Mar 31, 2018
INDEPENDENT AUDITOR''S REPORT
To
The Members of
VIDEOCON INDUSTRIES LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of VIDEOCON INDUSTRIES LIMITED (the Company), which comprise the Balance Sheet as at March 31, 2018 and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as standalone Ind AS financial statements)
Management''s Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and other accounting principles generally accepted in India.
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 standalone Ind AS 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 Ind AS financial statements based on our audit.
In conducting 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 of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the
in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Board of Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.
Basis for Qualified Opinion
a) As mentioned in Note No. 50 to the Standalone Ind AS Financial Statements, the Company has up to March 31, 2018 directly and through its subsidiaries, made investments of Rs. 75,339.53 Million in Videocon Telecommunications Limited (VTL), the subsidiary. VTL has huge accumulated losses as at March 31, 2018. The ability of VTL to continue as a going concern is substantially dependent on its ability to fund its operating and capital expenditure requirements. VTL is confident of continuing its commercial operations in the National Long Distance (NLD) and International Long Distance (ILD) Business.
However, in view of the huge accumulated losses of VTL and the referral of VTL, in line with the directives of Reserve Bank of India, to National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 as amended, we are unable to express an opinion on the extent of realisability of aforesaid investments in VTL. The consequential effect of the above, on the Standalone Ind AS Financial Statements for the year ended March 31, 2018 is not ascertainable.
The auditors'' report for the preceding financial period was also qualified in respect of this matter.
b) As mentioned in Note No. 52 to the Standalone Ind AS Financial Statements, the Company has been referred to National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 as amended, and there are persistent severe strains on the working capital and there is considerable decline in level of operations of the Company and the Company has been incurring losses. These factors raise significant doubts on the ability of the Company to continue as a "Going Concern". The management has assumed that the going concern concept stands vitiated and is in the process of ascertaining the liquidation value of the assets. The necessary adjustments required on the carrying amount of assets and liabilities are not ascertainable at this stage.
c) As mentioned in Note No. 53 to the Standalone Ind AS Financial Statements, the manufacturing activity of Glass Shell division which manufactured panels and funnels used in Colour Picture Tube of Colour Television, has been suspended from July, 2017 due to poor demand. However, the Company has not assessed or reviewed the plant and machinery and other fixed assets related to the Glass Shell division for the impairment and the impairment loss, if any, has not been ascertained. The consequent effect of the same is not ascertainable.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, the aforesaid standalone Ind AS financial statements read with the Notes thereon 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 March 31, 2018, and its loss, total comprehensive loss, its cash flows and the change in equity for the year ended on that date.
Emphasis of Matter
a) As mentioned in Note No. 51 to the Standalone Ind AS Financial Statements, the balance confirmations and reconciliation have not been received in respect of certain secured and unsecured loans, balances with banks, trade receivables, trade and other payables and loans and advances. In the opinion of the management, there will not be any material impact on the standalone Ind AS financial statements. of joint venture operations on a line by line basis. The Company has participating interest of 25% in Ravva Oil and Gas Field Joint Venture through a Production Sharing Contract (PSC). The Company incorporates its share in the operations of the joint venture based on statement of account received from the Joint Venture/Operator. The Company has received the audited financial statements upto March 31, 2017 and un-audited financial statements for the period April 1, 2017 to March 31, 2018, in respect of the said joint venture received from the Operator which has been certified by the management on which we have placed reliance.
Our opinion is not modified in respect of above matters. Other Matter
The comparative financial information of the Company for the period ended March 31, 2017 and the transition date opening balance sheet as at January 1, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditors whose report for the period ended March 31, 2017 and December 31, 2015 dated May 26, 2017 and May 14, 2016 respectively expressed modified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Report on Other Legal and Regulatory Requirements
1) As required by Section 143(3) of the Act, we report, that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account;
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued there under; except Ind AS 36 ''Impairment of Assets''.
e) The matter relating to the extent of realisability of investments in a subsidiary, management assumption that the going concern concept stands vitiated and the possible impairment loss described in Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act;
g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A;
h) 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, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements. Refer Note 38, 46, 47 and 48 to the standalone Ind AS financial statements.
ii) The Company did not have any long term contracts including derivatives contracts for which there were any material foreseeable losses; and
iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2) As required by the Companies (Auditor''s Report) Order, 2016 (the Order) issued by the Central Government in terms of Section 143(11) of the Act, we give in Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
For S Z DESHMUKH & CO.
Chartered Accountants
(Firm Registration No. 102380W)
D. U. KADAM
Partner
Membership No. 125886
Place: Mumbai Date: June 5, 2018
ANNEXURE "A" TO THE INDEPENDENT AUDITOR''S REPORT
(Referred to in paragraph 1 (g) under ''Report on Other Legal and Regulatory Requirements'' of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of VIDEOCON INDUSTRIES LIMITED (the Company) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S Z DESHMUKH & CO.
Chartered Accountants
(Firm Registration No. 102380W)
D. U. KADAM
Partner
Membership No. 125886
Place: Mumbai Date: June 5, 2018
ANNEXURE "B''TOTHE INDEPENDENT AUDITOR''S REPORT
(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' of our report of even date) (i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.
(c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) (a) As per the information and explanation given to us, the inventories (excluding stock of crude oil lying at extraction site with the Operator) have been physically verified during the period by the management at reasonable intervals. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.
(b) As per information and explanation given to us, no material discrepancies were noticed.
(iii) The Company has granted unsecured loans that are repayable on demand to 11 companies covered in the register maintained under section 189 of the Companies Act, 2013. The Company has not granted any secured/unsecured loans to firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(a) The terms and conditions of the aforesaid loans are not prejudicial to the Company''s interest.
(b) In respect of the aforesaid loans, we are informed that the parties are repaying the loans and interest wherever demanded and thus, there has been no default on the part of these companies to whom the money has been lent.
(c) In respect of the aforesaid loans, there is no overdue amount more than rupee one lakh.
(iv) In our opinion and according to the information and explanation given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, in respect of loans, investments, guarantees and security.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the period. Therefore, the provisions of clause (v) of the Order is not applicable.
