Mar 31, 2015
We have audited the accompanying financial statements of JAIN STUDIOS
LIMITED which comprise the Balance Sheet as at 31st March, 2015, the
Statement of Profit and Loss, the Cash Flow Statement for the year
then ended, and a summary of the significant accounting policies and
other explanatory information.
Management's Responsibility for the 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 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 the assets of the Company and
for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to the
preparation and presentation of the 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 financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under
the provisions of the Act and the Rules made thereunder. We conducted
our audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on whether the Company has in place an adequate
internal financial controls system over financial reporting and the
operating effectiveness of such controls. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company's
Directors, as well as evaluating the overall presentation of the
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 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 31,2015;
b) in the case of the Profit and Loss Account, of the profit/ loss for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's 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 the paragraph 3 and 4 of the
Order, to the extent applicable.
2. Further to our comments in the annexure, 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 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) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
2015 from being appointed as a director in terms of Section 164 (2) of
the Act.
(f) 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, to the extent applicable and according to the
explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements -Refer note 2.27 to the
financial statements.
ii. the Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts.
iii. there has been no situation requiring transfer of funds to the
Investor Education and Protection Fund by the Company.
(g) attention is invited to:
a. The company has made no provision in the accounts, for the custom
duty saved amounting to Rs 351.48 lacs, interest thereon and penalties
which may be levied by the office of Directorate General Of Foreign
Trade on account of non fulfillment of the export obligation, as per
EPCG scheme against which a sum of Rs 274.21 lacs are lying deposited
with custom department.
b. One time settlement with SASF (OTS) -Refer note no. 2.3 to the
financial statements.
In respect of one time settlement (OTS) arrived at with SASF, SASF
vide its letter dated 12th February 2015 and 5th March 2015
respectively denied the further extension and revoked the OTS and
subsequent modifications thereof including reversal of waiver of dues
and restoration of the original liability as per the terms of loan
agreement and adjustment of payment received by SASF from the company
towards the dues. The same has not been effected in the accounts book
as the company is hopeful to get the OTS restored. (Benefits availed
under OTS amount Rs. 1120.59 lacs)
As explained to us the company is discussing the matter with SASF
authority.
ANNEXURE TO INDEPENDENT AUDITORS' REPORT
The Annexure referred to in our report to the member s of JAIN STUDIOS
LIMITED for the year ended on 31st March, 2015:
(i) a. The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. The company has a regular program of physical verification of its
fixed assets by which these assets are verified in a phased manner
over a period of three years.
In accordance with this certain assets are verified during the year
and some discrepancies were found which were immaterial in nature.
Having regard to nature of asset and size of company, periodicity of
physical verification is reasonable.
ii. a. The company has a regular program of physical verification of
inventory by which inventories are verified twice in a year. Having
regard to nature of its business and size of company, periodicity of
physical verification is reasonable.
b. The procedure of physical verification followed by company is
reasonable having regard to nature of its business and size of the
company.
c. According to explanation and information given to us and on
examination of records,
The company is maintaining proper records of inventory and any
material discrepancies which were observed on physical verification
has been properly dealt in the books of account.
iii. The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act 2013:
a) According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
no outstanding on account unsecured loan as on 31-03-2015 to
companies, firms or other parties covered in the register maintained
under Section 189 of the Companies Act, 2013 ("the Act").
iv. In our opinion and according to information and explanation given
to us, there is an adequate internal control system commensurate with
its size of the company and inventory and fixed assets and for the
sale of goods and services. We have not observed any major weakness in
the internal control system during the course of our audit.
v. The Company has not accepted any deposits from the public covered
under section 73 to 76 of the Companies Act, 2013 and the rules framed
there under and the directives issued by RBI.
vi. In our opinion, maintenance of cost records under section 148(1)
of the Act is not applicable to the company.
vii. a. According to our information and explanation given to us and
from examination of records of the company, the company is not regular
in depositing undisputed statutory dues including provident fund,
employees' state insurance, income tax, duty of customs, service tax,
value added tax, cess and any other statutory dues with the
appropriate authorities and there are undisputed statutory dues which
remain in arrear for a period of more than six month as on 31st March
2015.
