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Auditor Report of Khyati Multimedia Entertainment Ltd.

Mar 31, 2014

We have audited the accompanying financial statement, of Khyati Multimedia Entertainment Limited 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.

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.

Auditor''s 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 evidences 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 merit of the financial statements, whether due to fraud or error. In making those risk assessments the auditor considers internal controls 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 statement of Profit and Loss, of the loss for the year ended on that date;

(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, 2003 ("the Order") Issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give In the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order

2 As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit:

b In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books,

c The Balance Sheet Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956:

e On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014. from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956

ANNEXURE TO THE AUDITOR''S REPORT

(I) (a) In our opinion and according to the information and explanation given to us. the company has maintained all the relevant records showing full particulars including quantitative details and situation of fixed assets.

(b) In our opinion, the fixed assets have been physically verified by the management at reasonable intervals having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The company has not disposed off any fixed assets during the year.

(2) As company is not having any kind of stock the Clauses 4(ii) of the Companies (Auditor''s Report) Order''2003 is not applicable is not applicable to the Company.

(3) (a) The company has not granted Loan to any party covered in the register maintained under Section 301 of the companies Act, 1956. Hence. Clause 4(iii)(a) to (d) of the Order is not applicable to he company.

(b) The company has Liken unsecured loan from one party covered in the register maintained under section 301 of the companies Act. 1956. The maximum amount Involved during the year is Rs. 179.82 lakhs and the year end balance of such party is Rs. 135.72 lakhs.

(c) As per the information and explanation given to us unsecured loans taken By the company are interests free and repayable on demand and hence are prima facie not prejudicial to the interest of the company.

(d) As per the information and explanation given to us unsecured loans taken by the company is repayable on demand and interest free.

(4) In our opinion and according to the information and explanation given to us. there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to the purchase of inventory. fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

(5) According to the information and explanation given to us, during the year, there were no transactions that need to be entered into the register maintained under section 301 of the Companies Act. 1956. Accordingly , paragraph (v) (a) and (b) of the order, arc not applicable.

(6) In our opinion and according to the information and explanations given to us, the company not accepted any deposits from the public which falls within the provisions of section 58 A and 58 AA of the Companies Act. 1956. and the rules framed there under

(7) The company has no formal internal audit system. However, in our opinion there are adequate internal control procedures commensurate with the size and nature of its business.

(8) To the best of know ledge and according to the information given to us, the Central Government has not prescribed maintenance of cost record under section 209 (1) (d) of the Companies Act, 1956.

(9) (a) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the company is regular in depositing undisputed statutory dues Including Provident Fund, Investor education protection fund, Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess and other statutory dues to the extent applicable with the appropriate authorities.

(b) According to information and explanation given to us, the following are the details of the sales Tax, Income Tax. Customs Duty, Wealth T ax or Cess or other statutory due which has not been deposited on account of any dispute.

Nature of Amount Forum where It Dues (Rs..) is pending

Provident Rs. 2,00,750/- Provident fund Fund Appellate Tribunal New Delhi, which has remanded the Case to APFC. Ahmedabad

(10) In our opinion, accumulated losses of the Company are more than 50% of its net worth. The Company has incurred cash losses in the financial year under report and in the immediately preceding financial year.

(11) According to the records of the company examined by us and the information and explanations given to us, the company hud not defaulted in repayment of dues to bank in earlier years.

(12) According to the information & explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provision of clause 4(xiii) of the companies (Auditor''s Report) order. 2003 are not applicable to the company

(14) 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 arc not applicable to the company.

(15) According to the information & explanations given to us, the company has not given any guarantees for the loans taken by others from banks or financial institutions

(16) In our opinion and as per the information given to us as the company has not taken term loan during the year.

(17) According to the information and explanations given to us and on an overall examination of the balance sheet of the company. we report that the no funds raised on short term basis have been used for long term investment.

(18) According to the information and explanation 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.

(19) According to the information and explanations given to us, Company has not issued any debenture during the year. Hence reporting on the question of securitization does not arise.

(20) The company has not raised any fund by way of public issues during the Year hence the Clause 4(xx) of the Order is not applicable.

(21) Based upon the audit procedures performed and on the basis of information and explanation provided by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For, DJNV & CO. Chartered Accountants (Firm Reg. No: 115145W)

Devang Dector Place: Ahmedabad Partner Date: 30/05/14 Membership No: 39833


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Khyati Multimedia Entertainment Limited, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit

ii 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 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 antrols relevant to the Company''s preparation and fair presentation of the financial statements in order to design

iii procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of counting policies used and the reasonableness of the accounting estimates made by management, as well as ewkiatingthe overall presentation of the financial statementsrWe believe that the audit evidence we have obtained ssufficient and appropriate to provide a basis for our audit opinion.