(vi) According to the information and explanations given to us, in our opinion, the Company has, pritna facie, made and maintained the prescribed cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under section 148(1) of the Companies Act, 2013. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues with appropriate authorities wherever applicable. According to the information and explanations given to us, undisputed arrears of statutory dues which were outstanding as on March 31, 2018 for a period of more than six months from the date they became payable and not paid till date are given below:
|
Nature of Dues |
Rs. in Million |
1. |
Central Sales Tax |
3.91 |
2. |
Value Added Tax |
230.87 |
3. |
Entry Tax |
45.63 |
4. |
Goods and Service Tax |
256.56 |
(b) According to the information and explanation given to us and on the basis of our examination of the records of the Company, details of dues of income tax, sales tax, service tax, custom duty, excise duty, value added tax, cess which have not been deposited as on March 31, 2018 on account of disputes are given below:
Name of Statute |
Nature of the Dues |
Rs. in Million |
Forum where dispute is pending |
1. Customs Act, 1962 |
Custom Duty and Penalties |
5.83 |
Supreme Court |
1.50 |
High Court |
||
159.72 |
CESTAT |
||
59.64 |
Commissioner |
||
26.28 |
Deputy Commissioner |
||
7.59 |
Asst. Commissioner |
||
2. Central Excise Act, 1944 |
Excise Duty and Penalties |
93.42 |
Supreme Court |
1.78 |
High Court |
||
1,306.69 |
CESTAT |
||
11.86 |
Commissioner (Appeals) |
||
74.75 |
Commissioner |
||
25.34 |
Addl. Commissioner |
||
2.00 |
Asst. Commissioner |
||
3. Finance Act, 1994 (Service Tax Provisions) |
Service Tax and Penalties |
41.77 |
Commissioner |
2.25 |
Addl. Commissioner |
Name of Statute |
Nature of the Dues |
Rs. in Million |
Forum where dispute is pending |
4. Central Sales Tax Act, |
Sales Tax |
44.67 |
High Court |
1956 and Sales Tax Acts |
8.48 |
Appellate Tribunal |
|
of various States |
152.18 |
Tribunal |
|
11.26 |
Commissioner (Appeals) |
||
42.76 |
Joint Commissioner (Appeals) |
||
11.93 |
Joint Commissioner |
||
40.30 |
Addl. Commissioner |
||
24.38 |
Addl. Commissioner (Appeals) |
||
0.19 |
Deputy Commissioner (Appeals) |
||
31.93 |
Deputy Commissioner |
||
26.65 |
Assistant Commissioner |
||
0.20 |
Commercial Tax Officer |
||
6.44 |
Sales Tax Officer |
||
5. Income Tax Act, 1961 |
Income Tax |
2,842.66 |
High Court |
34.09 |
Income Tax Appellate Tribunal |
||
162.67 |
Commissioner (Appeals) |
||
6. Navi Mumbai Municipal Corporation |
Cess |
1,012.64 |
High Court |
(viii) According to the information and explanation given to us and on the basis of our examination of the records of the Company, we observed that, the Company has defaulted in repayment of interest and principal amount of all loans to financial institutions and banks. The default runs into more than 365 days.
The Company has not borrowed from government and has not issued any debentures.
(ix) According to the information and explanations given to us, the Company has not raised money by way of initial public offer or further public offer (including debt instruments) or term loans during the year.
(x) According to the information and explanations given to us, no material fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the period.
(xi) The Company has not paid or provided the managerial remuneration to any of its Director.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.
(xiii) According to the information and explanation given to us and on the basis of our examination of the records of the Company, we observed that, transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements, etc., as required by the applicable accounting standards.
(xiv) According to the information and explanation given to us and on the basis of our examination of the records of the Company, we observed that, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the period.
(xv) According to the information and explanation given to us and on the basis of our examination of the records of the Company, we observed that, the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Therefore, the Clause (xvi) of paragraph 3 of the Order is not applicable to the Company.
For S Z DESHMUKH & CO.
Chartered Accountants
(Firm Registration No. 102380W)
D. U. KADAM
Partner
Membership No. 125886
Place: Mumbai Date: June 5, 2018
Dec 31, 2014
We have audited the accompanying financial statements of VIDEOCON
INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as
at 31st December, 2014, the Statement of Profit and Loss and the Cash
Flow Statement for the 18 months period ended on that date, and a
summary of significant accounting policies and other explanatory
information.
2. 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 notified under the Companies Act, 1956 ("the
Act") (which are deemed to be applicable as per section 133 of the
Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules,
2014) 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.
3. Auditors'' 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. I n making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s Internal Control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
4. Basis of Qualified Opinion
As mentioned in Note No.40, to the financiat statements, the Company
has, directly and through its subsidiaries, made investments
aggregating to Rs. 65,002.03 Million (As at 30th June, 2013 Rs. 49,337.50
Million) and also given advances ofRs. 340.4b Million (As at 30th June,
2013 Rs. 782.14 Million) to Videocon Telecommunications Limited (VTL),
the subsidiary. The licenses awarded by the Department of
Telecommunications (DoT) to VTL to provide Unified Access Services
(UAS) in 21 circles in India w.e.f 25th January, 2008, were quashed by
the Hon''ble Supreme Court of India, vide its order and judgment dated
2nd February, 2012. Subsequently, VTL participated in the auction
conducted by DoT and has been awarded the Unified Licenses (Access
Services) for 6 circles with effect from 16th February, 2013, which are
valid for a period of 20 years. VTL has also been allotted spectrum in
these 6 circles. VTL is continuing its commercial operations.
VTL has been continuously incurring losses and has huge accumulated
losses as at 31st December, 2014. The ability of VTL to continue as a
going concern is substantially dependent on its ability to fund its
operating and capital expenditure requirements. The management is
confident of mobilizing the necessary resources for continuing the
operations of VTL as per the business plan.
However, in view of the huge accumulated losses of the VTL, we are
unable to express an opinion on the extent of realisability of
aforesaid investments in and advances to VTL The consequential effect
of the above on assets and liabilities as at 31st December, 2014 and
loss for the period ended on that date is not ascertainable.
5. Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us except for the possible effects of the matters
described in the Basis of Qualified Opinion paragraph, the aforesaid
financial statements read with the Notes thereon 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 31 st December, 2014;
b) In the case of the Statement of Profit and Loss, of the profit for
the period ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
6. Other Matters
The Ministry of Corporate Affairs (MCA) had on 1st April, 2014, vide
its General Circular No. 01/2014, Dissemination of Information with
regards to the provision of the Companies Act, 2013 as notified titt
date vis a vis corresponding provisions of the Companies Act, 1956,
identifies such sections of the Companies Act, 1956, that would cease/
continue to have effect from 1st April, 2014.
Accordingly, in terms of the aforesaid Circular, our reporting in
respect of section 227(3)(f) of the Companies Act, 1956, and clauses
(iii), (v) (a) and (b), (vi), (viii), (xiv), (xviii) of the Companies
(Auditor''s Report) Order, 2003 (dealing with sections 49, 58A, 58AA,
209(1 )(d) and 301 of the Companies Act, 1956) is only for the period
beginning from 1st July, 2013 till 31st March, 2014 since as per the
aforementioned MCA circular these sections have ceased to have effect
from 1 st April, 2014.
7. Report on Other Legal and Regulator/ Requirements
A. 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 said
Order to the extent the same are applicable to the Company.