Nature of Dues Amount of Dues
Central sales tax (UP) Rs.12,62,756
Provident Fund Rs.10,65,584
TDS Rs.48,31,413
Bonus Payable Rs.14,83,679
Interest on TDS Payable Rs. 5,19,484
b. Details of Sales Tax, Income Tax, Wealth Tax, Service Tax, Excise
Duty and Cess which have not been deposited on account of dispute are
given below:
viii. Accumulated losses of the Company at the end of the financial
year do not exceed 50% of its net worth (as per Balance Sheet
including Revaluation Reserve). However company has incurred cash loss
of Rs.16896 thousand during the current financial year though there
was cash profit of Rs. 20311.2 thousands in the immediate preceding
financial year.
ix. In our opinion, and on the basis of our audit procedures and
according to information and explanation given to us, the company has
defaulted in repayment of Term Loan taken from IDBI (refer note no.
2.3).
x. The company has given Corporate guarantee on behalf of following
companies for the loan taken from given below financial institutions
or banks.
xi. The company has not obtained any term loan xii. No fraud was
noticed, on or by the company from any financial institutions, Bank
and during the year. NBFC.
For GIRI & BANSAL
Chartered Accountants
(N. P. BANSAL)
Place: New Delhi Partner
Date : 28th May, 2015 Membership No.: - 080319
FRN: 0877
Mar 31, 2014
1. We have audited the accompanying financial statements of Jain
Studios Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2014 and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Managements'' Responsibility for the Financial Statements
2. The Company''s 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 subsection (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.
Auditor''s Responsibility
3. 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.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of ac count ing pol i c ies used and the
reasonableness of the accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid financial statements give
the information required by the Act in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7. 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 Act, (hereinafter referred to as the "Order") 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 Order
8. Further, 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 read with our comments in para 2(f) below.
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 (read with our comments in para 2(a) above).
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 Balance Sheet, the 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 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.
f) Attention is invited to:
a) Note Nos. 2.8 and 2.31 (B) of notes to the financial statements, in
respect of custom duty saved Rs. 351.48 Lacs during earlier years as
per EPCG Scheme, against which the company''s fund amount Rs. 274.21
Lacs are laying deposited with the custom department. No provision has
been made for the custom duty saved and interest thereon.
As explained to us the company has made an application to DGFT for
extension to fullfil the export application.
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph (7) under the heading of ÂReport on the other
Legal and Regulatory Requirements'' of our Report, for Accounts of JAIN
STUDIOS LIMITED for the year ended 31st March 2014.)
(i) In respect of its fixed assets:
(a) Fixed assets records showing full particulars including
quantitative details and situation of fixed assets have been
maintained.
(b) The company has a program of verification of fixed assets to cover
all the items in a phased periodical manner which, in our opinion, is
reasonable having regard to the size of the company and the nature of
its assets. No material discrepancies were noticed on such physical
verification.
As per the records and information and explanations given to us, fixed
assets disposed off during the year were Nil.
(ii) In respect of its inventories:
(a) According to the information and explanations given to us, Physical
verification has been conducted by the management at reasonable
intervals during the year in respect of inventories of stock in trade
in the company''s possession. In our opinion, the frequency of physical
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business.
On the basis of our examination of the records of inventories, we are
of the opinion that the company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of accounts.
(iii) As per the information and explanations given to us, the company
has neither granted nor taken any loans, secured or unsecured, to/from
companies, firms or other parties listed in the Register maintained
under section 301 of the Act. Accordingly, the provisions of clauses 4
(iii) (b) to (d), (f) & (g) of the Order are not applicable.
(iv) In our opinion and according to the information and explanation
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness in such internal control system.
(v) Based on the audit procedures performed and according to the
information and explanations given to us, the contracts or arrangements
referred to in section 301 of the Act which need to be entered into
register required to be maintained under that section have been entered
accordingly.
(vi) According to the information and explanations given to us, the
company has not accepted any deposits from the public within the
meaning of section 58A and 58AA or any other relevant provisions of the
Act and rules framed thereunder and directives issued by Reserve Bank
of India or any other relevant provisions of the Act. Therefore, the
provisions of Clause
(vi) of paragraph 4 of the Order are not applicable to the Company.
