Mar 31, 2018
INDEPENDENT AUDITORSâ REPORT
To
To The Members of DQ Entertainment (International) Limited
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS
We have audited the accompanying standalone Ind AS financial statements of DQ Entertainment (International) Limited (âthe Companyâ), which comprise the Balance Sheet as at March 3l, 20l8, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section l34(5) of the Companies Act, 20l3 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equily of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended, and the accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITORSâ RESPONSIBILITY
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section l43(l0) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs (financial position) of the Company as at 3lst March, 20l8, and its loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
EMPHASIS OF MATTERS
We draw attention to the following matters in the Notes to the standalone Ind AS financial statements:
i. We draw attention to Note 6B with regard to the carrying value of intangibles assets. The carrying values have been supported by projection of revenue streams. We draw attention to the uncertainty and judgment involved in the estimated projected revenue streams of Intangible Assets.
ii. We draw attention to Note 7 with regard to the carrying value of investment in the wholly owned subsidiary. The carrying values have been supported by projection of revenue streams. We draw attention to the uncertainty and judgment involved in the estimated projected revenue streams of Intangible Assets. Our opinion is not qualified in respect of these matters.
OTHER MATTER
The comparative financial information of the Company for the year ended 31st March, 2017 and the transition date opening balance sheet as at 1st April, 2016 included in these standalone Ind AS financial statements are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 for the year ended 31st March, 2017 and 31st March, 2016 on which we issued an unmodified audit opinion vide our reports dated 06th June, 2017 and 30th May, 2016 respectively on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have also been audited by us.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(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 those books
(c) The Balance Sheet, the Statement of Profit and Loss, the Statement of Cash Flow and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended.
the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(g) The emphasis of matter relating to the maintenance of accounts and other matters connected there with are as stated in the Emphasis of Matter paragraph above.
(h)
With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Aâ
(i) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 32 to the standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. Following are the instances of delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company:
(e) The matter described in sub-paragraph (i) and (ii) under
Sr. No. |
Date of Payment |
Amount |
No of days delay |
1 |
28/12/2017 |
329,751 |
248 Days |
2 |
20/02/2018 |
169 |
302 Days |
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of subsection 11 of section 143 of the Act, we give in the âAnnexure Bâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
ANNEXURE A TO THE INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF DQ ENTERTAINMENT (INTERNATIONAL) LIMITED
[Referred to in paragraph 1(h) under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report]
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION I43 OF THE COMPANIES ACT, 20I3 (âTHE ACTâ)
We have audited the internal financial controls over financial reporting of DQ Entertainment (International) Limited (âthe Companyâ) as of March 3l, 20l8 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI) (the âGuidance Noteâ. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on my / our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section l43(l0) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial control over financial reporting includes those policies and procedures that (I) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
[Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report]
i. (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) All the fixed assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii. The Company is involved in the business of rendering services. Accordingly, the provisions stated in paragraph 3(ii) of the Order are not applicable to the Company.
iii. The Company has not granted any loans, secured or unsecured to Companies, Firms, Limited Liability Partnerships (LLP) or other parties* covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ). Accordingly, the provisions stated in paragraph 3 (iii) (a) to (c) of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of loans, investments, guarantees and security made.
v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under.
vi. The provisions of sub-section (1) of section 148 of the Act are not applicable to the Company as the Central Government of India has not specified the maintenance of cost records for any of the products of the Company. Accordingly, the provisions stated in paragraph 3 (vi) of the Order are not applicable to the Company.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues have not been regularly deposited with the appropriate authorities and there has been a delay in few cases.
