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Auditor Report of Net 4 India Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of NET4 INDIA LIMITED, ("the Company"), which comprise the Balance Sheet as at March 31,2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors isresponsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the act') with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities' selection and application of appropriate accounting policies; makingudgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that are 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 standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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'sudgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. 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 andappropriate to provide a basis for our audit opinion on the standalone financial statements.

BASIS FOR QUALIFIED OPINION

j. ) During the financial year 2013-14 the Company had defaulted in repayment of principle and interest thereon of Term Loan from State Bank of India. Working Capital Loans taken from . State Bank of India. State Bank of Travancore and Loan against FDR from Canara Bank. All the loans had been classified as Non-Performing Assets(NPA) by these banks. The status of these loans & credit facilities have remained the same during the current financial year.

k. ) Income Tax demand of Rs.132.78Lacs (Approx.) from AY 2004-05 to AY 2011-12 not deposited and appeals have been filed or in the process of filing.

l. ) Service Tax Amounting to Rs.8.33Crores (net) (Approx.) upto 31st March 2015 not deposited.

m. ) Provident Fund and ESI amounting to Rs.59.13Lacs (Approx.) upto 31st March, 2015 not deposited.

n. ) TDS amounting to Rs.68.59 Lacs(Approx.) as on 31st March 2015 not deposited.

o. ) VAT liability for certain branches still to be deposited.

p. ) Fixed Deposit amounting to Rs. 13.77 crore (approx.) were due for repayment as on 31st March, 2015.

The company has written off bad debts amounting to Rs. 13.78Crores (Approx.) The company has no security for these debts. On the basis that no security has been obtained and no cash has been received on these debts, the company has written off bad debts thereby reducing the profit for the year (if any) and net assets at 31st March by that amount.

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March 2015, its profit/loss and its cash flows for the year ended on that date.

OTHER MATTER

As per statutory records produced before us and explanations given to us, our comment as follows:

(x) There were no Independent Directors in the company leading to non-compliance of the provisions of the listing Agreement as well as the Companies Act 2013.

(xi) There was no Woman Director in the Board of Directors of the company, leading to non- compliance of the applicable provision.

(xii) There was no Audit Committee for the year.

(xiii) There was no Nomination and Remuneration Committee for the year.

(xiv) There was no Risk Management Committee for the year.

(xv) There was no Shareholder's & Investor Grievance Committee for the year.

(xvi) There was no Internal Auditor for the year.

(xvii) Non-Compliance of provisions relating to public deposit i.e.as per the requirements of Company (Acceptance of Deposit) Rules, 1975 a company has to deposit or invest at least 15% of its deposits maturing during the financial year latest by 30th April 2014. This requirement has not been complied by the company.

(xviii) The company has not provided service tax liability under reverse charge mechanism for the year.

(xix) The company has litigations filed against it under various counts like under section 138 of Negotiable Instrument Act, Arbitration, petition filed by ex-employee for recovery of dues, winding up petition, etc. The number of cases is large although the exact number of cases was not made available to us. As per available information & explanation provided by the management, the quantum of amount on these cases cannot be ascertained.

(xx) The company had received winding up order from the Court on the basis of a petition filed by 2 companies due to non-repayment of loans. However, the company has obtained stay order from the court on the basis of repayment schedule submitted before it. The Court has stayed this order subject to payment of Rs. 25 Lacs in 4 weeks out of which Rs. 10 Lacs was paid immediately and for the balance, the company has time till 17thune, 2015.

(xxi) The company has written off bad debts amounting to Rs. 13.78 Crore (Approx). Our Opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order, 2015 ("theOrder") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 ofour knowledge and belief were necessary for the purpose of our audit;

b) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been keptby the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

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

d) Except for the effects of the matter described in the Basis for qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Account) Rules 2014.

e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

9) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the companies (Audit and Auditors) Rules, 2014 in our opinion and to the best of our information and according to the explanation given to us:

(i) The Company does have pending litigations which may have impact on its financial position. Refer Note no.40 of the "Notes to Accounts" of Balance Sheet.

(ii) The Company did not have any long term contracts including derivative contracts: as such the question of commenting on any material foreseeable losses thereon does not arise.

(iii) There has not been an occasion in case of the company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of NET4 INDIA LIMITED on the accounts of the company for the year ended 31st March 2015.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

4. (a) The company has maintained proper records showing full particulars quantitative details. However, situation of its fixed assets have not been mentioned.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(a) The physical verification of inventories was carried out by the management from time to time.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification and the same have been properly dealt with in the books of account.

6. (a) According to the information and explanations given to us and on the basis of our exmination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 189 of the Companies Act. Consequently, the provisions of clauses iii (a) and iii (b) of the order are not applicable to the Company.

