Mar 31, 2017
TO THE MEMBERS OF PENTAMEDIA GRAPHICS LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Pentamedia Graphics Limited (the Company), which comprise the Balance Sheet as at March 31, 2017, the statement of Profit and Loss the Statement of Changes in Equity and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company''s Management is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under Section 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014 and in accordance with the accounting principles generally accepted in India.
This responsibility includes the 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 control, that were operating effectively 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.
AUDITORS'' RESPONSIBILITY
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and the matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order under section 143(11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 financial 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 internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2017
(b) In the case of Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by Section 143(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, the statement of changes in equity 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 comply with Accounting Standards prescribed under section 133 of the Act, as applicable.
e. On the basis of the written representations received from the directors as on March 31, 2017, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to adequacy of the internal financial controls over the financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "annexure A". Our respect expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
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) Rule,2014, in our opinion and to the best of our information and according to the explanation given to us:
a) The Company has disclosed the impact of profit in Profit and Loss Account as referred to Note to the financial statements.
b) The Company has provided requisite disclosures in the financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the company and as produced to us by the management.
2. As required by the Companies (Auditor''s Report) Order, 2016 (the Order) issued by the Central Government in terms of Section 143(11) of the Act, we give in Annexure B, a statement on the matters specified in the paragraphs 3 and 4 of the Order.
ANNEXURE"A"
TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1(f) under ''Report on Other Legal and Regulatory Requirements'' of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Pentamedia Graphics Limited ("the Company") as of 31st March, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITORS'' RESPONSIBILITY
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors'' 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, to the best of our Information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, 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.
ANNEXURE"B" TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 2 under ''Report on Other Legal and Regulator) Requirements'' of our report of even date)
1. Fixed Assets:
a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b) The fixed assets are physically verified during the year by the management at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
c) As per our verification we opine that, there are no immovable properties held in the name of the company. The company sold the land and building during the year.
2. The inventories were physically verified during the year by the management at reasonable intervals and according to the information and explanation given by the management, no material discrepancies were noticed on physical verification.
3. The company has not granted or taken any loans, secured or unsecured to or from companies, firms, Limited Liability Partnerships and other parties except from Mayajaal Entertainment Ltd covered in the register maintained under Sec 189 of Companies Act 2013.
4. The company has not provided any loans, investments, guarantees or securities which fall under the purview of Section 185 and Section 186 of the Companies Act, 2013.
5. In our opinion and according to the information given to us, the company has not accepted any deposits from the public during the year. Therefore, Clause 5 of this order is not applicable.
6. As per the information and explanations given to us, maintenance of cost records has not been prescribed by the Central Government under Sub-section (1) of Section 148 of the companies Act 2013.
7. According to the information and explanations given to us there are no dues of Income Tax, Sales Tax, Customs duty, Excise Duty, Service Tax, Provident Fund and Cess which have not been deposited on account of any dispute except the following cases:
INCOME IX
Claims against the company which has not been acknowledged as debt for the year ended 31st March, 2017 Includes demands from the Income Tax Authorities for payment of Tax Including Interest for the Issues mentioned hereinafter. Rs. 8.89 crores pertaining to the assessment years 1996-97, 1997-98 and 1998-99. The demands for these years are due to disallowance of Training Income in STP/ EHTP The matters are pending to these years in the Supreme Court of India. So also demand and interest of Rs. 21.53 pertaining to the assessment year 2000-01 is due to the treatment of Goodwill which is now pending in the High Court of Madras. For the assessment year 2001-02, 2002-03 and 2003-04 the demand and including interest is Rs. 109.09 crores due to the treatment of unrealized sales and opening of fresh cases u/s 263. These matters are pending in the Supreme Court of India. For the assessment years 2004-05, 2005-06 and 2006-07 the demands inclusive interest are Rs. 48.03 crores which arose due to opening of the files afresh u/s 147 due to non deduction of TDS for some matters, rate of depreciation etc. The company has appealed against the same in the High Court of Madras and has obtained a stay order. For the assessment years 2008-09, 2009-10, 2010-11, 2012-13, 2013-14, 2014-15 there is a total demand of Rs. 10.15 crores including interest because of the dispute in the rate depreciation, deduction of TDS in some matters and these matters are now with the Commissioner of Income Tax (Appeals) There is also matter pending for Pentasoft Technologies (now merged with Pentamedia Graphics) where demand inclusive interest is Rs. 6.30 crores for issues pertaining to unrealized sales.
CASES FILED BY THE COMPANY AGAINST INCOME TAX THE DEPARTMENT
1. The Company has filed a WP 2357/2010 and got a stay order dated 15.07.2010 and to dispose of all the issues /appeals from 1996 to 2000 -07 within 8 weeks from the date of the order.
