We have audited the attached Balance Sheet as at 31st March, 2009 and the Profit and
Loss Account along with the Cash Flow Statement for the year ended on that date of Energy
Development Company Limited. 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.
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 misstatements. 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 the management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
1. As required by the Companies (Auditor's Report) (Amendment) Order, 2004 ("the
Order") issued by the Central Government in terms of section 227(4A) of the Companies
Act, 1956,("the Act") and on the basis of such checks as we considered
appropriate and according to the information and explanations given to us, we report that:
i) (a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year, which
in our opinion is reasonable having regards to the size of the Company and nature of its
business. No material discrepancies in respect of the assets verified during the year were
(c) The Company has not disposed off any substantial part of the fixed assets during
ii) (a) The inventory has been physically verified during the year by the management at
(b) The procedure 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
(c) The Company is maintaining proper records of inventories and discrepancies noticed
on the physical verification of inventory, as explained, were not material as compared to
the book records.
iii) (a) According to information and explanations given to us the company had given
unsecured loans to a company listed in the register maintained under Section 301 of the
Act. The maximum amount involved during the year was Rs. 70000000 and the year-end balance
of such loans was Rs. 200000.
(b) In our opinion, the rate of interest and other terms and conditions on which the
unsecured loans as mentioned in (a) above were prima facie not prejudicial to the interest
of the Company.
(c) According to the information and explanations given to us, the principal amount and
interest in respect of loan granted as mentioned in (a) above are repayable on demand.
These loans are being repaid as and when recalled.
(d) As informed to us, having regards to terms and conditions of the loan as mentioned
above, there is no overdue amount outstanding in respect of such loan and interest there
(e) As informed to us, the company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained under section 301 of
the Act. Accordingly, the provisions of clause (iii) (e), (f) and (g) of the Order are not
applicable to the company.
iii) In our opinion and according to the information and explanations given to us,
there are adequate internal control procedures commensurate with the size of the Company
and the nature of its business with regard to purchases of inventory, fixed assets and
sale of goods. During the course of our audit, we have not observed any continuing failure
to correct weaknesses in the internal controls.
iv) (a) According to the information and explanations provided by the management,
particulars of the contracts or arrangement referred to in Section 301 of the Act have
been entered in the register required to be maintained under that section.
(b) In our opinion and according to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements entered into the register
maintained under Section 301 of the Act and exceeding five lacs in respect of any party
during the year, have been made at prices which are reasonable having regards to the
prevailing market prices at the relevant time.
v) The Company has not accepted any deposits from the public under Section 58A, 58AA or
any other relevant provision of the Act and the rules framed there under.
vi) Internal audit of the Company has been carried out by firms of Chartered
Accountants. In our opinion the internal audit system in respect of the areas covered
during the year is commensurate with the size and nature of the business of the Company.
vii) We have broadly reviewed the cost records and accounts prescribed by the Central
Government under section 209(1) (d) of the Act and are of the opinion that prima-facie,
such records have been maintained by the Company. However, we have not carried out any
detailed examination of such accounts and records.
viii) (a) According to the information and explanations given to us, the Company is
generally regular in depositing with the appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education & Protection Fund, Employees' State
Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it. According to the information and explanations
given to us, there are no undisputed amounts payable in respect of aforesaid dues 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 dues of
Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty and Cess that have not been
deposited with the appropriate authorities on account of any dispute.
ix) The Company does not have any accumulated losses as at the end of the financial
year and the Company has not incurred any cash losses during the financial year covered by
our audit and the immediately preceding financial year.
x) In our opinion and on the basis of information and explanations given by the
management, the Company has not defaulted in the repayment of dues to the Financial
Institutions and Banks. There were no debenture holders during the year.
xi) 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.
xii) In our opinion, the Company is not a chit fund or a nidhi mutual benefit
fund/society. Accordingly, the provisions of clause 4(xiii) of the Order are not
applicable to the Company.
xiii) In our opinion, the Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the
Order are not applicable to the Company.
xiv) 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.
xv) According to the information and explanations given to us, the Company has not
availed fresh term loans during the current financial year.
xvi) According to the information and explanations given to us and on an overall
examination of the Balance Sheet, no short-term funds have been utilized for the long term
investment during the year
xvii) The Company as given in Note 14 of Schedule 17 has made preferential issue of
warrants to the parties covered in the Register maintained under Section 301 of the Act.
Having regard to the terms of such issue, in our opinion, the same is not prejudicial to
the interest of the Company.
xviii) The Company has not issued any debentures during the year. Accordingly, the
provisions of clause 4(xix) of the Order are not applicable to the Company.
xix) The Company has not raised money by public issue during the year.
xx) During the course of our examination of the books of account carried out in
accordance with generally accepted auditing practices in India, we have neither come
across any incidence of fraud on or by the Company nor have we been informed of any such
case by the management.
2. Further to the above, 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) The Balance Sheet, the Profit and Loss Account and the Cash Flow statement are in
agreement with the books of account;
iii) Proper books of account as required by law have been kept by the Company so far as
it appears from our examination of the books of account;
iv) In our opinion, the Profit and Loss Account and the Balance Sheet of the Company
comply with the accounting standards referred to in Sub-Section 3(C) of Section 211 of the
v) On the basis of written representations received from the directors as on 31st
March, 2009 and taken on record by the Board of Directors, we report that none of the
directors of the Company is disqualified as on 31st March, 2009 from being appointed as a
director in terms of Clause (g) of Sub- section (1) of Section 274 of the Act;
vi) 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 Act in the manner so
required and read together with the other notes thereon, give a true and fair view :
(a) in case of the Balance Sheet, of the state of affairs of the Company as at 31st
(b) in case of the Profit and Loss Account, of the profit of the Company for the year
ended on that date; and
(c) in case of the Cash Flow Statement, of the cash flows of the Company for the year
ended on that date.
For Lodha & Co.
||H. S. Jha
|Date : 30th June, 2009
||Membership No. : 55854