In case of loans taken from other parties in earlier years, repayment of principle as well as interest has been irregular.

7 In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods& services except mentioned in Other Matter paragraph of Independent Auditor's Report. During the course of our audit, no major instance of continuing failure to correct anyweaknesses in the internal controls has been noticed.

8. The Company has not accepted any deposits from the public covered under section 73to 76 of the Companies Act, 2013 during the year. However, public deposits were accepted in earlier years. Earlier, deposits were governed by the provisions of Sections 58A of the Companies Act, 1956 and the rules framed thereunder relating to the deposits accepted, same were, wherever applicable, have not been complied with. The company has defaulted in repayment of principal and interest thereon w.e.f. August 2013.

During the financial year 2014-15, the company has paid amount of principle & interest of Rs. 25.34 Lac (approx.). Total amount payable (due plus overdue amount) as on 31.03.2015 was Rs. 13.77 Crore (approx.). During the year, the company had received 423 approx, complaints, out of which 84 approx, complaints were resolved.

As per explanation and records produced, the reason for default has been due to heavy losses resulting to cash crunch in the company leading to bouncing of cheques issued towards repayment of deposits (principal and interest). This has also lead to closure of the bank account from where cheques had been issued.

It has also come to our notice that due to default in repayment of deposits by the company some of the investors have issued notices to the company in order to instigate proceedings against the company before the Court or Company Law Board or National Company Law Tribunal under relevant sections of The Companies Act and Negotiable Instruments Act (against cheque bouncing) for repayment or winding up.

Further, as per the requirements of Company (Acceptance of Deposit) Rules, 1975 a company has to deposit or invest at least 15% of its deposits maturing during the financial year latest by 30th April 2014 i.e. in the beginning of the year in any of the specified assets which could be utilised for repayment of deposits maturing during the year but at no time the amount shall fall below 10% of the amount maturing

before 31st of that year. However, the company has not complied with this provision of the clause.

As per further information & explanation provided to us, the company has filed a repayment scheme with the Company Law Board for rescheduling payments to FD Holders. In the interim, the company has paid interest and principal to a number of FD holders who demonstrated genuine hardship cases. The company has also forwarded their revival plan, which include paying FD holders as per the scheme, settling all statutory dues and also setting all overdue debts.

9 As per information & explanation given by the management, maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 148 of the Act and hence this clause is not applicable to the company.

10. (a) According to the records of the company, 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 to the extent applicable and any other statutory dues have not been regularly deposited with the appropriate authorities. According to the information and explanations given to us, there were outstanding statutory dues as on 31st of March, 2015 for a period of more than six months from the date they became payable, which are as follows:

Particulars Amount (Rs. In lacs)

Tax Deducted at source 49.20

Service Tax 591 22

Professional Tax : o.05

PF and ESI 48.48

(b) According to the information and explanations given to us, there were amount payable in respect of income tax, service tax, sales tax, which have not been deposited on account ofdisputes.

INCOME TAX

Income Tax for the following years has not been deposited with the appropriate authorities on account of dispute. The company has filed the appeal before the Commissioner of Income Tax (Appeals)/ITAT/High court/other forums/in the process of filing the appeal. The details are as under:

Assessment Year Amount (Rs. In lacs)

2004-05 2.59*

2005-06 6.20*

2006-07 1.50*

2008-09 30.28*

2009-10 285.53*

2010-11 723.67*

2011-12 271.43

* Source - As per information available at Income Tax website and appeals filed by the company at various forums.

SERVICE TAX

Matter relating to Amount Involved

Taxability on SSL Certificate - 91.84 (Approx.) whether VAT applicable or Service (excluding Interest & tax applicable Penalty)

Taxability of Domain prior touly 1141.64(Approx.) 2012. (period from 2008-09 to 2011- (excluding Interest & 12) penalty)

Matter relating to (Rs. In Forum Lacs)

Taxability on SSL Certificate - The company has filed an whether VAT applicable or Service appeal before the Mumbai tax applicable High Court and Commissioner Appeals.

Taxability of Domain prior touly Service Tax Department, 2012. (period from 2008-09 to 2011- Indraprastha, New Delhi 12)

SALES TAX

Matter description Amount Involved (Rs. In Lacs)

Dispute regarding entitlement of 15.05 (Approx.) Input Vat Credit (2010-11) (excluding Interest & Penalty)

Liability created by Department 4.75 (Approx.) (excluding Interest & penalty)Mumbai

Matter description Forum

Dispute regarding entitlement of MVAT Department, Input Vat Credit (2010-11) Mumbai '

Liability created by Department MVAT Department, Interest & penalty)Mumbai

(c) There was no amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

11 The accumulated losses of the companyat the end of the financial year are more than the net worth andalso it has incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

12 Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has been in default in repayment of dues to a financial institution, bank or other lenders.