According to the information and explanations given to us, the Company has been regular in depositing undisputed dues in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues except in case of Income tax, GST, Provident Fund which were outstanding, as at March 31, 2018 for a period of more than six months from the date they became payable are as follows:
Name of the statute |
Nature of the dues |
Amount |
Period to which the amount relates |
Due Date |
Date of Payment |
Income Tax Act, 1961 |
Income Tax |
58,256,299 |
AY 2015-16 |
March 2015 |
Not yet paid |
Provident Fund |
Provident Fund |
72,222,426 |
FY 2017-18 |
Sept 2017 |
Paid Rs.20,834,500 during April, 2018 |
Total |
130,478,725 |
(b) According to the information and explanation given to us and examination of records of the Company, the outstanding dues of income-tax, sales-tax, service tax, customs duty, excise duty, value added tax, cess and any other statutory dues on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount () |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act |
Transfer Pricing |
10,511,254 |
AY 2008-09 |
Honâble High Court |
Income Tax Act |
Withholding tax on international transactions |
9,642,147 |
AY 2005-06 AY 2006-07 AY 2007-08 |
Honâble High Court |
Income Tax Act |
Transfer Pricing |
17,343,960 |
AY 2013-14 |
ITAT |
Income Tax Act |
Transfer Pricing |
24,128,210 |
AY 2014-15 |
DRP |
Service Tax |
ITC Claimed as Refund |
17,647,355 |
FY 2009-10 |
CESTAT |
Service Tax |
Service tax on import of services & Disallowance of ITC |
13,169,621 |
FY 2006-07 to 2008-09 |
CESTAT |
Service Tax |
Service tax on import of services & Disallowance of ITC |
74,513,200 |
FY 2012-13 FY 2013-14 FY 20l4-l5 |
CESTAT |
Service Tax |
ITC Claimed as Refund |
4,664,975 |
FY 2015-16 |
Principle Commissioner of ST |
Provident Fund |
Special Allowance |
705,021 |
FY 2011-12 |
AP Tribunal |
Provident Fund |
Special Allowance |
275,548 |
FY 2012-13 |
AP Tribunal |
Provident Fund |
Default in payment of contributions |
34,928,878 |
FY 2013-14 to FY 2016-17 |
Assistant Regional Provident Fund Commissioner |
Total |
207,530,I69 |
viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institution, bank or debenture holders except for in the following cases the details of which are as follows:
Particulars |
Amount of default as at March 31, 2018 |
Period of default |
Remarks, if any |
i) Name of the lenders in case of: |
|||
Bank: |
|||
1. Andhra Bank TL |
211,606,667 |
Mar-16 to Mar -18 |
Default of Principle Repayment |
77,356,444 |
April-16 to Mar-18 |
Default of Interest Repayment |
|
Axis Bank TL |
6,724,162 |
Dec 17 to Mar-18 |
Default of Interest Repayment |
EXIM Bank SBLC |
154,871,620 |
Feb 17 to Mar 18 |
Default of Principle Repayment |
9,723,804 |
Feb 17 to Mar 18 |
Default of Interest Repayment |
|
Axis Bank SBLC-EURO |
308,982,148 |
Jan 18 to Mar 18 |
Default of Principle and Interest Repayment |
Axis Bank SBLC-USD |
183,460,626 |
Jan 18 to Mar 18 |
Default of Principle and Interest Repayment |
IOB SBLC |
162,644,000 |
June 16 to Mar 18 |
Default of Principle and Interest Repayment |
Andhra Bank CC |
34,337,963 |
May-16 to Mar-18 |
Default of Interest Repayment |
IOB CC |
150,122,000 |
May-16 to Mar-18 |
Default of Interest Repayment |
Axis Bank CC |
1,493,772 |
Jan-18 to Mar-18 |
Default of Interest Repayment |
Total |
1,301,323,206 |
ix. In our opinion, according to the information explanation provided to us, money raised by way of term loans during the year have been applied for the purpose for which they were raised. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year.
x. During the course of our audit, 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 material fraud by the Company or on the Company by its officers or employees.
xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions stated in paragraph 3(xii) of the Order are not applicable to the Company.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions stated in paragraph 3 (xiv) of the Order are not applicable to the Company.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, provisions stated in paragraph 3(xv) of the Order are not applicable to the Company.
xvi. In our opinion, the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions stated in paragraph clause 3 (xvi) of the Order are not applicable to the Company.
For MSKA & Associates
(Formerly known as MZSK & Associates)
Chartered Accountants
ICAI Firm Registration No. I05047W
Ananthakrishnan G
Partner
Membership No.205226
Place :Hyderabad
Date :30th May, 2018
Mar 31, 2016
INDEPENDENT AUDITORSâ REPORT
To
The Members of DQ Entertainment (International) Limited
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of DQ Entertainment (International) Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section I34(5) of the Companies Act, 20I3 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section I33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 20I4. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section I43(I0) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at 3Ist March, 20I6, and its profit and its cash flows for the year ended on that date.
EMPHASIS OF MATTERS
We draw attention to the following matters in the Notes to the standalone financial statements:
a) We draw attention to Note I5 to the audited financial statements with regard to receivables which are due for more than I year. The balances have been confirmed by the parties and collections have also been made in many accounts. The management has also evaluated the dues and has made provision for debts considered doubtful. There is significant uncertainty and judgment involved in establishing both the timing and level of the future payment patterns of these trade receivables. In view of the significance of this uncertainty we consider that it should be drawn to your attention.
Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by Section I43 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(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 those books.
(c) 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.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section I33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 20I4.
(e) The matter described in sub-paragraph (a) under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors as on 3Ist March, 20I6 taken on record by the Board of Directors, none of the directors is disqualified as on 31 st March, 2016 from being appointed as a director in terms of Section I64 (2) of the Act.
(g) The emphasis of matter relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph above.
(h) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Aâ
(i) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule I I of the Companies (Audit and Auditors) Rules, 20I4, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 25(c) to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of sub-section II of section I43 of the Act, we give in the âAnnexure Bâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
[Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report of even date to the members of DQ Entertainment (International) Limited on the financial statements for the year ended March 31st 2016]
i. (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) All the fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii. The Company is involved in the business of rendering services. Accordingly, the requirements of paragraph 3(ii) of the Order are not applicable to the Company.
iii. The Company has not granted any loans, secured or unsecured to Companies, firms, Limited Liability Partnerships (LLP) or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions stated in paragraph 3 (iii) (a) to (c) of the order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of loans, investments, guarantees and security made.
v. In our opinion and according to the information and explanations given to us, there are no amounts outstanding which are in the nature of deposits as on 31st March, 2016 and the Company has not accepted any deposits during the year.
vi. The provisions of sub-section (1) of section 148 of the Act are not applicable to the Company. Accordingly, the provisions stated in paragraph 3 (vi) of the order are not applicable to the Company.
vii. (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues have not been regularly deposited with the appropriate authorities and there has been a delay in few cases.