2. Revised returns has been filed by the company for the AYs 2001-02 to 2004-05 on 31.03.2008 writing off Rs. 690 Crores of impaired assets is still pending with the department . The Madras High Court vide order/ direction dated 11.01.2010 has asked the departments to consider the revised returns.
3. The company has filed a WP 25120/2010 for Pentasoft Technologies and got a stay order dated 18.12.2009 till such time all the issues /appeals from 1996 to 2000 -07 are disposed off.
CASES FILED BY THE INCOME TAX THE DEPARTMENT AGAINST THE COMPANY
I. Department has filed in the Supreme Court of India against Pentasoft Technologies (now merged with Pentamedia Graphics) for Assessment Years 2001-02 and 2002-03 challenging the Depreciation on Non Compete Fees upheld by the Madras High Court.
8. The company has not obtained any loans or borrowings from financial institutions, banks, Government and debenture holders, hence this Clause is not applicable.
9. In our opinion and according to the information given to us, the company has not raised any money by way of initial public offer or further public offer and hence this clause is not applicable.
10. As per our verification and explanation given to us, by the company, no fraud on or by the company has been noticed or reported during the year.
II. The managerial remuneration paid by the company is as per Section 197 read with schedule V to the Companies Act, 2013.
12. The company is not a Nidhi company and hence this clause is not applicable.
13. As per our verification, it is opined that all the transactions with the related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements.
14. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year, hence this clause is not applicable.
15. According to the information and explanations given to us, the company has not entered into any non - cash transactions with the directors or persons connected with them. Hence provisions of Section 192 of the Companies Act, 2013 are not applicable to the company.
16. The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Babu Peram and Associates
Chartered Accountants
CA. Babu Peram
Proprietor
(Firm Registration No. 0127215)
Membership No.200803
Place : Chennai
Date : 29th May, 2017
Mar 31, 2015
We have audited the accompanying financial statements of Pentamedia
Graphics Limited (the Company), which comprise the Balance Sheet as at
March 31,2015, the statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under Section 133 of
Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules,
2014 and in accordance with the account- ing principles generally
accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material mis-statement, whether
due to fraud or error.
AUDITORS' RESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and 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 internal
control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by manage- ment, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2015;
(b) In the case of Statement of Profit and Loss, of the profit of the
Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
OTHER MATTERS
The financial statements and other financial information include the
company's write off of Rs. 52,52,30,000 towards advances and deposits
and Rs.95,31,34,000 towards Capital Work In Progress and related
disclosure in respect of the amount mentioned.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by Section 143(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 examina- tion 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 comply with Accounting Standards.
e. On the basis of the written representations received from the
directors as on March 31, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31,2015,
from being appointed as a director in terms of Section 164(2) of the
Act.
f. With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rule,2014, in our opinion and to the best of our information and
according to the explanation given to us:
The Company has disclosed the impact of loss in Profit and Loss Account
as referred to Note to the financial statements.
ANNEXURE TO AUDITORS' REPORT OF EVEN DATE
(Referred to in paragraph 8 under 'Report on other legal and
Regulatory Requirements' section of our report of even date)
1. (a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified during the year by the
management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of the fixed
assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) In our opinion and according to the information and explanations
given to us, as substantial part of the fixed assets is not been
disposed off by the company during the year
2. (a) As explained to us, the inventories were physically verified
during the year by the management at reasonable intervals.
(b) In Our Opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the company and the nature of its business.
(c) In our opinion and according to the information and explanation
given to us, the company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(d) The company has valued inventory at the lower of cost or net
realisable value. The determination of realisable value of this
inventory is based on the method adopted by the management. We have not
conducted audit procedures for the same. Part of the stock were written
off for which there is no value.
3. We have been informed by the company management that they have not
granted/taken any loans, secured or unsecured to/from companies, firms
and other parties covered in the register maintained under sec 189 of
Companies Act 2013 and accordingly the provisions of clause(iii) of
paragraph 3 of the order are not applicable to the company.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory and fixed assets
and the sale of goods and services. During the course of our audit, we
have not observed any major weakness in such internal control system.
5. In our opinion and according to the information and explanations
given to us, the company has not accepted deposits from the public
during the year, Therefore, the provisions of the Clause (V) of
paragraph 3 of the order are not applicable to the company.
6. As per the information and explanations given to us, maintenance of
cost records has not been prescribed by the central government under
Section 148 of the companies Act 2013.
7. According to the information and explanations given to us there are
no dues of Income Tax, Wealth Tax, Sales Tax, Customs duty, Excise
Duty, Service Tax and Cess Which have not been deposited on account of
any dispute except the following cases.