B. 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. Proper returns adequate for the purpose of our audit have been
received from branches not visited by us. The branch Auditors Reports
have been forwarded to us and have been appropriately dealt with;
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 and with the audited returns from the foreign
branches;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
the Cash Flow Statement comply with the Accounting Standards notified
under the Act (which are deemed to be applicable as per section 133 of
the Companies Act, 2013 read with Rule 7 of the Companies (Accounts)
Rules, 2014);
e) on the basis of written representations received from the directors
as on 31st March, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2014, from
being appointed as a director in terms of clause (g) of sub section (1)
of section 274 of the Act. The provisions of section 274(1 )(g) ceased
to have effect from 1 st April, 2014 and hence, the reporting
requirement under section 227(3)(f) of the Act is not applicable as of
the balance sheet date.
Statement referred to in paragraph 7A read with paragraph 6 of the
Independent Auditors'' Report of even date to the Members of VIDEOCON
INDUSTRIES LIMITED ("the Company") on the financial statements for the
period ended 31st December, 2014.
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanations given to us, physical
verification of fixed assets, other than those under joint venture, has
been carried out at reasonable intervals in terms of the phased
programme of verification adopted by the Company and no material
discrepancies were noticed on such verification. In our opinion, the
frequency of verification is reasonable, having regard to the size of
the Company and the nature of its business.
(c) In our opinion, during the period the Company has not disposed off
any substantial part of fixed assets.
(ii) (a) As per the information and explanation given to us, the
inventories (excluding stock of crude oil lying at extraction site with
the Operator) have been physically verified during the period by the
management. In our opinion, having regard to the nature and location of
stocks, the frequency of the physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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. As per the
information and explanations given to us, the discrepancies noticed on
physical verification of stocks were not material in relation to the
operations of the Company and the same have been properly dealt with in
the books of account.
(iii) (a) As per the information and explanations given to us, the
Company has not granted or taken any loans, secured or unsecured,
to/from Companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. (b) As the
Company has neither granted nor taken any loans, secured or unsecured
to/from companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956, sub-clauses
(b), (c), (d), (f) and (g) of clause (iii) of paragraph 4 of the Order
are not applicable, (iv) In our opinion and according to the
information and explanations given to us, there are adequate internal
control systems commensurate with the size of the Company and the
nature of its business with regard to purchases of inventory and fixed
assets and for the sales of goods and services. During the course of
our audit, we have not observed any continuing failure to correct the
major weakness in the internal control systems, (v) (a) Based on the
audit procedures applied by us and according to the information and
explanations provided by the management, we are of the opinion that the
particulars of contracts or arrangements referred to in section 301 of
the Companies Act, 1956, have been entered in the register required to
be maintained under that section, (b) In our opinion and according to
the information and explanations given to us, the transactions made in
pursuance of contracts or arrangements entered in the register
maintained under section 301 of the Companies Act, 1956, and exceeding
the value of Rupees Five Lakhs, in respect of any party during the
period, have been made at prices which are reasonable having regard to
prevailing market price at the relevant time, (vi) The Company has not
accepted any deposits from the public within the meaning of the
provisions of section 58A and 58AA or any other relevant provision of
the Companies Act, 1956 and rules framed there under, (vii) In our
opinion, the Company has an internal audit system commensurate with its
size and nature of its business.
(viii) The Central Government has prescribed maintenance of the cost
records under section 209(1 )(d) of the Companies Act, 1956, in respect
of the Company''s products. As per the information and explanations
provided to us, we are of the opinion that prima facie, the prescribed
records have been made and maintained. We have however not made a
detailed examination of the records with a view to determine whether
they are accurate or complete, (ix) (a) According to the information
and explanations given to us and the records examined by us, the
Company is regular in depositing with appropriate authorities
undisputed statutory dues including Provident Fund, Employees'' State
Insurance, Investor Education and Protection Fund, Income tax, Sales
tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other
statutory dues wherever applicable. According to the information and
explanations given to us, no undisputed arrears of statutory dues were
outstanding as at 31st December, 2014 for a period of more than six
months from the date they became payable, (b) According to the records
of the Company examined by us and information and explanations given to
us, the particulars of dues of Sales tax, Income tax, Wealth tax,
Service tax, Custom duty, Excise duty, Cess which have not been
deposited on account of any disputes, are given below:
Name of Statute Nature of Dues rs in Forum where
Million dispute is
pending
1. Customs Act, Custom Duty and Penalties 7.71 Supreme Court
1.50 High Court
0.04 Superintendent
163.25 CESTAT
0.93 Commissioner
(Appeals)
_67.56 Commissioner_
15.49 Joint
Commissioner
17.63 Deputy
Commissioner
8.59 Asst.
Commissioner
2. Central Excise Excise Duty and Penalties 4.01 High Court
Act 1944
490.86 CESTAT
3.61 Tribunal
1.23 Commissioner
(Appeals)
637.32 Commissioner
32.97 Additional
Commissioner
0.85 Deputy
Commissioner
0.71 Assistant
Commissioner
Name of Statute Nature of Dues rs in Forum where
Million dispute is
pending
3. Finance Act, Service Tax and Penalties 24.16 CESTAT
1944 service
Tax Provisions) 2.25 Additional
Commissioner
0.15 Deputy
Commissioner
1.03 Assistant
Commissioner
0.11 Superintendent
4. Central Sales Sales Tax 29.46 High Court
TAx Act 1956
and State
Sales Tax 16.49 Tribunal
Acts of various
States 10.30 Commissioner
1.05 Sr. Joint
Commissioner
18.20 Joint Commiss
ioner (Appeals)
516.50 Joint Commiss
ioner
409.44 Additional
Commissioner
0.19 Deputy
Commissioner
(Appeals)
31.54 Deputy Commiss
ioner
18.21 Assistant Commis
sioner
12.66 Commercial Tax
Officer
0.27 Assistant
Commercial Tax
Officer
5. Income Tax Income Tax 155.23 High Court
Act 1961 62.40 Appellate
Tribunal
6. Navi Mumbai Cess 1,012.64 High Court
Municipal
Corporation
(x) There are no accumulated losses as at 31st December, 2014. The
Company has not incurred any cash losses during the period covered by
our audit and the immediately preceding financial year.
(xi) Based on our audit procedures and the information and explanations
given to us, it is observed that, the Company has defaulted in
repayment of loans and payment of interest to banks and financial
institutions which are summarized below:
Particulars Principal Amount Interest Amount Delay in Days - Range
(Rs. in Million) (Rs. in Million)
Amount paid before
the period end 3,795.23 14,408.74 1 to 88 days
Amount outstanding
as at 31st
December, 2014 - - -
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund company or
nidhi/mutual benefit fund/society Therefore the clause (xiii) of
paragraph 4 of the Order is not applicable to the Company.
(xiv) The Company has maintained proper records of transactions and
contracts in respect of dealing and trading in shares, securities,
debentures and other investments and timely entries have generally been
made therein. All shares, debentures and other securities have been
held by the Company in its own name except to the extent of the
exemption granted under section 49 of the Companies Act, 1956.