According to the information and explanations given to us, undisputed dues in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues which were outstanding, as at 31st March, 2016 for a period of more than six months from the date they became payable are as follows:
Name of the statute |
Nature of dues |
Amount (Rs.) |
Period to which the amount relates |
Due Date |
Date of Payment |
Income Tax Act 1961 |
Income Tax |
7,55,48,709 |
AY 2014-15 |
March 2014 |
Not yet paid |
Income Tax Act 1961 |
Income Tax |
10,47,91,373 |
AY 2015-16 |
March 2015 |
Not yet paid |
Income Tax Act 1961 |
Income Tax |
7,67,75,235 |
AY 2016-17 |
September 2015 |
Not yet paid |
(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and any other statutory dues on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax |
Transfer Pricing |
83,95,971 |
AY 2010.11 |
ITAT |
Income Tax |
Transfer Pricing |
2,09,32,264 |
AY 2011.12 |
ITAT |
Income Tax |
Withholding tax on International Transactions |
96,42,147 |
AY 2005.06, 2006.07 & 2007.08 |
Hon''ble High Court |
Service Tax |
Interest & Penalty Proceedings on import payments |
1,32,01,091 |
FY 2006.07 to 2008.09 |
CESTAT |
Service Tax |
Tax Liability on Import of Production Services |
3,15,08,245 |
FY 2006.07 to 2010.11 |
Commissioner (Appeals) |
|
TOTAL |
8,36,79,718 |
|
|
viii. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to the financial institution, bank or debenture holders. The details of such default are as follows:
Particulars |
Amount of default as at 31st March, 2016 |
Period of default |
Remarks, if any |
i) Name of the lenders in case of: |
|
|
|
Bank: |
|
|
|
1. Andhra Bank FITL |
18,13,333 |
Jan.2016 |
Default of Principal repayment |
|
7,10,701 |
Jan to Mar 2016 |
Default of Interest repayment |
2. Andhra Bank TL |
2,19,00,000 |
Mar.2016 |
Default of Principal repayment |
|
75,04,985 |
Jan to Mar 2016 |
Default of Interest repayment |
TOTAL |
3,19,29,019 |
|
|
ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.
x. 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 material fraud by the Company or on the Company by its officers or employees during the course of our audit.
xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections I77 and I88 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. In our opinion, the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, I934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company.
For MZSK & Associates
Chartered Accountants
Firm Registration No.I05047W
Ananthakrishnan G
Partner
Membership No.205226
Place : Hyderabad
Date : 30th May 20I6
Mar 31, 2015
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of DQ
Entertainment (International) Limited ("the Company"),which comprise
the Balance Sheet as at 31st March, 2015, the Statement of Profit and
Loss and the Cash Flow Statement for the year then ended, and a summary
of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the standalone financial statements that give a true
and fair view and are free from material misstatement, whether due to
fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the standalone financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the standalone financial statements.
The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the standalone
financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal financial control
relevant to the Company's preparation of the standalone financial
statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on whether the Company has in place an
adequate internal financial controls system over financial reporting
and the operating effectiveness of such controls. An audit also
includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the
Company's Directors, as well as evaluating the overall presentation of
the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as
at 31st March, 2015, and its profit and its cash flows for the year
ended on that date.
Report on other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(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
those books.
(c) 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.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) In our opinion, there are no matters that may have an adverse
effect on the functioning of the Company.
(f) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(g) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its standalone financial statements  Refer Note
27(c) to the standalone financial statements.
ii. There are no material foreseeable losses on long-term contracts
including derivative contracts.
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government in terms of sub-section 11 of
section 143 of the Act, we give in the 'Annexure', a statement on the
matters specified in paragraphs 3 and 4 of the Order.
ANNEXURE TO AUDITORS' REPORT
[Referred to in paragraph 2 under 'Report on Other Legal and Regulatory
Requirements' in the Independent Auditors' Report of even date to the
members of DQ Entertainment (International) Limited on the financial
statements for the year ended March 31st,2015]
i.(a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management during the year and no material discrepancies were
identified on such verification.
ii. The Company is involved in the business of rendering services.
