Mar 31, 2018
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of Mukta Arts Limited (âthe Companyâ), 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 significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these 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 accounting principles generally accepted in India, including the Indian Accounting Standards prescribed under Section 133 of the Act. 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the 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 Company''s preparation of the Standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the 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 of Qualified Opinion
As at March 31, 2018, the companyâs investment in its subsidiary (including deemed investment), Whistling woods International Limited (WWIL) a joint venture between the company and Maharashtra Film, Stage and Cultural Development Corporation Limited (MFSCDCL), aggregates to Rs. 39,95,11,218 /- and loans and advances, deposits and rent receivable aggregate to Rs. 24,61,16,550/- recoverable from WWIL. /4s fully explained in Note 46 to the accompanying audited financial statements, the Order of February 9, 2012 passed by the High Court of judicature at Bombay (âHigh Courtâ), had quashed the joint Venture Agreement (âJVAâ) between the company and Maharashtra Film Stage Cultural Development Corporation (âMFSCDCLâ). Maharashtra Film Stage and Cultural Development Corporation (âMFSCDCâ) raised net demand of Rs. 59,19,66,210/- and asked WWIL to vacate the premises. WWILâs petition for special leave to appeal filed with the Supreme Court of India had also been dismissed. The Company and WWIL had filed application to review the said order with the High Court and an Interim stay was granted on July 30, 2014 which required deposit of Rs.10,00,38,000/- by January 2015 against payment of arrears of rent for the year 2000-01 to 2013-14 and payment of Rs.45,00,000/- per annum from Financial Year 2014-15 till the settlement of the case, to MFSCDCL. As per the terms of the said Order, till 31 March 2018 Rs 11,35,38,000/- has been paid by the Holding Company and Rs 45,00,000/- has been paid by WWIL. The State Govt. of Maharashtra and MFSCDCL challenged the order of the High Court in the Supreme Court which was dismissed by the Supreme Court on September 22, 2014. The amount so paid /being paid by the Company have been accounted under Non - Current Other Financial Assets in the Standalone Financial Statements to be adjusted on the settlement of the case.
Further, WWILâs net worth stands fully eroded as at March 31, 2018. Having regard to the circumstances explained above and pending final outcome of the matter under litigation, the Company has not made any adjustment to the carrying value of investment in and amounts due from WWIL and the deposit paid consequent to the High Courtâs Orders. Accordingly the impact on the carrying value of investments, recoverability of loans and advances and consequential impact on loss for the year and reserves is not determinable.
As explained in Note 45 to the accompanying audited financial statements, remuneration paid to the erstwhile managing director (including as film director fees) for earlier financial years from 2005-06 to 2014-15 (total remuneration paid aggregates to Rs.13,19,06,897/-) is in excess of the limits prescribed under Schedule XIII to the Companies Act, 2013. During the year 2011-12, the Company had received approval for part of excess remuneration paid (approval received for remuneration aggregating to Rs. 2,52,00,000/- for the financial years 2005-06, 2006-07, 2007-08) and made applications to the authorities requesting consideration/approval for the balance excess remuneration and for recognition of the erstwhile managing director as professionally qualified person under the Companies Act, 1956. Through its various communications, the Ministry of Corporate Affairs has directed the Company to recover the excess remuneration paid during the financial years 2008-09 to 2011-12. The company has requested the authorities to reconsider their Orders in respect of the above and also for his recognition as a professionally qualified person under this Act. Pending conclusion of this matter, no adjustment has been made in these standalone financial statements.
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 above, the aforesaid s Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013 we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
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 Standalone Balance Sheet, Standalone Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Standalone Cash Flow Statement and the Standalone Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act ;
(e) 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.
(f) 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 B, and
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Notes No. 42.
ii. The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses - Refer Note No. 49.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.
iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.
Annexure A referred to in Report on Other Legal and Regulatory Requirements Paragraph of Independent Auditorâs report of even date to the members of Mukta Arts Limited on the accounts for the year ended March 31, 2018
On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:
i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed assets except that tagging of certain fixed assets is yet to be completed.
(b) As explained by the Management, fixed assets have been physically verified by the management at regular intervals, which in our opinion is reasonable having regard to the size of the company and nature of its business. In our opinion, there were no material discrepancies between book records and physical fixed assets that were noticed during the period.
(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, except the following:
Number of |
Gross Block |
Net Block |
Remarks |
Cases |
(as at March 31, 2018) |
(as at March 31, 2018) |
|
1 |
75,00,000/- |
64,12,002/- |
Agreement yet to be registered. |
ii) As explained by the Management, Company does not have any inventory hence information under this clause is not required.
iii) Based on the audit procedures applied by us and according to the information and explanations given to us, the company has not granted any loans secured or unsecured to the firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause (iii) (a), (b) and (c) are not applicable to the Company.
iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans and investments made.
v) In our opinion and according to the information and explanation given to us the Company has not accepted any deposit from public within the provision of section 73 to 76 and other relevant provisions of the Companies Act, 2013 and the rules framed there under.
vi) As informed to us by management, the Central Government has not prescribed the maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 for any of services rendered by the company.
vii) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Service Tax, Value added Tax, Goods and Services Tax (âGST'') and any other statutory dues with the appropriate authorities except that there have been few delays in depositing Professional Tax, VAT and Employees'' State Insurance and significant delays in depositing dues pertaining to Income Tax. As explained to us, the company did not have any dues on account of Custom Duty, Excise Duty.
According to information and explanations given to us, there are no undisputed statutory dues payable in respect of Provident Fund, Employees'' State Insurance, Income Tax, Value Added Tax, GST and other material statutory dues, were in arrears as on March 31, 2018 for a period of more than 6 months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues payable in respect of value added tax, GST, customs duty and excise duty which have not been deposited with appropriate authorities on account of any disputes. The following dues of Service Tax & Income Tax have not been deposited by the company on account of dispute:
Name of the statute |
Nature of dues |
Amount (Rs.) |
Period to which the amount relates |
Forum where the dispute is pending |
Chapter V of the Finance Act, 1994 |
Service Tax |
8,75,000/-* |
November 1996 -November 2001 |
Customs, Excise & Service Tax Appelate Tribunal |
Income Tax Act, 1961 |
Income Tax |
19,53,900/- |
Asst year 2015-16 |
Commissioner of Income Tax (Appeals) |
1,55,77,380/- |
Asst year 2014-15 |
|||
15,08,440/- |
Asst year 2012-13 |
|||
5,24,938/- |
Asst year 2011-12 |
|||
15,22,033/- |
Asst year 2010-11 |
Income Tax Appellate Tribunal (Appeals) |
||
5,14,804/- |
Asst year 2009-10 |
* Excludes Amount deposited under protest Rs.800,000/-
viii) On the basis of verification of records and according to the information and explanations given to us and based on the records made available to us, the Company has not defaulted in repayment of any loans from Financial Institutions or from the Bank and has not issued Debentures.
ix) On the basis of verification of records and according to the information and explanations given to us and based on the records made available to us, the company has utilized the money raised by way of Term loan for the purpose for which they were raised. The Company did not raise any moneys by way of public issue/ follow-on offer including debt instruments.
x) Based upon the audit procedures performed and the information and explanations given to us, we report that no fraud by the Company or any fraud on the company by its officers or employees has been noticed or reported during the year.
xi) According to the information and explanations given to us and based on the examinations of the records of the company, the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
xii) The company is not a Nidhi Company. Accordingly, the provisions of clause (xii) of Para 3 of the order are not applicable to the company.
xiii) According to the information and explanations given to us, all transactions with the related parties are in compliance with Section 188 and 177 of Companies Act, 2013 and the details of such transactions have been disclosed in the Financial Statements as required by the accounting standards and Companies Act, 2013.
xiv) On the basis of verification of records and according to the information and explanations given to us and based on the records made available to us, the company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review.
xv) In our opinion and according to the information and explanations given to us, the company has not entered into noncash transactions with directors or persons connected with him.
xvi) The company is not required to be registered under section 45 IA of the Reserve Bank of lndia Act, 1934.
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Companies Actâ)
We have audited the internal financial controls over financial reporting of Mukta Arts Limited (âthe Companyâ) for the year ended on 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.
Managementâs 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 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 the 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.
