Mar 31, 2016
To the Members of Educomp Solutions Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Educomp Solutions Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, 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 the 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 and ensuring their operating effectiveness and 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 there under.
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 disclosures in the standalone financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whe,herdueM,raudoremrI"mak''"3,ho5erbkasâ
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. An audit also includes evaluating the appropriateness of 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, 2016, its loss and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the following matter in the notes to the standalone financial statements:
a) Note no. 32, regarding managerial remuneration paid to one of the whole time director of the Company during the quarter ended June 30, 2015, year ended March 31, 2015 in non-compliance with the requirements of Section 197 and Section 198 read with Schedule V to the Companies Act, 2013 and year ended March 31, 2014 in non-compliance with the requirements of Section 198, Section 269 and Section 309 read with Schedule XIII to the Companies Act, 1956, for which Central Government''s approval has not been obtained.
b) Note no. 2.11, with respect to Management''s assessment of carrying value of investment in 6 of its subsidiary companies namely, Educomp Infrastructure and School Management Limited, Educomp Online Supplemental Service Limited, Educomp Child Care Private Limited, Educomp Professional Education Limited, Vidya Mandir Classes Limited, Educomp Intelliprop Ventures Pte. Ltd. (formerly known as Educomp Intelprop Ventures Pte. Ltd.) and in its associate, Greycells18 Media Limited. The Company has evaluated the carrying value of its investments using business valuations performed by independent experts/ its own assessment, according to which the management is of opinion that no provision for impairment is considered necessary in respect of these investments.
c) Note no. 8, wherein, the Company has not considered impairment/diminution of trade receivables from/ investment in Edu Smart Services Private Limited (ESSPL) in the intervening period, in view of proposed merger of ESSPL with the Company.
d) Note no. 1(i)(b), wherein, in the opinion of the management, despite incurring substantial losses including during the current financial year and erosion of net worth as at March 31, 2016, the audited standalone financial statements have been prepared on a going concern basis in view of matters more fully explained in the said note.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditors'' Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in "Annexure 1, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(2) 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. The matter described in sub-paragraph (c) and (d) under the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;
f. On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;
g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give our separate Report in "Annexure 2".
h. 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 15(a) in respect of Contingent Liabilities and Note 34 to the standalone financial statements in respect of other pending litigations;
(ii) The Company did not have any long-term contracts including derivative contracts. Hence, the question of any material foreseeable losses does not arise;
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
BUSINESS OVERVIEW MANAGEMENT REPORTS FINANCIAL STATEMENTS
ANNEXURE 1 TO THE INDEPENDENT AUDITOR''S REPORT
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditor''s Report of even date to the members of Educomp Solutions Limited on the standalone financial statements for the year ended March 31, 2016]
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) During the year, fixed assets have been physically verified by the management as per the regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties recorded in the books of account of the Company are held in the name of the Company.
(ii) The inventory, has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As informed, no material discrepancies were noticed on physical verification carried out during the year.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraph 3 (iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.
(iv) According to the information and explanation given to us in respect of investments and guarantees, the Company has complied with the provisions of Section 185 and 186 of the Act. Further, the Company has not provided any loans or securities to any of the parties covered under section 185 and 186 of Companies Act 2013.
(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 provisions of Sections 73 to 76 of the Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
(vii) (a) The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, however, there have been slight delay in few cases.
According to the information and explanations given to us, no undisputed dues in respect of provident fund, employees'' state insurance, income tax, sales tax, ^ service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, which were outstanding, at the year-end for a period of more than six months from the date they became payable.