Accordingly, the requirements of paragraph 3(ii) of the Order are not
applicable to the Company.
iii. The Company has not granted any loans, secured or unsecured to
Companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act, 2013. Accordingly, the
provisions stated in paragraph 3 (iii) (a) and (b) of the order are not
applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets and for rendering of services. The activities
of the Company do not involve purchase of inventory and the sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct any major weakness in the internal
control system of the Company.
v. In our opinion and according to the information and explanations
given to us, there are no amounts outstanding which are in the nature
of deposits as on 31st March, 2015 and the Company has not accepted any
deposits during the year.
vi. The provisions of sub-section (1) of section 148 of the Companies
Act, 2013 are not applicable to the Company. Accordingly, the
provisions stated in paragraph 3 (vi) of the order are not applicable
to the Company.
vii. (a) According to the information and explanations given to us,
undisputed dues in respect of provident fund, employees' state
insurance, income-tax, sales-tax, wealth tax, service tax, duty of
customs, duty of excise, value added tax, cess and any other statutory
dues which were outstanding, as at 31st March, 2015 for a period of
more than six months from the date they became payable are as follows:
Name Nature of Amount Period to
of the dues (Rs.) which the
statute amount relates
Income Income AY
Tax Act 48,376,199
Tax 2013-14
1961
Income Income AY
Tax Act 83,640,965
Tax 2014-15
1961
Income Income AY
Tax Act 87,758,359
Tax 2015-16
1961
Provident
EPF Act fund FY
24,682,206
1952 (Employers 2014-15
Contribution)
Name of the Statute Due Date of
Date Payment
Income Tax Act 1961 March 2013 Not yet paid
Income Tax Act 1961 March 2014 Not yet paid
Income Tax Act 1961 March 2015 Not yet paid
EPF Act 1952 July 2014 to Not yet paid
March 2015
(b) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth- tax, service tax, customs duty, excise
duty, value added tax, cess and any other statutory dues on account of
any dispute, are as follows:
Name Nature of Amount (Rs.)
of the dues
statute
Income Transfer 1,05,11,254
Tax Pricing
Income Transfer 1,33,95,971
Tax Pricing
Withholding
Income tax on 96,42,147
Tax International
Transactions
Interest
& Penalty
Service Proceedings 1,32,01,091
Tax on import
payments
Tax Liability
Service on Import of 3,15,08,245
Tax Production
Services
TOTAL 7,82,58,708
Name of the Statute Period to Forum where
which the dispute is
amount pending
relates
Income Tax AY 2008-09 ITAT
Income Tax AY 2010-11 ITAT
Income Tax AY 2005-06, Hon'ble High Court
2006-07 & 2007-08
Service Tax FY 2006-07 to CESTAT
2008-09
Service Tax FY 2006-07 to Commissioner (Appeals)
2010-11
(c) There are no amounts due to be transferred to investor education
and protection fund in accordance with the relevant provisions of the
Companies Act, 1956 and Companies Act, 2013 and rules made thereunder.
viii. The company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
ix. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
x. In our opinion, the Company has not given any guarantee for loans
taken by others from banks or financial institutions during the year.
xi. The Company has not obtained any term loans during the year.
xii. 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 MZSK & Associates
Chartered Accountants
Firm Registration No.105047W
Ananthakrishnan G
Partner
Membership No.205226
Place : Hyderabad
Date : 27th May 2015
Mar 31, 2014
We have audited the accompanying financial statements of DQ
Entertainment (International) Limited ("the Company"), which comprise
the Balance Sheet as at March 31, 2014, 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.
Auditors'' 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 auditors'' 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. 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 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.
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 March 31, 2014
(b) in the case of the Statement of Profit and Loss, of the profit 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.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' 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 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 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 TO AUDITORS'' REPORT
[Referred to in paragraph 3 of the Auditors'' Report of even date to the
members of DQ Entertainment (International) Limited on the financial
statements for the year ended March 31, 2014]
(i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) The fixed assets of the company have been physically verified by the
management during the year in accordance with a regular programme of
verification and no material discrepancies between the book records and
the physical inventory have been noticed. In our opinion, the frequency
of verification is reasonable.
c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the company during the year that affect the going concern status
of the Company.
(ii) The provisions of clause 4(ii) of the Companies (Auditors'' Report)
Order, 2003 are not applicable to the Company, in view of the nature of
business activities carried on by the Company.
(iii) a) As per the information and explanations given to us, the
Company has not granted secured or unsecured to companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956.
b) As per the information and the explanations given to us, the company
has taken unsecured loan of Rs. 75,000,000 from the CMD of the company
during the year. Balance Outstanding as at March 31, 2014 is Rs,
17,500,000. The loan is interest free and there were no other
stipulations.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and with regard to the
sale of services. During the course of our audit, we have not observed
any continuing failure to correct weakness in internal control system
of the company.
(v) a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 30I of the Companies Act, 1956 that need to be
entered into the register maintained under section 30I have been so
entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rs. five lakhs have been entered into
during the financial year at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the company and nature of its
business.
(viii) The provisions relating to maintenance of cost records as
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act are not applicable to the Company.
(ix) a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, cess and
other material statutory dues applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, cess and other
undisputed statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable except
for the following:
Name of the Nature of Amount (Rs.) Period to
statute dues which the
amount
relates
Income Tax Income 48,376,199 AY 2013-14
Act, 1961 Tax
Income Tax Inerest on 5,807,361 AY 2013-14
Act, 1961 Tax
(c)According to the records of the Company and based on the information
and explanation provided to us, the dues outstanding on account of
income- tax, sales-tax, wealth-tax, service tax, customs duty, and cess
which have not been deposited on account of any dispute, are as
follows:
Name Nature of Amount Period to Forum
of the dues (Rs.) which the where
statute amount dispute is
relates pending
Interest
Service & Penalty 2006-07 to CESTAT
Tax on import 13,201,091 2008 - 09
payments
The provisions of clause 4(x) of the Companies (Auditors'' Report)
Order, 2003 (as amended) regarding accumulated losses are not
applicable to the Company.