(xv) According to the information and explanations given to us, the
terms and conditions of guarantees given by the Company for loans taken
by others from banks or financial institutions are prima facie not
prejudicial to the interest of the Company.
(xvi) According to the information and explanations given to us, the
term loans raised during the period were applied, on an overall basis,
for the purposes for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
our overall examination of the Balance Sheet of the Company, we report
that the Company has not used funds raised on short term basis for long
term investments.
(xviii) The Company has not made any preferential allotment of shares
during the period to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) The Company has not issued any secured debentures during the
period.
(xx) During the period, the Company has not raised any money by way of
public issue. The Company has during the period raised Rs. 2,851.27
Million (including securities premium ofRs. 2,694.27 Million) by way of
issue of Global Depository Receipts.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
period.
For KHANDELWAL JAIN & CO. For KADAM & CO.
Chartered Accountants Chartered Accountants
(Firm Registration No. 105049W) (Firm Registration No. 104524W)
BHUPENDRA Y. KARKHANIS U. S. KADAM
Partner Partner
Membership No.: 108336 Membership No.: 31055
Place : Mumbai
Date: 15th May, 2015
Jun 30, 2013
1. We have audited the attached Balance Sheet of VIDEOCON INDUSTRIES
LIMITED (the Company), as at 30th June, 2013, Statement of Profit and
Loss and also the Cash Flow Statement of the Company for the 18 months
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 the Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in 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, issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956, on the basis of such checks as considered
appropriate and according to the information and explanations given to
us during the course of the audit, we give in the Annexure hereto a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the 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. Proper returns adequate for the purpose of our audit have been
received from branches not visited by us. The branch Auditors Reports
have been forwarded to us and have been appropriately dealt with;
c) The Balance Sheet, Statement of Profit and Loss and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account and with the audited returns from the foreign branches;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Section 211(3C) of the Companies
Act, 1956 (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 30th June, 2013 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 30th June,
2013, from being appointed as a director in terms of Section 274(1 )(g)
of the Companies Act, 1956;
f) As mentioned in Note No. 37, to the financial statements, the
Company has, directly and through its subsidiaries, made investments
ofX 49,337.50 Million and advanced loans ofRs. 782.74 Million to Videocon
Telecommunications Limited (VTL), the subsidiary. VTL had been awarded
licenses by the Department of Telecommunications (DoT) to provide
Unified Access Service (UAS) in 27 circles in India w.e.f. 25th
January, 2008, which were valid for 20 years. VTL had also been
allotted spectrum in 20 circles and had launched its commercial
operations in 17 circles.
The Hon ''ble Supreme Court of India, vide its order and judgment dated
2nd February, 2012 ("Judgment") in two separate writ petitions, quashed
the UAS licenses granted on or after 10th January, 2008 pursuant to two
press releases issued on 10th January, 2008 and the subsequent
allocation of spectrum to licensees which included the 21 UAS licenses
issued and allocation of spectrum to VTL.
The Hon''ble Supreme Court of India vide its Judgment had also directed
the Central Government to grant fresh UAS licenses and spectrum
allocation by auction. The DoT, had issued a Notice inviting
applications for auction of spectrum, VTL participated in the said
auction and has been awarded the Unified Licenses (Access Services) for
6 circles w.e.f. 16th February, 2013, which are valid for a period of
20 years. VTL has also been allotted spectrum in these 6 circles. VTL
is continuing its commercial operations.
VTL has been continuously incurring losses and has huge accumulated
losses as at 30th June, 2013. The ability of VTL to continue as a going
concern is substantially dependent on its ability to fund its operating
and capital funding requirements. VTL is confident of mobilizing the
necessary resources for continuing its operations as per the business
plan.
However, in view of the accumulated losses of VTL, we are unable to
express an opinion on the extent of realisability of aforesaid
investments in and advances to VTL. The consequential effect of the
above on assets and liabilities as at 30th June, 2013 and the loss for
the period ended on that date is not ascertainable.
g) Without qualifying our report we draw attention to Note No. 38(A),
to the financial statements, regarding incorporation of the Company''s
share, in the operations of the joint ventures based on the statements
received from the respective Operator. The Company has received the
audited financial statements for the period upto 31st March, 2013 and
un-audited financial statements for the period 1st April, 2013 to 30th
June, 2013, in respect of Ravva Oil & Gas Field Joint Venture on which
we have placed reliance.
h) In our opinion and to the best of our information and according to
explanations given to us, the said financial statements subject to our
comment in paragraph (f) above, the impact of which on the financial
statements of the Company, if any, is unascertainable and read together
with the Significant Accounting Policies and 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 30th June, 2013;
(ii) In the case of the Statement of Profit and Loss, of the loss for
the period ended on that date; and
(iii) In the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
ANNEXURE TO THE AUDITORS'' REPORT
Statement referred to in paragraph 3 of the Auditors'' Report of even
date to the Members of VIDEOCON INDUSTRIES LIMITED (the Company) on the
financial statements for the period ended 30th June, 2013.
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanations given to us, physical
verification of fixed assets, other than those under joint venture, has
been carried out at reasonable intervals in terms of the phased
programme of verification adopted by the Company and no material
discrepancies were noticed on such verification. In our opinion, the
frequency of verification is reasonable, having regard to the size of
the Company and the nature of its business.
(c) In our opinion, during the period the Company has not disposed off
substantial part of fixed assets.
(ii) (a) As per the information and explanations given to us, the
inventories (excluding stock of crude oil lying at extraction site with
the Operator) have been physically verified during the period by the
management. In our opinion, having regard to the nature and location of
stocks, the frequency of the physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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. As per the
information and explanations given to us, the discrepancies noticed on
physical verification of stocks were not material in relation to the
operations of the Company and the same have been properly dealt with in
the books of account.
(iii) (a) As per the information and explanations given to us, the
Company has not granted or taken any loans, secured or unsecured,
to/from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
(b) As the Company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956,
sub-clauses (b), (c), (d), (f) and (g) of Clause (iii) of paragraph 4
of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchases of inventory and fixed assets and for the sales of goods
and services. During the course of our audit, we have not observed any
continuing failure to correct the major weakness in the internal
control systems.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the particulars of contracts or arrangements referred
to in Section 301 of the Companies Act, 1956, have been entered in the
register required to be maintained under that Section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956, and exceeding the value of Rupees Five Lakhs,
in respect of any party during the period, have been made at prices
which are reasonable having regard to prevailing market price at the
relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of the provisions of Section 58A and 58AA or any other
relevant provision of the Companies Act, 1956 and rules framed there
under.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) The Central Government has prescribed maintenance of the cost
records under Section 209(1 )(d) of the Companies Act, 1956, in respect
of the Company''s products. As per the information and explanations
provided to us, we are of the opinion that prima facie, the prescribed
records have been made and maintained. We have however not made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
(ix) According to the information and explanations given to us and
the records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Employees'' State Insurance, Investor Education and Protection
Fund, Income tax, Sales tax, Wealth tax, Service tax. Custom duty,
Excise duty, Cess and other statutory dues wherever applicable.