(b) According to the information and explanation given to us, there are no dues outstanding with respect to ^|r income tax, sales tax, value added tax, customs duty, excise duty on account of any dispute. According to the information and explanation given to us, dues of service tax which have not been deposited on account of any dispute are as under:
(Rs. in Millions)
Name of the statute |
Nature of the dues |
Amount Disputed (In Rs. Millions) |
Amount paid under protest (In Rs. Millions) |
Period to which the amount relates |
Forum where dispute is pending |
Finance Act, 1994 |
Service Tax |
25.46 |
16.98 |
2009-10 |
Customs, Excise & Service Tax Appellate Tribunal , New Delhi |
(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institutions, banks and debenture holders except as mentioned below:
a) Defaults during the year and rectified before the year- end:
Particulars |
Amount (In Rs. Millions) |
Period of Delay |
Banks |
||
IndusInd Bank |
1.28 |
8 9 |
Axis Bank |
95.72 |
91 |
Yes Bank |
61.47 |
9 1 |
State Bank of Patiala |
40.05 |
79-82 |
198.52 |
b) Defaults not rectified and existing as at March 31, 2016:
Particulars |
Amount (In Rs. Millions) |
Period of Delay |
Banks |
||
Canara Bank |
34.74 |
1-91 |
Central Bank of India |
56.87 |
1-91 |
ICICI Bank |
36.98 |
1-91 |
IndusInd Bank |
1.51 |
1-91 |
State Bank of Bikaner & Jaipur |
13.51 |
1-91 |
Syndicate Bank |
14.79 |
1-91 |
IDBI Bank |
273.00 |
1-91 |
Jammu & Kashmir Bank |
117.60 |
1-91 |
Union Bank Of India |
70.27 |
1-91 |
Axis Bank |
90.04 |
1-91 |
Standard Chartered Bank |
97.78 |
91-456 |
Yes Bank |
124.40 |
91-273 |
DBS Bank |
57.50 |
1-91 |
State Bank of India |
7.26 |
1-91 |
State Bank of Patiala |
38.45 |
1-91 |
Financial Institution |
||
International Finance Corporation |
180.91 |
76 |
PROPARCO |
241.21 |
76 |
HP Financial Services Private Limited |
61.64 |
30- 396 |
Reliance Capital Limited |
12.00 |
366 |
IBM India Private Limited |
32.58 |
16- 260 |
Total |
1,563.04 |
c) Defaults not rectified and existing as at March 31, 2016 in respect of Interest on Debentures:
Particulars |
Amount (In Rs. Millions) |
Period of Default (Days) |
Interest on Non |
34.75 |
255- |
convertible |
312 |
|
Debentures |
According to the information and explanations given to us, the Company has not taken any loans or borrowings from government.
(ix) In our opinion and according to the information and explanations given to us, the Company has utilized the money raised by way of term loans during the year for the purposes for which they were raised. The Company has not raised any money by way of initial public issue offer/ further public offer (including debt instruments) during the year.
(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 fraud by the Company or any fraud on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such instance by the management.
(xi) According to the information and explanations given to us, the Company has not paid the managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act. The details are as follows:
Payment made to |
Amount paid in excess of the limits prescribed |
Amount due for recovery as at March 31, 2016 (In Rs. Millions) |
Steps taken to secure the recovery of the amount |
Remarks |
Whole time Director |
0.45 |
0.45 |
Refer Note 32 to the financial statements. |
(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 to the Company.
(xiii) According to the information and explanation given to us, all transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of Act, where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him.
(xvi) According to the information and explanation given to us the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
ANNEXURE 2 TO THE INDEPENDENT AUDITOR''S REPORT
[Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditor''s Report of even date to the members of Educomp Solutions Limited on the standalone financial statements for the year ended March 31, 2016.
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Educomp Solutions Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that
Management''s Responsibility for Internal Financial Controls
The Company''s 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"). 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 company''s 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 Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. 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 auditor''s 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 Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s 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 company''s internal financial control over financial reporting includes those policies and procedures that (1) 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 company''s 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, 2016, 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 ICAI.
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.103523W
Sd/-
Pranav Jain
Place : Gurgaon Partner
Date : May 26, 2016 Membership No.: 098308
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Educomp Solutions Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2015, the Statement of Profit and Loss, 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 the 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
and ensuring their operating effectiveness and 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
there under.
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 disclosures in the standalone financial statements. The
procedures selected depend on the auditors' 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 appropriatness of 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 March 31, 2015, its loss and its cash flows for the year ended on
that date.
Emphasis of Matter
We draw attention to the following matters in the notes to the
standalone financial statements:
a) Note no. 33, regarding managerial remuneration paid to one of the
whole time director of the Company during the current and previous
financial year, in non compliance with the requirements of section 197
and section 198 read with schedule V to the Companies Act, 2013 and
Section 198 and Section 269 read with Schedule XIII to the Companies
Act, 1956 respectively, for which Central Government's approval has not
been obtained.
b) Note no. 2.12, with respect to Management's assessment of
recoverability of investment in 6 of its subsidiary companies namely,
Educomp Infrastructure and School Management Limited, Educomp Online
Supplemental Service Limited, Educomp Child Care Private Limited,
Educomp Professional Education Limited, Vidya Mandir Classes Limited,
Educomp Intelliprop Ventures Pte Ltd (formerly known as "Educomp
Intelprop Ventures Pte Ltd"), in a Trust- India Education Fund and in
one of its associate, Greycells18 Media Limited.
