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Auditor Report of Triton Corp Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of M/s Triton Corp Limited (Formerly Stencil Apparel Brands Limited), "The Company" which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these 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 the Companies(Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error

Auditor's Responsibility

Our responsibility is to express an opinion on these 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. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects 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;

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

b) In the case of the Statement of Profit and Loss, 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.

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 Attention is invited to the

a) Note no.4 & 5 regarding non–provision of impairment of assets taking into account the value of assets as at 31st March 2015. The amount has not been ascertained and disclosed. In view of the management there is no impairment of assets, hence provision is not required.

b) Note no.8 regarding pending confirmation / reconciliation of balances with parties and consequential adjustments, if any.

c) A sum of Rs48,22,69,512/- pertaining to the bad debts has been written off till date in respect of export sales and advance to suppliers. However, the necessary approval from Reserve Bank of India for such write off and extension of period for recovery of balance dues over one year amounting to Rs.31,78,81,503/ - is yet to be obtained. In the absence of full details and approvals, we have accepted the management representation regarding the quantum of write off and provision in respect of sundry debtors as adequate. (Refer Note No.-15)

d) Note no. 11 regarding non–provision of the diminution in the value of long term investments and the quantum has not been ascertained.

e) Note No.12 regarding the basic assumption about going concern. BPO / Call centre operations remained suspended from third quarter of financial year 2008-09. However, these accounts have been drawn on the concept of going concern.

f) Note no. 13 non provision of interest payable on outstanding secured loan balances with lenders as the loan accounts have become non performing and are subject to recovery proceedings.

Subject to (a) to (f) above and where the quantum has not been ascertained, had the above items been provided, the loss for the year, would have been higher to that extent, in our opinion and to the best of our information and according to the explanations given to us, the said Accounts read with the accounting policies and the other 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.

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 aforesaid financial statements give the information required by the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:- a) In the case of the Balance Sheet of the state of affairs of the Company as at March 31, 2015;

b) In the case of Statement of Profit and Loss, of the Loss of the Company for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

As required by Section 143(3) of the Act, we report that

(a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 it appears from our examination of those books.

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

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014

(e) on the basis of the written representations received from the directors as on 31 March 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section164(2) of the Act

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

a) the Company does not have any pending litigations except with the banks which would impact its standalone financial position

b) the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses

c) Company has not transferred unclaimed share application money of Rs 348323 to investor Education and Protection Fund in accordance with provisions of Companies Act,1956

Annexure referred to in paragraph [1] of the Our Report on other legal & regulatory requirements on the even date:

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

(b) According to the information and explanation given to us, the fixed assets of the company have been physically verified by the management at reasonable intervals in a phased manner so as to cover each asset at least once in three years, which in our opinion is reasonable having regard to size of the company and the nature of its assets. As informed to us no material discrepancy between the book records and the physical fixed assets have been noticed on such verification.

(ii) The Company does not have any tangible inventory. Accordingly, the provisions of clause 3(ii) of the Order are not applicable.

(iii) The Company has granted loan to subsidiary prior to financial year 2014 but during the year no loan fresh loan was granted, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act.

a) No terms have been stipulated for repayment of principal and interest from such loans to company grated prior to 1.04.2014

b) Since no terms for repayment have been stipulated for repayment there are no over dues of such loans to company grated prior to 1.4.2014

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended) . Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) As per information & explanation given by the management, maintenance of cost records has not been prescribed by the Central Government under sub-section (1) of section 148 of the Act.

(vii) (a) The Company has not regularly deposited undisputed statutory dues like Provident Fund and Employees State Insurance dues. According to the information and explanation given to us by the management, there are no undisputed amount payable in respect of Income-Tax as per return filed, Wealth-Tax, Value added Tax, Cess or ay other Statutory Dues. TDS (Income Tax ) dues Rs 2,17,588/ - were outstanding as on 31st March 2015 for a period more than six months from the date they became payable and Rs. 3,18,714/- towards Income Tax Demand for the assessment year 2006-07 & Rs. 2,11,000/- being FBT pertaining to financial year 2008-09.

b) According to the information and explanations given to us, there are no disputed demand amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom duty and Excise Duty outstanding as on 31st March 2012 for a period of more than six months from the date they become payable except for income tax Rs. 350800/- for AY 2008-09 & Rs. 14675661/- for AY 2007- 08. The Company has been granted relief by the Commissioner of Income Tax Appeal. ( Refer Note 18).

