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Auditor Report of Zee Media Corporation Ltd.

Mar 31, 2013

Report on the Financial Statements

1. we have audited the accompanying financial statements of Zee News Limited ("the Company") which comprise the Balance sheet as at 31 march 2013, the statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

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

Auditor''s responsibility

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

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

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

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together 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 March 2013;

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

c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. report on other Legal and regulatory requirements

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

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

(i) 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;

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

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

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

(v) On the basis of written representation received from the directors as at 31 march 2013 and taken on record by the Board of directors, none of the directors is disqualified as at 31 march 2013, from being appointed as a director in terms of Section 274 (1) (g) of the Act.

Annexure referred to in paragraph (7) under the heading of "report on other Legal and regulatory requirements" of our report of even date

1) (a) The Company has maintained proper records showing full

particulars, including quantitative details and situation of its fixed assets.

(b) All the fixed assets, except Integrated Receiver Decoders (IRD) boxes lying with third parties, have been physically verified by the management during the year. in our opinion, the periodicity of verification is reasonable having regard to the size of the Company and the nature of its assets. discrepancies noticed on such verification, which are not material, have been properly dealt with in the books of account.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2) (a) The inventory has been physically verified (copyrights of television programs verified with reference to title documents/ agreements) by the management at reasonable intervals during the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company has maintained proper records of inventory. As explained to us, no discrepancies were noticed on physical verification as compared to the book records.

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

(b) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act.

4) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of television programs (inventory) and services, however internal control system for purchase of television programs (inventory) is required to be strengthened. during the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system in respect of the aforesaid areas.

5) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register maintained in pursuance to section 301 of the Act.

6) The Company has not accepted any deposits from the public during the year.

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

8) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Act and are of the opinion that prima facie the prescribed cost records have been maintained. we have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9) According to the records of the Company examined by us and information and explanations given to us:

(a) undisputed Statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been regularly deposited with the appropriate authorities. there are no undisputed amounts payable in respect of the aforesaid dues outstanding as at 31 march, 2013 for a period of more than six months from the date they became payable

(b) According to the records of the Company, the dues of income tax which are not deposited on account of any dispute are as under:

Name of the statute Nature of the dues Amount (Rs. million) Period to which the Forum where dispute amount relate is pending

The income tax Act, Income tax 6.68 A.Y. 2007-2008 Commissioner of

1961 0.31 A.Y. 2008-2009 Income Tax Appeals)

2.69 A.Y. 2010-2011

The income tax Act, Income Tax- Tax 2.08 A.Y. 2008-2009 Commissioner of 1961 deducted at source 0.59 A.Y. 2009-2010 Income Tax (Appeals)

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

11) The Company has not defaulted in repayment of dues to banks. The Company has not borrowed any funds from financial institution or issued debentures during the year.

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

13) The Company is not a chit fund or a nidhi / mutual benefit fund / society.

14) The Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16) The Company has raised term loans during the year which have been applied for the purposes for which they were raised.

17) According to information and explanations given to us and on an overall examination of the Balance Sheet of the Company,

we are of the opinion that short term funds have not been used for long term investments.

18) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

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

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

21) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co

Chartered Accountants

Firm Registration Number 101169W

Hitendra Bhandari

Partner

membership Number 107832

mumbai, 23 may 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Zee News Limited ("the Company") as at march 31, 2012 and also the statement of Profit and Loss and 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 the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. we believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 ("the Order") issued by the Central Government of india in terms of sub section (4A) of Section 227 of the Companies Act, 1956, ("the Act") and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we annex 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;

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211(3C) of the Act;

e) On the basis of written representations received from the directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors are disqualified as at March 31, 2012 from being appointed as a director in terms of clause (g) of sub section (1) of the Section 274 of the Act.;

f) in our opinion and to the best of our information and according to the explanations given to us, they said accounts read together 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:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

1. a) The Company has maintained proper records showing

full particulars, including quantitative details and situation of its fixed assets.

b) All the fixed assets, except assets lying with third parties (including capital work in progress), have been physically verified by the management during the year. in our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

c) During the year, there was no disposal of substantial part of fixed assets.