c) Note no. 8, wherein the Company has not considered impairment of
trade receivable and investment in Edu Smart Services Private Limited
(ESSPL) in the intervening period, in view of proposed merger of ESSPL
with the Company.
d) Note no. 1(i)(b), wherein, in the opinion of the management, despite
incurring substantial losses during the current financial year and
erosion of net worth as at March 31, 2015, the standalone financial
statements have been prepared on a going concern basis in view of
matters more fully explained in the said note.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditors' Report) Order, 2015 ("the
Order") issued by the Central Government of India 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,
to the extent applicable.
(2) 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. The matters described in sub-paragraph (c) & (d) under the Emphasis
of Matter paragraph above and our comment on clause (viii) of Companies
(Auditors' Report) Order, 2015, in our opinion, may have an adverse
effect on the functioning of the Company;
f. On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the
Board of Directors, none of the directors is disqualified as on March
31, 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
15 in respect of Contingent Liabilities and Note 35 in respect of other
pending litigations to the standalone financial statements;
(ii) The Company did not have any long-term contracts including
derivative contracts. Hence, the question of any material foreseeable
losses does not arise;
(iii) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory
Requirements' in the Independent Auditor's Report of even date to the
members of Educomp Solutions Limited on the standalone financial
statements for the year ended March 31, 2015]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) During the year, all the fixed assets have not been physically
verified by the management. However, there is a regular programme of
verification of fixed assets which, in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
As informed, no material discrepancies were noticed on such
verification.
(ii) (a) The inventory (excluding stocks lying with third parties) has
been physically verified by the management during the year and in
respect of inventory lying with third parties, these have not been
confirmed by them. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. As informed
no material discrepancies were noticed on physical verification carried
out during the year.
(iii) As informed, 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 Act. Accordingly, the provisions
stated in paragraph 3 (iii) (a) and 3 (iii) (b) of the Order are not
applicable.
(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 for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, we have
not observed any continuing failure to correct major weaknesses in
internal control system of the Company.
(vj 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 provisions of Sections 73 to 76 of the Act and the rules
framed there under to be read with note no. 34 to the standalone
financial statements.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where the maintenance of cost records
has been specified by the Central Government under sub-section (1) of
Section 148 of the Act and the rules framed there under and we are of
the opinion that prima facie, the prescribed accounts and records have
been made and maintained.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities, undisputed statutory dues including provident
fund, employees' state insurance, income tax, sales tax, service tax,
value added tax, customs duty, cess and any other material statutory
dues applicable to it. There has been delay in few cases of provident
fund, employees' state insurance, income tax, service tax and value
added tax. However, delays in deposit have not been serious. As
explained to us, the Company did not have any dues on account of wealth
tax and excise duty.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, service tax, sales-tax, value added 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. However, undisputed dues in respect of interest on tax
deducted at source which was outstanding, at the year end for a period
of more than six months from the date they became payable are as
follows:
(Rs in Million)
Name Nature of Amount Period Due Date of
of the the dues to which Date Payment
statute the
amount
relates
Income Interest on 3.43 Financial Various Not yet
Tax Act, delay on Years dates paid
1961 deposition 2012-13
of Tax to 2014-
Deducted 15
at Source
(b) According to the information and explanation given to us, there are
no dues of income tax, sales- tax, wealth tax, value added tax, customs
duty, cess and any other material statutory dues applicable to it which
have not been deposited on account of any dispute. According to the
information and explanation given to us, dues of service tax and
employee provident fund which have not been deposited on account of any
dispute are as under:
Name of the statute Nature of dues Amount Amount
Disputed paid
Finance Act, 1994 Service Tax 25.46 16.98
Employees' Provident Fund 8.78 Nil
Provident Fund Penalty
and Miscellaneous
Provisions Act, 1952
Total 34.24 16.98
Name of the statute Period to which the Forum where dispute
amount relates is pending
Finance Act, 1994 2009-10 Customs, Excise &
Service Tax Appellate
Tribunal , New Delhi
Employees' March 2008 to Employees Provident
Provident Fund February 2014 Fund Appellate
and Miscellaneous Tribunal, New Delhi
Provision Act, 1952
(c) According to the information and explanations given to us, there
has been no delay in transferring amounts, required to be transferred,
to the Investor Education and Protection Fund by the Company.