13. According to the information and explanations given to us, the Company has not given guarantee for loans taken by others from bank or financial institutions. Terms loans, other credit limits and loan from financial institutions were unpaid and the dues have been classified as Non-Performing Assets (NPA) by the banks.

14. During the year, no fresh term loans taken by the company. However, term loans taken in earlier years, were in unpaid and classified as Non-Performing Assets (NPA) by the bank.

15. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Sandy Associates Chartered Accountants FRN: 007337N

Sd /-

(FCA SANDEEP GUPTA) Date: 02.06.2015 Proprietor Membership No.: 086069


Mar 31, 2014

1. We have audited the accompanying financialstatements of Net 4 IndiaLimited, which comprise the Balance Sheet as at 31st March, 2014, and the Statement of Profit and Loss and Cash Flow Statement for theyear then ended, and a summary of sig- nificant accounting policies and other explanatory information.

2. Management is responsible for the preparation of these financial statements that give a true and fair view of the financial posi- tion, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-sec- tion (3C) of section 211 of the Companies Act, 1956("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financialstate- ments that give a true and fair view and are free from materialmisstatement, whether due to fraud or error.

AUDITOR''S RESPONSIBILITY

3. Our responsibility is to express an opinion on these financial statements basedon our audit. We conducted our audit in ac- cordance with the Standards onAuditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial state- ments. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstate- ment 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 inorder to design audit proce- dures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

BASIS FOR QUALIFIED OPINION

a. The company has defaulted in repayment of Principle and Interest thereon of Term Loan from State Bank of India, Working Capital Loans taken from State Bank of India, State Bank of Travancore and Loan against FDR from Canara Bank on various dates. All these loans have been classified as Non Performing Assets (NPA) by these banks.

b. Income Tax demand of Rs. 13.50 Crores(Approx.) upto the Financial Year 2010-11 not deposited. Appeals have been filed/in the process of filing.

c. Service Tax amounting to Rs. 7.75 Crores (Net)(Approx.) upto 31st March, 2014 not deposited.

d. Provident Fund and ESI amounting to Rs. 0.56 Crores (Approx.) upto 31st March, 2014 not deposited.

e. TDS amounting to Rs. 1.08 Crores(Approx.) for the year 2013-14 not deposited. TDS for the year 2012-13 has been deposited but the TDS returns have not been filed.

f. VAT liability for certain branches still pending to be deposited.

g. Fixed deposit repayments during the year partially not done.

The company has written off bad debts amounting to Rs. 115.40 Crores (Approx.) and made a provision for bad debts amounting to Rs. 20.45 Crores (Approx.). The company has no security for these debts. On the basis that no security has been obtained and no cash has been received on these debts, the company has written off and provided for bad debts thereby reducing profit before taxation for the year (if any) and net assets at 31st March by that amount.

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the man- ner 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 asat31st March 2014;

b. in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

MATTER OF EMPHASIS

We draw your attention to :

i. The company was unable to repay the Term Loan availed from State Bank of India and Working Capital Loans taken from State Bank of India, State Bank of Travancore, Loan against FDR from Canara Bank. Due to the non-compliances of terms & con- dition and non-payment of amount due, all these loans have been classified as Non Performing Assets (NPA) by these banks.

ii. Income Tax demand of Rs. 13.50 Crores (Approx.) is pending for various years upto the Financial Year 2010-11 and has not been deposited. The company has filed appeals/under process for filing the same.

iii. Service Tax amounting to Rs. 7.75 Crores (Net) (Approx.) upto 31st March, 2014 has not been deposited. Notices have been received from the Service Tax Department in this regard and the company has started depositing some amount every month as per their directions.

iv. TDS amounting to Rs. 1.08 Crores (Approx.) for the year 2013-14 has not been deposited.

v. The company has not filed statutory returns under various acts, namely, Service Tax Returns (from October 2011 onwards), Income Tax Return (FY 2011-12 & 2012-13), TDS Returns for the years 2012-13 and 2013-14, Sales Tax Return and ESI & PF Returns (for major part of the year).

vi. The company has partially repaid public deposits matured during the year. The unpaid amount for the year 2013-14 is amount- ing to Rs. 4.04 Crores.

vii. Regarding provision for bad debts amounting to Rs. 20.45 Cr and writing off bad debts amounting to Rs. 115.40 Cr.

viii. There has been no deposit on account of gratuity fund during the year.

ix. Balance confirmations from the vendors have not been obtained.