Auditorâs 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 on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by the Institute of Chartered Accountants of India and specified under sub-section 10 of Section 143 of the Companies Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 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, 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 Uttam Abuwala & Co
Chartered Accountants
Firm No. 111184W
CA. Prerak Agarwal
(Partner)
Membership No. 158844
Date: May 24, 2018
Place: Mumbai
Mar 31, 2016
Independent Auditorsâ Report
To the Members of
MUKTA ARTS LIMITED Mumbai
Report on the Financial Statements
We have audited the accompanying standalone financial statements of MUKTA ARTS LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the standalone financial statements.
Basis of Qualified Opinion
As explained in Note 3.40 to the accompanying Statement of Audited financial results, remuneration paid to the erstwhile managing director (including as film director fees) for earlier financial years from 2005-06 to 2014-15 (total remuneration paid aggregates to Rs.13,19,06,897/-) is in excess of the limits prescribed under Schedule XIII to the Companies Act, 1956. During the year 2011-12, the Company had received approval for part of excess remuneration paid (approval received for remuneration aggregating to Rs. 2,52,00,000/- for the financial years 2005-06, 2006-07, 2007-08) and made applications to the authorities requesting consideration/approval for the balance excess remuneration and for recognition of the erstwhile managing director as professionally qualified person under the Companies Act, 1956. Through its various communications, the Ministry of Corporate Affairs has directed the Company to recover the excess remuneration paid during the financial years 2008-09 to 2011-12. The company has requested the authorities to reconsider their Orders in respect of the above and also for his recognition as a professionally qualified person under this Act. Pending conclusion of this matter, no adjustment has been made in these standalone financial results.
As at March 31, 2016, the companyâs investment in its subsidiary, Whistling woods International Limited (WWIL) a joint venture between the company and Maharashtra Film, Stage and Cultural Development Corporation Limited (MFSCDCL), aggregates to Rs.36,99,97,000/- and loans and advances, Accrued interest and deposits include Rs.28,74,78,014/-recoverable from WWIL. As fully explained in Note 3.41 to the accompanying Audited financial statements, the Order of February 9, 2012 passed by the High Court of judicature at Bombay (âHigh Courtâ), had quashed the joint Venture Agreement (âJVAâ) between the company and Maharashtra Film Stage Cultural Development Corporation (âMFSCDCLâ). Maharashtra Film Stage and Cultural Development Corporation (âMFSCDCâ) raised net demand of Rs. 59,19,66,210/- and asked WWIL to vacate the premises. WWILâs petition for special leave to appeal filed with the Supreme Court of India had also been dismissed. The Company and WWIL had filed application to review the said order with the High Court and an Interim stay was granted on July 30, 2014 which required deposit of Rs.10,00,38,000/- by January 2015 against payment of arrears of rent for the year 2000-01 to 2013-14 and payment of Rs.45,00,000/- per annum from Financial Year 2014-15 till the settlement of the case, to MFSCDCL. As per the terms of the said Order, the Company paid Rs. 10,90,38,000/- by March 31, 2016. The State Govt. of Maharashtra and MFSCDCL challenged the order of the High Court in the Supreme Court which was dismissed by the Supreme Court on September 22, 2014. The amount so paid/being paid by the Company have been treated as Deposit in the standalone financial statements to be adjusted on the settlement of the case.
Further, WWILâs net worth stands fully eroded as at March 31, 2016. Having regard to the circumstances explained above and pending final outcome of the matter under litigation, the Company has not made any adjustment to the carrying value of investment in and amounts due from WWIL and the deposit paid consequent to the High Courtâs Orders. Accordingly the impact on the carrying value of investments, recoverability of loans and advances and consequential impact on loss for the year and reserves is not determinable.
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 above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India,
a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;
b. in the case of the Profit and Loss Account, of the Loss for the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013 we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) 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 B, and
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Notes No. 3.35 and 3.41 to the standalone financial statements.
ii. The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses - Refer Note No. 3.45 to the standalone financial statements.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund.
Annexure A referred to in Report on Other Legal and Regulatory Requirements Paragraph of Independent Auditor''s report of even date to the members of Mukta Arts Limited on the accounts for the year ended March 31, 2016
On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:
i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of Fixed assets except that tagging of certain fixed assets is yet to be completed.
(b) As explained by the Management, fixed assets have been physically verified by the management at regular intervals, which in our opinion is reasonable having regard to the size of the company and nature of its business. In our opinion, there were no material discrepancies between book records and physical fixed assets that were noticed during the period.
(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, except the following:
Number of Cases |
Gross Block (as at March 31, 2016) |
Net Block (as at March 31, 2016) |
Remarks |
1 |
75,00,000/- |
71,09,329/- |
Agreement yet to be registered. |
ii) As explained by the Management, physical verification of Inventory of Food and Beverages has been conducted at reasonable intervals by the management. The company is maintaining proper records of inventory and no material discrepancies were noticed on such verification.
iii) Based on the audit procedures applied by us and according to the information and explanations given to us, the company has not granted any loans secured or unsecured to the firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause
(iii) (a), (b) and (c) of Para 3 of the Order are not applicable to the Company.
iv) In our opinion and according to the information and explanations given to us, the Company has not granted any new loans or made any investments, or provided any guarantee or security to the parties covered under Section 185 and 186 of the Companies Act, 2013, except for following loans to below mentioned parties, which were given prior to Section 185 coming into effect. As per the information and explanations provided by the management, the Company is in the process of recovering the outstanding balances:
Sr. No. |
Name of Party |
Amount Involved (Rs.) |
Balance outstanding as at Balance Sheet Date |
Rate of Interest |
1. |
Mukta Telemedia Limited |
1,24,05,000/- |
1,24,05,000/- |
NIL |
2. |
Whistling Woods International Limited |
32,70,00,000/- |
23,29,00,000/- |
10% |
v) In our opinion and according to the information and explanation given to us the Company has not accepted any deposit from public within the provision of section 73 to 76 and other relevant provisions of the Companies Act, 2013 and the rules framed there under.
vi) As informed to us by management, the Central Government has not prescribed the maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 for any of the food and beverage item sold/services rendered by the company.
vii) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Sales tax, Service Tax, Value added Tax, Cess and any other statutory dues with the appropriate authorities except that there have been few delays in depositing Provident Fund and Employees'' State Insurance and significant delays in depositing dues pertaining to Income Tax. As explained to us, the company did not have any dues on account of Custom Duty, Excise Duty.
According to the information and explanations given to us, the following undisputed statutory dues are outstanding as on March 31, 2016 for a period of more than six months from the date they became payable.
Name of the statute |
Nature of dues |
Amount (Rs.) |
Period to which it relates |
Due Date |
The Income Tax Act 1961 |
Tax Deducted at Source |
51,14,838/- |
July 2015 to August 2015 |
August 2015 to September 2015 |
Except for the above, there are no undisputed statutory dues payable in respect of Provident Fund, Employees'' State Insurance, Income Tax, Value Added Tax, Sales Tax and other material statutory dues, which were in arrears as on March 31, 2016 for a period of more than 6 months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues payable in respect of wealth tax, sales tax, Vale Added Tax, customs duty and excise duty which have not been deposited on account of any disputes. The following dues of Service Tax & Income Tax have not been deposited by the company on account of dispute:
Name of the statute |
Nature of dues |
Amount (Rs.) |
Period to which the amount relates |
Forum where the dispute is pending |
Chapter V of the Finance Act, 1994 |
Service Tax |
8,75,000/-* |
November 1996 -November 2001 |
Customs, Excise & Service Tax Appelate Tribunal |
Income Tax Act, 1961 |
Income Tax |
88,08,700/- |
Asst year 2013-14 |
Commissioner of Income Tax (Appeals) |
15,08,440/- |
Asst year 2012-13 |
|||
82,97,120/- |
Asst year 2010-11 |
Income Tax Appellate Tribunal |
||
8,30,118/- |
Asst year 2009-10 |
* Excludes Amount deposited under protest Rs. 8,00,000/-
viii) On the basis of verification of records and according to the information and explanations given to us and based on the records made available to us, the Company has not defaulted in repayment of any loans from Financial Institutions or from the Bank and has not issued Debentures.
ix) On the basis of verification of records and according to the information and explanations given to us and based on the records made available to us, the company has utilized the money raised by way of Term loan for the purpose for which they were raised. The Company did not raise any moneys by way of public issue/ follow-on offer including debt instruments.
x) Based upon the audit procedures performed and the information and explanations given to us, we report that no fraud by the Company or any fraud on the company by its officers or employees has been noticed or reported during the year.
xi) According to the information and explanations given to us and based on the examinations of the records of the company, the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
xii) The company is not a Nidhi Company. Accordingly, the provisions of clause (xii) of Para 3 of the order are not applicable to the company.
xiii) According to the information and explanations given to us, all transactions with the related parties are in compliance with Section 188 and 177 of Companies Act, 2013 and the details of such transactions have been disclosed in the Financial Statements as required by the accounting standards and Companies Act, 2013.
xiv) On the basis of verification of records and according to the information and explanations given to us and based on the records made available to us, the company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review.
xv) In our opinion and according to the information and explanations given to us, the company has not entered into noncash transactions with directors or persons connected with him.
xvi) The company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934.