(vii) In our opinion, the Company has an internal audit system, which
need to be further strengthened to be made the same commensurate with
the size of the Company and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company in respect of the activities where, pursuant to the rules made
by the Central Government, the maintenance of cost records has been
prescribed under section 209(1)(d) of the Companies Act, 1956 and are
of the opinion that, prime facie, the prescribed accounts and records
have been made and maintained. However, we have not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
(ix) In respect of statutory dues:
(a) According to the records and information and explanations given to
us, the Company is generally regular in depositing undisputed statutory
dues including Provident Fund, Employee'' State Insurance, Service Tax,
Custom Duty, Cess and other material statutory dues with the
appropriate authorities to the extent applicable and there are
undisputed statutory dues payable for a period of more than six months
from the date they became payable as at 31st March 2014 are given
below:
S.No. Particulars In Rs. thousands
1. Provident Fund Rs. 1,065.58
2. Tax Deducted at Source Rs. 1,019.86
3. Sales Tax/VAT Rs. 366.54
4. Bonus Rs. 1483.68
5. According to the records and information & explanations given to us,
there are no dues in respect of sales Tax, income tax, custom duty,
wealth tax, service tax, excise duty and cess that have not been
deposited with the appropriate authorities on account of any dispute.
(x) Accumulated losses of the Company at the end of the financial year
do not exceed 50% of its net worth (as per Balance Sheet including
Revaluation Reserve). It has earned cash profit of Rs. 20311.20
thousands in the current financial year, though there was a cash profit
of Rs 444.03 thousands in the immediate preceding financial year.
(xi) In our opinion, on the basis of audit procedures and according to
the information and explanations given to us, the company had defaulted
on one time settlement (OTS) arrived at with SASF on 26th July, 2008,
consequently, fresh OTS was made with SASF vide SASF letter dated 26th
February, 2011, which also could not be complied with in full and on
request of the company, SASF vide its letter dated 6th April 2013 has
agreed to extend the OTS till 31st March 2014. On further request of
the company the SASF vide its letter dated 29th March 2014 has agreed
to extend the date of buy back of shares upto 30th September 2014
subject to payment of interest on or before 30th April 2014 (read with
Note No.2.4 (i) & (ii) of Notes to the Financial Statements), which
payment is not made and disputed by the company, as the amount payable
is return on equity and not an interest.
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The company is not a chit fund or a nidhi/ mutual benefit
fund/society, therefore, provisions of clause 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.
(xv) According to the information and explanation given to us, during
the year the company has not raised any short term loans from any
financial institutions.
(xvi) On the basis of information and explanations given to us and on
an overall examination of the financial statements of the company, no
funds raised during the year on short term basis have been used for
long term investment.
(xvii) According to the information and explanations given to us, the
Company has made preferential allotment of shares and warrants to
promoters covered in the Register maintained under section 301 of the
Act during the financial year 2012-13(refer Note no.2.1 and 2.3 of
Notes to the Financial Statements), and the price at which the said
allotment has been made is not prejudicial to the interest of the
company.
(xviii) The company has not issued any debentures during the year.
(xix) The company has not raised any money through a public issue
during the year.
(xx) Based on audit procedure performed and on the basis of information
and explanations provided by the management and to the best of our
Knowledge and belief, no material fraud on or by the company has been
noticed or reported during the course of our audit nor we have been
informed of any such case by the management.
For GIRI & BANSAL
Chartered Accountants
(N. P. BANSAL)
Place: New Delhi Partner
Date : 28th May, 2014 Membership No.: - 80319
Mar 31, 2012
We have audited the attached Balance Sheet of JAIN STUDIOS LIMITED as
at 31st March 2012, the Statement of Profit and Loss and also the Cash
Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material 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.
1. As required by the Companies (Auditors' Report) Order, 2003 as
amended by Companies (Auditors' Report) Order 2004 (together the
"Order") issued by the Central Government of India in terms of Section
227 (4A) of the Companies Act, 1956 (The Act), and on the basis of such
examination of books and records of the company as we considered proper
and the information and explanations given to us during the course of
our audit, we annex a statement on the matters specified in the
paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred in Paragraph 1
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 read with our comments in para 2 (vi) below.