(viii) The accumulated losses of the Company as at March 31, 2015 are
more than fifty percent of its net worth. Further, the Company has
incurred cash losses during the financial year covered by our audit and
in the immediately preceding financial year.
(ix) According to the information and explanations given to us, the
Company has defaulted in repayment of dues to certain banks, financial
institutions and debenture holders. Some of such defaults pertaining to
current year and previous year have been made good during the year. The
particulars of defaults in repayment of dues (including interest) are
as follows:
(Rs in million)
Nature of dues Delay up
to 3 Delay of Delay of Delay for more
months 3 to 6
months 6 to 12
months than 12 months
Loans from banks
Principal due Nil 103.40 Nil Nil
Interest due 712.07 25.48 55.41 31.37
Loans from Financial
Institutions
Principal due 92.11 Nil Nil 12.00
Interest due 194.05 0.54 196.16 112.48
Non convertible
debentures
Interest due 10.00 40.00 37.55 Nil
Total 1,008.23 169.42 289.12 155.85
There are certain defaults, which are continuing at the Balance Sheet
date which have been disclosed under note no. 9 to the standalone
financial statements.
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institution,
are not prejudicial to the interest of the Company.
(xi) According to the information and explanations given to us, the
term loans have been applied for the purpose for which the loans were
obtained.
(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 any such instance by the management.
For Haribhakti & Co. LLP
Chartered Accountants
ICAI Firm Registration No.: 103523W
Sd/-
Raj Kumar Agarwal
Partner
Membership No. 074715
Place: Gurgaon
Date : May 28, 2015
Mar 31, 2014
We have audited the accompanying financial statements of Educomp
Solutions Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2014, and 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.
ManagementRs.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, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating 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 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.
Emphasis of Matter
a) We draw attention to Note no. 35 to the Financial Statements
regarding managerial remuneration paid/provided to managing
director/whole time director of the Company during the current
financial year, in non- compliance with the requirements of Section 198
and Section 269 read with Schedule XIII to the Act, for which Central
Government''s approval has not been obtained. Our opinion is not
qualified in respect of this matter.
b) We draw attention to Note no. 36 to the Financial Statements wherein
the Management of the Company has considered its long outstanding Trade
Receivables including dues from Government Companies/Agencies, which
are due for more than one year as good and fully recoverable. These
receivables may require adjustments including those for doubtful
receivables after reconciliations, which are not ascertainable at this
stage. Our opinion is not qualified in respect of this matter.
c) We draw attention to Note no. 2.12 (a) to the Financial Statements
with respect to Management''s assessment of recoverability of investment
in 2 of its subsidiary companies namely, Educomp Online Supplemental
Service Limited and Educomp Child Care Private Limited and in one of
its associates, Greycells18 Media Limited, based on valuations
performed by independent experts, according to which the decline in the
value of these long term investments has been considered to be
temporary. The recoverability of these amounts is significantly
dependent on these companies'' ability to achieve futuristic growth plan
envisaged in the related assumptions used for the purpose of their
respective valuation. Our report is not qualified in respect of this
matter.
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 the 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 Independent AUDITORS'' REPORT
Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' in the Independent Auditors'' Report of even date to the
members of Educomp Solutions 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) All the fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verification.
(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.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) The Company has granted unsecured loan to two companies
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs. 594.33
million and the year-end balance of loans granted to such parties was
Rs. Nil.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not, prima facie, prejudicial to the interest of the
Company.
(c) The parties have repaid the principal amounts as stipulated and
have also been regular in the payment of interest to the Company.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under Section 301 of
the Companies Act, 1956.
(e) The Company had taken unsecured interest free loan from the
promoter director in the form of promoter contribution, as per approved
Corporate Debt Restructuring (CDR) package. The maximum amount involved
during the year and the year end balances is Rs. 226.05 million.
(f) According to the information and explanation given to us, the
unsecured loan is interest free and other terms and conditions for such
unsecured loan are not, prima facie, prejudicial to the interest of the
Company.
(g) In respect of the aforesaid loans, as per the terms of the interest
free unsecured loan, the principal amount is not due till the Balance
Sheet date.