OTHER MATTERS

As per the statutory records produced before us and explanations given to us, our comment as follows:

i. There were no Independent Directors in the company leading to non-compliance of the provisions of the Listing Agreement as well as The Companies Act, 2013.

ii. There was no Audit Committee for a major part of the year.

iii. There was no Shareholder''s & Investor Grievance Committee for a major part of the year.

6. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A)of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our exam- ination of those books. However some of the relevant records required for the purposes of our audit have not been received from all the branches not visited by us.

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

d. Except for the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and CashFlow Statement comply with the Accounting Standards referred to in sub-section(3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

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

Annexure referred to in paragraph 7 of the Our Report of even date to the members of Net 4 India Limited on the ac- counts of the company for the year ended 31st March, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. The Company has not maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

As explained to us, physical verification of fixed assets was conducted by the management during the year. We have however not conducted physical verifica- tion of the assets. In our opinion, the frequency of physical verification is reasonable having regard to the size and operations of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

The company sold off some Fixed Assets (vehicles) during the year. Fixed Assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

2. As explained to us, inventory has been physically verified by the management at regular intervals during the year. In our opin- ion, the frequency of verification is reasonable having regard to size of the company and the nature of its business.

In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

The company is maintaining proper records of inventory. No material discrepancies have been noticed by the management on verification between the physi- cal stocks and the book records.

3. The Company has taken interest free unsecured loan from 2 parties listed in the register maintained under section 301 of the Companies Act, 1956, (maximum amount Rs. 1105 lakhs) the terms and conditions of which are prima facie not prejudicial to the interests of the Company.

The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

The company has not given any advances in the nature of loans to its employees.

In case of loans taken from other parties (other than listed in the register maintained under section 301 of the Companies Act, 1956) repayment of principle as well as interest has been irregular. The interest wherever provided are without deduction of tax at source.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of finished goods, fixed assets and for the sale of goods or rendering of services. During the course of our audit, no major weakness has been noticed in the internal controls system in respect of these areas.

5. a. In our opinion, and according to the information and explanations given to us, the transactions that need to be entered in the register in pursuance of section 301 of the Act have been complied with.

b. The transactions made in pursuance of contracts and arrangements referred to in 5(a) above and exceeding the value of Rs. 5 lac with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public upto July 2013.The provisions of Sections 58A of the Companies Act, 1956 and the rules framed there under relating to the deposits accepted, wherever applicable, have not been complied with. The company has defaulted in repayment of principal and interest thereon w.e.f. August 2013.The outstanding amount as on 31st March, 2014 amounted to Rs. 1269.03 Lacs excluding interest due but not paid. This includes unpaid liability Rs. 404.44 Lacs for the current year i.e. 2013-14.

As per explanation and records produced, the reason for default has been due to heavy losses resulting to cash crunch in the company leading to bouncing of cheques issued towards repayment of deposits (principal and interest). This also lead to closure of the bank account from where cheques had been issued.The company is, however, making some payments towards the unpaid liability from the year 13-14, as per fund availability

It has also come to our notice that due to default in repayment of deposits by the company some of the investors have issued notices to the company in order to instigate proceedings against the company before the Court or Company Law Board or National Company Law Tribunal under relevant sections of The Companies Act and Negotiable Instruments Act (against cheque bouncing) for repayment or winding up.

Further, as per the requirements of Company (Acceptance of Deposit) Rules, 1975 a company has to deposit or invest at least 15% of its deposits matur- ing during the financial year latest by 30th April 2013 i.e. in the beginning of the year in any of the specified assets which could be utilised for repayment of deposits maturing during the year but at no time the amount shall fall below 10% of the amount maturing before 31st of that year. Though the company had investments towards the liquid assets more than 10% of the amount maturing during the year 2013-14 but the same was not in consonance with the require- ment of maintaining the level of 15%.

7. In our opinion, the company has Internal Audit System commensurate with its size and nature of its business. However, during the major part of the year there was no Audit Committee. So, we are unable to comment fully on the basis of Internal Audit Reports.

8. The Central Government has not prescribed maintenance of Cost records under section 209(1) (d) of the Companies Act, 1956 in respect to the company.

9. According to the information and explanations given to us, the company is not regular in depositing undisputed statutory dues including Provident Fund, ESI, Income Tax, Sales Tax, Service Tax and any other statutory dues. The following are undisputed dues outstanding as on March 31, 2014 for a period of more than six months from the date they become payable.