Pentasoft Technologies Limited has obtained a direction/stay order
dated 18.12.2009 (W.P.No.25120/2009) from the High Court of Madras to
dispose off all the issues and appeals pertaining to the Assessment
Year 1998-99 to 2006-07 where Pentasoft Technologies Limited has
claimed refunds. Also vide WP No.5174 / 2015 the company was able to
life the attachment on its properties during February 2015.
The particulars of dues of Income Tax For Pentamedia Graphics Limited
and Pentasoft Technologies which have not been deposited on account of
a dispute for the following years as follows.
(i) Pentamedia
Assessment Year Amount in Crores
2008- 2009 1.96
2009- 2010 0.85
2010- 2011 5.72
2012-2013 1.20
(ii) Pentasoft
Assessment Year Amount in Crores
2001-2002 6.30
Pentamedia Graphics Limited has obtained a direction/order dated
15.07.2010 (W.P.No.2357/10) from the High Court of Madaras to dispose
off all the issues and appeals pertaining to the Assessment Year:
1997-98 to 2007-2008 within 8 weeks where the company has claimed
refunds.
For the AY 2005-06 a case against Pentamedia Graphics Limited was
reopened by Income tax Department on 21/10/2014 u/s 144 r.w.s 147 of
Income tax Act demanding an amount of Rs.25,38,54,740.The above said
case was under dispute stay has been obtaining company and the appeal
was pending in supreme court.
Consequent to the modified composite scheme of Amalgamation arrangement
and compromise between Pentamedia Graphics Ltd, Media Dreams Ltd,
Kris.Srikkanth Sports Entertainment Ltd, Intelevision and Mayajaal
Entertainment Ltd and their respective creditors and shareholders.
The company filed its Revised return as per the Madras High Court Order
dated 17th December 2007 wherein Rs.690 Cr of impaired assets has been
written off and the matter is still pending with the department. This
being not taken up immediately the company vide COMP. APPLN. No.330 to
333/2009 sort direction from Madras High Court and the same was given
while order dated 11th January 2010.
SERVICE TAX CLAIMS
A case against M/s.Pentasoft Technologies Ltd. (stay order No.823/12 dt
10.12.12) is pending in CST, Chennai. Demand amount of which is
Rs.11,38,904 out of which Rs.8,00,000 was deposited by the company on
11th January 2013. And the said case is still in process.
8. The company have an accumulated losses at the end of the financial
year and the company has not incurred cash losses during the financial
year covered by our audit.
9. In our opinion and according to the information and explanation
given to us, the company has not defaulted in the repayment of dues to
financial institutions, banks and debenture holders.
10. According to the information and explanations furnished to us, the
company has not given guarantees, for loans taken by others from banks
or financial institutions
11. In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance sheet of the
company, we report that funds raised on short-term basis have prima
facie not been used during the year for long-term purpose.
12. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For Babuperam Associates,
Chartered Accountants
CA. BABUPERAM
Place : Chennai Membership No.200803
Date : 29.05.2015 Firm Registration No.012721S
Mar 31, 2014
We have audited the accompanying financial statements of M/s.
PENTAMEDIA GRAPHICS LIMITED (the "Company"), which com- prise the
Balance Sheet as at March 31,2014, the Statement of Profit and Loss and
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information,
which we have signed under reference to this report.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211(3C)
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 and in
accordance with the accounting principles generally accepted in India.
This responsibility includes the design, implementation and maintenance
of internal controls relevant to the preparation and presentation of
the financial statements that give a true and fair view and are free
from material misstatements, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing and other applicable authoritative
pronouncements 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 assur- ance about
whether the financial statements are free from material misstatements.
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 and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required, give a true
and fair view in conformity with the accounting principles generally
accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the 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.
Emphasis of matter
We draw attention to :
a. Note no.B(2) relating to amounts written off under exceptional items
b. The company has valued inventory at the lower of cost or net
realizable value. The determination of realizable value of this
inventory is a technical matter and we have relied on the valuation
conducted by the technical experts in the management. We have not
conducted audit procedure for the same.
c. The value of Long Term/Short Term Loans and Advances amounting to
Rs.133.82 crores is based on confirmation from management as to
recoverability and consequent implication of AS-28 is subject to
confirmation.
Report on Other Legal and Regulatory Requirements
1. As required by "the Companies (Auditor''s Report) Order, 2003"
"(the "Order") as amended by "the Companies (Auditor''s Report)
(Amendment) Order, 2004" issued by the Central Government of India in
terms of Section 227(4A) of the Act, (herein after referred to as the
"Order") and on the basis of such checks of the books and records
of the company as we considered appropriate and according to the
information and explanations given to us, we give in the Annexure a
statement on the matters specified in para- graphs 4 and 5 of the
Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as 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 agree- ment with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Companies Act, 1956 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.