Opinion

opinion and to the best of our information and according to the explanations given to us, the financial merits 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:

(aj 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 statement of Profit and Loss, of the loss for the year ended on that date ;

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Reoort) Government of India in terms of sub-seotion a statement on the matters specified in

2. As required by section 227(3) of the Act, we report that: with by this Keport are in agreement with the books of account; y

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and

On the basis of written representations received from the directors as on March 2011 and token on record by the Board of Directors, none of the directors not issued any notification a, to the rate at which the cess is to be paid under sectron 441A of the Companies Act, 1956 nor has it issued any

(1) (a) In our opinion and according to the information and explanation given to us, the company has maintained all the relevant records showing full particulars including quantitative details and situation of fixed assets.

(b) In our opinion, the fixed assets have been physically verified by the management at reasonable intervals having regard to the size of the company and the nature of its assets. No material discrepai ties were noticed on such verification.

(c) The company has not disposed off any fixed assets during the year.

(2) As company is not having any kind of stock the Clauses 4(ii) of the Companies (Auditor''s Report) Order''2003 is not applicable is not applicable to the Company.

(3) (a) The company has not granted Loan to any party covered in the register maintained under Section 301 of the companies Act, 1956. Hence, Clause 4(iii)(a) to ''d) of the Order is not applicable to he company.

(b)The company has taken unsecured loan from Two party covered in the register maintained under section 301 of the companies Act, 1956.The maximum amount involved during the year is Rs.187.13 lakhs and the yeai end balance of such party is Rs. 179.41 lakhs.

(c) As per the information and explanation given to us unsecured loans taken by the company are interest free and repayable on demand and hence are prima facie net prejudicial to the interest of the company.

(d) As per the information and explanation given to us unsecured loans taken by the company is repayable on demand and interest free.

(4) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to the purchase of inventory,- fixed assets and with regard CO the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

(5) According to the information and explanation given to us, during the year, there were no transactions that need to be entered into the register maintained under section 301 of the Companies Act,1956. Accordingly, paragraph (v) (a) and (b) of the order, are not applicable.

(6) In our opinion and according to the information and explanations given to us, the company not accepted any deposits from the public which falls within the provisions of section 58 A and 58 AA of the Companies Act, 1956, and the rules framed there under

(7) The company has" no formal internal audit system. However, in our opinion there are adequate internal control procedures commensurate with the size and nature of its business.

(8) To the best of knowledge and. according to the information given to us, the Central Government has not prescribed maintenance of cost record under section 209 (1) (d) of the Companies Act, 1956.

(9) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the company is regular in depositing undisputed statutory duer including Provident Fund, Investor education protection fund, Employee State Insurance Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty'' Excise Duty, Cess and other statutory dues to the extent applicable with the appropriate authorities.

(10) In our opinion, accumulated losses of the Company are more than 50% of its net worth. The Company has incurred cash losses-in-the financial year under report and in the immediately preceding financial year.

(11) According to the records of the company examined by us and the information and explanations given to us, the company had defaulted in repayment of dues to bank in earlier years and has now opted for One time settlement with the bank. The Company is regular in paying the installments of One time settlement with the bank.

According to the information & explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(12) According to the information & sxplanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provision of clause 4(xiii) of the companies (Auditor''s Report) order, 2003 are not applicable to the company

(14) In our opinion, the company is not dealing in o.* trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) order, 2003 are not applicable to the company.

(15) According to the information & explanations given to us, the company has not given any guarantees for the loans taken by others from banks or financial institutions

(16) In our opinion and as per the information given to us as the company has taken term loan during the year.

(17) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no hinds raised on short term basis have been used for long term investment.

(18) According to the information and explanation 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.

(19) According to the information and explanations given to us, Company has not issued any debenture during the year. Hence reporting on the question of securitization does not arise.

(20) The company has not raised any fund, by way of pubiic issues during the - Year hence the Clause 4(xx) of the Order is not applicable,

(21) Based upon the audit procedures perfonned and on the basis of information and explanation provided by the management, we report that no fraud on or by the company has been noticed or reported during ths year.

DATE: 10TH JULY, 2013 By Order of the BoardofDirectors

PLACE: Ahmedabad. Of Khyati Multimedia Entertainment Limited

Sd/-

(Kartik J. Patel)

Chairman And Managing Director.


Mar 31, 2011

We have audited the attached Balance Sheet of KHYATI MULTIMEDIA ENTERTAINMENT LIMITED for the year ended 31st March, 2011 and the Profit & 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.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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.