For Uttam Abuwala & Co.
Chartered Accountants
Firm No. 111184W
CA. Urmish P. Mehta
(Partner)
Membership No. 137150
Date: May 26, 2016
Place: Mumbai
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Mukta Arts Limited ('the Company'), which comprise the Balance sheet as
at 31 March 2015, the Statement of profit and loss and the Cash flow
statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's responsibility for the standalone financial statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate
internal financial controls that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company's preparation of the financial statements that give a true and
fair view in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial control
system over financial reporting and the operating effectiveness of such
controls. An audit also includes evaluating the appropriateness of the
accounting policies used and the reasonableness of the accounting
estimates made by the Company's Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion on the
standalone financial statements.
Basis of Qualified Opinion
(i) As explained in Note 3.40 to the standalone financial statements,
remuneration paid to the erstwhile managing director (including as film
director fees) for earlier financial years from 2005-06 to 2013-2014
(total remuneration paid aggregates to Rs 125,744,747) is in excess of
the limits prescribed under Schedule XIII to the Companies Act, 1956.
During the year 2011-12, the Company had received approval for part of
the excess remuneration paid (approval received for remuneration
aggregating to Rs 25,200,000 for the financial years 2005-06, 2006-07
and 2007-08) and made applications to the authorities requesting
reconsideration/ approval for the balance excess remuneration and for
recognition of the erstwhile managing director as a professionally
qualified person under the Companies Act,
Basis of Qualified Opinion (Continued)
1956. Through its various communications, the Ministry of Corporate
Affairs has directed the Company to recover the excess remuneration
paid during the financial years 2008-09 to 2010-11 and 2011-12
respectively. The Company has requested the authorities to reconsider
their orders in respect of the above. Pending final communication from
the authorities in this regard, no adjustment has been made in these
standalone financial statements. This matter was also qualified in our
report on the standalone financial statements for the year ended 31
March 2014.
(ii) As at 31 March 2015, the Company's investment in its subsidiary,
Whistling Woods International Limited ('WWI'), a joint venture between
the Company and Maharashtra Film, Stage and Cultural Development
Corporation Limited ('MFSCDL'), aggregates to Rs 369,997,000 and loans,
advances, accrued interest and deposits include Rs 394,188,264
recoverable from WWI. As more fully explained in Note 3.41 to the
financial statements, through its Order of 9 February 2012, the
Hon'bleHigh Court of Judicature at Bombay ("High Court') had quashed
the Joint Venture Agreement ('JVA') between the Company and MFSCDCL and
passed consequential orders. WWI's petition for special leave to appeal
filed with the Supreme Court of India had also been dismissed. The
Company and WWI had filed applications to review the said order with
the High Court and an interim stay was granted on 30 July 2014 which
required deposit of Rs 100,038,000 by January 2015 against payment of
arrears of rent for the years 2000-01 to 2013- 14 and payment of Rs
4,500,000 per annum from financial year 2014-15 till the settlement of
the case, to MFSCDCL. The State Government of Maharashtra and MFSCDCL
challenged the Order of the High Court in the Supreme Court, which
special leave petition was dismissed by the Supreme Court on 22
September 2014. The amounts so paid/being paid by the Company have been
treated as Deposits in the standalone financial statements, to be
adjusted on the settlement of the case.
Further, WWI's net worth stands fully eroded as at 31 March 2015.
Having regard to the circumstances explained above and pending final
outcome of the matter under litigation, the Company has not made any
adjustment to the carrying value of investments in and amounts due from
WWI and the deposit paid consequent to the High Court's Order.
Accordingly, the impact on the carrying value of investments,
recoverability of loan and advances and consequential impact on loss
for the year and reserves is not determinable. This matter was also
qualified in our report on the standalone financial statements for the
year ended 31 March 2014.
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 above,
the aforesaid standalone financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India of the state of affairs of the Company as at 31 March 2015,and
its loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ('the
Order') issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the Annexure, a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best 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, and the Cash
flow statement dealt with by this Report are in agreement with the
books of account;
Report on Other Legal and Regulatory Requirements (Contd.)
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of the written representations received from the
directors as at 31 March 2015 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act;
(f) The matter described in the Basis of Qualified Opinion paragraph
above, in our opinion, may have an adverse effect on the functioning of
the Company.
(g) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - refer Notes 3.35 and
3.41 to the standalone financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses - refer Note 3.45 to the standalone financial statements.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to Independent Auditors' Report - 31 March 2015
(Referred to in our report of even date)
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets except that tagging of certain fixed assets is yet to be
completed.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified annually. However,
during the year the Company has not carried out a physical verification
of any of its fixed assets.
ii. (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of such verification is
reasonable.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act. Accordingly, paragraphs (iii) (a) and (b)
of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us,controls over recording of inventories (food and beverage
items), purchase of fixed assets, customer contracting and tracking of
amounts billable need to be further strengthened and having regard to
the explanation that certain services rendered/rights sold are of a
specialised nature and are rendered/sold to specific buyers and
suitable alternative sources are not available to obtain comparable
quotations, 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 inventories (food and beverage items), fixed assets and
the sale of goods and services. We have not observed any other material
weakness/continuing failure to correct weakness during the course of
the audit.
v. The Company has not accepted any deposits from the public.
vi. As informed to us by the management, the Central Government has
not prescribed the maintenance of cost records under Section 148 (1) of
the Act for any of the food and beverage items sold/ services rendered
by the Company.
vii. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, the
Company has been generally regular in depositing with appropriate
authorities, amounts deducted/accrued in the books of account in respect
of undisputed statutory dues including Service tax and other material
statutory dues applicable except that there have been significant delays
in depositing Valued added tax, Sales tax and Income tax and few delays
in depositing Provident fund and Employees' State Insurance. As
explained to us, the Company did not have any dues on account of Excise
duty, customs duty and Wealth tax.
According to the information and explanations given to us, the
following undisputed statutory dues are outstanding as at 31 March 2015
for a period of more than six months from the date they became payable.