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, read with our comments in para 2(i) above.
iii) The Balance Sheet and Statement of Profit and Loss dealt with by
this report are in agreement with the books of accounts.
iv) In our opinion, the Balance Sheet and Statement Profit and Loss
dealt with by this report comply with the mandatory Accounting
Standards (AS) referred to in sub-section (3C) of section 211 of the
companies Act, 1956.
v) As per the information and explanations given to us, none of the
directors is disqualified from being appointed as a director in terms
of clause (g) of sub-section (1) of section 274 of the Companies Act,
1956.
vi) Attention is invited to:
a) Note no. 2.5 (i) & (ii) of notes to the financial statements, in
respect of secured loan of SASF (IDBI) which is the subject matter of
One Time Settlement.
b) In respect of recognition and carry over of deferred tax assets
(net) amounting to Rs.835.69 Lacs to the extent as stated in said note,
based on management perception (Note no.2.13 of notes to the financial
statements), and our inability to comment thereon.
c) Note no.2.33 of notes to the financial statements, in respect of
custom duty saved as per EPCG Scheme, no provision has been made as the
extension has been granted by concerned authorities.
Subject to the foregoing, in our opinion, and to the best of our
information and according to the explanations given to us, the said
accounts read together with Notes thereon, 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;
i) In the case of Balance Sheet, of the state of affairs of the Company
as at 31st March 2012;
ii) In the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph (1) of our
Report on Accounts of JAIN STUDIOS LIMITED for the period ended 31st
March 2012).
(i) (a) Fixed assets records showing full particulars including
quantitative details and situation of fixed assets have been
maintained.
(b) According to the information and explanations given to us, the
company has a phased programme of verification of its fixed assets,
however physical verification of fixed assets carried out during the
year is not as per the programme and also discrepancy, if any, on such
verification has not been determined, hence cannot be commented upon by
us. In our opinion, the frequency of verification needs to be further
strengthened to be made the same reasonable with regard to the size of
the Company.
(c) As per the records and information and explanations given to us,
fixed assets disposed off during the year were not substantial.
(ii) The company has no inventory, hence provisions of clause 4(ii) (a)
and (b) of the order are not applicable and records of inventory are
updated.
(iii) As per the information and explanations given to us, the company
has neither granted nor taken any loans, secured or unsecured, to/from
companies, firms or other parties listed in the Register maintained
under section 301 of the Act. Accordingly, the provisions of clauses 4
(iii) (b) to (d), (f) & (g) of the Order are not applicable.
(iv) According to the information and explanations given to us, having
regard to the explanations that some of the items purchased/ contracts
for services availed/ provided are of special nature and suitable
alternative sources do not exists for obtaining comparable quotations
(read with our comment in para 2(vi) above and note no.2.18(a) of Notes
to the Financial Statements, internal control system needs to be
further strengthened to be made the same commensurate with the size of
the company and the nature of its business, for the purchase of
inventory and fixed assets, expenditures and for the sale of services.
(v) Based on the audit procedures performed and according to the
information and explanations given to us, the contracts or arrangements
referred to in section 301 of the Act which need to be entered into
register required to be maintained under that section have been entered
accordingly.
(vi) According to the information and explanations given to us, the
company has not accepted any deposits from the public within the
meaning of section 58A and 58AA or any other relevant provisions of the
Act and rules framed thereunder and directives issued by Reserve Bank
of India or any other relevant provisions of the Act. We have been
informed that no order has been passed by Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal in this regard.
(vii) In our opinion, the Company has an internal audit system, which
need to be further strengthened to be made the same commensurate with
the size of the Company and nature of its business.
(viii) We are informed that the Central Government has prescribed
maintenance of Cost Records under section 209 (1)(d) of the Act. w.e.f.
Financial Year 2011-12.
(ix) (a) According to the records and information and explanations
given to us, the Company is generally regular in depositing undisputed
statutory dues including Provident Fund, Employee' State Insurance,
Service Tax, Custom Duty, Cess and other material statutory dues with
the appropriate authorities to the extent applicable and there are
undisputed statutory dues payable for a period of more than six months
from the date they became payable as at 31st March 2012 are Provident
Fund(Rs.1,067.09 thousands), Service Tax(Rs.2,039.33 thousands) and
Bonus (Rs. 1483.68 thousands). It is to be read with note no.2.9 of
Notes to the Financial Statements.