2. As required by the Companies ( Auditor's Report ) Order, 2003 and the Companies (Auditor's Report) (Amendment) Order , 2004 issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956 we enclose in the Annexure a statement on the matter specified in paragraphs 4 & 5 of the said order.

3. 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 purposes of our audit;

(b) In our opinion, proper books of account as required by the law have been kept by the company so far as appears from our examination of the books;

(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the Books of Account;

(d) In our opinion, the Balance Sheet and Profit and Loss Account & Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Companies Act, 1956.

(e) On the basis of written representations received from the Directors of the company as at March 31, 2011 and taken on record by the board of directors, we report that no director is disqualified from being appointed as director of the company under clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Accounting Policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true & fair view;

(I) In case of the Balance Sheet, of the state of Affairs of the company as at 31st March, 2011.

(II) In case of the Profit & Loss Account, of the Loss for the year ended on that date.

(III) In case of the cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

(1) (a) In our opinion and according to the information and explanation given to us, the company has maintained all the relevant records showing full particulars including quantitative details and situation of fixed assets.

(b) In our opinion, the fixed assets have been physically verified by the management at reasonable intervals having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion, the disposal of fixed assets during the year does not affect the going concern assumption.

(2) As company is not having any kind of stock the Clauses 4(ii) of the Companies

(Auditor's Report) Order'2003 is not applicable is not applicable to the Company.

(3) a) The company has not granted Loan to any party covered in the register maintained under Section 301 of the companies Act, 1956. Hence, Clause 4 (iii) (a) to (d) of the Order is not applicable to the Company.

b) The company has taken unsecured loan from one party covered in the register maintained under section 301 of the companies Act, 1956.The maximum amount involved during the year is Rs.14.75 and the year end balance of such party is Rs.Nil.

c) As per the information and explanation given to us unsecured loans taken by the company is prima-facie prejudicial to the interest of the company.

d) As per the information and explanation given to us unsecured loans taken by the company is repayable on demand.

(4) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to the purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

(5) According to the information and explanation given to us, during the year, there were no transactions that need to be entered into the register maintained under section 301 of the Companies Act,1956. Accordingly, paragraph (v) (a) and (b) of the order, are not applicable.

(6) In our opinion and according to the information and explanations given to us, the company not accepted any deposits from the public which falls within the provisions of section 58 A and 58 AA of the Companies Act, 1956, and the rules framed there under

(7) The company has no formal internal audit system. However, in our opinion there are adequate internal control procedures commensurate with the size and nature of its business.

(8) To the best of knowledge and according to the information given to us, the Central Government has not prescribed maintenance of cost record under section 209 (1) (d) of the Companies Act, 1956.

(9) a) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor education protection fund, Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

(b) According to information and explanation given to us, the following are the details of the sales Tax, Income Tax, Customs Duty, Wealth Tax or Cess which has not been deposited on account of any dispute.

Nature of Amount Forum where it Dues (Rs. In Lacs) is pending

Provident Fund Rs. 200750/- Provident fund Appellate Tribunal New Delhi, which has remanded the Case to APFC, Ahmedabad

(10) The company have accumulated losses at the end of the financial year and the company has incurred cash Loss during the financial year covered by our audit and also in the immediately preceding financial year.

(11) According to the records of the company examined by us and the information and explanations given to us, the company during the year has defaulted in repayment of dues to banks and the bank has been suspended from clearing operations.

(12) According to the information & explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provision of clause 4(xiii) of the companies (Auditor's Report) order, 2003 are not applicable to the comp

(14) 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 are not applicable to the company.

(15) According to the information & explanations given to us, the company has not given any guarantees for the loans taken by others from banks or financial institutions

(16) In our opinion and as per the information given to us as the company has taken term loan during the year.

(17) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short term basis have been used for long term investment.

(18) According to the information and explanation 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.

(19) According to the information and explanations given to us, Company has not issued any debenture during the year. Hence reporting on the question of securitization does not arise.

(20) The company has not raised any fund by way of public issues during the Year hence the Clause 4(xx) of the Order is not applicable.

(21) Based upon the audit procedures performed and on the basis of information and explanation provided by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For DJNV & CO.

Chartered Accountants

ICAI Regn No.115145W

Nainesh Khandhar

Partner

M.No.115145W

PLACE: AHMEDABAD

DATE: 02/09/2011


Mar 31, 2009

1. We have audited the attached Balance Sheet of KHYAT1 MULTIMEDIA ENTERTAINMENT LIMITED for the year endec 31st March, 2009 and the Profit & Loss Account for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial staiements are free of material misstatement. An audit includes examining, on a test basis. evidence supporting the amounts and disclosures in the financial statemerts. 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 ( Auditors Report ) Order. 2003 and (he Companies (Auditors Repcrt) {Amendment) Order , 2004 issued by ihe Central Government in terms of Section 227 (4A) of the Companies Act, 1956 we enclose in the Annexurc a statement on the matter specified in paragraphs 4 & 5 of the said order.