Name of the Statute Nature of dues Amount
(Rs)
Maharashtra Value Added Tax Act, 2002 Value-added tax 842,867
Gujarat Value Added Tax Act, 2003 Value-added tax 653,019
Gujarat Value Added Tax Act, 2003 Value-added tax 77,214
The Income tax Act, 1961 Tax deducted at 1,862,635
source
Name of the Statute Period to which Due date
it relates
Maharashtra Value June 2014 July 2014
Added Tax Act, 2002
September 2013 October 2013
Gujarat Value Added to March 2014 to April 2014
Tax Act, 2003
Gujarat Value Added April 2013 to May 2013 to
Tax Act, 2003 August 2013 September
2013
The Income tax June 2014 to July 2014 to
Act, 1961 August 2014 September
Except for the above, there are no undisputed amounts payable in
respect of Provident fund, Employees' State Insurance, Income tax,
Service tax, Value added tax, Sales tax and other material statutory
dues which were in arrears as at 31 March 2015 for a period of more
than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Wealth tax, Income tax,Value added tax and Sales tax
which have not been deposited on account of any dispute. The following
dues of Service tax have not been deposited by the Company on account
of dispute:
Name of the statute Nature of Amount
dues (Rs)*
Chapter V of the Finance Service Tax 875,000
Act, 1994
Name of the statute Period to which the Forum where the
amount relates dispute is pending
Chapter V of the Finance November 1996 - Customs, Excise
Act, 1994 & Service Tax
November 2001 Appellate Tribunal
* excludes amount deposited under protest Rs 800,000
(c) According to the information and explanations given to us, the
amount required to be transferred to Investor Education and Protection
Fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made thereunder has been transferred to such
fund within time.
viii. The accumulated losses of the Company is not more than 50% of its
net worth. The Company has not incurred cash losses in the financial
year and in the immediately preceding financial year.
ix. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institution or bank, except for default in re-payment of dues
to one bank, details of which are stated below:
(Amount in Rupees)
Particulars Delay upto 30 Delay in range Delay in
days 31-60 days range 61-90
days
Loan re-payment
(including interest) to 48,733,982 14,325,876 7,108,813
Kotak Mahindra bank
Limited
Particulars Delay in Total amount
range 91-120
days
Loan re-payment
(including interest) to 5,166,774 75,335,445
Kotak Mahindra bank
Limited
The above dues have been paid before the year end and there is no
continuing default as on the Balance sheet date. The Company did not
have any dues to debenture holders during the year.
x. In our opinion and according to the information and explanations
given to us, the term and conditions on which the Company has given
guarantee for loan taken by subsidiary from a bank are not prima facie
prejudicial to the interests of the Company.
xi. In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were obtained.
xii. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Rajesh Mehra
Mumbai Partner
29 May 2015 Membership No: 103145
Mar 31, 2014
We have audited the accompanying financial statements of Mukta Arts
Limited (''the Company''), which comprise the Balance sheet as at 31
March 2014, the Statement of profit and loss and the Cash flow
statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''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 qualified opinion.
Basis for Qualified Opinion
a. As explained in Note 3.39 to the financial statements, the
remuneration paid to the managing director (including as film director
fees) for the year ended 31 March 2014 amounting to Rs 15,138,588 and
for earlier financial years from 2005-06 to 2012-2013 aggregating to Rs
110,606,159 is in excess of the limits prescribed under Schedule XIII
to the Companies Act, 1956. The Company made applications to the
Central Government seeking post-facto approval for earlier years, which
is awaited; application for the current year is proposed to be made.
During the financial year 2011-12, the Company had received approval
for part of the excess remuneration paid (approval received for
remuneration aggregating to Rs 25,200,000 for the financial years
2005-06, 2006-07 and 2007-08) and made applications to the authorities
requesting reconsideration/approval for the balance excess
remuneration. Pending final communication from the authorities in this
regard, no adjustment has been made in these financial statements.
b. As at 31 March 2014, the Company''s investment in its subsidiary,
Whistling Woods International Limited (WWI), a joint venture between
the Company and Maharashtra Film, Stage and Cultural Development
Corporation Limited (''MFSCDCL), aggregates to Rs 369,997,000 and loans,
advances and deposits include Rs 445,870,587 recoverable from WWI. As
more fully explained in Note 3.40 to these financial statements,
through its order of 9 February 2012, the High Court of Judicature at
Bombay ("High Court'') had quashed the Joint Venture Agreement (''JVA'')
between the Company and MFSCDCL and passed consequential orders. WWI''s
petition for special leave to appeal filed with the Supreme Court of
India had also been dismissed. However, the Company and WWI have filed
applications to review the said order with the High Court, which have
not yet come up for hearing. Further, MAL has made an application to
the Government of Maharashtra in February 2013 to appoint expert
valuers to determine the market price of the building. WWI''s net worth
stands fully eroded as at 31 March 2014 and the management is currently
evaluating plans for the future.
Having regard to the circumstances explained above and pending final
outcome of the matter under litigation, the Company has not made any
adjustment to the carrying value of investments in and amounts due from
WWI. Accordingly, the impact on the carrying value of investments,
recoverability of loan and advances and consequential impact on loss
for the year and reserves is not determinable.
Qualified opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the matter relating to the
investment in and loans and advances recoverable from the Company''s
subsidiary WWIL referred to in paragraph (b) of the Basis for Qualified
Opinion paragraph above, the outcome and consequent adjustments to the
financial statements of which cannot be presently determined, and for
the matter relating to the remuneration to the managing director
referred to in paragraph (a) of the Basis for Qualified Opinion
paragraph above, the said financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with 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 2014;
(b) in the case of the Statement of profit and loss, of the loss 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
1. As required by the Companies (Auditor''s Report) Order, 2003 (''the
Order''), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
2. As required by Section 227(3) of the Act, we report that:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary, for the purpose of our
audit;
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) the Balance sheet, the Statement of profit and loss and the Cash
flow statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the Balance sheet, the Statement of profit and
loss, and the Cash flow statement dealt by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Act, read with the General Circular 15/2013 dated 13 September 2013
of the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013; and
(e) on the basis of written representations received from the directors
of the Company as at 31 March 2014, and taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2014
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
Annexure to the Independent Auditors'' Report - 31 March 2014
(Referred to in our report of even date)
i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets except that tagging of certain fixed assets is yet to be
completed.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified annually. In our
opinion, this periodicity of physical verification is reasonable having
regard to the size of the Company and the nature of its assets.
However, during the year the Company has not carried out a physical
verification of any of its fixed assets.
(c) Fixed assets disposed off during the year were not substantial and,
therefore, do not affect the going concern assumption.
ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of such verification is
reasonable.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to or 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, controls relating to purchase of fixed assets, customer
contracting and tracking of amounts billable need to be further
strengthened, and having regard to the explanation that certain
services rendered/ rights sold are of a specialised nature and are
rendered/ sold to specific buyers and suitable alternative sources are
not available to obtain comparable quotations, 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 inventories (food
and beverage items) and with regard to sale of services. We have not
observed any other material weaknesses / continuing failure to correct
weaknesses during the course of audit.
(v) In our opinion, and according to the information and explanations
given to us, there are no contracts and arrangements the particulars of
which need to be entered into the register maintained under Section 301
of the Act.
(vi) The Company has not accepted any deposits from the public.
(vii) The Company has an internal audit system which needs to be
strengthened in terms of seeking updates on remedial actions taken by
management, to make it commensurate with the size of the Company and
the nature of its business.
(viii) The Central Government has not prescribed the maintenance of
cost records under Section 209(1 )(d) of the Act for any of the
services rendered/ food and beverages sold by the Company.
(ix) (a) According to the information and explanations given to us and
on the basis of our examination of the records, the Company has been
generally regular in depositing with appropriate authorities undisputed
statutory dues deducted/ accrued in the books of account including
Provident fund, Employees'' State Insurance, Wealth tax, Service tax,
and other material statutory dues applicable to it except that there
have been significant delays in depositing Value added tax and few
delays in depositing income tax dues with appropriate authorities. As
explained to us, the Company did not have any dues on account of Excise
duty, Customs duty and Investor Education and Protection Fund.
According to the information and explanations given to us, the
following undisputed statutory dues are outstanding as at 31 March 2014
for a period of more than six months from the date they became payable:
Name of the Statute Nature of dues Amount
Maharashtra Value Value-added tax 1,173,077
Added Tax Act, 2002
Maharashtra Value Value-added tax 9,069,231
Added Tax Act, 2002
Maharashtra Value Value-added tax 4,138,462
Added Tax Act, 2002
Maharashtra Value Value-added tax 2,096,154
Added Tax Act, 2002
Maharashtra Value Value-added tax 1,580,769
Added Tax Act, 2002
Maharashtra Value Value-added tax 1,384,615
Added Tax Act, 2002
Gujarat Value Added Value-added tax 328,463
Tax Act, 2003
Gujarat Value Added Value-added tax 509,478
Tax Act, 2003
Karnataka Value Value-added tax 341,036
Added Tax Act, 2003
Name of the Statute Period to which it relates Due date
Maharashtra Value April 2005 to March 2006 May 2005 to
Added Tax Act, 2002 April 2006
Maharashtra Value April 2006 to March 2007 May 2006 to
Added Tax Act, 2002 April 2007
Maharashtra Value April 2007 to March 2008 May 2007 to
Added Tax Act, 2002 April 2008
Maharashtra Value April 2008 to March 2009 May 2008 to
Added Tax Act, 2002 April 2009
Maharashtra Value April 2009 to March 2010 May 2009 to
Added Tax Act, 2002 April 2010
Maharashtra Value April 2010 to March 2011 May 2010to
Added Tax Act, 2002 April 2011
Gujarat Value Added September 2012 to March 2013 Octoberto
Tax Act, 2003 2012 to
April 2013
Gujarat Value Added April 2013 to August 2013 May 2013 to
Tax Act, 2003 September
2013
Karnataka Value April 2013 to August 2013 May 2013 to
Added Tax Act, 2003 September
201
"Credit available Rs 18,875,364 pending adjustment.