(b) According to the records and information & explanations given to
us, there are no dues in respect of sales Tax, income tax, custom duty,
wealth tax, service tax, excise duty and cess that have not been
deposited with the appropriate authorities on account of any dispute.
However this is to be read with note no 2.9 of Notes to the Financial
Statements.
(x) Accumulated losses of the Company at the end of the financial year
do not exceed 50% of its net worth (as per Balance Sheet including
Revaluation Reserve). It has incurred cash loss of Rs. 39,145.28
thousands in the current financial year, though there was a cash profit
of Rs 23,877.82 thousands in the immediate preceding financial year.
(xi) In our opinion, on the basis of audit procedures and according to
the information and explanations given to us, the company had defaulted
on one time settlement (OTS) arrived at with SASF on 26th July, 2008,
consequently, fresh OTS was made with SASF vide SASF letter dated 26th
February, 2011, which also could not be complied with in full and on
request of the company, SASF vide its letter dated 24th April 2012 has
agreed to extend the OTS till 31st July 2012 (read with Note No.2.5 (i)
& (ii) of Notes to the Financial Statements).
Further, the company has not paid interest on the loan taken from
Syndicate Bank against pledge of fixed deposits, and the cumulated
interest payable amounts to Rs.588.74 thousands (P.Y. Rs. 481.43
thousands).
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/ or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The company is not a chit fund or a nidhi/ mutual benefit
fund/society, therefore, provisions of clause 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.
(xv) In our opinion, on the basis of information and explanations given
to us, the short terms loans were applied for the purposes for which
the loans were obtained during the year.
(xvi) On the basis of information and explanations given to us and on
an overall examination of the financial statements of the company, no
funds raised during the year on short term basis have been used for
long term investment.
(xvii) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties /
companies covered in the Register maintained under section 301 of the
Act during the financial year 2011-12. However, the company has, during
the financial year 2012- 13, made preferential allotment of shares and
warrants to promoters, against the money received in the financial year
2011-12 (refer Note no.2.3 and 2.4 of Notes to the Financial
Statements)
(xviii) The company has not issued any debentures during the year.
(xix) The company has not raised any money through a public issue
during the year.
(xx) Based on audit procedure performed and on the basis of information
and explanations provided by the management and to the best of our
Knowledge and belief read with comments in audit report in Para 2(vi)
above, no material fraud on or by the company has been noticed or
reported during the course of our audit nor we have been informed of
any such case by the management.
For GIRI & BANSAL
Chartered Accountants
(N. P. BANSAL)
New Delhi Partner
Date: 26th May 2012 Membership No.: - 80319
Mar 31, 2010
We have audited the attached Balance Sheet of JAIN STUDIOS LIMITED as
at 31st March 2010, the Profit & Loss Account and also the Cash Flow
Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of Companys management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
1. As required by the Companies (Auditors Report) Order, 2004 (as
amended) (The Order) issued by the Central Government of India in terms
of Section 227 (4A) of the Companies Act, 1956 (The Act), and on the
basis of such examination of books and records of the company as we
considered proper and the information and explanations given to us
during the course of our audit, we annex a statement on the matters
specified in the paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred in Paragraph 1
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 read with our comments in para 2 (vi) below.
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, read with our comments in para 2(i) above.
iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts.
iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the mandatory
Accounting Standards (AS) referred to in sub section (3C) of section
211 of the companies Act, 1956 except as stated in para (vi)(a) below
regarding accounting of income [AS 9-Revenue Recognition]
v) As per the information and explanations given to us, none of the
directors is disqualified from being appointed as a director in terms
of clause (g) of sub-section (1) of section 274 of the Companies Act,
1956.
vi) Attention is invited to:
a) In respect of non-provision against shortfall in recovery
(amount-unascertainable) against overdue and other debts amounting to
Rs 181,354.47 thousand; accounting of uplinking license fees amounting
to Rs 24,000 thousands as per terms of agreement which is pending
necessary approvals and our inability to comment on realisability/
recoverability thereof.
b) In respect of non confirmation/reconciliation and non availability
of documents in support and audit trail of balances of debtors, loans
and advances, sundry creditors and other current liabilities (including
statutory dues), banks and secured loans and income and expenditure
accounted for during the year and contingent liabilities considered as
ascertained by the management, consequential impact where of presently
cannot be ascertained and our inability to comment on correctness and
completeness.
c) In respect of transfer of Provident Fund amount payable of Rs.