Particular Amount (Rs. In lakh)

Income Tax (As per the tax provision made subject to the credit of TDS) 1043.40

Tax Deducted at source 53.31

Service Tax 655.03

Professional Tax 0.18

PF and ESI 36.21

INCOME TAX

Income Tax for the following years has not been deposited with the appropriate authorities on account of dispute. The company has filed the appeal before the Commissioner of Income Tax (Appeals)/in the process of filing the appeal. The details are as under:

Assessment Year Amount (Rs. In lakh) (including interest)

2008-09 40.28

2009-10 265.61

2010-11 773.67

2011-12 271.43

SERVICE TAX

Matter relating to Amount Involved (Rs. In Lakh)

Taxability on SSL Certificate - whether 91.84 (Approx.) (excluding VAT applicable or Service tax applicable Interest & Penalty) High Court

Taxability of Domain prior to July 2012. (pe- 1141.64(Approx.) riod from 2008-09 to 2011-12) penalty) (excluding Interest &

Matter relating to Forum Taxability on SSL Certificate - whether High Court VAT applicable or Service tax applicable

Taxability of Domain prior to July 2012. Service Tax Department, riod from 2008-09 to 2011-12) penalty) Indraprastha, New Delhi

SALES TAX

Matter description Amount Involved (Rs. In Lakh)

Dispute regarding entitlement 15.05 (Approx.) (excluding of Input Vat Credit (2010-11) Interest & Penalty)

Liability created by Department 4.75 (Approx.) penalty (excluding Interest & penalty)

Matter description Forum

Dispute regarding entitlement of Input Vat Credit (2010-11) MVAT Department, Mumbai

Liability created by Department MVAT Department, Mumbai 10. The Company has accumulated losses at the end of the financial year. It has also incurred cash losses in the current financial year. However it had not incurred cash losses in the financial year immediately preceding such financial year.

11. In our opinion and according to the information and explanations given to us and records produced before us, the Company has defaulted in repayment of the term loans and working capital loans due to the banks who have classified than as Non Performing Assets (NPA). Further, other loans due to the financial institutions have been in default status. The Company has not issued any debentures. The outstanding as at the end of the year as per banks are as under :

Name of the bank Type of Loan Default since

State Bank of India Term Loan June 2013

State Bank of Travancore Term Loan June 2013

Canara Bank Term Loan April 2013

Canara Bank Term Loan April 2013

State Bank of India Working Capital February 2014

State Bank of Travancore Working Capital October 2013

Name of the bank Outstanding as Outstanding as on 01.04.2013 on 31.03.2014

State Bank of India 1968.06 2334.16

State Bank of Travancore - 498.91

Canara Bank 24.49 25.84

Canara Bank 74.35 77.73

State Bank of India 5640.09 9449.51

State Bank of Travancore 1498.27 1517.14

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the order is not applicable.

13. The Company is not a chit fund, mutual benefit fund or a society. Accordingly, clause 4(xiii) of the order is not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, deben- tures and other investments. Accordingly, clause 4(xiv) of the order is not applicable.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not prima-facie prejudicial to the interests of the Company.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short-term basis have not been used during the year for long term investment and vice versa.

18. The Company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, clause 4(xviii) of the order is not applicable.

19. The Company has not issued any debentures. Accordingly, clause 4(xix) of the order is not applicable.

20. The Company has not raised any money by public issues during the year. Accordingly, clause 4(xx) of the order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Sandy Associates Chartered Accountants Firm Registration No.: 007337N

Sd /- Sandeep Gupta (Proprietor) Membership No. : 86069

Place: Noida Date: June 12, 2014


Mar 31, 2013

1. We have audited the accompanying financial statements of Net 4 India Limited, which comprise the Balance Sheet as at 31st March 2013, and the Statement of Profit and Loss, and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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 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 misstatement, whether due to fraud or error.

3,. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants. of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit- evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of. material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design , audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial .statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 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 31st March 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 the Cash Flow Statement, of the cash flows for the year ended if-—, on that date.

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. :

All the assets have been physically verified by the management at the close of the financial year which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

2. As explained to us, inventory has been physically verified by the management at regular *''*'' intervals during the year. In our opinion, the frequency of verification is reasonable having regard to size of the company and the nature of its business.

In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

The company is maintaining proper records of inventory. No material discrepancies have been noticed by the management on verification between the physical stocks and the book records.

3. The Company has taken interest free unsecured loan from a party listed in the register maintained under section 301 of the Companies Act, 1956, (maximum amount Rs. 205 lakhs) the terms and conditions of which are prima facie not prejudicial to the interests of the Company.

The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

The company has given interest free advances in the nature of loans to the employees of the company, the repayment in respect of which is regular and as stipulated, where such stipulations exist.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of finished gods, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls system in respect of these areas.

5. In our opinion, and according to the information and explanations given to us, the transactions that need to be entered in the register in pursuance of section 301 of the

5. In our opinion, and according to the information and explanations given to us, the transactions that need to be entered in the register in pursuance of section 301 of the Act have been entered, and the transactions have been made at prices which are reasonable with regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public and the provisions of Sections 58A of the Companies Act, 1956 and the rules framed there under, wherever applicable, have been complied with.

