Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying financial statements of KSS LIMITED (âthe companyâ),which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss(including other comprehensive Income), the Cash Flow Statement and the statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the state of affairs (financial position), Profit or loss (financial Performance including other comprehensive income), change in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd. ASâ) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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.
Auditorâs 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 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 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 auditorâs 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 Companyâs preparation of the financial statements that give 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 Companyâs 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 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 including Ind. AS specified under section 133 of the Act, of the state of affairs (financial position) of the company as at 31st March 2018, and its profit and loss account (financial performance including other comprehensive Income),its cash flow and the changes in equity for the year ended on that date.
Emphasis of Matters
a. We draw attention to the Note 32 to the financial statement for a demand of Rs 734.06 Lacs excluding interest and penalty under section 142 of the Custom Act 1962. Custom department freeze/attached the various assets and bank accounts against the said recovery. Based on legal Opinion obtained, the company is of the view that said demand contesting. Provision has been considered by the management in these financial statements. Our opinion is not qualified in respect of this matter.
b. We draw attention to the Note 32 to the financial statement for a demand of Rs 1035.05 Lacs including the interest and penalty under MVAT. In line with film industry consensus, the Company is of the opinion that there are no grounds for levying VAT Based on legal Opinion obtained; the company is of the view that said demand contesting. Hence, no provision has been considered by the management in these financial statements. Our opinion is not qualified in respect of this matter.
c. Notes to the financial statements which describe the uncertainty related to the outcome of the pendencyâs of appeals and legal matters filed by the company as well as against the company.
Our opinion is not modified in respect of these matters.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub section (11) of section 143 of the Act, we give in the âAnnexure Aâ statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. Further to our comments in Annexure A, 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 appears from our examination of those books;
c) The Balance sheet, statement of profit and loss (including other comprehensive income), the statement of changes in Equity and statement of cash flows dealt with by this report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply with Ind. AS specified under section 133 of the Act;
e) In our opinion, the matter described under the Emphasis of Matter Para above may have an adverse effect on the functioning of the Company;
f) on the basis of written representations received from the directors as on 31st march, 2018, taken on record by the board of directors, none of the directors is disqualified as on 31st march, 2018, from being appointed as a director in terms of section 164(2) of the act;
g) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls refer to our separate report in âannexure Bâ; and
h) With respect to the other matters included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rule 2014 in our opinion 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 financial statements Refer to Note No. 32;
ii. The Company does not have any long-term contracts including derivatives contracts for which any provision is required;
iii. The Company is not required to transfer amounts to the Investor Education and Protection Fund.
iv. The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made since requirement does not pertain to financial year ended 31 march 2018.
Annexure A to the Standalone Auditorsâ Report-31 March 2018 on the standalone Ind AS financial statements
The Annexure referred to in Independent Auditorsâ Report to the members of the KSS Limited on the standalone financial statements for the year ended 31 March 2018, we report that:
i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of all fixed assets.
(b) The Company has regular Programme of physical verification of its fixed assets at reasonable intervals; no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii. The Company is a service company. Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable to the company.
iii. The Company has granted loans corporate covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ).
S/no |
Name of Company |
Opening Balance |
Loan given |
Repay/Adjusted |
Closing Balance |
1. |
Birla Jewels Limited |
158.48 |
32.00 |
160.00 |
30.48 |
2. |
Birla Gold and Precious Metals Limited |
319.14 |
739.76 |
320.22 |
738.68 |
3. |
K Sera Sera Box office Pvt. Limited |
79.65 |
80.73 |
80.75 |
79.63 |
4. |
K Sera Sera Productions FZE *(Foreign exch. Gain) |
443.75 |
31.93 |
*27.06 |
448.62 |
a. In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the bodies corporate listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.
b. In the case of the loans granted to the bodies corporate listed in the register maintained under Section 189 of the Act have been regular in the payment of the principle and interest as stipulated.
c. There are no overdue amounts in respect of the loan granted to body corporate listed in the register maintained under Section 189 of the Act.
iv. In our opinion and according to the information and explanations given to us, provisions of section 186 of the Act in respect of loans and advances given, investments made and, guarantees given has been complied with by the Company. The provisions of section 185 in respect of loans to directors including entities in which they are interested and provisions of section 186 with respect to securities given are not applicable to the Company and hence not commented upon
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
vi. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.
vii. (a) According to the information and explanation given to us and records examined by us, the company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities. According to the information and explanation given to us, there were no undisputed amounts payable in respect of Income Tax, and any other statutory dues outstanding as on 31st March, 2018 for a period more than six months from the date they became payable.
(b) According to the information and explanations given to us, the dues in respect of Income Tax, Sales Tax, wealth Tax, Value Added Tax, Service tax customs duty, have not been deposited with the appropriate authorities on account of dispute and the forum where the disputes are pending are as given below:
(Amount in Lacs)
Nature of Statues |
Nature of Dues |
Amount |
Period for which amount related |
Forum where dispute is pending |
MVAT- 2002 |
Value Added taxes |
1,035.05 |
F.Y. 2005-06 to 201011 |
Joint Commissioner of Sales Tax, Mumbai |
Income tax Act-1961 |
Income tax |
887.68 |
A.Y. 2006-07 to 2013-14 |
ITAT Mumbai |
Custom Act 1962 |
Custom duty |
734.06 |
2009-10 to 2010-11 |
Writ petition filed in Honâble high Court Mumbai Demand U/s 114A of Customs Act, |
(c) Demand of Rs 734.06 Lacs excluding the interest and penalty under section 142 of the Custom Act 1962. Custom department freeze/attached the various assets and bank accounts against the said recovery. Based on legal Opinion obtained, the company is of the view that said demand contesting. Provision has been considered by the management in these financial statements. Our opinion is not qualified in respect of this matter.
(d) Demand of Rs 1035.05 Lacs including the interest and penalty under MVAT. In line with film industry consensus, the Company is of the opinion that there are no grounds for levying VAT Based on legal Opinion obtained; the company is of the view that said demand contesting. Hence, no provision has been considered by the management in these financial statements. Our opinion is not qualified in respect of this matter
viii. The Company does not have any loans or borrowings from any financial institution, banks, government or debenture holders during the year. Accordingly, paragraph 3(viii) of the Order is not applicable.
ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable.
x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi. According to the information and explanations given to us and based on our examination of our records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Indian accounting standards.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or person connected with him as referred to in section 192 of the Act.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure B to the Independent Auditorsâ Report of the even date on the standalone financial statement of KSS Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
To the member of KSS Limited
We have audited the internal financial controls over financial reporting of KSS LIMITED (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ 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 âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 auditorsâ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A 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, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Agrawal Jain and Gupta
Chartered Accountants
ICAI Firm Reg. No. 013538C
Sd/-
CA Narayan Swami
PARTNER
Membership No. 409759
Place: Mumbai
Dated: 05/06/2018
Mar 31, 2016
INDEPENDENT AUDITORSâ REPORT TO THE MEMBERS OF KSS LIMITED Report on the Standalone Financial Statements
We have audited the accompanying financial statements of KSS LIMITED (âthe companyâ),which comprise the Balance Sheet as at 31 March 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.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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.
Auditorâs 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 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 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 auditorâs 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 Companyâs preparation of the financial statements that give 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 Companyâs 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 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 statement of affairs of the company as at 31st March 2016, and profit and loss account and its cash flow for the year ended on that date.
Emphasis of Matters
The reports should be read together with the Notes to the financial statements and attention to following matters be given:
a) Notes to the financial statements which describe the uncertainty related to the outcome of the pendencyâs of appeals and legal matters filed by the company as well as against the company.
Our opinion is not modified in respect of these matters.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2015 (âthe Orderâ) issued by the Central Government of India in terms of sub section (11) of section 143 of the Act, we give in the âAnnexure Aâ statement on the matters specified in the paragraph 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 appears from our examination of those books;
c) the Balance Sheet, the 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 section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014;
e) on the basis of written representations received from the directors as on 31st March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164(2) of the Act;
f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate report in âAnnexure Bâ; and
g) With respect to the other matters included in the Auditorâs Report and to our 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 financial statements;
ii. The Company does not have any long-term contracts including derivatives contracts for which any provision is required;
iii. The Company is not required to transfer amounts to the Investor Education and Protection Fund.
The Annexure referred to in Independent Auditorsâ Report to the members of the KSS Limited on the standalone financial statements for the year ended 31 March 2016, we report that:
(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of all fixed assets.
(b) The Company has regular programme of physical verification of its fixed assets at reasonable intervals; no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) The Company is a service company. Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable to the company.
(iii) The Company has granted loans corporate covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ).
(Amount in lacs)
Sr. No. |
Name of Company |
Opening Balance |
Loan given |
Repay/ Adjusted |
Max amount |
Closing Balance |
1. |
Birla Jewels Limited (Formerly Known as K Bazzar Online trading Pvt. Limited) |
5.29 |
107.00 |
99.00 |
107.00 |
13.29 |
2. |
Birla Gold and Precious Metals Limited |
NIL |
262.00 |
100.40 |
161.60 |
161.60 |
3. |
K Sera Sera Box office Pvt Limited |
77.34 |
0.08 |
0.00 |
77.42 |
77.42 |
4. |
K Sera Sera Productions FZE * (Foreign Exchange Gain) |
428.53 |
* 24.40 |
452.93 |
452.93 |
(a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the bodies corporate listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.
(b) In the case of the loans granted to the bodies corporate listed in the register maintained under Section 189 of the Act have been regular in the payment of the principle and interest as stipulated.
(c) There are no overdue amounts in respect of the loan granted to body corporate listed in the register maintained under Section 189 of the Act.
(iv) The Company in respect of loans, investments, guarantees and security the provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.
(v) The Company has not accepted any deposits from the public.
(vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.
(vii) (a) According to the information and explanation given to us and records examined by us, the company is regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities. According to the information and explanation given to us, there were no undisputed amounts payable in respect of Income Tax, Excise Duty, cess and any other statutory dues outstanding as on 31st March, 2016 for a period more than six months from the date they became payable.
(b) According to the information and explanations given to us, the dues in respect of Income Tax, Sales Tax, wealth Tax, Value Added Tax, Service tax customs duty, Excise or Cess have not been deposited with the appropriate authorities on account of dispute and the forum where the disputes are pending are as given below:
Name of the Statute |
Period to which amount relates |
Section |
Appeal filed by |
Amount in Lacs (Rs.) |
Forum where dispute is pending |
|
Income Tax Act 1961 |
A.Y. 2004-05 A.Y. 2004-05 A.Y. 2005-06 A.Y. 2005-06 A.Y. 2006-07 A.Y. 2007-08 A.Y. 2007-08 A.Y. 2008-09 A.Y. 2011-12 |
271 (1) (c) 143 (3) r.w.s. 153A 271 (1) (c) 143 (3) r.w.s. 153A 271 (1) (c) 271 (1) (c) 143 (3) r.w.s. 153A 143 (3) 143 (3) r.w.s. 144C |
Assessee Assessee Assessee Assessee Assessee Assessee Assessee Assessee Assessee |
3.63 12.89 8.91 7.05 30.85 47.02 19.45 50.54 186.20 |
Income Tax Appellate Tribunal (Mumbai) |
|
A.Y. 2012-13 |
143 (3) r.w.s. 144C |
Assessee |
95.02 |
DRP(Dispute Resolution Panel) |
|
|
Maharashtra Value Added Tax, 2002 |
F.Y. 2005-06 F.Y. 2007-08 F.Y. 2008-09 F.Y. 2010-11 |
Business audit matters Business audit matters Business audit matters Business audit matters |
Assessee Assessee Assessee Assessee |
180.64 494.67 333.19 26.54 |
Joint Commissioner of Sales Tax, Mumbai |
|
Custom Duty, The Custom Act 1962. CBEC |
F.Y. 2009-10 |
Under section 112(a), 114AA and 28 of the Customs Act, 1962. |
Assessee |
734.06 |
Writ petition filed in Hon''ble high Court Mumbai DemandU/s 114A of Customs Act, 1962. |
|
* In line with film industry consensus, the Company is of the opinion that there are no grounds for levying VAT on film distribution activity and hence no provision is made in the books of accounts for these years. The same is disclosed as contingent liability under Notes to Accounts.
** The company, having IEC number 0306007649, export rights of several films produced by them and/or for which, the distribution rights were purchased/ acquired by them in the past. By exporting distribution rights of the films in the territories abroad, KSS did import of various capital goods including 400 digital cinematographic projectors under EPCG Scheme - concessional rate of duty 3% with the proper compliances. Under EPCG Scheme company have to export eight times (approx 4500.00 lacs) of duty saved within eight years, but till date company did not export under the said obligation.