4. 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 purposes of our audit:

(b) In our opinion, proper books of account as required by the law have been kept by the company so far as appears from our examination of the books;

(c) The Balance Sheet, and Profit & Loss Account dealt with by this report are in agreement with the Books of Account;

(d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Companies Act, 1956.

(e) On the basis of written representations received from the Directors of the company as at March 31, 2009 and taken on record by the board of directors, we report that no director is disqualified from being appointed as director of the company under clause

(g) of sub- section (l) of section 274 of the Companies Act 1956.

(h) Subject to the above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Accounting Policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true & fair view:

(I) in case of the Balance Sheet , of the. state of Affairs of the company as at 31st March, 2009

(II) in case of the Profit & Loss Account , of the Loss for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

(1) (a) In our opinion and according to the information and explanation given, to us

the company has maintained all the relevant records showing lull particulars including quantitative details and situation of fixed assets.


(c) in our opinion, there is no disposal of fixed assets during the year & it does not affect the going concern assumption.

(2) (a) N.A.

(b) N.A.

(c) N.A.

(3) (a) The company has granted Loan to Khyati Finance covered in the register maintained under Section 301 of the companies Act,. 1956. The maximum amount involved during the year was Rs. 157 Lacs.And the year end balance of the loan granted to company is Rs. 14.24 Lacs.

(b) The rate of interest and other terms and condition of such loans are not, prima facie, prejudicial to the interest of the company.

(c) No term of repayment is prescribed for the loan granted mentioned above.

(d) In our opinion and according to information and explanation given to us, as there is no stipulation for repayment of loan,there is no over due amount of more then Rs. one Lacs.

(e) The company had not taken any loan, secured or unsecured from companies, firms or other party covered in the register maintained under section 301 of the companies Act, 1956.

(4) In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to the purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

(5) (a) The transaction that are required to be entered into die register in pursuance of section 301 of the act has been so entered.

(b) In our opinion and according to the information and explanation given to us, die transaction . made in pursuance of the contract or arrangements entered in the register maintained under section 301 of the companies Act, 1956 exceeding the value of rupees five lacs in respect of any party during the year have been made at price which arc reasonable having regard to prevailing market prices at that time.

(6) In our opinion and according to the information and explanations given to as. the company not accepted any deposits IVom the public which falls within the provisions of section :58 A and 53 A A of The Companies Act. 1956. and the rules framed there under.

(7) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(8) To ihe best of knowledge and according to the information given to us, The Central Government has not prescribed maintenance of cost record under section 209 (1 )(d) of the Companies Act 1956,

(9)(a) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor education protection fund, Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

(b) According to information and explanation given to us,the following are the details of the sales Tax, Income Tax, Customs Duty, Wealth Tax or Cess which has not been deposited on accouat of any dispute.

Nature of Amount Forum where it Dues (Rs. In Lacs) is pending

Provident Rs. 200750/- Provident fund Fund AppellateTribunal New Delhi, which Has remanded the Case to APFC, Ahmedabad

(10) The company have accumulated losses at the end of the financial year and the company has not incurred cash Loss during the financial year covered by our audit and the immediately preceding financial year.

(11) According to the records of the company examined by us and the information and explanations given to us, the company during the year has defaulted in repayment of dues to banks and the bank has been suspended from clearing operations.

(12) According to the information & explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provision of clause 4(xiii) of the companies (Auditors Report) order, 2003 are not applicable to the company.

14} in our opinion, the company is not dealing in or trading in shares, securities, debentures and other nivc-itincnB. Accordingly, the provisions of clause 4(xiv) of the Companies Auditors Report) order. 2003 are not applicable to the company.

15) According to the information & explanations given, to us, the company has not given any guarantees for the loans taken by others from hanks or financial institutions

(16) In our opinion rind as per the information given tc us as the company has not taken term loan so this clause is not applicable.

(17) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short term basis have been used for long term investment.

(18) According to the information and explanation 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.

(19) According to the information and explanations given to us, Company has not issued any debenture during the year. Hence reporting on the question of securatisation does not arise.

(20) The company has not raised any fund by way of public issues during the Year.

(21) Based upon the audit procedures performed and on the basis of information and explanation provided by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For DJNV & CO. Chartered Accountants

(VASANT PATEL )

Partner

PLACE: AHMEDABAD

DATE: 25/08/2009

 
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