(xi) In our opinion and according to the information and explanations
given to us, the Company has been regular in repayment of dues to a
financial institution and banks except for the last quarter dues of Rs.
5,721,190 (including interest of Rs. 104,304) to one of the banks. The
Company has not issued any debentures 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 & 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 Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) 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 Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the company has given guarantee for Rs. 1,060,397,701/- as
at the reporting date for loans taken by Subsidiary from various banks.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which the loans were raised, other than temporary deployment pending
application.
(xvii) 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 funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, no
debentures have been issued by the Company during the year.
(xx) The company has not raised any money from public during the year.
Accordingly, the provisions of clause 4(xx) of the Companies (Auditor''s
Report) Order, 2003 (as amended) are not applicable to the Company.
(xxi) 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 MZSK & Associates
Chartered Accountants
Firm Registration No.105047W
Ananthakrishnan G
Partner
Membership No. 205226
Hyderabad, May 30, 2014
Mar 31, 2013
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of DQ
Entertainment (International) Limited ("the Company"), which comprise
the Balance Sheet as at March 31, 2013, 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.
Auditors'' 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 auditors'' 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. 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 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.
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 March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit /
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.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditors'' 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 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO AUDITORS'' REPORT
[Referred to in paragraph 3 of the Auditors'' Report of even date to the
members of DQ Entertainment (International) Limited on the financial
statements for the year ended March 31, 2013]
(i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) The fixed assets of the company have been physically verified by the
management during the year in accordance with a regular programme of
verification and no material discrepancies between the book records and
the physical inventory have been noticed. In our opinion, the frequency
of verification is reasonable.
c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the company during the year that affect the going concern status
of the Company.
(ii) The provisions of clause 4(ii) of the Companies (Auditors'' Report)
Order, 2003 are not applicable to the Company, in view of the nature of
business activities carried on by the Company.
(iii) a. As per the information and explanations given to us, the
Company has not granted secured or unsecured to companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956.
b. As per the information and explanations given to us the Company has
taken unsecured loan of Rs25,500,000 from the Chairman of the Company
during the year. The loan is interest free and there were no other
stipulations.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and with regard to the
sale of services. During the course of our audit, we have not observed
any continuing failure to correct weakness in internal control system
of the company.
(v) a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Companies Act, 1956 that need to be
entered into the register maintained under section 301 have been so
entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rs. five lakhs have been entered into
during the financial year at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the company and nature of its
business.
(viii) The provisions relating to maintenance of cost records as
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act are not applicable to the Company.
(ix) a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income- tax, sales-tax, wealth-tax, service tax, customs duty, cess and
other material statutory dues applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth- tax, service tax, sales-tax, customs duty, cess and other
undisputed statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company and based on the
information and explanation provided to us, the dues outstanding on
account of income-tax, sales-tax, wealth-tax, service tax, customs
duty, and cess which have not been deposited on account of any dispute,
are as follows:
Name of Amount (Rs.)
Nature of dues
the statute
Income
Income tax  TDS on payments to
Tax Act, 9,642,147
non residents 1961
Penality for non-payment of Service
Service Tax on Business Auxiliary Services
13,201,091
Tax and Management or Business
Consultant Services
Name of the Statute Period to which Forum where
the amount relates dispute is pending
Income Tax Act,1961 Appellate Tribunal
2008-09
Hyderabad
Service Tax 2006-07, 2007-08 &
CESTAT, Banglore
2008-09
(x) The provisions of clause 4(x) of the Companies (Auditors'' Report)
Order, 2003 (as amended) regarding accumulated losses are not
applicable to the Company.
(xi) In our opinion and according to the information and explanations
given to us, the Company has been regular in repayment of dues to a
financial institution and banks except for the last quarter (Rs
55,139,141) during the year. The Company has not issued any debentures
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 & 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 Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) 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 Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the company has given guarantee for Rs. 449,525,000/- as
at the reporting date for loans taken by Subsidiary from various banks.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which the loans were raised, other than temporary deployment pending
application.
(xvii) 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 funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
(xix) According to the information and explanations given to us, no
debentures have been issued by the company during the year.
(xx) The management has disclosed the end use of the money raised by
public issue and the same has been verified.
(xxi) 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 Haribhakti & Co.
Chartered Accountants
Firm Registration No.103523W
ananthakrishnan G
Partner
Membership No. 205226
Hyderabad, May 30, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of DQ Entertainment
(International) Limited ('the Company') as at March 3I, 20I2 and
also the Statement of Profit and Loss and the cash flow statement for
the year ended on that date annexed thereto. 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.