(viii) The Company does not have any loans or borrowings from any financial institution, banks, government or debenture holders during the year. Accordingly, paragraph 3(viii) of the Order is not applicable.
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us and based on our examination of our records of the Company, the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or person connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Annexure B to the Auditorsâ Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of KSS LIMITED (âthe Companyâ) as of 31st March, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 auditorsâ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (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 companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 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 Institute of Chartered Accountants of India
For Agrawal Jain and Gupta
Chartered Accountants
Firm Reg. No. 013538C
CA Narayan Swami
Partner
Membership No. 409759
Place: Mumbai Dated: 30th May, 2016
Mar 31, 2015
We have audited the accompanying financial statements of KSS LIMITED
("the company"),which comprise the Balance Sheet as at March31, 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 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 the maintenance of
adequate accounting records in accordance with the provision of the Act
for safeguarding of the assets of the Company and for preventing and
detecting the 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 internal financial control, 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 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 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
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 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 statement of
affairs of the company as at March31, 2015, and profit and loss account
and its cash flow for the year ended on that date.
Emphasis of Matters
The reports should be read together with the Notes to the financial
statements and attention to following matters be given:
a) Notes to the financial statements which describe the uncertainty
related to the outcome of the pendencies of appeals and legal matters
filed by the company as well as against the company.
Our opinion is not modified in respect of these matters.
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. 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 appears from our examination of those
books.
c) the Balance Sheet, the 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
section 133 of the Companies Act, 2013, read with rule 7 of the
Companies (Accounts) Rules, 2014.
e) On the basis of written representations received from the directors
as on 31 March, 2015, taken on record by the Board of Directors, none
of the directors is disqualified as on 31 March, 2015, from being
appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the other matters included in the Auditor's Report
and to our best of our information and according to the explanations
given to us:
i. The Company has disclosed the impact of pending litigations on
itsfinancial position in itsfinancial statements; ii. The Company does
not have any long-term contracts including derivatives contracts for
which any provision is
required; iii. The Company is not required to transfer amounts to the
Investor Education and Protection Fund.
Additional Information annexed to the Independent Auditors' Report
(I) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of all fixed
assets.
(b) We are informed that these fixed assets have been physically
verified by the management at reasonable intervals;
no material discrepancies were noticed on such verification.
(c) The company has not disposed of any substantial part of its fixed
assets so as to affect its going concern status;
(ii) (a) As explained to us, physical verification of inventory has
been conducted at reasonable Intervals by the management, in our
opinion the frequency of such verification is reasonable.
(b) As per the information given to us, the procedures of physical
verification of inventory followed by the management are in our opinion
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 in our
opinion, discrepancies noticed on physical verification of inventory
were not material in relation to the operations of the Company and the
same have been properly dealt with in the books of account.
(iii) (a)The Company has granted loans four bodies corporate covered in
the register maintained under section 189 of the Companies Act, 2013
('the Act').
(Amount in lacs)
S/no. Name of Company Opening Loan given Repay
Balance
1. K Sra sera Box office 54.78 22.56 0.00
Pvt Limited
2. K Sera Sera Miniplex 10.34 5.47 74.01
Limited
3. K Sera Sera Productions 409.52 19.01 -
FZE *(Foreign exch. Gain)
Max amount Closing Balance
K Sra sera Box office 77.34 77.34
K Sera Sera Miniplex (63.65) (58.20)
K Sera Sera Productions 428.53 428.53
(b) In our opinion, the terms and conditions of such interest free
advances are not, prima facie, prejudicial to the interest of the
Company.
(c) The above interest free advances would be adjusted on the purchase
of film rights or On completion of films as applicable, and in
accordance with the terms and conditions Stipulated in the agreement,
Advances are given by the company to wholly owned subsidiaries
companies.
(d) The above interest free advances given by the Company would be
adjusted, on the purchase of film rights completion of films, as
applicable, and therefore there are no amounts overdue in respect of
advances as at the year end. Accordingly, the provisions of clause
4(iii) (d) of the Order are not applicable.
(e) The Company has not taken interest free advances from parties
covered under the register maintained under Section 189 of the Act.
(iv) According to the information and explanation given to us, there is
an adequate internal control procedure 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. According to the
information and explanation given to us, we have not come across
continuing failure to any to correct major weaknesses in internal
control;
(v) According to the information and explanation given to us and
records examined by us, The Company has not accepted any deposits from
the public during the year.
(Amount in Lacs)
S/no Name of Company Opening Interest given Repay Closing
Balance Balance
1. Aruna Vijay Patil 0.50 0.05 0.55 NIL
2. Bharat Ramanilal
Navlakhi 0.25 0.03 0.28 NIL
3. Dinanath Anant
Choukekar 0.25 0.03 0.28 NIL
4. Satish R. Panchariya 1.00 0.11 1.11 NIL
5. Vasant Jiji Chavan 0.50 .07 0.57 NIL
6. Md. Shahid Raza Khan 0.12 .02 0.14 NIL
Total 2.62 0.31 2.93 NIL
(vi) We are informed that Maintenance of cost records has been
prescribed by the Central Government under sub-section (1) of section
148 of the Act, are not applicable to the company.
(vii) (a) According to the information and explanation given to us and
records examined by us, the company is generally regular in depositing
undisputed statutory dues including Income Tax, Excise Duty, cess and
any other statutory dues with the appropriate authorities. According to
the information and explanation given to us, there were no undisputed
amounts payable in respect of Income Tax, Excise Duty, cess and any
other statutory dues outstanding as on 31st March, 2015 for a period
more than six months from the date they became payable, except as
follows:
(b) According to the information and explanations given to us, the dues
in respect of Income Tax and Sales Tax that have not been deposited
with the appropriate authorities on account of dispute and the forum
where the disputes are pending are as given below:
Name of Period to Section Appeal filed
the which amount by
Statute relates
A.Y. 2004-05 271 (1) (c) Department
A.Y. 2004-05 271 (1) (c) Assessee
A.Y. 2004-05 143 (3) r.w.s. 153A Assessee
A.Y. 2004-05 143 (3) r.w.s. 153A Department
Income A.Y. 2005-06 271 (1) (c) Assessee
Tax om Act A.Y. 2005-06 143 (3) r.w.s. 153A Assessee
1961 A.Y. 2007-08 271 (1) (c) Department
A.Y. 2007-08 143 (3) r.w.s. 153A Assessee
A.Y. 2007-08 143 (3) r.w.s. 153A Assessee
A.Y. 2007-08 143 (3) r.w.s. 153A Department
A.Y. 2008-09 143 (3) r.w.s. 153A Assessee
A.Y. 2008-09 143 (3) Department
A.Y. 2009-10 143 (3) Assessee
A.Y. 2010-11 143 (3) r.w.s. 144C Assessee
A.Y. 2011-12 143 (3) r.w.s. 144C Assessee
F.Y. 2005-06
Maharas F.Y. 2006-07
htra
Value F.Y. 2007-08
AddTax
2002 F.Y. 2008-09
F.Y. 2010-11
Custom F.Y. 2009-10 Under section 112(a),
Duty, 114AA and 28 of the
The Custom Act 1962.