(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 inventory and fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct material
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) The transactions entered into during the financial year with the
parties listed in Section 301 of the Act, in pursuance of such
contracts or arrangements exceeding value of Rupees five lakhs are
considered to be proprietary in nature, as explained by the management
of the Company, and in the absence of comparable market prices we are
unable to comment if such transactions 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. Accordingly, the provisions stated in paragraph 4
(vi) of the Order are not applicable to the Company.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government of India has not prescribed the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products or business activities
of the Company. Accordingly, the provisions stated in paragraph 4
(viii) of the Order are not applicable to the Company.
(ix) (a) The Company is regular in depositing with appropriate
authorities undisputed statutory dues including investor education and
protection fund, wealth-tax, customs duty, cess and other material
statutory dues applicable to it. There are serious delays in a large
number of cases in deposition of undisputed dues of provident fund,
service tax, professional tax, sales tax, employee state insurance,
labour welfare fund and income tax (tax deducted at source), with the
appropriate authorities.
(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, excise 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 information and explanation given to us, there are
no dues of sales- tax, wealth tax, customs duty, excise duty and cess
which have not been deposited on account of any dispute. According to
the information and explanation given to us, dues of service tax which
have not been deposited on account of any dispute is as under:
(Amount in Rs. Million)
Name Nature Amount Amount Period to Forum where
of the of dues Disputed paid which the dispute is
statute amount pending
relates
Finance Service 25.46 16.98 2009-10 Customs,
Act, Tax Excise &
1994 Service Tax
Appellate
Tribunal,
New Delhi
Total 25.46 16.98
(x) In our opinion and according to the information and explanation
given to us, the Company does not have any accumulated losses as at
March 31, 2014. The Company has incurred cash losses during the
financial year covered by our audit, however there were no cash losses
in immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, there have been defaults in
repayment of dues to certain banks and financial institutions during
the year, which have been subsequently rescheduled by way of Corporate
Debt Restructuring (CDR) package as disclosed in the Note No. 2.3 to
the Financial Statements. Further, during the year the Company has
defaulted in repayments of dues to Banks, financial institutions and
debentures holders, which did not participate in CDR, some of which
have been made good during the year. The detail of such defaults is as
below:
(Amount in Rs. Million)
Nature of dues Delay up to Delay of Delay of
3 months 3 to 6 months 6 to 12 months
Term loan
Principal due 64.00 32.00 30.60
Interest 33.04 5.77 -
Non convertible
debentures
Interest 0.60 4.56 55.33
Total 97.64 42.33 85.93
(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. Accordingly, the provisions
stated in paragraph 4 (xii) of the Order are not applicable to the
Company.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Accordingly, the provisions stated in
paragraph 4 (xiii) of the Order 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 stated in paragraph 4 (xiv) of the Order are not applicable
to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(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. Accordingly, the provisions stated in
paragraph 4 (xviii) of the Order are not applicable to the Company
(xix) According to the information and explanations given to us, during
the previous year, the Company had created partial security on assets
having a book value of Rs. 1.08 million in respect of the debentures of
Rs. 450 million issued by the Company during the previous year. As
explained to us, the Company is taking necessary steps to create
security in respect of these debentures.
(xx) The Company has not raised money by way of public issue during the
year. Accordingly, the provisions stated in paragraph 4 (xx) of the
Order 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 Haribhakti & Co.
Chartered Accountants
Firm Registration No. 103523W
Sd/-
Raj Kumar Agarwal
Partner
Membership No. 74715
Place: Gurgaon
Date: May 26, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Educomp
Solutions Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2013, and 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 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 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 the 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.
[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' in the Independent Auditors'' Report of even date to the
members of Educomp Solutions 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) All the fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) The Company has granted unsecured loans to three companies
covered in the register maintained under Section 301 of the Act. The
maximum amount involved during the year was Rs.711.70 million and the
year-end balance of loans granted to such parties is Rs.572.24 million.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not, prima facie, prejudicial to the interest of the
Company.
(c) The parties have repaid the principal amounts in accordance with
the terms of the agreement. Interest repayment is not due till the
Balance Sheet date.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under Section 301 of
the Act.
(e) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under Section 301 of the Act. Accordingly, the
provisions stated in paragraph 4 (iii)(e);4(iii)(f)and 4(iii)(g) of the
order 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 inventory, fixed assets and with
regard to the sale of goods and 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 Act that need to be entered into the
register maintained under section 301 have been so entered.