Except tor the above, there are no undisputed amounts payable in
respect of Provident fund, Employees'' State Insurance, Income tax,
Sales tax, Wealth tax, Service tax, value added tax and other material
statutory dues which were in arrears as at 31 March 2014 for a period
of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Income tax, Sales tax and other material statutory dues
which have not been deposited on account of any dispute. The following
dues of Service tax have not been deposited by the Company on account
of dispute:
Name of the Nature of Amount Period to which the Forum where the
statute dues (Rs)* amount relates dispute is
pending
Chapter v Service 875,000 November 1996 - Customs, Excise
of the Tax November 2001 & Service Tax
Finance Act Appellate
1994 Tribunal
*- excludes amount deposited under protest Rs 800,000
(x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the current and in
the immediately preceding financial year.
(xi) According to the information and explanations given to us and on
the basis of our examination of the records, the Company has defaulted
in the repayment of dues to one of its bankers. Loan amounting to Rs
56,932,251 which became due on 31 December 2013 was paid on 9 January
2014 and loan amounting to Rs 25,976,545 which became due on 31 March
2014 was paid on 21 April 2014. The Company has not defaulted in the
repayment of dues to any financial institutions and the Company did not
have any outstanding debentures during the year.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures or other securities.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or nidhi/ mutual benefit
fund/ society.
(xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company had given
guarantees for loans taken by others from banks are not prejudicial to
the interest of the Company. The guarantee was cancelled during the
year on repayment of the loan by the subsidiary.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the Balance sheet of the Company, we report
that the Company has used short term funds aggregating Rs 302,413,814
to fund tangible assets and intangible assets under development.
(xviii) The Company has not made any preferential allotment of shares
during the year to companies/ firms/ parties covered in the register
maintained under Section 301 of the Act.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For B S R & Co. LLP
Chartered Accountants
Firm''s Registration No: 101248W
Rajesh Mehra
Place : Mumbai Partner
Date : 29 May 2014 Membership No: 103145
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying fnancial statements of Mukta Arts
Limited (''the Company''), which comprise the Balance sheet as at 31
March 2013, the Statement of proft and loss and the Cash fow statement
for the year then ended, and a summary of signifcant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
fnancial performance and cash fows of the Company in accordance with
the Accounting principles generaly accepted in india. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
fnancial 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 fnancial
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 fnancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our qualifed opinion.
Basis for Qualifed Opinion
a. As explained in Note 3.39 to the fnancial statements, the
remuneration paid to the managing director of the Company for the year
ended 31 March 2013 amounting to Rs 9,979,490 (including fees as flm
director) and for earlier fnancial years from 2005-06 to 2011-2012
aggregating to Rs 100,626,669, is in excess of the limits prescribed
under Schedule XIII to the Act. The Company has made applications to
the Central Government seeking post-facto approval for earlier years,
which is awaited; application for the current year is proposed to be
made. During the previous year, the Company had received approval for
part of the excess remuneration paid (approval received for
remuneration aggregating to Rs 25,200,000 for the fnancial years
2005-06, 2006-07and 2007-08). The Company had made an application to
authorities requesting reconsideration/ approval for the balance excess
remuneration. Pending fnal communication from the authorities in this
regard and application for the current year, no adjustment has been
made in these fnancial statements.
b. As at 31 March 2013, the Company''s investment in its subsidiary,
Whistling Woods International Limited (WWI), a joint venture between
the Company and Maharashtra Film, Stage and Cultural Development
Corporation Limited (''MFSCDCL''), aggregates to Rs 369,997,000 and
loans, advances and deposits include Rs 424,096,877 recoverable from
WWI. As more fully explained in Note 3.40 to these fnancial statements,
through its order of 9 February 2012, the High Court of Judicature at
Bombay (''High Court'') has quashed the Joint Venture Agreement (''JVA'')
between the Company and MFSCDCL and passed consequential orders. WWI''s
petition for special leave to appeal fled with the Supreme Court of
India has been dismissed. However, the Company and WWI have fled
applications to review the said order with the High Court, which have
not yet come up for hearing. During the year, the Public Works
Department (PWD) Engineer has given his valuation report based on the
Balance sheet of WWI as at 31 March 2011. Further, MAL has made an
application to the Government of Maharashtra in February 2013 to
appoint expert valuers to determine the market price. Also, WWI''s net
worth stands fully eroded as at 31 March 2013 - management is currently
evaluating plans for the future.
Having regard to the circumstances explained above and pending fnal
outcome of the matter under litigation, the Company has not made any
adjustment to the carrying value of investments in and amounts due from
WWI. Accordingly, the impact on the carrying value of investments,
recoverability of loan and advances, proft for the year and
consequentially on the dividend for the year is not determinable.
Qualifed opinion
1. In our opinion and to the best of our information and according to
the explanations given to us, except for the matter relating to the
investment in and loans and advances recoverable from the Company''s
subsidiary WWIL referred to in paragraph (b) of the Basis for Qualifed
Opinion paragraph above, the outcome and consequent adjustments to the
fnancial statements of which cannot be presently determined, and for
the matter relating to the remuneration to the managing director
referred to in paragraph (a) of the Basis for Qualifed Opinion
paragraph above, the said fnancial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with 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 proft and loss, of the proft of the
Company for the year ended on that date; and
(c) in the case of the Cash fow statement, of the cash fows of the
Company for the year ended on that date.
Report on other Legal and Regulatory Requirements
2. 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 specifed in paragraphs 4 and 5 of the said
Order.
3. As required by section 227(3) of the Act, we report that:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) the Balance sheet, Statement of proft and loss and Cash fow
statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the Balance sheet, Statement of proft and loss and
Cash fow statement comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Act; and
(e) on the basis of written representations received from the directors
of the Company as at 31 March 2013, and taken on record by the Board of
Directors, none of the directors is disqualifed as on 31 March 2013,
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
Annexure to the Independent Auditors'' Report - 31 March 2013
(Referred to in our report of even date)
i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fxed assets
except that tagging of certain fxed assets is yet to be completed.
(b) The Company has a regular programme of physical verifcation of its
fxed assets by which all fxed assets are verifed annually. In our
opinion, this periodicity of physical verifcation is reasonable having
regard to the size of the Company and the nature of its assets. No
material discrepancies were noticed on such verifcation during the
year.
(c) The Company has not disposed off any fxed assets during the year.
ii) (a) The inventory has been physically verifed by the management
during the year. In our opinion, the frequency of such verifcation is
reasonable.
(b) The procedures for the physical verifcation of inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verifcation between the physical stocks and
the book records were not material.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, frms 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, controls relating to purchase of fxed assets, customer
contracting and tracking of amounts billable need to be further
strengthened, and having regard to the explanation that certain
services rendered/ rights sold are of a specialised nature and are
rendered/ sold to specifc buyers and suitable alternative sources are
not available to obtain comparable quotations, 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 inventories (food
and beverage items) and fxed assets and with regard to sale of services
and food and beverage items. We have not observed any material
weaknesses during the course of audit.
(v) In our opinion, and according to the information and explanations
given to us, there are no contracts and arrangements the particulars of
which need to be entered into the register maintained under Section 301
of the Act.
(vi) In our opinion and according to the information and explanations
given to us, Company has not complied with the provisions of Sections
58A and 58AA of the Act and the Companies (Acceptance of Deposits)
Rules, 1975 with regard to the loan taken and repaid during the year
from a director shareholder of the Company.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii) The Central Government has not prescribed the maintenance of
cost records under Section 209(1)(d) of the Act for any of the services
rendered/ food and beverages sold by the Company.