(c) Company has not transferred unclaimed share application money of Rs 348323 to investor Education and Protection Fund in accordance with provisions of Companies Act,1956

(viii) In our opinion, the Company has been registered more than five year and the accumulated losses exceed the fifty percent of the net worth of the company. The Company has incurred cash loss during the financial year covered by our audit and has also incurred cash loss in the immediately preceding financial year

(ix) The Company has defaulted in repayment of the dues of the bank and Other Financial Institutions since the year 2010 and amount of default is Rs. 35.20 crores as per books of the company.

(x) In our opinion, the terms and conditions on which the company has not given guarantees for loans taken by others from banks or financial institutions.

(xi) The term loans were applied for the purpose for which the loans were obtained;

(xii) No fraud on or by the Company has been noticed or reported during the period covered by our audit

For KPMR & ASSOCIATES

CHARTERED ACCOUNTANTS

FRN: 002504N

Sd/-

( DEEPAK JAIN )

PARTNER

M. No: 090854

PLACE: NEW DELHI

DATE : May 30, 2015


Mar 31, 2014

We have audited the accompanying financial statement of TRITON CORP LIMITED (Formerly Stencil Apparel Brands Limited) ("the Company"), which comprises the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 ("the Act") 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 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 the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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.

a) Note no.4 & 5 regarding non-provision of impairment of assets taking into account the value of assets as at 31s> March 2014. The amount has not been ascertained and disclosed- In view of the management there is no impairment of assets, hence provision is not required.

b) Note no 8 regarding pending confirmation / reconciliation of balances with parties and consequential adjustments, if any.

c) A sum of Rs42,27,55,174/- pertaining to the bad debts has been written off till date in respect of export safes and advance to suppliers. However, the necessary approval from Reserve Bank of India for such write off and extension of period for recovery of balance dues over one year amounting to Rs.31,78,81,503/- is yet to be obtained. In the absence of full details and approvals, we have accepted the management representation regarding the quantum of write off and provision in respect of sundry debtors as adequate. (Refer Note No.-15)

d) Note no. 11 regarding non-provision of the diminution in the value of long term investments and the quantum has not been ascertained.

e) Note No.12 regarding the basic assumption about going concern. BPO / Call centre operations remained suspended from third quarter of financial year 2008-09. However, these accounts have been drawn on the concept of going concern.

f) Note no. 13 non provision of interest payable on outstanding secured loan balances with lenders as the loan accounts have become non performing and are subject to recovery proceedings.

Subject to (a) to (f) above and where the quantum has not been ascertained, had the above items been provided, the loss for the year, would have been higher to that extent, in our opinion and to the best of our information and according to the explanations given to us, the said Accounts read with the accounting policies and the other 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.

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 aforesaid financial statements 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 March 31, 2014;

b) In the case of Statement of Profit and Loss, of the Loss of the Company for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act 1956 (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 purposes of our audit;

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

c) The Balance Sheet, Statement of Profit & 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 & Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; &

e) On the basis of the 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;

1. (a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) According to the information and explanation given to us, the fixed assets of the company have been physically verified by the management at reasonable intervals In a phased manner so as to cover each asset at least once in three years, which in our opinion is reasonable having regard to size of the company and the nature of its assets. As informed to us no material discrepancy between the book records and the physical fixed assets have been noticed on such verification.

(c) Part of fixed assets have been disposed off during the year to settle the bank dues. The B.P.O. / call centre operation remained suspended since third quarter of financial year 2008-09. Possession of the other building has been taken over by the bank. The company is not functioning after the aforesaid events. (Refer Note No.-12 & 13)

2. There are no stocks or inventories.

3.a. The company has not granted secured or unsecured loans to companies, firms or other parties covered in the register maintained under section 301 of the Act, except to its subsidiary company having outstanding balance of Rs.813.32 Lac (Maximum amount involved during the year was Rs. 825.72 Lac).

b According to the information and explanations given to us, the terms and conditions of loans given, secured and unsecured are not prima-facie prejudicial to the interest of the company. No interest was charged on unsecured loan given to subsidiary company.

c. No terms for repayment has been stipulated in respect of the subsidiary company.

d The Company has not taken any loans, secured or unsecured, from companies, or other parties covered in the register maintained under Section 301 of the Act.

e The rate of interest and other terms and conditions of loans taken by the company, secured and unsecured, are prima facie not prejudicial the interest of company; and

f. The company has become irregular in repayment of principal and interest on secured loans & the loans have become non- performing.(Refer Note 13 )

4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with size of the company and the nature of its business with regard to purchase of stores, fixed Assets and other assets and with regard to sale of services. During the course of our audit we have not observed any continuing failure to correct major weakness in internal controls.