(b) The transactions entered into during the financial year with the
parties listed in Section 301 of the Act, in pursuance of such
contracts or arrangements exceeding value of Rupees five lakhs are
considered to be proprietary in nature, as explained by the management
of the Company, and in the absence of comparable market prices we are
unable to comment if such transactions 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 Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government of India has not prescribed the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products or business activities
of the Company. Accordingly, the provisions stated in paragraph 4
(viii) of the order are not applicable to the Company.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including investor
education and protection fund, employees'' state insurance, wealth-tax,
customs duty, excise duty, cess and other material statutory dues as
applicable to it. However there were frequent delays in depositing dues
related to provident fund, income-tax, professional tax, sales- tax and
service tax.
(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, wealth- tax,
service tax, sales-tax, customs duty, excise duty, cess and other
undisputed statutory dues as applicable, were outstanding, at the year
end, for a period of more than six months from the date they became
payable except for income tax as follows:
*Note: Includes interest on amount of default accrued till March 31,
2013.
(c) According to the information and explanation given to us, there are
no dues of sales- tax, wealth tax, customs duty, excise duty and cess
which have not been deposited on account of any dispute. According to
the information and explanation given to us, dues of income tax and
service tax which have not been deposited on account of any dispute is
as under:
Name Nature amount Period to Due Date Date of
Of the (Rs.in) Payment
Statue Million amount
relatels
Income Income 28.12 28.12 2007-08 Income
Tax Act, Tax (adjusted Tax
1961 against Appellate
refund Tribunal,
due) New Delhi
Finance Service 25.46 16.98 2009-10 Customs,
Act, 1994 Tax Excise &
Service Tax
Appellate
Tribunal,
New Delhi
Total 53.58 45.10
(x) According to the information and explanation given to us, the
Company does not have accumulated losses and has not incurred cash
losses in the current year and the immediately preceding financial
year.
(xi) In our opinion and according to the information and explanations
given to us by the management, the Company has not defaulted in
repayments of due to debenture holders and financial institutions.
However, during the year the Company has defaulted in repayment of dues
to banks, some of which have been made good during the year. The detail
of defaults existing on the Balance Sheet date is as below:
(Amount in Rs. million)
Nature Delay up to 1 Delaye of 2 Delay up to 3 Delaye of 4
Term loans
Principal
due 72.99 50.00 79.14 216.46
Interest* 18.28 18.60 3.44
Total 91.27 68.60 82.58 216.46
*Including penal interest
(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. Accordingly, the provisions stated in
paragraph 4 (xii) of the order are not applicable to the Company.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Accordingly, the provisions stated in
paragraph 4 (xiii) of the order 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 stated in paragraph 4 (xiv) of the order are not applicable
to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prima facie prejudicial to the interest of the
Company.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(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 made preferential allotment of shares to parties and
companies covered in the register maintained under Section 301 of the
Act. In our opinion, the prices at which shares have been issued are
not prejudicial to the interest of the Company.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company had issued 450
debentures of Rs.1 million each. The Company has created partial security
on assets having book value Rs. 1.08 million in respect of debentures
issued amounting X450 million. As explained, the Company is taking
necessary steps to create security in respect of these debentures.
(xx) The Company has not raised money by way of public issue during the
year. Accordingly, the provisions stated in paragraph 4 (xx) of the
order 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 Haribhakti & Co. Raj Kumar Agarwal
Chartered Accountants Partner
Firm Registration No.103523W Membership No.074715
Place: Gurgaon Date: May 30, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of Educomp Solutions
Limited ('the Company') as at March 31, 2012 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 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' 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 211 of
the Companies Act, 1956.
v. On the basis of the written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 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, 2012;
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 Educomp Solutions
Limited on the Financial Statements for the year ended 31st March 2012]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The company has a phased program of physical verification to cover
all its assets over a period of 3 years, which in our opinion is
reasonable having regard to the size of the company and nature of its
assets. Some of the fixed assets of the company were physically
verified by the management during the year and as informed no material
discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the company during the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) As informed, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly
clauses (iii)(a), (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of the
Order are not applicable to the Company.
As informed, the Company has not taken any loans, secured or unsecured
from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly
clauses (iii) (e), (iii)(f) and (iii)(g) of paragraph 4 of the Order
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 inventory, fixed assets and with
regard to the sale of goods and 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) We are unable to comment if the transactions made with the parties
isted in section 301 of the Companies Act, 1956, in pursuance of such
contracts or arrangements exceeding value of Rupees Five lakh have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time as
there are no market prices comparable to those transactions, however
are considered to be proprietary in nature as explained by the
management of the company.