(ix) (a) According to the information and explanations given to us and
on the basis of our examination of records of the Company, except for
Value added tax dues aggregating to Rs 35,592,323 amounts deducted/
accrued in the books of account in respect of undisputed statutory dues
including Provident fund, Employees'' State Insurance, Income tax, Sales
tax, Wealth tax, Service tax, and other material statutory dues have
been generally regularly deposited during the year by the Company with
appropriate authorities. As explained to us, the Company did not have
any dues on account of Excise duty, Custom duty and Investor Education
and Protection Fund.
According to the information and explanations given to us, the
following undisputed statutory dues are outstanding as at 31 March 2013
for a period of more than six months from the date they became payable:
Name of the
Statute Nature of dues Amount * Period to
which it Due date
relates
Maharashtra Value
Added Value-added tax 1,173,077 April 2005
to March
2006 May 2005
to
tax Act, 2002 April 2006
Maharashtra Value
Added Value-added tax 9,069,231 April 2006
to March
2007 May 2006
to
tax Act, 2002 April 2007
Maharashtra Value
Added Value-added tax 4,138,462 April 2007
to March
2008 May 2007
to
tax Act, 2002 April 2008
Maharashtra Value
Added Value-added tax 2,096,154 April 2008
to March
2009 May 2008
to
tax Act, 2002 April 2009
Maharashtra Value
Added Value-added tax 1,580,769 April 2009
to March
2010 May 2009
to
tax Act, 2002 April 2010
Maharashtra Value
Added Value-added tax 1,384,615 April 2010
to March
2011 May 2010
to
tax Act, 2002 April 2011
Maharashtra Value
Added Value-added tax 952,380 April 2011
to August
2011 May 2011
to
tax Act, 2002 September
2011
*Credit available Rs 12,885,786 pending adjustment.
Except for the above, there are no undisputed amounts payable in
respect of Provident fund, Employees'' State Insurance, Income tax,
Sales tax, Wealth tax, Service tax, and other material statutory dues
which were in arrears as at 31 March 2013 for a period of more than six
months from the date they became payable.
(b) According to the information and explanations given to us, the
following dues of Service tax have not been deposited by the Company on
account of dispute:
Name of the statute Nature of Amount
dues (Rs)*
Chapter V of the Finance Service Tax 800,000
Act, 1994
Chapter V of the Finance Service Tax 875,000
Act, 1994
Name of the Statute Period to which Forum where the dispute
is
the amount relates pending
Chapter V of the Finance April 1999 -October Customs, Excise &
Service Tax Appellate
2003 Tribunal
Chapter V of the Finance November 1996 Customs, Excise &
Service Tax Appellate
-November 2001 Tribunal
I *- excludes amount deposited under protest Rs 1,240,000
(x) The Company does not have any accumulated losses at the end of the
fnancial year and has not incurred cash losses in the current and in
the immediately preceding fnancial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers or to any fnancial institutions. The Company did not have any
outstanding debentures during the year.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures or other securities.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or nidhi/ mutual beneft
fund/ society.
(xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
guarantees for loans taken by others from banks or fnancial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
(xvii) According to the 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 investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to companies/ frms/ parties covered in the register
maintained under Section 301 of the Act.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For B S R & Co.
Chartered Accountants
Firm''s Registration No: 101248W
Bhavesh Dhupelia
Place : Mumbai Partner
Date : 28 May 2013 Membership No: 042070
Mar 31, 2012
We have audited the attached Balance sheet of Mukta Arts Limited
('the Company') as at 31 March 2012 and the related Statement of
Profit and loss and the Cash flow statement for the year ended on that
date, annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are 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
1 As required by the Companies (Auditor's Report) Order, 2003 ('the
Order'), issued by the Central Government of India in terms of
sub-Section (4A) of Section 227 of the Companies Act, 1956 ('the
Act'), we enclose in the Annexure, a statement on the matters specified
in paragraphs 4 and 5 of the said Order.
2 As explained in Note 3.40 to the financial statements, the
remuneration paid to the managing director of the Company for the
period 1 April 2011 to 31 March 2012 amounting to Rs 12,997,900 and for
earlier financial years 2005-06, 2006- 07, 2007-08, 2008-09, 2009-2010
and 2010-11 aggregating to Rs 87,628,769, is in excess of the limits
prescribed under Section 198 of the Companies Act, 1956. The Company
made applications to the Central Government seeking post-facto approval
for earlier years, which is awaited; application for the current year
is being made. During the year, the Company has received approval for
part of the excess remuneration paid (approval received for
remuneration aggregating to Rs 25,200,000 for the financial years
2005-06, 2006-07and 2007-08). The Company has made an application to
authorities requesting reconsideration/ approval for the balance excess
remuneration. Pending final communication from the authorities in this
regard and application for the current year, no adjustment has been
made in these financial statements.
3 As at 31 March 2012, the Company's investment in its subsidiary,
Whistling Woods International Limited (WWI), a joint venture between
the Company and Maharashtra Film, Stage and Cultural Development
Corporation Limited ('MFSCDCL'), aggregates to Rs 369,997,000 and
loans, advances and deposits include Rs 391,595,281 recoverable from
WWI. As more fully explained in Note 3.41 to the financial statements,
through its order of 9 February 2012, the High Court of Judicature at
Bombay ('High Court') has quashed the Joint Venture Agreement
('JVA') between the Company and MFSCDCL and passed consequential
orders. WWI's petition for special leave to appeal filed with the
Supreme Court of India has been dismissed. However, the Company and WWI
have filed applications to review the said order with the High Court,
which have not yet come up for hearing. Also, WWI's net worth stands
fully eroded as at 31 March 2012 - management is currently evaluating
plans for the future.
Having regard to the circumstances explained above and pending final
outcome of the matter under litigation, the Company has not made any
adjustment to the carrying value of investments in and amounts due from
WWI. Accordingly, the impact on the carrying value of investments,
recoverability of loan and advances, profit for the year and
consequentially on the dividend for the year is not determinable.
4 Further to our comments in the Annexure referred to 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 purposes of our
audit;
b. in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. the Balance sheet, Statement of Profit and loss and the Cash flow
statement dealt with by this report are in agreement with the books of
account;
d. in our opinion, the 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 sub-Section (3C) of Section 211 of
the Act;
e. on the basis of written representations received from the directors
of the Company as at 31 March 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31 March 2012 from being appointed as a director in terms of clause (g)
of sub-Section (1) of Section 274 of the Act; and
f. in our opinion, and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Act in the manner so required and, except for the
matter referred to in paragraph 3 above, the outcome and consequent
adjustments to the financial statements of which cannot be presently
determined, and subject to the matter referred to in paragraph 2 above,
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 31 March 2012;
(ii) in the case of the Statement of Profit and loss, of the profit of
the Company for the year ended on that date; and
(iii) in the case of the Cash flow statement, of the cash flows of the
Company for the year ended on that date.
Annexure to the Auditors' Report- 31 March 2012
(Referred to in our report of even date)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets. The management is in the process of performing a detailed
exercise of tagging its fixed assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified annually. In our
opinion, this periodicity of physical verification is reasonable having
regard to the size of the Company and the nature of its assets. No
material discrepancies were noticed on such verification during the
year.
(c) Fixed assets disposed off during the year were not substantial and,
therefore, do not affect the going concern assumption.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of such verification is
reasonable.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956
('the Act').
(iv) In our opinion and according to the information and explanations
given to us, controls relating to purchase of fixed assets, customer
contracting and tracking of amounts billable need to be further
strengthened, and having regard to the explanation that certain
services rendered/ rights sold are of a specialised nature and are
rendered/ sold to specific buyers and suitable alternative sources are
not available to obtain comparable quotations, 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 inventories (food
and beverage items) and fixed assets and with regard to sale of
services and food and beverage items.
(v) In our opinion, and according to the information and explanations
given to us, there are no contracts and arrangements the particulars of
which need to be entered into the register maintained under Section 301
of the Act.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii) The Central Government has not prescribed the maintenance of
cost records under Section 209(1)(d) of the Act for any of the services
rendered/ food and beverages sold by the Company.