5. a) In our opinion and according to the information and explanations given to us, the transaction that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions of sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the companies Act,1956, and aggregating during the year to Rs. 5,00,000 or more in respect of each party, have been made at prices which are reasonable having regard to the prevailing market prices for such goods, materials or services or prices at which such transactions for similar goods or services have been made with other parties.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year to which the provisions of section 58-A and 58-AA of Companies Act, 1956 and the rules framed thereunder including the directions issued by the Reserve Bank of India attract.

7. In our opinion, the company does not have formal internal audit system and needs further strengthen to commensurate with the size and nature of the business.

8 As explained to us, the maintenance of cost records has not been prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956.

9. a) The Company has not regularly deposited undisputed statutory dues like Provident Fund and Employees State Insurance dues. According to the information and explanation given to us by the management, there are no undisputed amount payable in respect of Income-Tax as per return filed, Wealth-Tax, Sales-Tax, Custom-Duty and Excise-Duty. PFdues Rs 3,11,730/-& TDS (Income Tax jdues Rs 1,90,058/-were outstanding as on 31st March 2013 for a period more than six months from the date they became payable and Rs. 3,18,714/- towards Income Tax Demand for the assessment year 2006-07 & Rs. 2,11,000/- being FBT pertaining to financial year 2008-09.

b) According to the information and explanations given to us, there are no disputed demand amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom duty and Excise Duty outstanding as on 315" March 2012 for a period of more than six months from the date they become payable except for income tax Rs. 350800/- for AY 2008-09 & Rs. 14675661/- for AY 2007-08.

10. The Company is registered for a period for more than five years. There are accumulated losses, at the end of financial year, as per the Profit & Loss Account. The Company has incurred net loss during the year In the preceding year also the Company has incurred net loss.

11. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to banks during the year. The credit facilities availed from Karnataka Bank Ltd. and Bank of India have been classified as NPA during the year.

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

13. The provisions of any special statute as specified under clause (xiii) of the order are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

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 institution.

16. According to the information and explanations given to us, the term loans have been utilized for the purpose of which it has been obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, no short-term loans have been used for long-term investment.

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

19. The Company has not issued any debentures during the year,

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

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year.

For KPMR & ASSOCIATES CHARTERED ACCOUNTANTS FRN:002504N

Sd/- ( DEEPAK JAIN) PARTNER M. No: 090854

PLACE: NEW DELHI DATE: May 30, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statement of TRITON CORP LIMITED (Formerly Stencil Apparel Brands Limited) ("the Company "), which comprises the Balance Sheet as at March 31, 2013 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") 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 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 Chartffed 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 the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of tie financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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.

Basis for qualified opinion

Attention is invited to the

a) Note no.4 & 5 regarding non—provision of impairment of assets taking into account the value of assets as at 31s'' March 2013. The amount has not been ascertained and disclosed. In view of the management there is no impairment of assets, hence provision is not required.

b) Note no. 8 regarding pending confirmation / reconciliation of balances with parties and consequential adjustments, if any.

c) A sum of Rs41.68,16,864/- pertaining to the bad debts has been written off till date in respect of export sales and advance to suppliers. However, the necessary approval from Reserve Bank of India for such write off and extension of period for recovery of balance dues over one year amounting to Rs. 27.03,93.622/- is yet to be obtained. In the absence of full details and approvals, we have accepted the management representation regarding the quantum of write off and provision in respect of sundry debtors as adequate. (Refer Note No.-15)

d) Note no. 11 regarding non—provision of the diminution in the value of long term investments and the quantum has not been ascertained.

e) Note No. 12 regarding the basic assumption about going concerh. BPO / Call centre operations remained suspended from third quarter of financial year 2008-09. However, these accounts have been drawn on the concept of going concern.

f) Note no. 13 non provision of interest payable on outstanding secured loan balances with lenders as the loan accounts have become non performing and are subject to recovery proceedings.

Subject to (a) to (f) above and where th e quantum has not been ascertained, had the above items been provided, the loss for the year, would have been higher to that extent, in our opinion and to the best of our information and according to the explanations given to us, the said Accounts read with the accounting policies and the other 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.

Qualified Opinion

In our opinion and to the best of our information and accordng to the explanations given to us, except for the effects of the matter described in the basis for qualified opinion paragraph, the aforesaid financial statements give the information required by the Companies Act, 1956 in the manner so required are! 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 tl® Company as at March 31,2013;

b) In the case of Statement of Profit and Loss, of the Loss of the Company for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act 1956 (the Act), we give in the Annexure a statement on the matters specified in paragraphs 4 arai 5 oi 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 purposes of cur audit;

b) In our coinion, 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 & Loss, and Cash Flow Statemes dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profit & Loss, antd Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; &

e) On the basis of the 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 ;

1.(a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) According to the information and explanation gi ven to us, the fixed assets of the company have been physically verified by the management at reasonable intervals in a phased manner so as to cover each .

asset at least once in three years, which in our opinion is reasonable having regard to size of the company and the nature of its assets. As informed to us no material discrepancy between the book records and the physical fixed assets have been noticed on such verification.