2. 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 statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, (as
amended), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of 'The Companies Act, I956' of
India (the 'Act') and on the basis of such checks of the books and
records of the company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the paragraph 3 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. 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, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account
iv. In our opinion, the balance sheet, statement of profit and loss
and cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 2II of
the Companies Act, I956.
v. On the basis of the written representations received from the
directors, as on March 3I, 20I2, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 3I, 20I2 from being appointed as a director in terms of clause
(g) of sub-section (I) of section 274 of the Companies Act, I956.
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 Companies Act, I956, 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 March 3I, 20I2;
b) in the case of the 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.
ANNEXURE TO AUDITORS' REPORT
[Referred to in paragraph 3 of the Auditors' Report of even date to
the members of DQ Entertainment (International) Limited on the
financial statements for the year ended March 3I, 20I2]
(i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) The fixed assets of the company have been physically verified by the
management during the year in accordance with a regular programme of
verification and no material discrepancies between the book records and
the physical inventory have been noticed. In our opinion, the frequency
of verification is reasonable.
c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the company during the year that affect the going concern status
of the Company.
(ii) The provisions of clause 4(ii) of the Companies (Auditors'
Report) Order, 2003 are not applicable to the Company, in view of the
nature of business activities carried on by the Company.
(iii) As per the information and explanations given to us, the Company
has not granted / taken any loans, secured or unsecured to companies,
firms or other parties covered in the register maintained under section
30I of the Companies Act, I956. Accordingly, the provisions stated in
paragraph 4 (iii)(b),(c) and (d) of the Companies (Auditors' Report)
Order, 2033 are not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and with regard to the
sale of services. During the course of our audit, we have not observed
any continuing failure to correct weakness in internal control system
of the company.
(v) a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 30I of the Companies Act, I956 that need to be
entered into the register maintained under section 30I have been so
entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rs five lakhs have been entered into
during the financial year at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
within the meaning of Sections 58A and 58AA of the Act and the rules
framed there under.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the company and nature of its
business.
(viii) The provisions relating to maintenance of cost records as
prescribed under clause (d) of sub-section (I) of Section 209 of the
Act are not applicable to the Company.
(ix) a) The Company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees' state insurance,
income- tax, sales-tax, wealth-tax, service tax, customs duty, cess and
other material statutory dues applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance,
income-tax, wealth- tax, service tax, sales-tax, customs duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) According to the records of the Company and based on the
information and explanation provided to us, the dues outstanding on
account of income-tax, sales-tax, wealth-tax, service tax, customs
duty, and cess which have not been deposited on account of any dispute,
are as follows:
Name of Nature of dues Amount (Rs) Period to which Forum where
the
statute the amount
relates dispute is
pending
Income Income tax -
TDS on payments
to 9,642,I47 2008-09 Appellate
Tribunal
Tax act Hyderabad
Non Residents
I96I
Penalty for
non-payment of
service
Service tax on Business
Auxiliary Services
,nnn,nn, 2006-07,
2007-08
I3,20I,09I CESTAT,
Banglore
Tax Act and Management
or Business and
2008-09
consultant
Services
(x) The provisions of clause 4(x) of the Companies (Auditors' Report)
Order, 2003 (as amended) regarding accumulated losses are not
applicable to the Company.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution and/or bank. The Company has not issued any
debentures 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 & 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 Companies (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) 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 Companies
(Auditor's Report) Order, 2003 (as amended) are not applicable to the
Company.
(xv) In our opinion and according to the information and explanations
given to us, the company has given guarantee for Rs. 705,093,878/- as
at the reporting date for loans taken by Subsidiary from various banks.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which the loans were raised, other than temporary deployment pending
application.
(xvii) 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 funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 30I of
the Companies Act, I956.
(xix) According to the information and explanations given to us, no
debentures have been issued by the company during the year.
(xx) The management has disclosed the end use of the money raised by
public issue and the same has been verified.
(xxi) 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 Haribhakti & Co.
Chartered Accountants
Firm Registration No.I03523W
Ananthakrishnan G
Partner
Membership No. 205226
Hyderabad, May 28, 20I2
Mar 31, 2011
1. We have audited the attached Balance Sheet of DQ Entertainment
(International) Limited ('the Company') as at March 31, 2011 and also
the Profit & Loss account & cash flow Statement for the year ended on
that date annexed thereto. 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.
2. 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 statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956' (the 'Act') and on the basis
of such checks of the books and records of the company as we considered
appropriate and according to the information and explanations given to
us, we give in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Without qualifying our report, we draw attention to Note No.6 (b) of
Schedule 17(II) forming part of accounts wherein the basis of
recognition of deferred tax asset on unabsorbed depreciation has been
explained.
5. Further to our comments in paragraph 3 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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
v. On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
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 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:- a) in the case of the Balance Sheet, of
the state of affairs of the Company as at March 31, 2011;
b) in the case of the Profit & Loss account, of the profits of the
company for the year ended on that date.
c) In the case of the cash flow statement, of the cash flows of the
company for the year ended on that date.