(ix) (a) According to the information and explanations given to us and
on the basis of our examination of records of the Company, except for
Value added tax dues aggregating to Rs. 24,889,325, amounts deducted
/accrued in the books of account in respect of undisputed statutory
dues including Provident fund, Employees' State Insurance, Income tax,
Sales tax, Wealth tax, Service tax, and other material statutory dues
have been generally regularly deposited during the year by the Company
with appropriate authorities. As explained to us, the Company did not
have any dues on account of Excise duty, Custom duty and Investor
Education and Protection Fund.
According to the information and explanations given to us, the
following undisputed statutory dues are outstanding as at 31 March 2012
for a period of more than six months from the date they became payable:
Name of the
statute Nature of dues Amount * period to
which it relates Due date
Maharashtra
Value Added
tax Value-added tax 1,173,077 April 2005 to
March 2006 May 2005
to
Act, 2002 April
2006
Maharashtra
Value Added
tax Value-added tax 9,069,231 April 2006 to
March 2007 May
2006 to
Act, 2002 April
2007
Maharashtra
Value Added
tax Value-added tax 4,138,462 April 2007 to
March 2008 May 2007
to
Act, 2002 April
2008
Maharashtra
Value Added
tax Value-added tax 2,096,154 April 2008 to
March 2009 May 2008
to
Act, 2002 April
2009
Maharashtra
Value Added
tax Value-added tax 1,580,769 April 2009 to
March 2010 May 2009
to
Act, 2002 April
2010
Maharashtra
Value Added
tax Value-added tax 1,384,615 April 2010 to
March 2011 May 2010
to
Act, 2002 April 2011 to
August 2011 April
2011
Maharashtra
Value Added
tax Value-added tax 952,380 May 2011
to
Act, 2002 September
2011
*Credit available Rs 12,902,371 pending adjustment.
Except for the above, there are no undisputed amounts payable in
respect of Provident fund, Employees' State Insurance, Income tax,
Sales tax, Wealth tax, Service tax, and other material statutory dues
which were in arrears as at 31 March 2012 for a period of more than six
months from the date they became payable
(b) According to the information and explanations given to us, the
following dues of Service tax and Income-tax have not been deposited by
the Company on account of dispute:
Name of the
statute Nature of Amount
(Rs.)* Period to which
the Forum where the
dispute
dues amount relates is pending
Chapter V
of the Service Tax 800,000 April 1999
-October Customs,
Excise &
Finance
Act, 1994 2003 Service Tax
Appellate
Tribunal
Chapter V
of the Service Tax 875,000 November 1996 Customs,
Excise &
Finance
Act, 1994 -November 2001 Service Tax
Appellate
Tribunal
*- excludes amount deposited under protest Rs 1,240,000
(x) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the current and in
the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers or to any financial institutions. The Company did not have any
outstanding debentures during the year
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures or other securities.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or nidhi/ mutual benefit
fund/ society.
(xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
guarantees for loans taken by others from banks or financial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
(xvii) According to the 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 investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to companies/firms/parties covered in the register
maintained under Section 301 of the Act.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For B s R & Co.
Chartered Accountants
Firm's Registration No: 101248W
Bhavesh Dhupelia
Mumbai Partner
29 May 2012 Membership No: 042070
Mar 31, 2011
We have audited the attached Balance sheet of Mukta Arts Limited (Ãthe
Company') as at 31 March 2011 and the related Profit and loss account
and Cash fl ow statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are 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
1 As required by the Companies (Auditor's Report) Order, 2003 (Ãthe
Order'), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956 (Ãthe Act'),
we enclose in the Annexure, a statement on the matters specifi ed in
paragraphs 4 and 5 of the said Order.
2 As more fully explained in Schedule 22.3 to the financial
statements, the remuneration paid to a whole-time director of the
Company for the period 1 April 2010 to 31 March 2011 and for earlier
years ended 31 March 2010, 31 March 2009 and 31 March 2008 is in excess
of the limits prescribed under Section 198 of the Companies Act, 1956.
The Company has made an application to the Central Government seeking
post-facto approval, which is awaited.
3 Further to our comments in the Annexure referred to 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 purposes of our
audit;
b. in our opinion, proper books of account as required by law has 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 fl ow
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 fl ow statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Act;
e. on the basis of written representations received from the directors
of the Company as at 31 March 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualifi ed as on
31 March 2011 from being appointed as a director in terms of clause (g)
of sub-section (1) of Section 274 of the Act; and
f. in our opinion and to the best of our information and according to
the explanations given to us, subject to the effect of the matter
stated in paragraph 2 above, the said accounts 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:
(vi) in the case of the Balance sheet, of the state of affairs of the
Company as at 31 March 2011;
(vii) in the case of the Profit and loss account, of the loss of the
Company for the year ended on that date; and
(viii) in the case of the Cash fl ow statement ,of the cash flows of
the Company for the year ended on that date.
Annexure to the Auditors' Report- 31 March 2011
(Referred to in our report of even date)
i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fi xed
assets. The management is in the process of performing a detailed
exercise of tagging its fi xed assets.
(b) The Company has a regular programme of physical verifi cation of
its fi xed assets by which all fi xed assets are verifi ed during the
year. In our opinion, this periodicity of physical verifi cation is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on such verifi
cation during the year.
(c) Fixed assets disposed off during the year were not substantial and,
therefore, do not affect the going concern assumption.
ii) The Company is a service company, primarily engaged in the business
of film production, distribution, exhibition and related services. It
does not hold any physical inventories. Accordingly, paragraph 4(ii) of
the Order is not applicable.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, fi rms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
iv) In our opinion and according to the information and explanations
given to us, controls relating to purchase of fi xed assets, customer
contracting and tracking of amounts billable need to be strengthened,
and having regard to the explanation that certain services rendered/
rights sold are of a specialised nature and are rendered/ sold to
specifi c buyers and suitable alternative sources are not available to
obtain comparable quotations, 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 fi xed assets and with regard to
sale of services. The activities of the Company do not involve purchase
of inventory and sale of goods.
v) (a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act have been entered in the register required to
be maintained under that Section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs 5
lakhs are for the Company's specialised requirements for which suitable
alternative sources are not available to obtain comparable quotations.
However, on the basis of information and explanations provided, the
same appear reasonable.
vi) The Company has not accepted any deposits from the public.
vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
viii) The Central Government has not prescribed the maintenance of cost
records under Section 209(1)(d) of the Act for any of the services
rendered by the Company.
(ix) (a) According to the information and explanations given to us and
on the basis of our examination of records of the Company, except for
value added tax dues aggregating to Rs 19,442,308, amounts deducted
/accrued in the books of account in respect of undisputed statutory
dues including Provident fund, Employees' State Insurance, Income tax,
Sales tax, Wealth tax, Service tax, and other material statutory dues
have been generally regularly deposited during the year by the Company
with appropriate authorities. As explained to us, the Company did not
have any dues on account of Excise duty, Custom duty and Investor
Education and Protection Fund.
There were no dues on account of Cess under Section 441A of the Act
since the date from which the aforementioned Section comes into force
has not yet been notifi ed by the Central Government.
According to the information and explanations given to us, the
following undisputed statutory dues are outstanding for a period of
more than six months from the date they became payable as at 31 March
2011:
Name of the
Statute Nature of
dues Amount * Period to
which it relates Due date
Maharashtra
Value Value-added
tax 1,173,077 April 2005 to
March 2006 May 2005 to
April 2006
Added tax
Act, 2002
Maharashtra
Value Value-added
tax 9,069,231 April 2006 to
March 2007 May 2006 to
April 2007
Added tax
Act, 2002
Maharashtra
Value Value-added
tax 4,138,462 April 2007 to
March 2008 May 2007 to
April 2008
Added tax
Act, 2002
Maharashtra
Value Value-added
tax 2,096,154 April 2008 to
March 2009 May 2008 to
April 2009
Added tax
Act, 2002
Maharashtra
Value Value-added
tax 1,580,769 April 2009 to
March 2010 May 2009 to
April 2010
Added tax
Act, 2002
Maharashtra
Value Value-added
tax 1,000,000 April 2010 to
March 2011 May 2010 to
April 2011
Added tax
Act, 2002
*Credit available Rs 11,500,000 pending adjustment.