(c) Part of fixed assets have been disposed off diring the year to settle the bank dues.The B.RO. / call centre operation remained suspended since third quarter of fnancial year 2008-09. Possession of the other building has been taken over by the bank.The company is not functioning after the aforesaid events.

(Refer Note No.-12 & 13)

2. There are no st ocks or inventories.

3.a. The company has not granted se cured or unsecured loans to companies, firms or other parties covered in the register maintained under section 301 of the Act, except to its subsidiary company having outstanding balance of Rs.818.32 Lac (Maximum amount involved during the year was Rs. 825.72 Lac) .

b. According to the information and explanations given to us, the terms and conditions of loans given, secured and unsecured are not prima-facie prejudicial to the interest of the company. No interest was charged on unsecured loan given to subsidiary company.

c. No terms for repayment has been stipulated in respect of the subsidiary company.

d. The Company has not taken any loans, secured or unsecured, from companies, or other parties covered in the register maintained under Section 301 of the Act.

e.The rate of interest and other terms and conditions of loans taken by the company, secured and unsecured, are prinna facie not prejudicial the interest of company; and

f.The company has become irregular in repayment of principal and interest on secured loans & the loans have become non- performing.(Refer Note 13 )

4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with size of the company and the nature of its business with regard to purchase of stores, fixed Assets and other assets and with regard to sale of services. During the course of our audit we have not observed any continuing failure to correct major weakness in internal controls.

5. a) In our opinion and according to the information and explanations given to us, the transaction that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions of sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the companies Act, 1956, and aggregating during the year to Rs. 5,00,000 or more in respect of each party, have been made at prices which are reasonable having regard to the prevailing market prices for such goods, materials or services or prices at which such transactions for similar goods or services have been made with other parties.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year to which the provisions of section 58-A and 58-AA of Companies Act,

1956 and the rules framed thereunder including the directions issued by the Reserve Bank of India attract.

7. In our opinion, the company does not have formal internal audit system and needs further strengthen to commensurate with the size and nature of the business.

8. As explained to us, the maintenance of cost records has not been prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956.

9. a) The Company has not regularly deposited undis puted statutory dues like Provident Fund and Employees State Insurance dues. According to the information and explanation given to us by the management, there are no undisputed amount payable in respect of Income-Tax as per return filed, Wealth-Tax, Sales-Tax, Custom-Duty and Excise-Duty. PF dues Rs 3,11,730/- & TDS (Income Tax ) dues Rs 1,90,058/- were outstanding as on 31s1 March 2013 for a period more than six months from the date they became payable and Rs. 3,18,714/- towards Income Tax Demand for the assessment year 2006-07 & Rs. 2,11,000/- being FBT pertaining to financial year 2008-09.

b) According to the information and explanations given to us, there are no disputed demand amount payable in respect of Income Tax, Weal th Tax, Sales Tax, Custom duty and Excise Duty outstanding as on 31st March 2012 for a period of more than six months from the date '' they become payable except for income tax Rs. 350800/- for AY 2008-09 & Rs. 14675661/- for AY 2007-

OS.

10. The Company is registered for a period for more t han five years. There are accumulated losses, at the end of financial year, as per the Profit & Loss Account. The Company has incurred net loss during the year. In the preceding year also the Company has incurred net loss.

11. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to banks during the year.The credi t facilities availed from Karnataka Bank Ltd. and Bank of India have been classified as NPA during the year.

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

13. The provisions of any special statute as specified under clause (xiii) of the order are not applicable to the Company.

14. in our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

15. According to the information and explanations given to us, the Company has net-given any guarantee for loans taken by others from banks or financial institution.

16. According to the information and explanations given to us, the term loans have been utilized for the purpose of which it has been obtained.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, no short-term loans have been used for long-term investment.

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

19. The Company has not issued any debentures during the year.

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

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come aero ss any instances of material fraud on or by the Company, noticed or reported during the year.

For KPMR & ASSOCIATES ''

CHARTERED ACCOUNTANTS

FRN: 002504N



Sd/-

( DEEPAK JAIN )

PARTNER

M. No: 090854

LACE: NEW DELHI

DATE: May 30, 2013

 
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