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

8. The Central Government has not prescribed maintenance of Cost records under section 209(1) (d) of the Companies Act, 1956 in respect to the company.

9. According to the information and explanations given to us, following are undisputed dues outstanding as on March 31, 2013 for a period of more than six months from the date they become payable.

Particulars Amount (Rs. In lakh)

income Tax 416.20

Tax Deducted at source 18.95

Service Tax 352.65

Income Tax for the following years has not been deposited with the appropriate authorities on account of dispute. The company has filed the appeal before the Commissioner of Income Tax (Appeals). However based on past experience, there is a highly fair chance of liability being quashed. *

Assessment Year Amount (Rs. In lakh) (including interest)

2008-09 40.28

2009-10 265.61

2010-11 773.67

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the financial year immediately preceding such financial year

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any bank or financial institution.

The Company has not issued any debentures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the order is not applicable.

13. The Company is not a chit fund, mutual benefit fund or a society. Accordingly, clause 4(xiii) of the order is not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, clause 4(xiv) of the order is not applicable.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not prima-facie prejudicial to the interests of the Company.

16. In our opinion, the term loans have been applied for the purpose for which they were raised. .

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short-term basis have not been used during the year for long term investment and vice versa.

18. The Company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, clause 4(xviii) of the order is not applicable

19. The Company has not issued any debentures. Accordingly, clause 4(xjx) of the order is not applicable.

20. The Company has not raised any money by public issues during the year. Accordingly, clause 4(xx) of the order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Sandy Associates.

Chartered Accountants

A FRN:007337N

(Sandeep Gupta)

Place: Noida (Proprietor)

Date: May 28,2013 Membership No.: 86069


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. NET 4 INDIA LTD. as at March 31, 2012, the Profit and Loss Account and also the Cash Flow Statement for the period ended on that date, annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit. presentation. We believe that our audit provides a reasonable basis for our opinion.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies

(Auditor''s Report) (Amendment) Order,2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, 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:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

(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 and Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(i) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; and

(b) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS'' REPORT TO THE MEMBERS OF M/S NET 4 INDIA LIMITED ON THEIR ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2011.

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

2. As explained to us, inventory (excluding stock with third parties) has been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable having regard to size of the company and the nature of its business.

In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

The company is maintaining proper records of inventory. No material discrepancies have been noticed by the management on verification between the physical stocks and the book records.

3. The Company has taken interest free unsecured loan from a party listed in the register maintained under section 301 of the Companies Act, 1956, (maximum amount Rs. 205 lakhs) the terms and conditions of which are prima facie not prejudicial to the interests of the Company.

The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

The company has given interest free advances in the nature of loans to the employees of the company, the repayment in respect of which is regular and as stipulated, where such stipulations exist.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of finished goods, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls system in respect of these areas.

5. In our opinion, and according to the information and explanations given to us, the transactions that need to be entered in the register in pursuance of section 301 of the Act have been entered, and the transactions have been made at prices which are reasonable with regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public and the provisions of Sections 58A of the Companies Act, 1956 and the rules framed there under, wherever applicable, have been complied with.

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

8. The Central Government has not prescribed maintenance of Cost records under section 209(1) (d) of the Companies Act, 1956 in respect to the company.

9. According to the information and explanations given to us, and on the basis of our examination of the books of account, the Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Wealth Tax, Sales- Tax, Customs Duty, investor education and protection fund and any other material statutory dues applicable to it. Interest has been deposited wherever applicable.

According to the information and explanations given to us, no undisputed dues payable in respect of Provident Fund, Investor Education and Protection Fund, Income tax, Wealth tax, Sales tax, Customs duty, Cess and other material statutory dues were outstanding at March 31, 2012 for a period of more than six months from the date they become payable.

According to the information and explanations given to us, Income Tax for the AY 2008-09 of Rs. 40.28 lakhs (including interest) and for AY 2009-10 of Rs. 265.61 lakhs (including interest) has not been deposited with the appropriate authorities on account of dispute. The company has filed the appeal before the Commissioner of Income Tax (Appeals). However based on past experience, there is a highly fair chance of liability being quashed.

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the financial year immediately proceeding such financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any bank or financial institution. The Company has not issued any debentures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the order is not applicable.

13. The Company is not a chit fund, mutual benefit fund or a society. Accordingly, clause 4(xiii) of the order is not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, clause 4(xiv) of the order is not applicable.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not prima-facie prejudicial to the interests of the Company.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short-term basis have not been used during the year for long term investment and vice versa.

