Companies (Auditors Report) Order 2003 is not applicable
to the company.
xiii) In our opinion and according to the information and explanation
given to us the company is not dealing in or trading in shares,
securities and other investments. Accordingly the provisions of clause
4(xiv) of the Companies (Auditors Report) Order 2003 are not
applicable to the company.
xiv) In our opinion and according to the information and explanation
given to us, the terms and conditions on which the company has given
guarantee for loan taken by others from banks or financial institutions
is prima-facie not prejudicial to the interest of the company.
xv) In our opinion and explanations given to us, the term loans have
been applied for the purpose for which they were raised.
xvi) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company, we report
that no fund raised on short-term basis has been utilized for long-term
investment.
xvii) According to the information and explanations given to us, the
company has not made any preferential allotment of shares to parties
and companies covered in the register maintained u/s 301 of the
Companies Act, 1956.
xviii) In our opinion and according to the information and explanations
given to us the company has not issued any secured debentures during
the period covered by our report. Accordingly, the provisions of clause
4 (xix) of the Companies (Auditors Report) Order2003 are not
applicable to the company.
xix) During the period covered by our audit report, the company has not
raised any money by way of public issue. xx) In our opinion and
according to the information and explanation given to us. no fraud on
or by the company has been noticed or reported during the year that
causes the financial statements to be materially misstated.
Place : Bhilai for P.C. BAFNA & CO.
Date 3rd September 2009 Chartered Accountants
(SUNIL KASHYAP)
PARTNER
Membership No.75681 |