According to the information and explanations given to us, no
undisputed arrears of statutory dues were outstanding as at 30th June,
2013, for a period of more than six months from the date they became
payable.
(x) There are no accumulated losses as at 30th June, 2013. The Company
has not incurred any cash losses during the period covered by our audit
and the immediately preceding financial year.
(xi) Based on our audit procedures and the information and explanations
given to us, we observed that, the Company has defaulted in repayment
of loans and payment of interest to banks and financial institutions is
summarized below:
Particulars X in Million Delay in Days
Principal Repayment 20,731.85 1 to 89 Days
Interest 19,515.97 1 to 89 Days
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund company or
nidhi/mutual benefit fund/society. Therefore the Clause (xiii) of
paragraph 4 of the Order is not applicable to the Company.
(xiv) The Company has maintained proper records of transactions and
contracts in respect of dealing and trading in shares, securities,
debentures and other investments and timely entries have generally been
made therein. All shares, debentures and other securities have been
held by the Company in its own name except to the extent of the
exemption granted under Section 49 of the Companies Act, 1956.
(xv) According to the information and explanations given to us, the
terms and conditions of guarantees given by the Company for loans taken
by others from banks or financial institutions are prima facie not
prejudicial to the interest of the Company.
(xvi) According to the information and explanations given to us, the
term loans raised during the period were applied, on an overall basis,
for the purposes for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
our overall examination of the Balance Sheet of the Company, we report
that the Company has not used funds raised on short term basis for long
term investments.
(xviii) The Company has not made any preferential allotment of shares
during the period to parties and companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any secured debentures during the
period.
(xx) During the period, the Company has not raised any money by way of
public issue.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
period.
For KHANDELWAL JAIN & CO. For KADAM & CO.
Chartered Accountants Chartered Accountants
(Firm Registration No. 105049W) (Firm Registration No. 104524W)
SHIVRATAN AGARWAL U. S. KADAM
Partner Partner
Membership No.: 104180 Membership No.:31055
Place : Mumbai
Date : 29th November, 2013
Dec 31, 2011
1. We have audited the attached Balance Sheet of VIDEOCON INDUSTRIES
LIMITED, as at 31st December, 2011, Profit and Loss Account and also
the 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.
2. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in 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,
issued by the Central Government of India in terms of Section 227(4A)
of the Companies Act, 1956, on the basis of such checks as considered
appropriate and according to the information and explanations given to
us during the course of the audit, we give in the Annexure hereto a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the 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. Proper returns adequate for the purpose of our audit have been
received from branches not visited by us. The branch Auditors Reports
have been forwarded to us and have been appropriately dealt with;
c) The Balance Sheet, Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account and with the audited returns from the foreign branches;
d) In our opinion, the Balance Sheet, Profit and Loss Account, and the
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Section 211(3C) of the Companies
Act, 1956;
e) On the basis of written representations received from the directors
as on 31st December, 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st December, 2011 from being appointed as a director in terms of
Section 274(1)(g) of the Companies Act, 1956;
f) As mentioned in Note No. B-9 of Schedule No. 15 to the financial
statements, the Company has, directly and through its subsidiaries,
made investments of Rs 15,000.00 Million, given share application money
ofRs 5,000.00 Million and advanced loans ofRs 19,620.84 Million to
Videocon Telecommunications Limited (VTL), the subsidiary. VTL was
granted Unified Access Services (UAS) Licenses in 21 circles on 10th
January, 2008 and had also been allotted spectrum in 20 circles out of
which it has launched its services in 16 circles.
The Hon'ble Supreme Court of India, vide its judgement dated 2nd
February, 2012 in two separate writ petitions filed by Centre for
Public Interest Litigation and by another, has quashed all the UAS
licenses granted on or after 10th January, 2008 and the subsequent
allocation of spectrum to these licencees. This includes the 21
licenses issued to VTL and the spectrum allotted to it in 20 circles.
The Hon'ble Supreme Court of India had directed that its aforesaid
order shall be operative after four months from 2nd February, 2012. On
24th April, 2012, the Hon'ble Supreme Court of India modified its order
and postponed the operation of its order of quashing the Telecom
Licenses and related allocation of spectrum to 7th September, 2012. The
Hon'ble Supreme Court of India has, vide order dated 2nd February,
2012, also directed TRAI to make fresh recommendations for grant of
licenses and allocation of spectrum and the Central Government to grant
fresh licenses and allocation of spectrum by auction thereafter. The
Central Government has announced that it will complete the auction of
licenses and related spectrum on or before 31st August, 2012.
Pending the fresh auction as mentioned above, VTL is continuing its
business. It proposes to participate in the fresh auction and is
hopeful of continuing the business thereafter. Accordingly, in the
opinion of the management, no provision is required for diminution in
the value of aforesaid investments, share application money and
advances. We are unable to comment upon the extent of realisability of
the said investments, share application money and advances;
g) In our opinion and to the best of our information and according to
explanations given to us, the said financial statements subject to
paragraph (f) above, the impact of which on the financial statements of
the Company, if any, is unascertainable and read together with the
Significant Accounting Policies and 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 December, 2011;
(ii) In the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO IN THE AUDITORS' REPORT
Statement referred to in paragraph 3 of the Auditors' Report of even
date to the Members of VIDEOCON INDUSTRIES LIMITED on the financial
statements for the year ended 31st December, 2011.
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanations given to us, physical
verification of fixed assets, other than those under joint venture, has
been carried out at reasonable intervals in terms of the phased
programme of verification adopted by the Company and no material
discrepancies were noticed on such verification. In our opinion, the
frequency of verification is reasonable, having regard to the size of
the Company and the nature of its business.
(c) In our opinion, during the year the Company has not disposed off a
substantial part of fixed assets.
(ii) (a) As per the information and explanations given to us, the
inventories (excluding stock of crude oil lying at extraction site with
the Operator) have been physically verified during the year by the
management. In our opinion, having regard to the nature and location of
stocks, the frequency of the physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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. As per the
information and explanations given to us the discrepancies noticed on
physical verification of stocks were not material in relation to the
operations of the Company and the same have been properly dealt with in
the books of account.
(iii) (a) As per the information and explanations given to us, the
Company has not granted or taken any loans, secured or unsecured,
to/from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
(b) As the Company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956,
sub-clauses (b), (c), (d), (f) and (g) of Clause (iii) of paragraph 4
of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchases of inventory and fixed assets and for the sales of goods
and services. During the course of our audit, we have not observed any
continuing failure to correct the major weakness in the internal
control systems.
(v) (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the particulars of contracts or arrangements referred
to in Section 301 of the Companies Act, 1956, have been entered in the
register required to be maintained under that Section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956, and exceeding the value of Rupees Five Lakhs,
in respect of any party during the year, have been made at prices which
are reasonable having regard to prevailing market price at the relevant
time.