2286.78 thousands (net) to Social Security Fund A/c, and regarding
write back of sundry balances/excess provision written back amounting
to Rs.2217.33 thousands based on management perception and our inability
to comment thereon. Further in respect of non-payment of certain statutory
dues and non filing of certain statutory returns/ forms w.r.t. Employees
state Insurance, Provident Fund, Tax deducted at source, Service tax, custom
duty, Fringe Benefit tax and other and accounting of penalty, interest, etc.
(amount unascer -tainable) and our inability to comment thereon.
d) In respect of recognition and carry over of deferred tax assets
(net) to the extent as stated in said note, based on management
perception (note no. 13 of schedule S) and MAT credit entitlement of
amounting to Rs. 2645.30 thousands recognized and carried over based on
management perception (note no. 17 of schedule S) and our inability to
comment thereon.
e) In respect of management perception about recoverable amount of the
fixed assets (including the assets held for disposal) (Impairment of
assets: AS-28) and of investments (Accounting for Investments: AS- 13)
of the company being more than carrying amount; and our inability to
comment thereon.
f) In respect of non provision of the liability for Custom Duty saved
as per EPCG Scheme, which becomes payable on account of shortfall of
exports over the years; and our inability to comment thereon.
We further report that the profit for the year, balance in profit &
loss account and respective assets and liabilities are without
considering the impact of items referred to in paragraphs 2(vi) (a)
to (e) a bo ve or otherwise, the effect of which could not be
determined.
Subject to the foregoing, in our opinion, and to the best of our
information and according to the explanations given to us, the said
accounts read together with Notes thereon, 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;
i) In the case of Balance Sheet, of the state of affairs of the Company
as at 31st March 2010;
ii) In the case of the Profit & Loss Account, of the Profit for the
year ended on that date; and
iii) In the case of Cash Flow Statement, of the Cash Flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph (1) of our Report of even date of JAIN
STUDIOS LIMITED for the year ended 31st March 2010.)
(i) (a) Fixed assets records showing full particulars including
quantitative details and situation of fixed assets are under process of
updation/ completion.
(b) According to the information and explanations given to us, the
company has a phased programme of verification of its fixed assets,
however physical verification of fixed assets carried out during the
year is not as per the programme and also discrepancy, if any, on such
verification has not been determined, hence cannot be commented upon by
us. In our opinion, the frequency of verification needs to be further
strengthened to be made the same reasonable with regard to the size of
the Company.
(c) As per the records and information and explanations given to us,
fixed assets disposed off during the year were not substantial.
(ii) The company has no inventory other than WIP (feature film), hence
provisions of clause 4(ii)
(a) and (b) of the order are not applicable and records of inventory
are updated.
(iii) As per the information and explanations given to us, the company
has neither granted nor taken any loans, secured or unsecured, to/from
companies, firms or other parties listed in the Register maintained
under section 301 of the Act. Accordingly, the provisions of clauses 4
(iii) (b) to (d), (f) & (g) of the Order are not applicable.
(iv) According to the information and explanations given to us, having
regard to the explanations that some of the items purchased/ contracts
for services availed/ provided are of special nature and suitable
alternative sources do not exists for obtaining comparable quotations
(read with our comment in para 2(vi) above and note no. 13(b) of
Schedule S), internal control system needs to be further strengthened
to be made the same commensurate with the size of the company and the
nature of its business, for the purchase of inventory and fixed assets,
expenditures and for the sale of services.
(v) Based on the audit procedures performed and according to the
information and explanations given to us, there are no contracts or
arrangements referred to in section 301 of the Act that need to be
entered into register required to be maintained under that section,
accordingly provisions of clause 4 (v)(b) of the Order is not
applicable.