18. The Company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, clause 4(xviii) of the order is not applicable.

19. The Company has not issued any debentures. Accordingly, clause 4(xix) of the order is not applicable.

20. The Company has not raised any money by public issues during the year. Accordingly, clause 4(xx) of the order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Sandy Associates

Chartered Accountants

Sd/-

(Sandeep Gupta)

Proprietor

Place: Noida Membership No: 86069

Dated: May 28, 2012 FRN No: 007337N


Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. NET 4 INDIA LTD. as at March 31, 2011, the Profit and Loss Account and also the Cash Flow Statement for the period ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order,2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, 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:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

(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 and Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011; and

b) In the case of the Profit and Loss Account, of the profit for the year ended on that date.

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

NET 4 INDIA LTD. ANNEXURE TO AUDITOR'S REPORT

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS' REPORT TO THE MEMBERS OF M/S NET 4 INDIA LIMITED ON THEIR ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2011.

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

2. As explained to us, inventory (excluding stock with third parties) has been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable having regard to size of the company and the nature of its business.

In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

The company is maintaining proper records of inventory. No material discrepancies have been noticed by the management on verification between the physical stocks and the book records.

3. The Company has taken interest free unsecured loan from a party listed in the register maintained under section 301 of the Companies Act, 1956, (maximum amount Rs. 205 lakhs) the terms and conditions of which are prima facie not prejudicial to the interests of the Company.

The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

The company has given interest free advances in the nature of loans to the employees of the company, the repayment in respect of which is regular and as stipulated, where such stipulations exist.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of finished goods, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls system in respect of these areas.

5. In our opinion, and according to the information and explanations given to us, the transactions that need to be entered in the register in pursuance of section 301 of the Act have been entered, and the transactions have been made at prices which are reasonable with regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public and the provisions of Sections 58A of the Companies Act, 1956 and the rules framed there under, wherever applicable, have been complied with.

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

8. The Central Government has not prescribed maintenance of Cost records under section 209(1) (d) of the Companies Act, 1956 in respect to the company.

9. According to the information and explanations given to us, and on the basis of our examination of the books of account, the Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Wealth Tax, Sales- Tax, Customs Duty, investor education and protection fund and any other material statutory dues applicable to it. Interest has been deposited wherever applicable.

According to the information and explanations given to us, no undisputed dues payable in respect of Provident Fund, Investor Education and Protection Fund, Income tax, Wealth tax, Sales tax, Customs duty, Cess and other material statutory dues were outstanding at March 31, 2011 for a period of more than six months from the date they become payable.

According to the information and explanations given to us, Income Tax for the AY 08-09 of Rs. 40.28 lakhs (including interest) has not been deposited with the appropriate authorities on account of dispute. The company has filed the appeal before the Commissioner of Income Tax (Appeals). However based on past experience, there is a highly fair chance of liability being quashed.

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the financial year immediately proceeding such financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any bank or financial institution. The Company has not issued any debentures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the order is not applicable.

13. The Company is not a chit fund, mutual benefit fund or a society. Accordingly, clause 4(xiii) of the order is not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, clause 4(xiv) of the order is not applicable.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not prima-facie prejudicial to the interests of the Company.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short-term basis have not been used during the year for long term investment and vice versa.

18. The Company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, clause 4(xviii) of the order is not applicable.

19. The Company has not issued any debentures. Accordingly, clause 4(xix) of the order is not applicable.

20. The Company has not raised any money by public issues during the year. Accordingly, clause 4(xx) of the order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Sandy Associates

Chartered Accountants

Sd/-

(Sandeep Gupta)

Proprietor

Place: New Delhi Membership No: 86069

Dated: May 23, 2011 FRN No: 007337N














Mar 31, 2010

1 We have audited the attached Balance Sheet of M/s. NET 4 INDIA LTD. as at March 31, 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2 We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial state- ments 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 signifcant 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, as amended by the Companies (Auditors Report) (Amendment) Order,2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the said Order.

4 Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

(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 and Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors of the Company is disquali- fed as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said ac- counts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; and

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

(c) In the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

Annexture Refferred to Auditors Reports ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT TO THE MEMBERS OF M/S NET 4 INDIA LTD. ON THEIR ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010.

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fxed assets.

All the assets have not been physically verifed by the management during the year but there is a regular programme of verifcation which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verifcation.

Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going con- cern assumption.

2. As explained to us, inventory (excluding stock with third parties) have been physically verifed by the management at regular intervals during the year. In our opinion, the frequency of verifcation is reasonable having regard to the size of the Company and the nature of its business.

In our opinion and according to the information and explanation given to us, the procedures of physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

The company is maintaining proper records of inventory. No material discrepancies have been noticed by the management on verifcation between the physical stocks and the book records.

3. The Company has taken interest free unsecured loan from a party listed in the register maintained under section 301 of the Companies Act, 1956, (maximum amount Rs. 205 lakhs) the terms and conditions of which are prima facie not prejudicial to the interests of the Company.