(vi) The Company has not accepted any deposits from the public within
the meaning of the provisions of Section 58A and 58AA or any other
relevant provision of the Companies Act, 1956 and rules made there
under.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) The Central Government has prescribed maintenance of the cost
records under Section 209(1)(d) of the Companies Act, 1956, in respect
of the Company's products. As per the information and explanations
provided to us, we are of the opinion that prima facie, the prescribed
records have been made and maintained. We have however not made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees' State
Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs
duty, Excise duty, Cess and other statutory dues wherever applicable.
According to the information and explanations given to us, no
undisputed arrears of statutory dues were outstanding as on 31st
December, 2011 for a period of more than six months from the date they
became payable.
(b) According to the records of the Company examined by us and
information and explanations given to us, the particulars of dues of
Sales tax, Income tax, Wealth tax, Service tax, Customs duty, Excise
duty, Cess which have not been deposited on account of disputes, are
given below:
Nature of Statute Nature of Dues Rs in Million Forum where
dispute is
Pending
1. Customs
Act, 1962 Custom Duty 131.09 CESTAT
1.14 Asst.
Commissioner
0.93 Commissioner
(Appeals)
200.86 Supreme Court
17.44 Deputy
Commissioner
89.49 Commissioner
Custom Penalty 6.00 CESTAT
2. Central
Excise Act,
1944 / Finance
Act, 1994 Excise Duty 1.46 Asst.
Commissioner
(Service Tax
Provisions) 2.65 Addl.
Commissioner
4.61 Joint
Commissioner
87.28 Commissioner
0.70 Commissioner
(Appeals)
71.02 CESTAT
3.61 Tribunal
33.02 High Court
Excise Penalty 3.16 Commissioner
(Appeals)
0.01 High Court
118.11 CESTAT
Service Tax 7.16 Asst.
Commissioner
14.95 Deputy
Commissioner
2.99 Joint
Commissioner
7.54 Addl.
Commissioner
1.21 Commissioner
(Appeals)
1.91 CESTAT
222.23 Commissioner
Service Tax
Penalty 20.89 Commissioner
0.28 Commissioner
(Appeals)
1.88 CESTAT
3. Central
Sales Tax
Act, 1956 and
State Sales Tax Sales Tax 13.88 Sales Tax
Officer/
Commercial
Taxation
Officer
Acts of various
States 0.55 Asst.
Commissioner (A)
0.18 Asst.
Commissioner of
Commercial Tax
0.27 Asst.
Commercial
Taxation Officer
10.75 Deputy
Commissioner (A)
116.94 Joint
Commissioner (A)
18.58 Joint
Commissioner -
Commercial Tax
364.08 Addl. Commissioner
5.53 Addl. Deputy
Commissioner
27.46 Tribunal
0.23 Addl. E&T
Commissioner
0.85 High Court
0.46 Supreme Court
4. Income Tax
Act, 1961 Income Tax 494.74 Appellate
Tribunal
5. Navi Mumbai
Municipal
Corporation Cess 1,012.64 High Court
(x) There are no accumulated losses as at 31st December, 2011. The
Company has not incurred any cash losses during the year covered by our
audit and the immediately preceding financial year.
(xi) Based on our audit procedures and the information and explanations
given by the management, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions, banks or to
debenture holders during the year.
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the Company is not a Chit fund Company or nidhi/
mutual benefit fund/ society. Therefore the Clause (xiii) of paragraph
4 of the Order is not applicable to the Company.
(xiv) The Company has maintained proper records of transactions and
contracts in respect of dealing and trading in shares, securities,
debentures and other investments and timely entries have generally been
made therein. All shares, debentures and other securities have been
held by the Company in its own name except to the extent of the
exemption granted under Section 49 of the Companies Act, 1956.
(xv) According to the information and explanations given to us, the
terms and conditions of guarantees given by the Company for loans taken
by others from banks or financial institutions are prima facie not
prejudicial to the interest of the Company.
(xvi) According to the information and explanations given to us, the
term loans raised during the year were applied, on an overall basis,
for the purposes for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
our overall examination of the Balance Sheet of the Company, we report
that the Company has not used funds raised on short term basis for long
term investments.
(xviii)The Company has not made any preferential allotment of shares
during the year to parties and companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any secured debentures during the
year. The Company has created security in respect of debentures issued
in earlier years.
(xx) During the year, the Company has not raised any money by way of
public issue.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
For KHANDELWAL JAIN & CO. For KADAM & CO.
Chartered Accountants Chartered Accountants
(Firm Registration No. 105049W) (Firm Registration No. 104524W)
AKASH SHINGHAL U. S. KADAM
Partner Partner
Membership No. 103490 Membership No. 31055
Place : Mumbai
Date : 26th May, 2012
Dec 31, 2010
1. We have audited the attached Balance Sheet of VIDEOCON INDUSTRIES
LIMITED, as at 31st December, 2010, Profit and Loss Account and also
the Cash Flow Statement of the Company for the period ended on that
date annexed thereto. These financial statements are the responsibility
of the CompanyÃs management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in 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 (AuditorÃs Report) Order, 2003, issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, on the basis of such checks as considered appropriate and
according to the information and explanations given to us during the
course of the audit, we give in the Annexure hereto a statement on the
matters specified in Paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the 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. Proper returns adequate for the purpose of our audit have been
received from branches not visited by us. The branch Auditors Reports
have been forwarded to us and have been appropriately dealt with;
c) The Balance Sheet, Profit and Loss Account and the Cash Flow
Statement dealt with by the report are in agreement with the books of
account and with the audited returns from the foreign branches;
d) In our opinion, the Balance Sheet, Profit and Loss Account, and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in Section 211(3C) of the Companies Act, 1956;
e) According to the information and explanations given to us and on the
basis of written representations received from the directors and taken
on record by the Board of Directors, we report that none of the
directors is disqualified from being appointed as a director in terms
of Section 274(1)(g) of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
explanations given to us, the said financial statements, read together
with the signifcant accounting policies, paragraph 4 above and 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 December, 2010;
(ii) In the case of the Profit and Loss Account, of the profit for the
period ended on that date; and
(iii) In the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
ANNEXURE REFERRED TO THE AUDITORSÃ REPORT
Statement referred to in paragraph 3 of the Auditorsà Report of even
date to the Members of VIDEOCON INDUSTRIES LIMITED on the financial
statements for the period ended 31st December, 2010.
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanations given to us, physical
verification of fixed assets, other than those under joint venture, has
been carried out at reasonable intervals in terms of the phased
programme of verification adopted by the Company and no material
discrepancies were noticed on such verification. In our opinion, the
frequency of verification is reasonable, having regard to the size of
the Company and nature of its business.
(c) In our opinion, during the period the Company has not disposed off
any substantial part of fixed assets.