Custom
Act 1962
CBEC
Amount in Closing Balance Lacs (Rs.)
12.89
3.63
4.74
3.97
8.91 Income Tax
7.25 Appellate Tribunal
- Mumbai
69.16
19.45
47.73
131.73
120.52 Appeal to be Filed
before Honble
high Court
196.70 Income Tax
Appellate Tribunal
- Mumbai
95.02 DRP(Dispute
Resolution Panel)
165.63
15.07
Joint Commissioner
494.67 of Sales Tax, Mumbai
333.19
26.54
582.96 approx Commissioner of Customs,
ACC, Sahar, and Deputy
commissioner of Custom,
Mumbai
* In line with film industry consensus, the Company is of the opinion
that there are no grounds for levying VAT onfilm distribution activity
and hence no provision is made in the books of accounts for these
years. The same is disclosed as contingent liability under Notes to
Accounts.
** The company, having IEC number 0306007649, export rights of
Several films produced by them and/or for which, the distribution rights
were purchased/ acquired by them in the past. By exporting distribution
rights of the films in the territories abroad, KSS did import of
various capital goods including 400 digital cinematographic projectors
under EPCG Scheme - concessional rate of duty 3% with the proper
compliances. Under EPCG Scheme company have to export eight times
(approx 4500.00 lacs) of duty saved within eight years, but till date
company did not export under the said obligation.
(c) According to the information and explanations given to us, the
company has not defaulted in transfer of amount to Investor Education
and Protection Fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made. Accordingly, the
provisions of clause 3(vii) (c) of the Order are not applicable.
(viii) The company has 4271.93 lacs accumulated losses as at 31st
March, 2015 and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year;
(ix) According to the records of the company examined by us, and the
information and explanation given to us, the company has not defaulted
in repayment of dues to any bank as at the balance sheet date;
(x) According to the information and explanation given to us, the
company has not given any guarantee for loans taken by others from bank
or financial institutions;
S/no. Name of Bank Amount and Case no/ [Remarks
1 Standard Chartered
Bank OA 62 of 2008 Against outstanding Bank
Guarantee given to
Twenty Twenty
Television Company
Ltd. Of Rs. 160.40
in DRT at Mumbai.
(xi) According to the information and explanation given to us and
records examined by us, we have not come across any such cases where
the funds raised on short-term basis have been used for long-term
investments and vice versa;
(xii) According to the information and explanation given to us and
records examined by us, there has not been any fraud on or by the
company has been noticed or reported during the year;
FOR Agrawal Jain and Gupta.
Chartered Accountants
Firm Reg. No. 013538C
CA Narayan Swami
PARTNER
Membership No. 409759
Place: Mumbai
Dated:29.05.2015
Mar 31, 2014
We have audited the accompanying financial statements of KSS LIMITED
(Formerly known as K Sera Sera Limited) which comprise the Balance
Sheet as at March 31, 2014 and 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.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 misstatements ,whether
due to fraud and 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 Standards on auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with the
ethical requirements plan and perform the audit to obtained reasonable
assurance about whether the financial statements are free from material
misstatements.
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 judgement, including the
assessment of the risk of material misstatements 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 expressing an opinion on the
effectiveness of entity''s internal control. An audit also includes
evaluating the appropriateness of accounting policies and the
reasonableness of accounting estimates made by management, as well as
evaluating the overall financial statement.
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 Profit and Loss Account, of the profit/ loss for
the year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash flow 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 term of sub
section (4A) of the 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. Required by section 227(3) of the act, 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
these books.
(iii) The Balance Sheet and 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 statements comply with the accounting standards referred to
in sub-section (3C) of Section 211 of the Companies Act, 1956;
(v) On the basis of written representation 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 Section 274(1)(g) of the Companies
Act, 1956.
Annexure to the Independent Auditors'' Report
Of the even date of member of KSS Limited on the financial statement
for the year ended 31st march 2014
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, We report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management at
reasonable intervals, which in our opinion, is considered reasonable
having regard to the size of the Company and the nature of its assets.
No material discrepancies were noticed on such verifications.
(c) In our opinion, a substantial part of fixed assets has not been
dispose off during the year,
(ii) The Company has a policy of treating motion pictures under
production as inventory till the date of release/agreement whichever is
earlier. Consequently, there is no tangible inventory carried by the
Company. Accordingly, the provisions of Paragraph 4(ii) of the said
Order are not applicable to the Company.
(iii) (a) The company has granted interest free advances to five
parties covered the register maintained under section 301 of the
Companies Act, 1956. As below
(Amount in lacs)
S/no. Name of Opening Loan Reply Max Closing
Company Balance given amount Balance
1. K Bazzar Online
trading Pvt.
Limited 5.17 0.08 - 5.25 5.25
2. K Kampus Education
Private Limited 8.58 12.62 21.20 12.47 NIL
3. K Sra sera
Box office
Pvt Limited (252.87) 307.83 0.19 547.79 54.77
4. K Sera Sera
Miniplex Limited 624.75 1443.64 2058.05 699.31 10.34
5. K sera sera Fze 409.52 - - 409.52 409.52
(b) In our opinion, the terms and conditions of such interest free
advances are not, prima facie, prejudicial to the interest of the
Company.
(c) The above interest free advances would be adjusted on the purchase
of film rights or on completion of films as applicable, and in
accordance with the terms and conditions stipulated in the agreement,
Advances are given by the company to wholly owned subsidiaries
companies.
(d) The above interest free advances given by the Company would be
adjusted, on the purchase of film rights completion of films, as
applicable, and therefore there are no amounts overdue in respect of
advances as at the year end. Accordingly, the provisions of clause
4(iii)(d) of the Order are not applicable.