(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 Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government of India has not prescribed the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products/business activities of
the company.
(ix) (a) According to information and explanation given to us, the
Company is generally regular in depositing with appropriate authorities
undisputed statutory dues including income tax, provident fund,
investor education and protection fund, employees' state insurance,
sales tax, service tax, customs duty, and other material statutory dues
applicable to it. However, there have been delays in depositing
undisputed statutory dues related to advance income tax.
As informed statutory dues in respect of wealth-tax, excise duty and
cess are not applicable to the company.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, provident fund,
investor education and protection fund, employees' state insurance,
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.
As informed statutory dues in respect of wealth-tax, excise duty and
cess are not applicable to the company.
(c) According to the information and explanation given to us, there are
no dues of service tax and customs duty which have not been deposited
on account of any dispute. According to the information and explanation
given to us, disputed amount on account of sales tax and income tax
that have not been deposited are as follows:
Name of Statue Nature of Dues Amount Disputed Amount paid
(Rs.In millions) (Rs.)
Uttar Pradesh
Value Added VAT 2.16 0.97
Tax
Income Tax
Act, 1961 Income Tax 28.12 28.12
(adjusted against
refund due)
Total 30.28 29.09
Name of Statue Period to which Forum where the dispute
relates is pending.
Uttar Pradesh Value
Added
Tax 2009-10 Tribunal, Commercial Tax,
Uttar Pradesh
Income Tax Act, 1961 2007-08 Income Tax Appellate
Tribunal
Total
As informed statutory dues in respect of wealth-tax, excise duty and
cess are not applicable to the company.
(x) In our opinion and according to the information and explanations
given to us, the company does not have accumulated losses. Further, the
company has not incurred cash losses during the financial year covered
by our audit and the immediately preceding financial year.
(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
financia institution or a bank. The company has not issued any
debenture.
(xii) According to the information and explanations given to us, the
Company has not granted any 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 terms and conditions of the guarantees given by the
company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the company.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(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 preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the
Act.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) During the year covered by our audit report, the company has not
raised any money by way of public issue.
(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 Anupam Bansal & Co. For Haribhakti & Co.
Chartered Accountants Chartered Accountants
Firm Registration No: 009864N Firm Registration No:103523W
(Anupam Bansal) (Raj Kumar Agarwal)
Proprietor Partner
Membership No. 87699 Membership No.74715
Place : Gurgaon
Date : 30th May, 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of Educomp Solutions
Limited ('the Company') as at March 31, 2011 and also the Profit and
Loss account 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 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' 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, 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 and loss account, 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 Auditor's Report
[Referred to in paragraph 3 of the Auditors' Report of even date to the
members of Educomp Solutions Limited on the Financial Statements for
the year ended 31st March 2011]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The company has a phased program of physical verification to cover
all its assets over a period of 3 years, which in our opinion is
reasonable having regard to the size of the company and nature of its
assets. Some of the fixed assets of the company were physically
verified by the management during the year and as informed no material
discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the company during the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) As informed, the Company has not granted any loans, secured
or unsecured to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly clauses (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of
the Order are not applicable to the Company.
(b) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly clauses (iii)(f) and (iii)(g) of paragraph 4 of the Order
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 inventory, fixed assets and with
regard to the sale of goods and 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) We are unable to comment if the transactions made with the parties
listed in section 301 of the Companies Act, 1956, in pursuance of such
contracts or arrangements exceeding value of Rupees 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 as there are no market prices comparable to those
transactions, however are considered to be proprietary in nature as
explained by the management of the company.
(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 Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government of India has not prescribed the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products/business activities of
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, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(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, excise 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 information and explanation given to us, there are
no dues of wealth tax, service tax, customs duty, excise duty and cess
which have not been deposited on account of any dispute. According to
the information and explanation given to us, disputed sales tax and
income tax that have not been deposited are as follows:
Name of Statue Nature of
Dues Amount
Disputed Amount paid Period to
which
relates Forum where
the
(Rs.) (Rs.) dispute is
pending
Uttar Pradesh
Value VAT 21,64,000 9,73,800 2009-10 Commissioner
Uttar
Added Tax Pradesh
Income Tax
Act, 1961 Income
Tax 5,85,91,285 1,24,00,000 2007-08 CIT(A)
Total 6,07,55,285 1,33,73,800
(x) In our opinion and according to the information and explanations
given to us, the company does not have accumulated losses. Further, the
company has not incurred cash losses during the financial year covered
by our audit and the immediately preceding financial year.