The Company has neither granted nor taken any loan, secured or unsecured, to companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

The company has given interest free advances in the nature of loans to the employees of the company, the repayment in respect of which is regular and as stipulated, where such stipulations exist.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the pur- chase of fnished goods, fxed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls system in respect of these areas.

5. In our opinion, and according to the information and explanations given to us, the transactions that need to be entered in the register in pursuance of section 301 of the Act have been entered, and the transactions have been made at prices which are reasonable with regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public and the provisions of Sections 58A of the Companies Act, 1956 and the rules framed there under, wherever applicable, have been complied with.

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

8. The Central Government has not prescribed maintenance of Cost records under section 209(1) (d) of the Companies Act, 1956 in respect to the company.

9. According to the information and explanations given to us, and on the basis of our examination of the books of account, the Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Wealth tax, Sales-tax, Customs duty, Investor Edu- cation and Protection Fund and any other material statutory dues applicable to it. Interest has been depos- ited wherever applicable.

According to the information and explanations given to us, no undisputed dues payable in respect of Provi- dent Fund, Investor Education and Protection Fund, Income tax, Wealth tax, Sales tax, Customs duty, Cess and other material statutory dues were outstanding at March 31, 2010 for a period of more than six months from the date they become payable.

According to the information and explanations given to us, there are no dues in respect of Sales tax, In- come tax, Wealth tax, Customs duty and Cess which have not been deposited with the appropriate authori- ties on account of any dispute.

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the financial year immediately proceeding such financial year. Ac- cordingly, clause 4(x) of the order is not applicable.

11. In our opinion and according to the information and explanations given to us, the Company has not de- faulted in repayment of dues to any bank or financial institution. The Company has not issued any deben- tures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the order is not applicable.

13. The Company is not a chit fund, mutual beneft fund or a society. Accordingly, clause 4(xiii) of the order is not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, clause 4(xiv) of the order is not applicable.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not prima-facie prejudicial to the interests of the Company.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis have not been used during the year for long term investment and vice versa.

18. The Company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, clause 4(xviii) of the order is not applicable.

19. The Company has not issued any debentures. Accordingly, clause 4(xix) of the order is not applicable.

20. The Company has not raised any money by public issues during the year. Accordingly, clause 4(xx) of the order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.



For Sandy Associates

Chartered Accountants





Sd/-

Place: New Delhi (Sandeep Gupta)

Dated: May 25, 2010 Proprietor

Membership No: 86069

FRN No: 007337N




Mar 31, 2000

We have audited the attached Balance Sheet of M/S AMULET DEVELOPERS LIMITED as at 31st March, 2000 and also the statement of Profit & Loss Account of the Company for the year ended on that date annexed there to and reports as under-

1. As required by the Manufacturing and other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227(4-A), of the Companies Act, 1956, and on the basis of such checks of the Books and the Records of the Company as we considered appropriate and on the basis of the information and explanation given to us during the course of audit, we enclose in the annexure, a statement on the matters specified in paragraphs 4 & 5 of the said order.

2. Further to our comments in the Annexure referred in paragraph 1 above,

(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 accounts as required by law have been kept by the Company so far as appears from our examination of those books.

(c) The Balance Sheet and Statement of Profit & Loss Account dealt with by this report are in compliance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 and are in agreement with the books of accounts.

(d) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the Notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair vies:-

(i) In the case of the Balance Sheet, of the state of the affairs of the company as at 31st March, 2000.

AND

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

ANNEXURE TO AUDITORS REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

1. The company has not taken any loans during the year..

2. In our opinion and according to information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of stores, raw materials, including components, plant and machinery, equipment and other assets and with regard to the sale of goods.

3. The Company has not entered into any transactions of purchase of goods and materials and sale of goods, materials and services, made in pursuance of contracts or arrangements entered in the register maintained under Section 301 and aggregating during the year to Rs. 50,000/- or more in respect of each party and accordingly, we have no comment on the same.

4. The company has not accepted any deposits from the public and consequently the provisions of Section 58-A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable.

5. The Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 in respect of the products dealt with by the Company.

6. According to the information and explanation given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty & Excise Duty were outstanding for more than six months as at 31st March, 2000.

7. According to the information and explanations given to us, no personal expenses of employees or Directors have been charged to revenue account.

8. The Company is not a sick industrial Company within the meaning of Section 3 (1) (o) of the sick Industrial Companies (Special Provisions) Act, 1985.

9. All other provision of the said order do not apply to the company.

SANDY ASSOCIATES, Chartered Accountants

Place : New Delhi Dated : 05.06.2000 SANDEEP GUPTA

 
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