(e) The Company has not taken interest free advances from parties
covered under the register maintained under Section 301 of the Act.
(f) In our opinion, the terms and conditions of interest free advances
taken by the Company are not, prima facie, prejudicial to the interest
of the Company.
(g) Interest free advances would be adjusted against in accordance with
the terms and conditions stipulated in the agreement, Advance taken by
the company to wholly owned subsidiaries companies.
(iv) In our opinion, and according to the information and explanations
given to us, the Company''s internal control procedures for the purchase
of inventory and for the sale of goods and services needs to be further
strengthened so as to be commensurate with the size of the Company and
nature of its business. In respect of purchase of fixed assets, the
Company has adequate internal control procedures commensurate with the
size of the Company and nature of its business. During the course of
our audit, we have not observed any continuing failure to correct major
weakness in internal control system.
(v) (a) In our opinion the particulars of all contracts or arrangements
that need to be been entered in the register maintained under section
301 of the Companies Act, 1956 so entered Owing to the unique and
specialized nature of the items involved and in the absence of any
comparable prices, we are unable to comment as to whether the
transactions made in pursuance of such contracts or arrangements have
been made at the prevailing market prices at the relevant time.
(vi) In our opinion to the information and explanation given to us The
Company has complied with the provision of section 58A, 58AA or any
other applicable provision of the Companies Act, 1956 and the Companies
(Acceptance and Deposit) Rules 1975, with regard to the deposit
accepted from public. No order has been passed by the Company Law
Board, National Company Law Tribunal or Reserve bank of India or any
court or any other Tribunal.
(vii) The Company has an internal audit system, commensurate with the
size of the Company and the nature of its business.
(viii) As informed to us, the maintenance of cost records has not been
prescribed by the Central Government under clause (d) of sub- section
(1) of section 209 of the Companies Act, 1956 in respect of the
activities of the Company. Accordingly the provisions of Paragraph
4(viii) of the said Order are not applicable to the Company.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales tax, wealth-tax, service-tax, custom duty, excise duty, cess and
other material statutory dues, as applicable, have been regularly
deposited with the appropriate authorities and there have been
significant delays in a below cases. Undisputed amounts payable in
respect thereof, which were outstanding at the year-end for a period of
more than six months from the date they became payable are as follows.
(x)
Name of the Nature of Amount Period to Due Date Date of
statute the dues which the Payment
amount
relates
Finance Act, Service 2007 to 30.06.2014
1994 Tax 28.75 *Lacs March 2014
Service Tax
*Statutory liabilities of Service tax company has applied for Voluntary
Compliance Encouragement Scheme,2014 as per Notification No:
10/2014-Service tax- Tax due Declare Rs 57,49,701/- amount of Rs
28,74,851/-to paid 30th December 2014, Remaining Before 30th June 2014
Rs 28,74,850/-
(b) The dues outstanding in respect of sales-tax, income-tax, custom
duty, wealth-tax, excise duty, cess on account of any dispute are as
follows.
Name of Nature of Amount Period to
the statute the dues which the
amount relates
Maharashtra Value Value Added *Rs 17.71 Lacks F.Y. 20065-07
Added Tax Act, 2002 Tax (Gross) Rs 314.67 Lacks F.Y. 2009-10
Value Added Amount of other
Tax (Gross) years liabilities
is still not
certain by the
Authority
Income Tax Act,
1961 Income tax Income Tax **417.14 Laks A.Y. 2009-10
CBEC- details Custom duty Amount of 2009-10
regarding matter liabilities is
pending before CIU still not certain
by the Authority
* In line with film industry consensus, the Company is of the opinion
that there are no grounds for levying VAT on film distribution activity
and hence no provision is made in the books of accounts for these
years. The same is disclosed as contingent liability under Notes to
Accounts.
Company appeal against the said orders of in higher authority.
** Company appeal against the said orders of income tax in higher
authority.
(xi) After considering the effect of quantified qualification, in our
opinion and according to the information and explanations given to us,
the accumulated losses of the Company at the end of the financial year
does not exceed fifty percent of its net worth. The Company has not
incurred cash losses during the current financial year and also in the
immediately preceding financial year.
(xii) In our opinion, and on the basis of our examination and according
to the information and explanations given to us, the Company has not
defaulted in repayment of its dues to financial institutions :
(xiii) In our opinion, and on the basis of our examination and
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. Accordingly the
provisions of Paragraph 4(xii) of the said Order are not applicable to
the Company.
(xiv) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Accordingly, the provisions of Paragraph 4(xiii)
of the said Order are not applicable to the Company.
(xv) The Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of
Paragraph 4(xiv) of the said Order are not applicable to the Company.
(xvi) According to the information and explanations given to us, the
Company has given guarantee to the Company as reflected in Note no 3 to
Schedule ''S''.
(xvii) According to the information and explanations given to us that
the company had not raised any term loan.
(xviii) On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term
basis, which have been used for long-term purposes.
(xix) The Company has not made preferential allotment of shares to the
parties covered in the register maintained under section 301 of the
Companies Act, 1956. Accordingly, the provisions of Paragraph 4(xviii)
of the said Order are not applicable to the Company.
(xx) The Company has not issued any debentures during the year.
Accordingly, the provisions of Paragraph 4(xix) of the said Order are
not applicable to the Company.
(xxi) During the year the Company has partly restructured the Bank loan
by issuing Fully Convertible Warrants as stated in Notes.
(xxii) To the best of our knowledge and belief, and according to the
information and explanations given to us, there have been no cases of
fraud on or by the Company noticed or reported during the year.
For Agrawal Jain & Gupta
Chartered Accountants
FRN:013538C
CA Nitesh Agrawal
Partner
M. No -406155
Mumbai, 30th May 2014
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying financial statements of KSS
LIMITED (Formerly known as K Sera Sera Limited) which comprise the
Balance Sheet as at March 31, 2013 and 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
2. 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
211of the Companies Act ,1956.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 misstatements ,whether
due to fraud and 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 Standards on auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with the
ethical requirements plan and perform the audit to obtained reasonable
assurance about whether the financial statements are free from material
misstatements.
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 risk of material misstatements 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 and the reasonableness of
accounting estimates made by management, as well as evaluating the
overall financial statement.
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 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 Profit and Loss Account, of the profit/ loss for
the year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash flow 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("the Order") issued by the Central Government of India in term
of sub section (4A) of the section 227 of the Act, we give in the
annexure a statement on the matters specified in paragraphs 4 and 5 of
the order:
8. Required by section 227(3) of the act, 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
these books.