2. a) the inventory has been physically verified (copyrights of programs and films rights verified with reference to title documents/agreements) by the management at reasonable intervals during the year.

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

c) in our opinion, the Company has maintained proper records of inventory and no discrepancies were noticed on physical verification as compared to the book records.

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

b) the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act.

4. in our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services. during the course of our audit, no major weaknesses were noticed in the internal control system in respect of the aforesaid areas.

5. According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register maintained in pursuance to section 301 of the Act.

6. the Company has not accepted any deposits from the public during the year.

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

8. we have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. we have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. According to the records of the Company examined by us and information and explanations given to us:

a) undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and others as applicable have generally been regularly deposited with appropriate authorities except delay in few cases. there are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at March 31, 2012 for a period of more than six months from the date they became payable.

b) According to the records of the Company, the dues of income tax, which are not deposited on account of any dispute, are as under:

Name of the Statute Nature of the Dues Amount (Rs.) Period to which the The Income amount relate tax Act,1961 Income tax 522,678 Assessment year 2008-09

The Income tax Act, 1961 Income tax 225,585 Assessment year 2009-10

The Income tax Act, 1961 Income tax deducted 2,081,830 Assessment year 2008-09

The Income tax Act, 1961 Income tax deducted 588,120 Assessment year 2009-10

Name of the Statute Forum where dispute is pending

The Income Tax Act,1961 Commissioner of Income Tax (Appeals)-Mumbai

The Income Tax Act,1961 Commissioner of Income Tax (Appeals)-Mumbai

The Income Tax Act,1961 Commissioner of Income Tax (Appeals)-Ghaziabad

The Income Tax Act,1961 Commissioner of Income Tax (Appeals)-Ghaziabad

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

11. On the basis of our examination of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks and financial institutions during the year.

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

13. the Company is not chit fund or a nidhi / mutual benefit fund / society.

14. the Company has not dealt in or trading in shares, securities, debentures and other investments during the year.

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

16. According to the information and explanations given to us, the term loan raised during the year has been applied for purpose for which they were raised.

17. According to information and explanations given to us and on an overall examination of the Balance sheet of the Company, we are of the opinion that the funds raised on short term basis have not been used for long term investments.

18. the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

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

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

21. Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For MGB & Co

Firm Registration No- 101169w

Chartered Accountants

Lalit Kumar Jain

Partner

Membership No. 72664

Place : Noida

Date : may 16, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of Zee News Limited ("the Company") as at March 31, 2011 and also the Profit and Loss Account and 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 the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1 956, ("the Act") and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we annex 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;

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 21 1 (3C) of the Act;

e) On the basis of written representations received from the directors, as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the directors are disqualified as at March 31, 201 1 from being appointed as a director in terms of clause (g) of sub section (1) of the Section 274 of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes to accounts as per Schedule o16, 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:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

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

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

Annexure referred to in Paragraph (3) of our report to the members of Zee News Limited on the accounts for the year ended March 31, 2011.

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

(b) According to the information and explanations given to us, the fixed assets except fixed assets including capital work in progress lying with third parties have been physically verified by the management during the year and discrepancies found on such verification, which were not material, has been properly dealt with in books of account. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and nature of its assets.

(c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

(ii) (a) The inventory has been physically verified by the management (copyright of programs/films rights verified with reference to title documents/agreements) at reasonable intervals during the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company has maintained proper records of inventory and no discrepancies were noticed on physical verification as compared to the book records.

(iii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

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

(v) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register in pursuance of Section 301 of the Act.

(vi) The Company has not accepted any deposits from the public during the year.

(vii) The Company has an internal audit system commensurate with the size and nature of its business.

(viii) We are informed that the Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Companys activities.