(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 banks.
(xii) According to the information and explanations given to us, the
Company has not granted any 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 terms and conditions of the guarantees given by the
company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the company.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(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 preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the
Act.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) During the year covered by our audit report, the company has not
raised any money by way of public issue.
(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 Anupam Bansal & Co. For Haribhakti & Co.
Chartered Accountants Chartered Accountants
Firm No: 009864N FRN No.103523W
Anupam Bansal Raj Kumar Agarwal
Proprietor Partner
M. No.: F-87699 Membership No.74715
Place: Gurgaon
Date: May 30, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Educomp Solutions
Limited (the Company) as at March 31, 2010 and also the Proft and
Loss account and the cash fow statement for the year ended on that date
annexed thereto. These fnancial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion
on these fnancial 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
fnancial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the fnancial statements. An audit also includes
assessing the accounting principles used and signifcant estimates made
by management, as well as evaluating the overall fnancial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of ÃThe Companies Act, 1956 of India (the ÃAct) 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 specifed 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, proft and loss account and cash fow statement
dealt with by this report are in agreement with the books of account;
(iv) In our opinion, the balance sheet, proft and loss account and cash
fow 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, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualifed as on
March 31, 2010 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 afairs of the
Company as at March 31, 2010;
(b) in the case of the proft and loss account, of the proft for the
year ended on that date; and
(c) in the case of cash fow statement, of the cash fows for the year
ended on that date.
ANNEXURETO AUDITORS REPORT
[Referred to in paragraph 3 of the AuditorsReport of even date to the
members of Educomp Solutions Limited on the Financial Statements for
the year ended 31st March 2010]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fxed
assets.
(b) All the fxed assets have not been physically verifed by the
management during the year but there is a regular programme of
verifcation which, in our opinion,is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed on such verifcation.
(c) During the year, the Company has disposed of a substantial part of
the Fixed Assets. On the basis of our examination of the books and
records of the company, and according to the information and
explanations given to us, we are of the opinion that the disposal of
the said part of fxed assets has not afected the going concern status
of the Company.
(ii) (a) The inventory has been physically verifed by the management
during the year. In our opinion, the frequency of verifcation is
reasonable.
(b) The procedures of physical verifcation of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The Company ismaintaining proper recordsof inventory and no
material discrepancies were noticed on physical verifcation carried
outatthe end of the year.
(iii) (a) As informed, the Company has not granted any loans, secured
or unsecured to companies, frms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly clauses (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of
the Order are not applicable to the Company.
(e) As informed, the Company has not taken any loans, secured or
unsecured from companies, frms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly
clauses (iii)(f) and (iii)(g) of paragraph 4 of the Order 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 inventory, fxed assets and with
regard to the sale of goods and 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 Rupees fve lakhs have been entered into
during the fnancial year 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 Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government of India has not prescribed the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products of 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, employeesstate
insurance, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employeesstate insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise 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 information and explanation given to us, there are
no dues of income tax, sales-tax, wealth tax, service tax, customs
duty, excise duty and cess which have not been deposited on account of
any dispute.
(x) In our opinion, the accumulated losses of the company are not more
than ffty percent of its net worth. Further, the company has not
incurred cash losses during the fnancial year covered by our audit and
the immediately preceding fnancial year.
(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
fnancial institution and banks.
(xii) According to the information and explanations given to us, the
Company has not granted any 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 beneft fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditors 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 (Auditors 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 terms and conditions of the guarantees given by the
company, for loans taken by others from banks or fnancial institutions
during the year, are not prejudicial to the interest of the company.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(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 preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the
Act. In our opinion, the prices at which shares have been issued is not
prejudicial to the interest of the company.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) During the year covered by our audit report, the company has not
raised any money by way of public issue.
(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 Anupam Bansal&Co. For Haribhakti&Co.
Chartered Accountants Chartered Accountants
Firm No: 009864N FRN No.103523W
Anupam Bansal Raj Kumar Agarwal
Proprietor Partner
M. No.: F-87699 M.No.:74715
Place: Gurgaon
Date: August 17, 2010
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