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Auditor Report of Sowbhagya Media Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of M/S. SOWBHAGYA MEDIA 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

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

3. 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

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 financial control relevant to the Company's preparation of the financial statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's management and Board of Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

7. Emphasis of Matter

Without qualifying our opinion, we draw attention to Note No 2.26 regarding legal cases against company and its managing director as detailed in the said note.

Report on Other Legal and Regulatory Requirements

8. 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 section143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order.

9. As required by section 143(3) of the Act, we further 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 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 aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) 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 are disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014;

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note no.2.26 to the financial statements;

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.

Annexure referred to in paragraph 7 Our Report of even date to the members of Sowbhagya Media 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 explanations given to us during the course of our audit, we report that:

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets ;

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

ii. The nature of business of the Company does not require it to have any inventory. Hence, the requirement of clause (ii) of paragraph 3 of the said Order is not applicable to the Company

iii. The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness has been noticed or reported.

v. The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

vi. As informed to us, the Central Government has not prescribed maintenance of cost records under sub- section (1) of Section 148 of the Act.

vii. (a) According to the information and explanations given to us and based on the records of the company examined by us, the company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities in India ;

(b) According to the information and explanations given to us and based on the records of the company examined by us, there are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes.

(c) 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 reporting delay in transferring such sums does not arise.

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

ix. According to the records of the company examined by us and as per the information and explanations given to us, the company has not availed of any loans from any financial institution or banks and has not issued debentures.

x. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from a bank or financial institution during the year.

xi. In our opinion, and according to the information and explanations given to us, the company has not raised any term loans during the year.

xii. During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

For M/s. Ganesh Venkat & Co.,

Chartered Accountants Firm Regd.No.005293S

Sd/-

G. Rajavenkat Partner Membership No.025014

Place: Hyderabad.

Date: 25th May, 2015.


Mar 31, 2014

We have audited the accompanying financial statements of M/S. SOWBHAGYA MEDIA LIMITED, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the Act) read with the general circular 15/2013 dated 13.09.2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. 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 or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit 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.

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 loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

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 are 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;

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of M/s.SOWBHAGYA MEDIA LIMITED on the accounts of the company for the year ended 31st March, 2014.

i. (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(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.

(c) Fixed assets disposed off during the year were not substantial; therefore do not affect the going concern assumption.

ii. (a) The company is not a manufacturing company and hence there are no inventories. Therefore provisions of clause 4(ii)(a), (b) and (c) of companies (Auditor''s Report) Order, 2003 as amended are not applicable to the Company.

iii. (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore the provisions of clauses (4) iii (b), iii(c) and iii (d) of the companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(e) According to the information and explanations given to us, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore provisions of clause 4(ii)(f) and (g) of companies (Auditor''s Report) Order, 2003 as amended are not applicable to the Company.

iv. 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. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

v. (a) In our opinion and according to the information and explanations given to us, and based on representations by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act exceeding five lakhs rupees in a financial year have been duly entered.

vi. In our opinion and according to the information and explanations given to us, The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956 and the companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. Therefore provisions of clause 4(vi) of companies (Auditor''s Report) Order, 2003 as amended are not applicable to the company.

vii. There is no Internal Audit System in Vouge in the company.

viii. In our opinion and according to information and explanation given to us, 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. Therefore provisions of clause 4(viii) (Auditor''s Report) Order, 2003 as amended are not applicable to the Company

ix. (a) According to information and explanations given to us and the records of the company, the company is regular in depositing 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 with the appropriate authorities.

(b) According to the information and explanations given to us, there are no statutory dues as on 31st of March, 2014 which are outstanding for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues on account of income tax, wealth tax, service tax, sales tax, customs duty and excise duty and any other statutory dues as at 31st March, 2014 except the following:

Name of the Amount Period to which the statute Nature of dues Rs. amount relates

Income Tax Demand under Assessment year 2008- Act, 1961 section 226(3) 26,24,531 09 & 2009-10

Name of the Statute Forum where dispute is pending

Income Tax Act 1961 ITAT, Hyderabad

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

xi. In our opinon and according to information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders during the year.

xii. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion and according to information and explanations given to us, the Company is not a chit fund /mutual benefit fund/society. Therefore, the provision of this clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

xiv. According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

xvi. According to information and explanations given to us, the company has not availed any term loans during the year.

xvii. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

xviii. According to the information and explanations given to us, during the year under report the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The Company did not have any outstanding debentures during the year.

xx. The Company has not raised any money by public issue during the year.

xxi. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For M/s. Ganesh Venkat & Co., Chartered Accountants Firm Regd.No.005293S

Sd/- G. Rajavenkat Partner Membership No.025014

Place: Hyderabad. Date: 29th May, 2014.


Mar 31, 2013

We have audited the accompanying financial statements of M/S. SOWBHAGYA MEDIA LIMITED, which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the financial Statements

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

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) In the case of the 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. If Report on Other Legal and Regulatory Requirements

I 1. As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central

- Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure || a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

I 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;

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of M/s. SOWBHAGYA MEDIA LIMITED on the accounts of the company for the year ended 31st March, 2013.

i. (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(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.