(ii) (a) As per the information and explanation given to us, the
inventories (excluding stock of crude oil lying at extraction site with
the Operator) have been physically verified during the period by the
management. In our opinion, having regard to the nature and location of
stocks, the frequency of the physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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. As per the
information and explanations given to us, the discrepancies noticed on
physical verification of stocks were not material in relation to the
operations of the Company and the same have been properly dealt with in
the books of account.
(iii) (a) As per the information and explanations given to us, the
Company has not granted or taken any loans, secured or unsecured,
to/from Companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956.
(b) As the Company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956,
sub-clauses (b), (c), (d), (f) and (g) of Clause
(iii) of paragraph 4 of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchases of inventory and fixed assets and for the sales of goods
and services. During the course of our audit, we have not observed any
continuing failure to correct the major weakness in the internal
controls systems.
(v) (a) Based on the audit procedures applied by us
and according to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Companies Act, 1956,
have been entered in the register required to be maintained under that
Section.
(b) In our opinion and according to the information and
explanations given to us, the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Companies Act, 1956, and exceeding the value of
Rupees Five Lakhs, in respect of any party during the period, have been
made at prices which are reasonable having regard to prevailing market
price at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of the provisions of Sections 58A and 58AA or any other
relevant provision of the Companies Act, 1956 and rules made
thereunder.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) The Central Government has prescribed maintenance of the cost
records under Section 209(1)(d) of the Companies Act, 1956, in respect
of the CompanyÃs products. As per the information and explanations
provided to us, we are of the opinion that prima facie, the prescribed
records have been made and maintained. We have however not made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employeesà State
Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty,
Excise duty, Cess and other statutory dues wherever applicable.
According to the information and explanations given to us, no
undisputed arrears of statutory dues were outstanding as on 31st
December, 2010 for a period of more than six months from the date they
became payable.
(b) According to the records of the Company examined by us and
information and explanations given to us, the particulars of dues of
Sales tax, Income tax, Wealth tax, Service tax, Custom duty, Excise
duty, Cess which have not been deposited on account of disputes, are
given below:
Nature of
Statute Nature of Dues Amount
(Rs. Million) Forum where
dispute is
pending
1. Customs
Act, 1962 Custom Duty 120.51 CESTAT
1.13 Asst. Commissioner
0.93 Commissioner (Appeals)
1.31 Addl. Commissioner
200.61 Supreme Court
18.86 Deputy Commissioner
57.32 Commissioner
Custom Penalty 11.00 Commissioner
2. Central
Excise Act,
1944/ Finance
Act, 1994 Excise Penalty 8.25 Commissioner (Appeals)
(Service Tax
Provisions) 0.12 Asst. Commissioner
92.93 CESTAT
Service Tax and
Education Cess 1.06 Asst. Commissioner
9.73 Addl. Commissioner
0.83 Commissioner
(Appeals)
1.91 CESTAT
97.75 Commissioner
Excise Duty 4.61 Joint Commissioner
76.87 CESTAT
12.61 Commissioner
9.65 Commissioner
(Appeals)
0.20 Dy. Commissioner
3.82 High Court
3. Central
Sales Tax
Act, 1956
and State
Sales Sales Tax 21.40 Jt.Commissioner
(Appeals)
Tax Acts
of various
States 14.65 Dy.Commissioner
(Appeals)
12.83 Appellate Tribunal
0.46 Supreme Court
2.28 Addl. Commissioner
5.33 Commissioner
(Appeals)
20.17 Sr. Asst. Commissioner
4. Income
Tax Act,
1961 Income Tax 351.13 Appellate Tribunal
5. Navi
Mumbai
Municipal
Corporation Cess 372.30 High Court
(x) There are no accumulated losses as at 31st December, 2010. The
Company has not incurred any cash losses during the period covered by
our audit and the immediately preceding financial year.
(xi) Based on our audit procedures and the information and explanations
given by the management, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions, banks or to
debenture holders during the period.
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund Company or nidhi/
mutual benefit fund/ society. Therefore the Clause(xiii) of paragraph
4 of the Order is not applicable to the Company.
(xiv) The Company has maintained proper records of transactions and
contracts in respect of dealing and trading in shares, securities,
debentures and other investments and timely entries have generally been
made therein. All shares, debentures and other securities have been
held by the Company in its own name except to the extent of the
exemption granted under Section 49 of the Companies Act, 1956.
(xv) According to the information and explanations given to us, the
terms and conditions of guarantees given by the Company for loans taken
by others from banks or financial institutions are prima facie not
prejudicial to the interest of the Company.
(xvi) According to the information and explanations given to us, the
term loans raised during the period were applied, on an overall basis,
for the purposes for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
our overall examination of the balance sheet of the Company, we report
that the Company has not used funds raised on short term basis for
long-term investments.
(xviii) The Company has not made any preferential allotment of shares
during the period to parties and companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any secured
debentures during the period. The Company has created security in
respect of debentures issued in earlier years.
(xx) During the period,
the Company has raised money through right issue. The Company has
disclosed on the end use of money raised and have verified the same.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
period.
For KHANDELWAL JAIN & CO. For KADAM & CO.
Chartered Accountants Chartered Accountants
Firm Registration No. 105049W Firm Registration
No. 104524W
SHIVRATAN AGARWAL U. S. KADAM
Partner Partner
Membership No. 104180 Membership No. 31055
Place : Mumbai
Date : 26th May, 2011
Sep 30, 2009
1. We have audited the attached Balance Sheet of VIDEOCON INDUSTRIES
LIMITED, as at 30th September, 2009, Profit and Loss Account and also
the Cash Flow Statement of the Company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
Includes examining, on a test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Oder, 2003, issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, on the basis of such checks as considered appropriate and
according to the information and explanations given to us during the
course of the audit, we give in the Annexure hereto a statement on the
matters specified in Paragraphs 4 and 5 of the said Order.
4. Attention is invited to Note No. B-9 of Schedule 15 regarding
Incorporation of the Companys share in the operations of the joint
ventures based on the statements received from the respective
Operators. The Company has received the audited financial statements
for the period upto 31st March, 2009 and un-audited financial
statements for the period 1 st April, 2009 to 30th September, 2009, in
respect of the Joint Venture Rawa Oil & Gas Field and un-audited
statements upto 30th September, 2009 in respect of other joint ventures
on which we have placed reliance. We have also placed reliance on
technical / commercial evaluation by the management In respect of
allocation of development cost to producing properties depletion of
producing properties, on the basis of provsd.remaining reserves and
liability for abandonment costs.
5. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the 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. Proper returns adequate for the purpose of our audit have been
receive?) from branches not visited by us. The branch Auditors Reports
have been forwarded to us and have been appropriately dealt with;
c) The Balance Sheet, Profit and Loss Account and the Cash Flow
Statement dealt with by the report are in agreement with the books of
account and with the audited returns from the foreign branches;
d) In our opinion, the Balance Sheet, Profit and Loss Account, and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in Section 211 (3C) of the Companies Act, 1956;
e) According to the information and explanations given to us and on the
basis of written representations received from the directors and taken
on record by the Board of Directors, we report that none of the
directors is disqualified from being appointed as a director in terms
of Section 274(1 )(g) of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
explanations given to us, the said financial statements, read together
with the significant accounting policies, notes thereon and paragraph 4
above, 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 30th September, 2009;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO THE AUDITORS REPORT
Statement referred to in paragraph 3 of the Auditors Report of even
date to the Members of VIDEOCON INDUSTRIES LIMITED on the financial
statements for the year ended 30th September, 2009.
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As per the information and explanations given to us, physical
verification of fixed assets, other than those under joint venture, has
been carried out at reasonable intervals in terms of the phased
programme of verification adopted by the Company and no material
discrepancies were noticed on such verification. In our opinion, the
frequency of verification is reasonable, having regard to the size of
the Company and nature of its business.
(c) In our opinion, during the year the Company has not disposed off a
substantial part of fixed assets.
(ii) (a) As per the information and explanations given to us, the
inventories (excluding stock of crude oil lying at extraction site with
the Operator) have been physically verified during the year by the
management. In our opinion, having regard to thenature and location of
stocks, the frequency of the physical verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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. As per the
information and explanations given to us the discrepancies noticed on
physical verification of stocks were not material in relation to the
operations of the Company and the same have been properly dealt with in
the books of account.
(iii) (a) As per the information and explanations given to us, the
Company has not granted or taken any loans, secured or unsecured,
to/from Companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1 956. (b) As the
Company has neither granted nor taken any loans, secured or unsecured
to/from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956, sub-clauses
(b), (c), (d), (f) and (g) of Clause (iii) of paragraph 4 of the Order
are not applicable. (iv) In our opinion and according to the
information and explanations given to us, there are adequate internal
control systems commensurate with the size of the Company and the
nature of its business with regard to purchases of inventory and fixed
assets and for the sales of goods and services. During the course of
our audit, we have not observed any continuing failure to correct the
major weakness in the internal controls systems. (v) (a) Based on the
audit procedures applied by us and according to the information and
explanations provided by the management, we are of the opinion that the
particulars - of contracts or arrangements referred to in Section 301
of the Companies Act, 1956 have been entered in the register required
to be maintained under that section. (b) In our opinion and according
to the information and explanations given to us, the transactions made
in pursuance of contracts or arrangements entered in the register
maintained under Section 301 of the Companies Act, 1956 and exceeding
the value of Rupees Five Lakh, in respect of any party during the year,
have been made at prices which are reasonable having regard to
prevailing market price at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of the provisions of Section 58A and 58AA or any other
relevant provision of the Companies Act, 1956 and rules made there
under.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) The Central Government has prescribed maintenance of the cost
records under Section 209(1 )(d) of the Companies Act, 1956 in respect
of the Companys products. As per the information and explanations
provided to us, we are of the opinion that prima facie, the prescribed
records have been made and maintained. We have however not made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
(ix) (a) According to the information and explanations given to us and
the records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees State
Insurance, Income-tax, Sales-tax, Wealth-tax, Service-tax,
Customs-duty, Excise-duty, Cess and other statutory dues wherever
applicable. According to the information and explanations given to us,
no undisputed arrears of statutory dues were outstanding as on 30th
September, 2009 for a period of more than six months from the date they
became payable.
(b) According to the records of the Company examined by us and
information and explanations given to us the particulars of dues of
Sale-tax, Income-tax, Wealth-tax, Service-tax, Customs-duty,
Excise-duty, Cess which have not been deposited on account of disputes,
are given below:
Nature of
Statute Nature of Dues Amount Forum where dispute is pending
(Rs. in Million)
1. Customs
Act, 1962 Customs Duty 123.32 CESTAT
18.31 Asst. Commissioner
0.94 Commissioner (Appeal)
0.57 Addl. Commissioner
12.13 Supreme Court
Customs Penalty 23.96 Commissioner
2. Central
Excise Act,
1944 Excise Penalty 9.34 Commissioner (Appeals)
8.20 CESTAT
Service Tax and
Education Cess 0.60 Asst. Commissioner
15.99 Addl. Commissioner
0.28 Deputy Commissioner
3.33 CESTAT
2.25 Joint Commissioner
Excise Duty 0.86 Addl. Commissioner
9.71 Asst. Commissioner
77.48 CESTAT
44.54 Commissioner
8.56 Commissioner (Appeal)
0.20 Dy. Commissioner
3.82 High Court
3. Central
Sales Tax Act,
1956 and Sales Tax 1.31 Joint Commissioner (Appeal)
Sales Tax Acts
of various States 75.58 Dy. Commissioner (Appeals)
1.50 High Court
17.56 Tribunal
2.52 Sr. Asst. Commissioner
4.Income Tax
Act, 1961 Income Tax 161.59 Dy. Commissioner
82.00 Joint Commissioner
90.59 Asst. Commissioner
15.20 Appellate Tribunal
(x) There are no accumulated losses as at 30th September, 2009. The
Company has not incurred any cash losses during the year covered by our
audit and the immediately preceding financial year.
(xi) Based on our audit procedures and the information and explanations
given by the management, we are of the opinion that the Company has not
defaulted in repayment of dues to a financial institution, bank or to
debenture holders during the year.
(xii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the Company is not a Chit fund Company or nidhi/
mutual benefit fund/ society. Therefore the Clause (xiii) of paragraph
4 of the Order is not applicable to the Company.
(xiv) The Company has maintained proper records of transactions and
contracts in respect of dealing and trading in shares, securities,
debentures and other investments and timely entries have generally been
made therein. All shares, debentures and other securities have been
held by the Company in its own name except to the extent of the
exemption granted under Section 49 of the Companies Act, 1956.
(xv) According to the information and explanations given to us, the
terms and conditions of guarantees given by the Company for loans taken
by others from banks or financial institutions are prima facie not
prejudicial to the interest of the Company.
(xvi) According to the information and explanations given to us, the
term loans raised during the year were applied, on an overall basis,
for the purposes for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
our overall examination of the balance sheet Of the Company, we report
that the Company has not used funds raised on short term basis for long
term investments.
(xviii)The Company has not made any preferential allotment of shares
during the year to parties and companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any secured debentures during the
year. The Company has created security in respect of debentures issued
in earlier years.
(xx) During the year the Company has not raised any money by way of
public issue.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
For KHANDELWAL JAIN & CO. For KADAM & CO.
Chartered Accountants Chartered Accountants
SHIVRATAN AGARWAL U. S. KADAM
Partner Partner
Membership No. 104180 Membership No. 31055
Firm Registration No. 105049W Firm Registration No. 104524W
Place : Mumbai
Date : 15th February, 2010
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