(iii) The Balance Sheet and 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 statements comply with the accounting standards referred to
in sub-section (3C) of Section 211 of the Companies Act, 1956;
(v) On the basis of written representation 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 Section 274 (1)(g) of the Companies
Act 1956.
Of the even date of member of KSS Limited on the financial statement
for the year ended 31st march 2013
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, We report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management at
reasonable intervals, which in our opinion, is considered reasonable
having regard to the size of the Company and the nature of its assets.
No material discrepancies were noticed on such verifications.
(c) In our opinion, a substantial part of fixed assets has not been
dispose off during the year,
(ii) The Company has a policy of treating motion pictures under
production as inventory till the date of release/agreement whichever is
earlier. Consequently, there is no tangible inventory carried by the
Company. Accordingly, the provisions of Paragraph 4(ii) of the said
Order are not applicable to the Company.
(iii) (a) The company has granted interest free
advances to five parties covered the register maintained under section
301 of the Companies Act 1956 the Maximum amount outstanding during the
year is 1214.15 lacs and the year ended balance 970.36 lacs.
(b) In our opinion, the terms and conditions of such interest free
advances are not, prima facie, prejudicial to the interest of the
Company.
(c) The above interest free advances would be adjusted on the purchase
of film rights or on completion of films as applicable, and in
accordance with the terms and conditions stipulated in the agreement.
Advance given by the company to wholly owned subsidiaries companies.
(d) The above interest free advances given by the Company would be
adjusted, on the purchase of film rights completion of films, as
applicable, and therefore there are no amounts overdue in respect of
advances as at the year end. Accordingly, the provisions of clause
4(iii)(d) of the Order are not applicable.
(e) The Company has taken interest free advances from two parties
covered under the register maintained under Section 301 of the Act. The
maximum amount outstanding during the year is 735.68 lacs and the
year-end balance is 283.60 lacs.
(f) In our opinion, the terms and conditions of interest free advances
taken by the Company are not, prima facie, prejudicial to the interest
of the Company.
(g) Interest free advances would be adjusted against in accordance with
the terms and conditions stipulated in the agreement. Advance taken by
the company to wholly owned subsidiaries companies.
(iv) In our opinion, and according to the information and explanations
given to us, the Company''s internal control procedures for the
purchase of inventory and for the sale of goods and services needs to
be further strengthened so as to be commensurate with the size of the
Company and nature of its business. In respect of purchase of fixed
assets, the Company has adequate internal control procedures
commensurate with the size of the Company and nature of its business.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system.
(v) (a) In our opinion the particulars of all contracts or arrangements
that need to be been entered in the register maintained under section
301 of the Companies Act, 1956 so entered Owing to the unique and
specialized nature of the items involved and in the absence of any
comparable prices, we are unable to comment as to whether the
transactions made in pursuance of such contracts or arrangements have
been made at the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public to which
the directives issued by the Reserve Bank of India and the provisions
of section 58A, 58AA and any other relevant provisions of the Companies
Act, 1956 and the rules framed there under are applicable. Accordingly,
the provisions of Paragraph 4(vi) of the said Order are not applicable
to the Company.
(vii) The Company has an internal audit system, commensurate with the
size of the Company and the nature of its business.
(viii) As informed to us, the maintenance of cost records has not been
prescribed by the Central Government under clause (d) of sub-section
(1) of section 209 of the Companies Act, 1956 in respect of the
activities of the Company. Accordingly the provisions of Paragraph
4(viii) of the said Order are not applicable to the Company.
(ix) (a) Undisputed statutory dues including provident
fund, investor education and protection fund, employees'' state
insurance, income-tax, sales tax, wealth-tax, service-tax, custom duty,
excise duty, cess and other material statutory dues, as applicable,
have not been regularly deposited with the appropriate authorities and
there have been significant delays in a large number of cases.
Undisputed amounts payable in respect thereof, which were outstanding
at the year-end for a period of more than six months from the date they
became payable are as follows.
Name Nature Amount Period Due Date
of the of the to which Date of
statute dues the Payment
relates amount
Finance Service 57.49 2007 to 31.12.2013
Act, 1994 Tax *Lacs March
Service 2013
Tax
* Statutory liabilities of Service tax company has applied
for Voluntary Compliance Encouragement Scheme,2013 as per Notification
No: 10/2013-Service tax- Tax due Declare Rs 57,49,701/-Minimum amount
to be paid 31st December 2013 Rs 28,74,851/-, Remaining Before 30th
June 2014 Rs 28,74,850/-
(b) The dues outstanding in respect of sales-tax, income-tax, custom
duty, wealth-tax, excise duty, cess on account of any dispute are as
follows.
Name Nature Amount Period
of the of the to
statute dues which the
amount
relates
Maharashtra Value * Amount of F.Y.
Value Added Added liabilities is 2005-06
Tax Act, 2002 Tax still not to
Value Added (Gross) certain 2012-13
Tax (Gross) by the
Authority
certain
Income
Tax Act, Income **336.14 A.Y.
1961 Tax lakhs 2003-04
Income tax to
2009-10
CBEC - details Custom Amount of 2009-10
regarding
matter duty liabilities is
pending before still not
CIU certain by
the Authority
* In line with film industry consensus, the Company is of the opinion
that there are no grounds for levying VAT on film distribution activity
and hence no provision is made in the books of accounts for these
years. The same is disclosed as contingent liability under Notes to
Accounts.
** Company appeal against the said orders of income tax in higher
authority.
(x) After considering the effect of quantified qualification, in our
opinion and according to the information and explanations given to us,
the accumulated losses of the Company at the end of the financial year
does not exceed fifty percent of its net worth. The Company has not
incurred cash losses during the current financial year and also in the
immediately preceding financial year.
(xi) In our opinion, and on the basis of our examination and according
to the information and explanations given to us, the Company has not
defaulted in repayment of its dues to financial institutions :
(xii) In our opinion, and on the basis of our examination and 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. Accordingly the
provisions of Paragraph 4(xii) of the said 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 of Paragraph 4(xiii)
of the said Order are not applicable to the Company.
(xiv) The Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of
Paragraph 4(xiv) of the said Order are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee to the Company as reflected in Note no 3 to
Schedule''S''.
(xvi) According to the information and explanations given to us that
the company had not raised any term loan.