(c) Fixed asset has been disposed off during the year were not substantial, therefore do not affect the going concern assumption.

ii. (a) The company is not manufacturing company and hence there are no inventories Therefore provisions of clause 4(h)(a), (b) and (c) of companies (Auditor''s Report) Order, 2003 as amended are not applicable to the Company.

iii. (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore the provisions of clauses (4) iii (b), iii(c) and iii (d) of the companies (Auditor''s Report) Order, 2003 are not applicable to the Company. (e) According to the information and explanations given to us, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore provisions of clause 4(ii)(f) and (g) of companies (Auditor''s Report) Order, 2003 as amended are not applicable to the Company.

iv. 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. In our opinion according to the information and explanations given to us, there has continuing failure to correct major weaknesses in the internal control system during the year.

v. (a) In our opinion and according to the information and explanations given to us, and based on representations by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act exceeding five lakhs rupees in a financial year have been duly entered.

vi. In our opinion and according to the information and explanations given to us, The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956 and the companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. Therefore provisions of clause 4(vi) of companies (Auditor''s Report) Order, 2003 as amended are not applicable to the company.

vii. There is no internal Audit System in vogue.

viii. In our opinion and according to information and explanation given to us, 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. Therefore provisions of clause 4(viii) (Auditor''s Report) Order, 2003 as amended are not applicable to the Company. ix. (a) According to information and explanations given to us, the records of the company, the company regular in depositing 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 been deposited with the appropriate authorities. (b)According to the information and explanations given to us, there are no statutory dues as on 31st of March, 2013 which are outstanding for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there is no dues on account of income tax, wealth tax, service tax, sales tax, customs duty and excise duty and any other statutory dues as at 31st March, 2013 which have not been deposited on account of any disputes except the following:

Period to Forum which the where Name of the Amount amount dispute is statute Nature of Dues Rs. relates pending

CIT

Assessment Appeals - Income Tax Demand under section year 2008-09 II, Act, 1961 226(3) 26,24,531 & 2009-10 Hyderabad

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

xi. In our opinion and according to information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders during the year

xii. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion and according to information and explanations given to us, the Company is not a chit fund / /mutual benefit fund/society. Therefore, the provision of this clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

xiv.According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

xvi.According to information and explanations given to us, the company has not availed any term loans during the year.

xvii. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments..

xviii. According to the information and explanations given to us, during the year under report the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix.The Company did not have any outstanding debentures during the year.

xx. The Company has not raised any money by public issue during the year.

xxi. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.



For M/s. Ganesh Venkat & Co.,

Chartered Accountants

Firm Regd.No.005293S



Sd/-

G. Rajavenkat

Partner

Membership No.025014



Place: Hyderabad.

Date: 29th May, 2013.


Mar 31, 2011

We have audited the attached Balance Sheet of Sowbhagya Media Limited as at 31st March, 2011 and Profit & Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003, as amended, issued by the Central Government of India in terms of Section 227(4A) 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 wherever applicable.

2. Subject to our comments in the Annexure referred to in paragraph 1 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 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 such books;

c) The Company's Balance Sheet ,Profit & Loss Account & Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and the Profit & Loss Account & Cash Flow Statement are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

e) On the basis of the written representation from the directors as at 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as at 31st March, 2011 from being appointed as a Director in terms of clause(g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

f) In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account, Cash flow statement 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 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 31st March, 2011;

ii. in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date;

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 1 OF OUR REPORT OF EVEN DATE

1. (a) The Company has maintained proper records to show full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by the management periodically, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

(c) In our opinion the Company has not disposed off substantial part of Fixed Assets during the period and the going concern status of the Company is not affected.

2. The Company does not deal with stocks and it does not hold any physical inventories. Thus paragraph 4 (ii) of the Order is not applicable.

3. The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

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 stores, raw materials, including components, plant and machinery, equipments, other assets and for sale of finished goods.

5. In our opinion and according to the information and explanations given to us, the transactions aggregating during the year to Rs. 5,00,000/-made in pursuance of contract of purchase of goods and materials and sale of goods, materials and services that need to be entered into the register maintained under Section 301 of the Companies Act have been duly entered during the period under review.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from public within the meaning of Rule 2(b) of the Companies (Acceptance of Deposits) Rule 1975, and the provisions of Sec. 58 A of the Companies Act, 1956.

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

8. The Central Government of India has not prescribed the maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 for this type of Company.

9. (a) The Company is regular in depositing undisputed statutory dues including provident fund, sales tax, income tax, wealth tax, professional tax and other material statutory dues with appropriate authorities when applicable. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2011 for a period exceeding six months from the date they become payable.

(b) According to the information and explanations given to us, there are no dues of sales tax, income tax, wealth tax and other statutory dues, which have not been deposited on account of any disputes.

10. In our opinion and according to the information and explanations given to us and according to the books of account examined by us, the company has not incurred cash losses during the year under review. The company has no accumulated losses at the end of the 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 Banks and Financial Institutions.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

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

14. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments during the year under review. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order 2003 are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. The Company did not have any term loans outstanding during the year.

17. According to the information and explanation given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

18. According to the information and explanation given to us the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. No debentures have been issued by the Company and hence, the question of creating securities in respect of these does not arise.

20. The Company has not raised any money by way of public issue during the year.

21. In our opinion, according to the information and explanations given to us no fraud on or by the Company has been noticed or reported during the year under review that causes the financial statements to be materially misstated.



For M/S. GANESHVENKAT & CO CHARTERED ACCOUNTANTS Firm Registration No: 05293S

Sd/- G RAJAVENKAT PARTNER M.No.25014 Place: Hyderabad Date : 26th June, 2011.

 
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