Except for the above, there are no undisputed amounts payable in
respect of Provident fund, Employees' State Insurance, Income tax,
Sales tax, Wealth tax, Service tax, and other material statutory dues
which were in arrears as at 31 March 2010 for a period of more than six
months from the date they became payable
(b) According to the information and explanations given to us, the
following dues of Service tax and Income-tax have not been deposited by
the Company on account of dispute.
Name of the
statute Nature of Amount (Rs.) Period to which Forum where
the dispute
dues the amount
relates is pending
Chapter V
of the Service 440,000 April 1999 - Customs,
Excise &
Finance Act,
1994 Tax (Deposit made
under October 2003 Service Tax
Appellate
protest Rs
440,000) Tribunal
Chapter V
of the Service 1,675,000 November 1996 - Customs,
Excise &
Finance Act,
1994 Tax (Deposit made
under November 2001 Service Tax
Appellate
protest -
Rs 800,000) Tribunal
x) The accumulated losses of the Company are less than fi fty percent
of its net worth and it has incurred cash losses in the current fi
nancial year and in the immediately preceding financial year.
xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers or to any financial institutions. The Company did not have any
outstanding debentures during the year
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures or other securities.
xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or nidhi/ mutual benefit
fund/ society.
xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
guarantees for loans taken by others from banks or financial
institutions are not prejudicial to the interest of the Company.
xvi) In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
xvii) According to the 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 investment
xviii) The Company has not made any preferential allotment of shares to
companies/fi rms/parties covered in the register maintained under
Section 301 of the Act.
xix) The Company did not have any outstanding debentures during the
year.
xx) The Company has not raised any money by public issues during the
year.
xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For B S R & Co.
Chartered Accountants
Firm's Registration No: 101248W
Bhavesh Dhupelia
Mumbai Partner
27th May, 2011 Membership No: 042070
Mar 31, 2010
1. We have audited the attached Balance Sheet of Mukta Arts Ltd. as at
31st March 2010 and the related Proft and Loss Account and the Cash
Flow Statement for the year ended on that date annexed thereto. These
fnancial statements are the responsibility of the Companys management.
Our responsibility is to express an opinion on these fnancial
statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
fnancial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the fnancial statements. An audit also includes
assessing the accounting principles used and signifcant estimates made
by management, as well as evaluating the overall fnancial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we give in the Annexure a
statement on the matters specifed in paragraphs 4 and 5 of the said
Order.
4. As more explained in Note no. 2(f) in schedule ÃPÃ to the fnancial
statements, the Company has disputed dues in respect of Service Tax is
Rs 2.12 millions out of which Rs 0.88 millions has not been paid since
the matter is pending before CESTAT.
5. As more explained in Note no. 2(g) in schedule ÃPÃ to the fnancial
statements, the managerial remuneration paid to the Chairman is in
excess of the limits prescribed under Section 198 of the Act. The
Company has made an application to the Central Government seeking
post-fact approval, which is awaited.
6. Further to our comments in the Annexure referred to in paragraph 3
above:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of such
books;
(iii) the Balance Sheet, Proft and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the Balance Sheet, Proft and Loss Account and Cash
Flow Statement dealt with by this report comply with the requirements
of the Accounting Standards referred to in sub-section (3C) of Section
211 of the Companies Act, 1956;
(v) on the basis of the written representations received from the
directors as on 31st March, 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualifed as on
31st March, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
7. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with signifcant
accounting policies and other notes thereon, give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
(ii) in the case of Proft and Loss Account of the Loss of the Company
for the year ended on that date, and
(iii) in the case of Cash Flow Statement, of the cash fows for the year
ended on that date.
Annexure to the Auditors Report [Referred to in paragraph (3) thereof]
(i) The nature of the Companys business/ activities during the year is
such that clauses (viii) and (xiii) of paragraph 4 of the Companies
(Auditors Report) order, 2003 are not applicable to the Company for
the year ending 31st March 2010.
(ii) In respect of fxed assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fxed assets.
(b) The fxed assets of the company have been physically verifed by the
management at the end of the year and we are informed that no
discrepancies between book records and the physical inventory have been
noticed.
(c) In our opinion and according to the information and explanations
given to us, the Company has not made any substantial disposals during
the year.
(iii) In respect of inventories:
(a) As explained to us, inventories were physically verifed during the
year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verifcation of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its activity during the year.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verifcation.
(iv) In respect of loans, secured or unsecured, granted or taken by the
Company to or from companies, frms or other parties covered in the
register maintained under section 301 of The Companies Act, 1956:
According to the information and explanations given to us the Company
has given unsecured loan to a Subsidiary Company, the maximum
outstanding balance during the year was Rs. 280.3 millions and the
outstanding balance as on 31st March 2010 is Rs. 265.00 millions. The
outstanding interest on unsecured loan as on 31.03.2010 is Rs. 20.53
millions. The same is not overdue and the rate of interest and other
terms and conditions of loan is in our opinion not prima facie
prejudicial to the interest of the Company. Apart from the above, the
Company has neither granted nor taken any loans, secured or unsecured,
to or from companies, frms or other parties covered in the register
maintained under section 301 of The Companies Act, 1956.
(v) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and nature of its business,
for purchase of inventory and fxed assets. There are no sales of goods.
(vi) In respect of transactions entered in the register maintained in
pursuance of section 301 of the Companies Act 1956:
(a) To the best of our knowledge and belief and according to the
information and explanations given to us, transactions that needed to
be entered into the register have been so entered.
(b) According to the information and explanations given to us, there
are transactions/arrangements in excess of Rs 0.50 millions in respect
of subsidiary companies in which directors are interested and prices
are reasonable having regard to the prevailing market prices at the
relevant time.
(vii) The Company has not accepted any deposits from the public to
which the provisions of Section 58A and section 58AA of the Companies
Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975, are
applicable.
(viii) In our opinion, the Company has an adequate internal audit
system commensurate with the size and the nature of its business.
(ix) According to the information and explanations given to us in
respect of statutory and other dues:
(a) The Company has been generally regular in depositing undisputed
statutory dues, including Provident Fund, Employees State Insurance,
Income Tax, Sales Tax, Wealth Tax, Customs Duty, Cess and any other
statutory dues with the appropriate authorities during the year. There
were no undisputed amount of outstanding statutory dues as at 31st
March 2010 for more than six months from the date they became payable.
(b) Disputed dues in respect of Service Tax is Rs 2.12 millions out of
which Rs 0.88 millions has not been paid since the matter is pending
before CESTAT. (kindly refer Note no. 2(f) in schedule P)
(c) The managerial remuneration paid to the Chairman is in excess of
the limits prescribed under Section 198 of the Act. The Company has
made an application to the Central Government seeking post-fact
approval, which is awaited. (kindly refer Note no. 2(g) in schedule P)
(x) The Company has no accumulated losses as at the end of the year.
The Company has incurred cash losses during the fnancial year, however
there were no cash losses during the previous year.
(xi) According to the information and explanations given to us, the
Company was not liable to repay any dues to any fnancial institution
and bank, and there were no debenture holders during the year.
(xii) According to the information and explanations given to us, the
Company has not given any loans and 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 beneft fund /
society. Therefore, the provisions of clause 4(xiii) of the companies
(Auditors Report) Order, 2003 are not applicable to the company.
(xiv) According to the information and explanations given to us and on
the basis of our examination of the Companys records we are of the
opinion that the Company is maintaining adequate records regarding
transactions in its trading activities in the units of Mutual Funds
(Debt Schemes) and timely entries have been made in these records. The
investments have been held by the Company in its own name.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by subsidiary Whistling
Woods International Limited from Punjab National Bank during the
previous year.
(xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, the Company has taken term
loan during the year and was used for the purpose for which the loan
was taken.
(xvii) According to the cash fow statement and other records examined
by us and the information and explanations given to us, on an overall
basis, funds raised on short term basis have, prima facie, not been
used during the year for long term investment (fxed assets etc.) and
vice versa.
(xviii)The Company has not made any preferential allotment during the
year.
(xix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
For SHAMIT MAJMUDAR ASSOCIATES
Firm Registration No. 109881 W
Chartered Accountants
Place: Mumbai SHAMIT MAJMUDAR
Dated: 12th August, 2010 Proprietor
Membership No. F-010595
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