(xvii) On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short- term
basis, which have been used for long-term purposes.
(xviii) The Company has not made preferential allotment of shares to
the parties covered in the register maintained under section 301 of the
Companies Act, 1956. Accordingly, the provisions of Paragraph 4(xviii)
of the said Order are not applicable to the Company.
(xix) The Company has not issued any debentures during the year.
Accordingly, the provisions of Paragraph 4(xix) of the said Order are
not applicable to the Company.
(xx) During the year the Company has partly restructured the Bank loan
by issuing Fully Convertible Warrants as stated in Notes.
(xxi) To the best of our knowledge and belief, and according to the
information and explanations given to us, there have been no cases of
fraud on or by the Company noticed or reported during the year.
For Agrawal Jain & Gupta
Chartered Accountants
FRN: 013538C
CA Narayan Swami
Partner
M. No - 409759
Mumbai, 30th May 2013
Mar 31, 2011
1. We have audited the attached balance sheet of K Sera Sera Limited
('the Company') as at March 31, 2011, the profit and loss account and
also the cash flow statement of the Company for the year ended on that
date (all together referred to as the 'financial statements'). 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 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.
3. As required by the Companies (Auditor's Report) Order, 2003 ('the
said Order') issued by the Central Government of India in terms of sub-
section (4A) of section 227 of the Companies Act, 1956 (The Act'), we
enclose in the Annexure, a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report 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 law have
been kept by the Company, so far as appears from our examination of
those books;
c. the balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
d. in our opinion, the balance sheet, the profit and loss account and
cash flow statement comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956;
e. on the basis of the written representations received from the
directors, and taken on record by the board of directors, we report
that none of the directors are disqualified as on March 31,2011 from
being appointed as a director 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 explanation given to us, the said financial statements, read with
the notes thereon give the information required by the Companies Act,
1956, in the manner so required and give a true and fair view in
conformity with the Accounting Principles Generally Accepted in India;
i. in the case of the balance sheet, of the state of affairs of the
Company as at March 31,2011;
ii. in the case of the profit and loss account, of the loss of the
Company for the year ended on that date; and
iii. in the case of the cash flow statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO AUDITORS' REPORT
(Referred to in paragraph 4 of our report to the members of K Sera Sera
Limited of even date)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management at
reasonable intervals, which in our opinion, is considered reasonable
having regard to the size of the Company and the nature of its assets.
No material discrepancies were noticed on such verifications.
(c) The Company has not disposed off a substantial part of fixed assets
during the year, and accordingly, going concern is not affected.
(ii) The Company has a policy of treating motion pictures under
production as inventory till the date of release/agreement whichever is
earlier. Consequently, there is no tangible inventory carried by the
Company. Accordingly, the provisions of Paragraph 4(ii) of the said
Order are not applicable to the Company.
(iii) According to the information and explanations given to us, the
Company has not taken any loan, secured or unsecured from companies,
firms or other parties listed in the register maintained under section
301 of the Companies Act 1956. Accordingly, Paragraph 4(iii) of the
said Order is not applicable to the Company.
(iv) In our opinion, and according to the information and explanations
given to us, the Company's internal control procedures for the purchase
of inventory and for the sale of goods and services needs to be further
strengthened so as to be commensurate with the size of the Company and
nature of its business. In respect of purchase of fixed assets, the
Company has adequate internal control procedures commensurate with the
size of the Company and nature of its business. During the course of
our audit, we have not observed any continuing failure to correct major
weakness in internal control system.
(v) In our opinion and according to the information and explanations
given to us, there are no transactions that need to be been entered in
the register maintained under section 301 of the Companies Act, 1956.
(vi) The Company has not accepted any deposits from the public to which
the directives issued by the Reserve Bank of India and the provisions
of section 58A, 58AAand any other relevant provisions of the Companies
Act, 1956 and the rules framed there under are applicable. Accordingly,
the provisions of Paragraph 4(vi) of the said Order are not applicable
to the Company.
(vii) The Company has an internal audit system, commensurate with the
size of the Company and the nature of its business.
(viii)As informed to us, the maintenance of cost records has not been
prescribed by the Central Government under clause (d) of sub- section
(1) of section 209 of the Companies Act, 1956 in respect of the
activities of the Company. Accordingly the provisions of Paragraph
4(viii) of the said Order are not applicable to the Company.
(ix) (a) According to the information and explanations given to us,
except for delays in depositing tax deducted at source, the Company is
generally regular in depositing undisputed statutory dues including
provident fund, investors education and protection fund, employees'
state insurance, income-tax, service tax, excise duty, custom duty,
cess and any other statutory dues as applicable, with the appropriate
authorities during the year. Except arrears of outstanding Income Tax
Demand pertaining to period 2006-07 amounting to Rs.4,18,94,580/- as at
the end of the financial year, and the company had filed appeal against
the said order. There are no outstanding Statutory dues except above
as at the last day of the financial year concerned for a period of more
than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of sales tax, income-tax, wealth tax, service tax, custom
duty, excise duty and cess which have not been deposited on account of
any dispute.
(x) After considering the effect of quantified qualification, in our
opinion and according to the information and explanations given to us,
the accumulated losses of the Company at the end of the financial year
does not exceed fifty percent of its net worth. The Company has not
incurred cash losses during the current financial year and also in the
immediately preceding financial year.
(xi) In our opinion, and on the basis of our examination and according
to the information and explanations given to us, the Company has not
defaulted in repayment of its dues to financial institutions:
(xii) In our opinion, and on the basis of our examination and 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. Accordingly the
provisions of Paragraph 4(xii) 1 of the said 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 of Paragraph 4(xiii)
of the said Order are not applicable to the Company.
(xiv) The Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of
Paragraph 4(xiv) of the said Order are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee to the Company as reflected in Note no 3 to
Schedule'S'.
(xvi) According to the information and explanations given to us that
the company had not raised any term loan.
(xvii) On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term
basis, which have been used for long-term purposes.
(xviii) The Company has not made preferential allotment of shares to
the parties covered in the register maintained under section 301 of the
Companies Act, 1956. Accordingly, the provisions of Paragraph 4(xviii)
of the said Order are not applicable to the Company.
(xix) The Company has not issued any debentures during the year.
Accordingly, the provisions of Paragraph 4(xix) of the said Order are
not applicable to the Company.
(xx) Previous year the Company has partly restructured the Bank loan by
issuing Fully Convertible Bonds which is still not yet converted in
equity share as stated in Note no.8 of schedule's'.