(vi) According to the information and explanations given to us, the
company has not accepted any deposits from the public within the
meaning of section 58A and 58AA or any other relevant provisions of the
Act and rules framed thereunder and directives issued by Reserve Bank
of India or any other relevant provisions of the Act. We have been
informed that no order has been passed by Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal in this regard.
(vii) In our opinion, the Company has an internal audit system, which
need to be further strengthened to be made the same commensurate with
the size of the Company and nature of its business.
(viii)We are informed that the Central Government has not prescribed
maintenance of Cost Records under section 209 (1)(d) of the Act.
(ix) (a) According to the records and information and explanations
given to us, the Company is generally regular in depositing undisputed
statutory dues including Provident Fund, Employee State Insurance,
Service Tax, Custom Duty, Cess and other material statutory dues with
the appropriate authorities to the extent applicable (Sales Tax and
Excise Duty are not applicable to the company) and there are undisputed
statutory dues payable for a period of more than six months from the
date they became payable as at 31st March 2010 are Employees State
lnsurance(Rs.848.69 thousands), Tax Deduction at Source (Rs. 4,191.13
thousands), Fringe Benefit Tax (Rs. 340.94 thousands) and Bonus (Rs.
1415.01 thousands). It is to be read together with comments in Para no
2(vi) (b) & (c) above and note no. 6 of Schedule S.
(b) According to the records and information & explanations given to
us, there are no dues in respect of sales Tax, income tax, custom duty,
wealth tax, service tax, excise duty and cess that have not been
deposited with the appropriate authorities on account of any dispute.
However this is to be read with note no 6 of schedule S and our
comments in para no 2(vi) (c) above.
(x) Accumulated losses of the Company at the end of the financial year
do not exceed 50% of its net worth. It has incurred cash loss of Rs.
12,820.19 thousands in the current financial year , though there was a
cash loss of Rs 41,988.68 thousands in the immediate preceding
financial year . However, it is to be read together with comments in
audit report in Para 2(vi) above in respect of unquantified
qualifications, effect of which could not be determined.
(xi) In our opinion, on the basis of audit procedures and according to
the information and explanations given to us, the company has not
deposited the dues to Financial Institutions. The company has delayed
(after restructuring on 26.07.2008) in repayment of principal amount of
Rs.210,000.00 thousands and subsequent approval of SASF vide its letter
dated 8th December 2009, wherein the SASF has relaxed payment of
interest by way of capitalization of the interest with certain terms
and conditions and therefore , the principal amount payable as on
31.03.2010 is Rs. 228,746.93thousands (after fresh approval) and
maximum amount of interest of Rs.18,362.78 thousands for a maximum
period of 114 days to SASF which since has been settled for one time
settlement and fresh proposal for revised settlement of repayment terms
has been forwarded to SASF (refer Note no. 3 of Schedule S).
Further, the company has not paid interest on the loan taken from
Syndicate Bank against pledge of fixed deposits, and the cumulated
interest payable amounts to Rs. 409.89 thousands (P.Y. Rs. 334.89
thousands).
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/ or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii)The company is not a chit fund or a nidhi/ mutual benefit
fund/society, therefore, provisions of clause 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.
(xv) In our opinion, on the basis of information and explanations given
to us, the short terms loans were applied for the purposes for which
the loans were obtained during the year.
(xvi)On the basis of information and explanations given to us and on an
overall examination of the financial statements of the company, no
funds raised during the year on short term basis have been used for
long term investment.
(xvii) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties /
companies covered in the Register maintained under section 301 of the
Act, and we are of the opinion that the price at which shares have been
issued is not prejudicial to the interest of the company.
(xviii) The company has not issued any debentures during the year.
(xix)The company has not raised any money through a public issue during
the year.
(xx) Based on audit procedure performed and on the basis of information
and explanations provided by the management and to the best of our
Knowledge and belief read with comments in audit report in Para 2(vi)
above, no material fraud on or by the company has been noticed or
reported during the course of our audit nor we have been informed of
any such case by the management.
For GIRI & BANSAL
Chartered Accountants
(N. P. BANSAL)
Partner
Membership No.: - 80319
New Delhi
Date: 27th May 2010
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