(ix) According to the records of the Company examined by us and information and explanations given to us:

(a) The Company has been generally regular in depositing its 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 others as applicable. There are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at March 31, 2011 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, there are no dues in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, which have not been deposited on account of any dispute except the followings:

Name of the Amount Period to Forum where

Statute (in lacs) which the dispute is

(Nature of dues) amount pending

relates

The Income Tax 5.22 Assessment The

Act, 1961 Year Commissioner

2008-09 of Income Tax (Appeals)

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the current financial year or in the immediately preceding financial year.

(xi) On the basis of our examination of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks and financial institutions.

(xii) According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi/mutual benefit fund/society.

(xiv) The Company has not dealt in or traded in shares, securities, debentures and other investments during the year.

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

(xvi) According to the information and explanations given to us, the term loan raised during the year has been applied for the purposes for which they were raised.

(xvii)On the basis of overall examination of the Balance Sheet and cash flows of the Company and related information as made available to us, we report that no short-term funds have been utilized for long-term investments.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

(xix) The Company has not issued any secured debentures during the year.

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

(xxi) Based on the audit procedures performed and according to the information and explanations given to us no fraud on or by the Company has been noticed or reported.

For MGB & Co Firm Registration No. 101169W Chartered Accountants

Lalit Kumar Jain

Partner

Membership No. 72664

Place : Mumbai Date : May 25, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Zee News Limited ("the Company") as at March 31, 2010 and also the Profit and Loss Account and 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 the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956, ("the Act") and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we annex 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;

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

d) In our opinion, the Balance Sheet, 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 Act;

e) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors are disqualified as at March 31, 2010 from being appointed as a director in terms of clause (g) of sub section (1) of the Section 274 of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes to accounts as per Schedule 16, 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:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

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

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

Annexure referred to in Paragraph (3) of our report to the members of Zee News Limited on the accounts for the year ended March 31, 2010.

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

(b) According to the information and explanations given to us, the fixed assets except lying with third parties have been physically verified by the management as per the phased program of verification and the material discrepancies noticed on such verification have been properly dealt with in books of account. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and nature of its assets.

(c) During the year, the Company has transferred a substantial part of its fixed assets pursuant to the Scheme of Arrangement (Refer Note 1 to the financial statements). However, such transfer has not affected the going concern status of the Company.

(ii) (a) The inventory has been physically verified by the management (copyright of programs/films rights verified with reference to title documents/ agreements) at reasonable intervals during the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company has maintained proper records of inventory and no discrepancies were noticed on physical verification as compared to the book records.

(iii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

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

(v) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register in pursuance of Section 301 of the Act.

(vi) The Company has not accepted any deposits from the public during the year.

(vii) The Company has an internal audit system commensurate with the size and nature of its business.

(viii) We are informed that the Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Companys activities.

(ix) According to the records of the Company examined by us and information and explanations given to us:

(a) The Company has been generally regular in depositing its statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, VAT, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and others as applicable. There are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at March 31, 2010 for a period of more than six months from the date they became payable

(b) There are no disputed amounts on account of Income Tax, Wealth Tax, Sales Tax, VAT, Custom Duty, Service Tax, Excise Duty and Cess which have not been deposited.

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the current financial year or in the immediately preceding financial year.

(xi) On the basis of our examination of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks and financial institution.

(xii) According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi/ mutual benefit fund / society.

(xiv) The Company has not dealt in or traded in shares, securities, debentures and other investments during the year.

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

(xvi) According to the information and explanations given to us, the term loan raised during the year has been applied for the purposes for which they were raised.

(xvii)On the basis of overall examination of the Balance Sheet and Cash Flows of the Company and related information as made available to us, we report that no short term funds have been utilized for long term investments.

(xviii)The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

(xix) The Company has not issued any secured debentures during the year.

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

(xxi) Based on the audit procedures performed and according to the information and explanations given to us, no fraud on the Company or by the Company has been noticed or reported except misappropriation of Rs. 70 lacs approximately by certain employees reported by the Company.

L. K. Shrishrimal Membership No. 72664 Partner

For MGB & Co Firm Registration No. 101169W Chartered Accountants

Place: Noida Date : July 05, 2010

 
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