ANNEXURE TO AUDITORS' REPORT
[Referred to in paragraph 3 of the Auditors' Report of even date to the
members of DQ Entertainment (International) Limited on the financial
statements for the year ended March 31, 2011]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets of the company have been physically verified by
the management during the year in accordance with a regular programme
of verification and no material discrepancies between the book records
and the physical inventory were noticed. In our opinion, the frequency
of verification is reasonable.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the company
and has not affected the going concern status of the company.
(ii) The provisions of clause 4(ii) of the Companies (Auditor's Report)
Order, 2003 (as amended) are not applicable to the Company, in view of
the nature of business activities carried on by the company.
(iii)(a) As per our information and the explanations given to us, the
Company has not granted / taken any loans, secured or unsecured to/
from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
the provisions of Clauses 4(iii)(b), 4(iii) (c) and 4(iii)(d) of the
Companies (Auditors' Report) order, 2003 (as amended) are not
applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and for sale of
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system of the Company.
(v) (a) According to the information and explanations given to us,
transactions that need to be entered into a register in pursuance of
sec 301 of the Companies Act, 1956 have been so entered.
(b) The transactions exceeding the value of Rs. 500000 in respect of
any party in any one financial year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
(vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the company and nature of its
business.
(viii) The provisions of clause 4(viii) of the Companies (Auditor's
Report) Order, 2003 (as amended) regarding maintenance of cost records
are not applicable to the Company.
(ix) (a) Undisputed statutory dues including provident fund, employees'
state insurance, income-tax, sales- tax, wealth-tax, service tax,
customs duty, have been regularly deposited with the appropriate
authorities. According to the information and explanations given to
us, no undisputed amounts payable in respect of provident fund,
employees' state insurance, income- tax, wealth-tax, service tax,
sales-tax, customs duty, and other undisputed statutory dues were
outstanding, at the year end, for a period of more than six months from
the date they became payable.
(c) According to the information and explanation given to us, there are
no dues of income tax, sales-tax, wealth tax, service tax, customs
duty, and cess which have not been deposited on account of any dispute
except the following:
forum where dispute Period to
which the amount involved
statute Nature of dues is pending amount
relates (Rs.)
Incometax - TDS
Incometax Appellate Tribunal
on payments
to non 2008-09 9,642,147
Act, 1961 Hyderabad
residents.
(x) The provisions of clause 4(x) of the Companies (Auditor's Report)
Order, 2003 (as amended) regarding accumulated losses are not
applicable to the Company.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank. The company has not issued any
debentures 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 Companies (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) 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 Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) In our opinion and 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 during the year.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained, other than temporary deployment pending
application.
(xvii) 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 funds raised on short-term basis have been used for long-term
investment.
(xviii) 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 under section 301 of
the Act. Accordingly, the provisions of clause 4(xviii) of the
Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xix) The Company has not issued any debentures during the year.
Accordingly, the provisions of clause 4(xix) of the Companies
(Auditor's Report) Order, 2003 (as amended) are not applicable to the
Company.
(xx) The management has disclosed the end use of money raised by public
issue and the same has been verified.
(xxi) 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 any such case by the management.
Place: Hyderabad
Date: 10.08.2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of DQ ENTERTAINMENT
(INTERNATIONAL) LIMITED ("the Company") as at 31 st March, 2010, the
Profit and Loss Account and the Cash Flow Statement of the Company for
the year ended on that date, both annexed thereto. 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.
2. We conducted our audit in accordance with the 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 the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the 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.
3. As required by the Companies (Auditors Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(l4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(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
audit;
(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
those books;
(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956;
(e) 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 the Balance Sheet, of the state of affairs of the
Company as at 31 March, 2010;
(ii) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31 st March, 2010 taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st March, 2010
from being appointed as a director in terms of Section 274( I )(g) of
the Companies Act, 1956.
Annexure to the Auditors Report
(Referred to in paragraph 3 of our report of even date)
(i) Having regard to the nature of the Companys
business/activities/result, (ii), (vi), (viii), (x), (xii), (xiii),
(xiv), (xv), and (xix) clauses of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties listed in the
Register maintained under Section 301,of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining 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 purchases of
fixed assets and for the sale of services. During the course of our
audit, we have not observed any major weakness in such internal control
system.
(v) To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion there were no
contracts or arrangements that need to be entered into the Register
maintained in pursuance of Section 301 of
the Companies Act, 1956. Accordingly clause (v) of CARO is not
applicable.
(vi) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
(vii) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Employees State Insurance, Income-tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other material statutory dues applicable to it with the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Income-tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
dues in arrears as at 31st March, 2010 for a period of more than six
months from the date they became payable.
(c) Details of dues of Income-tax which have not been deposited as on
31st March, 2010 on account of disputes is given below:
Siatute Nafuice
Dues Forum Penod to Amount
involved (Rs)
Which the
Where
Dispute amount
relates
is pending
Non
Income deduction Appellate 2008-09 9,642,142
Tax Act,
1961 of TSD for Tribunal,
Hydera-bad
payments to
non residents
There were no amounts in respect of sales tax, wealth tax, service tax,
custom duty, excise duty and cess which have not been deposited on
account of any dispute.
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions.