(xxi) To the best of our knowledge and belief, and according to the
information and explanations given to us, there have been no cases of
fraud on or by the Company noticed or reported during the year.
For Agrawal Jain & Gupta
Chartered Accountants
FRN : 013538C
CA Narayan Swami
Partner
M. No-409759
Mumbai, 30th May2011
Mar 31, 2010
1. We have audited the attached balance sheet of K Sera Sera
Productions Limited (the Company) as at March 31, 2010, the profit
and loss account and also the cash flow statement of the Company for
the year ended on that date (all together referred to as the financial
statements). 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 whetherthe
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 (Auditors Report) Order, 2003 (the
said Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the CompaniesAct, 1956 (The Act),
we enclose in the Annexure, a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our coThe most diverrs to in paragraph 3 above, 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 law have
been kept by the Company, so far as appears from our examination of
those books;
c. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
d. In our opinion, the balance sheet, the profit and loss account and
cash flow statement comply with the accounting standards referred to in
sub- section (3C) of section 211 of the Companies Act, 1956;
e. On the basis of the written representations received from the
directors, and taken on record by the board of directors, we report
that none of the directors are disqualified as on March 31, 2010 from
being appointed as a director under clause (g) of sub-section (1) of
section 274 of the CompaniesAct, 1956;
f. In our opinion and to the best of our information and according to
the explanation given to us, the said financial statements, read with
the notes thereon give the information required by the CompaniesAct,
1956, in the manner so required and give a true and fair view in
conformity with the Accounting Principles Generally Accepted in India;
i. In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2010;
ii. In the case of the Profit and Loss account, of the loss of the
Company for the year ended on that date; and
iii. In the case of the cash flow statement, of the Company for the
year ended on that date.
Annexure to Auditors Report (Referred to in paragraph 4 of our report
to the members of K Sera Sera Productions Limited of even date)
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management at
reasonable intervals, which in our opinion, is considered reasonable
having regard to the size of the Company and the nature of its assets.
No material discrepancies were noticed on such verifications.
(c) The Company has not disposed off a substantial part of fixed assets
during the year, and accordingly, going concern is not affected.
(ii) The Company has a policy of treating motion pictures under
production as inventory till the date of release/ agreement whichever
is earlier. Consequently, there is no tangible inventory carried by the
Company. Accordingly, the provisions of Paragraph 4(ii) of the said
Order are not applicable to the Company.
(iii) According to the information and explanations given to us, the
Company has not taken any loan, secured or unsecured from companies, f
irms or other parties listed in the register maintained under section
301 of the Companies Act 1956. Accordingly, Paragraph 4(iii) of the
said Order is not applicable to the Company.
(iv) In our opinion, and according to the information and explanations
given to us, the Companys internal control procedures for the purchase
of inventory and forthe sale of goods and services needs to be further
strengthened so as to be commensurate with the size of the Company and
nature of its business. In respect of purchase of fixed assets, the
Company has adequate internal control procedures commensurate wiThe
most divers nature of its business. Dunng the course of our audit, we
have not observed any continuing failure to correct majorweakness in
internal control system.
(vi) The Company has not accepted any deposits from the public to which
the directives issued by the Reserve Bank of India and the provisions
of section 58A, 58AA and any other relevant provisions of the Companies
Act, 1956 and the rules framed there under are applicable. Accordingly,
the provisions of Paragraph 4(vi) of the said Order are not applicable
to the Company.
(vii) The Company has an internal audit system, commensurate with the
size of the Company and the nature of its business.
(viii) As informed to us, the maintenance of cost records has not been
prescribed by the Central Government under clause (d) of sub-section
(1) of section 209 of the Companies Act, 1956 in respect of the
activities f of the Company. Accordingly the provisions of Paragraph
4(viii) of the said Order are not applicable to the Company.
(ix) (a) According to the information and explanations given to us,
except for delays in depositing tax deducted at source, the Company is
generally regular in depositing undisputed statutory dues including
provident fund, investors education and protection fund, employees
state insurance, income-tax, service tax, excise duty, custom duty,
cess and any other statutory dues as applicable, with the appropriate
authorities during the year. Except arrears of outstanding Income Tax
Demand pertaining to period 2006- 07 amounting to Rs.4,18,94,580/- as
at the end of the financial year, and the company had filed appeal
against the said order. There are no outstanding Statutory dues except
above as at the last day of the financial year concerned for a period
of more than six months from the date they became payable.
According to the information and explanations given to us, there
are no dues of sales tax, income-tax, wealth tax, service tax, custom
duty, excise duty and cess which have not been deposited on account of
any dispute.
(x) After considering the effect of quantified qualification, in our
opinion and according to the information and explanations given to us,
the accumulated losses of the Company at the end of the financial year
does not exceed fifty percent of its net worth. The Company has not
incurred cash losses during the current financial year and also in the
immediately preceding financial year.
(xi) In our opinion, and on the basis of our examination and according
to the information and explanations given to us, the Company has not
defaulted in repayment of its dues to financial institutions:
(xii) In our opinion, and on the basis of our examination and 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. Accordingly the
provisions of Paragraph 4(xii) of the said 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 of Paragraph
4(xiii) of the said Order are not applicable to the Company.
(xiv) The Company is not dealing in ortrading in shares, securities,
debentures and other investments. Accordingly, the provisions of
Paragraph 4(xiv) of the said Order are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee to the Company as reflected in Note no 3 to
ScheduleS.
(xvi) According to the information and explanations given to us that
the company had not raised any term loan.
(xvii) On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short-term
basis, which have been used for long-term purposes.
(xviii) The Company has not made preferential allotment of shares to
the parties covered in the register maintained under section 301 of the
Companies Act, 1956. Accordingly, the provisions of Paragraph 4(xviii)
of the said Order are not applicable to the Company.
(xix) The Company has not issued any debentures during the year.
Accordingly, the provisions of Paragraph 4(xix) of the said Order are
not applicable to the Company.
(xx) During the year the Company has partly restructured the Bank loan
by issuing Fully Convertible Warrants as stated in Note no.8 of
schedule S.
(xxi) To the best of our knowledge and belief, and according to the
information and explanations given to us, there have been no cases of
fraud on or by the Company noticed or reported during the year.
For Agrawal Jain & Gupta
Chartered Accountants
FRN:013538C
CA Narayan Swami
Partner
M. No-409759
Mumbai, 26th May 2010
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