(ix) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained, other than temporary deployment pending
application.
(x) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xi) During the current year, the Company has not made any preferential
allotment of shares to parties and companies covered under section 301
of the companies Act, 1956 at a price which is prejudicial to the
interests of the company.
(xii) The Management has disclosed the end use of money raised by
public issue and we have verified the same.
(xiii) To the best of our knowledge and according to the information
and explanations given to us, no fraud by the Company and no fraud on
the Company has been noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
(Registration No.008072S)
Ganesh Balakrishnan
Partner
(Membership No.20l 193)
Secunderabad, 26th July, 2010
Mar 31, 2009
1. We have audited the attached Balance Sheet of DQ Entertainment
(International) Private Limited (Ãthe CompanyÃ) as at 31 March 2009,
the Profit and Loss Account of the Company for the year ended on that
date and the Cash Flow Statement for the year ended on that date, both
annexed thereto. These fi- nancial statements are the responsibility of
the com- panyÃs management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with the 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 mate- rial 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (AuditorÃs Report) Order (CARO), 2003
issued by the Central Govern- ment of India in terms of sub-section
(4A) of Sec- tion 227 of the Companies Act, 1956, we enclose in the
annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order to the extent applicable.
4. Further to our comments in the annexure referred to in paragraph 3
above, we report as follows:
(a) we have obtained all the information and expla- nations, which to
the best of our knowledge and be- lief were necessary for the purposes
of our audit;
(b) in our opinion, proper books of account as re- quired by law have
been kept by the Company so far as it appears from our examination of
those books;
(c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
(e) in our opinion and to the best of our informa- tion 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 the Balance Sheet, of the state of affairs of the
Company as at 31 March 2009; and
(ii) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of written representations received from the directors
as on 31 March 2009 and taken on record by the Board of Directors and
according to the information and explanations given to us, none of the
directors is disqualified as on 31 March 2009 from being appointed as a
director in terms of clause (g) of sub-section (1) of Section 274 of
the Compa- nies Act, 1956.
Annexure to the Auditorsà Report (Referred to in paragraph 3 of our
report attached)
(i) The nature of the CompanyÃs business/activities during the year is
such that paragraphs 4 (ii), (vi), (viii), (x), (xii), (xiii), (xiv),
(xv), (xix) and (xx) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) As explained to us, some of the fixed assets have been physically
verified by the management during the year in accordance with a
programme of verification, the frequency of which is reasonable, having
regard to the size of the Company and nature of its assets. To the best
of our knowledge, no material discrepancies were noticed on such
verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) According to the information and explanations given to us, the
Company has neither granted nor taken any loan, secured or unsecured,
from / to companies, firms or other parties listed in the register
maintained under Section 301 of the Companies Act, 1956. Accordingly,
paragraph 4(iii) of the CARO is not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchases of fixed assets and for the sale of services and we have not
observed any continuing failure to correct major weaknesses in such
internal control system.
(v) To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion there were no
contracts or arrangements that need to be entered into the register
maintained in pursuance of Section 301 of the Com- panies Act, 1956.
Accordingly, paragraph 4(v) of CARO is not applicable.
(vi) In our opinion, the internal audit function of the Company carried
out by a firm of Chartered Accountants appointed by the management has
been commensurate with the size of the Company and nature of its
business.
(vii) In respect of statutory dues:
(a) According to the information and explanations given to us, the
Company has during the year, been generally regular in deposit- ing
with appropriate authorities, undisputed statutory dues including
provident fund, income-tax, sales-tax, wealth tax, service tax, custom
duty, excise duty, cess and any other material statutory dues
applicable to it, except for few instances of delays in deposit of
taxes deducted at source.
(b) According to the information and explanation given to us, no
undisputed statutory amounts payable in respect of income-tax,
sales-tax, wealth tax, service tax, custom duty, excise duty, cess and
any other material statutory dues were in arrears as at 31 March 2009,
for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to us, as at 31
March 2009, there were amounts in respect of income-tax which have not
been deposited on account of disputes.
Period to which Forum where
Name of the Nature of
Amount(Rs) the amount dispute is
Statute the dues relates pending
Non
deduction Commissioner
Income
Tax Act, of TDS for of Income Tax
9,642,147 2008-09
1961 payments (Appeals),
to non Hyderabad
residents
There were no amounts in respect of sales tax, wealth tax, service tax,
custom duty, excise duty and cess which have not been deposited on
account of any dispute.
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repay- ment of dues
to banks.
(ix) To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, term loans
availed by the Company were, prima facie applied by the Company during
the year for the purposes for which the loans were obtained, other than
temporary deployment pending application.
(x) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Com- pany, in our
opinion funds raised on short term basis have, prima facie, not been
used during the year for long term investment.
(xi) During the year, the company has not made any preferential
allotment of shares to parties and companies covered under Section 301
of the Companies Act, 1956 at a price which is prejudicial to the
interests of the company.
(xii) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
Secunderabad, For Deloitte Haskins & Sells
25th July, 2009 Chartered Accountants
Ganesh Balakrishnan
Partner
Membership No. 201193