(e) On the basis of the written representations received from the
directors as on March 31,2014 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31,2014
from being appointed as a director in terms of Sec- tion 274(1)(g) of
the Act.
ANNEXURE TO AUDITORS'' REPORT OF EVEN DATE (Referred to in paragraph 1
under ''Report on Other Legal and Regulatory Requirements'' section of
our report of even date)
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of the fixed
assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of the fixed assets is not been
disposed off by the company during the year.
2. (a) As explained to us, the inventories were physically verified
during the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inven- tories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(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
verification.
(d) The company has valued inventory at the lower of cost or net
realisable value. The determination of realisable value of this
inventory is based on the method adopted by the management. We have not
conducted audit procedures for the same.
3. We have been informed by the company management that they have not
granted/taken any loans, secured or unsecured to/from companies, firms
and other parties covered in the register maintained under Section 301
of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system com-
mensurate with the size of the Company and the nature of its business
with regard to purchases of inventory and fixed assets and the sale of
goods and services. During the course of our audit, we have not
observed any major weakness in such internal control system.
5. In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Act, to the best of our
knowledge and belief and according to the information and explanations
given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs.5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits from the public
during the year. Therefore, the provisions of the clause 4 (vi) of the
Order are not applicable to the Company.
7. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8. As per the information and explanations given to us, maintenance of
cost records has not been prescribed by the central govern- ment under
Section 209(1)(d) of the Companies Act, 1956.
9. According to the information and explanations given to us there are
no dues of Income Tax, Wealth Tax, Sales Tax, Customs duty, Excise
Duty, Service Tax and Cess which have not been deposited on account of
any dispute except in the following cases.
Income Tax
Pentamedia Graphics Limited has obtained a direction/order dated
15.07.2010 (W.P No.2357/10) from the High court of Madras to dispose
off all the issues and appeals pertaining to the Assessment Year :
1997-98 to 2007-2008 where the company have claimed refunds. The issues
and appeals are on various stages with the Income Tax department.
Pentasoft Technologies Limited has obtained a direction/order dated
18.12.2009 (W.P.No.25120/2009) from the High Court of Madras to dispose
off all the issues and appeals pertaining to the Assessment Year :
1998-99 to 2006-07 where Pentasoft Technologies Limited have claimed
refunds. The issues and appeals are on various stages with the Income
Tax department.
The volume of Claims/Refunds cannot be quantified.
The particulars of dues of Income Tax which have not been deposited on
account of a dispute for the following years as follows.
Assessment Year Amount in Crores
2008- 2009 1.96
2009- 2010 0.85
2010- 2011 5.72
10. The Company has accumulated losses as at the end of the financial
year and incurred cash losses during the financial year covered by our
audit. However, the company had not incurred any losses in the
immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institutions and banks. The company has not issued any
debentures.
12. I n our opinion and according to the information and explanations
given to us, the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
13. I n our opinion and according to the information and explanations
given to us, the Company is not dealing in shares, securities and
debentures. Therefore, the provisions of clause 4(xii) of the Order are
not applicable to the Company.
14. I n our opinion, the company is not a chit fund or a nidhi, mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
company.
15. According to the information and explanations furnished to us, the
company has not given guarantees, for loans taken by others from banks
or financial institutions.
16. The company has not raised any new term loan during the year.
17. I n our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that funds raised on short-term basis have prima
facie not been used during the year for long- term purposes.
18. According to the information and explanations given to us, during
the year covered by our audit, the Company has not made preferential
allotment of equity shares to parties and companies covered in the
register maintained under Section 301 of the Act.
19. According to the information and explanations given to us, during
the year covered by our report, the Company has not issued any secured
debentures.
20. During the year covered by our report, the Company has not raised
any money by way of public issue.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally ac- cepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For Sudhindran & Co
Chartered Accountants
CA P.SUDHINDRAN
PARTNER
Place : Chennai Membership No.32100
Date : 27.06.2014 Firm Registration No.006019S
Mar 31, 2013
We have audited the attached the Balance Sheet of Pentamedia Graphics
Limited as at 31st March 2013, the Statement of Profi t & Loss Account
and also the Cash Flow Statement for the year ended on that date
annexed thereto. These fi nancial statements are the responsibility of
the CompanyÂs management. Our responsibility is to express an opinion
on these fi nancial 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 fi nancial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the fi nancial statements. An audit also includes
assessing the accounting principles used and signifi cant estimates
made by the management, as well as evaluating the overall fi nancial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As required by the Companies (AuditorÂs Report) Order, 2003 (as
amended) hereinafter referred to as "the order" issued by the Central
Government of India in terms of sub section (4A) of section 227 of the
Companies Act, 1956, hereinafter referred to as the "the Act" we
enclose in the Annexure a statement on the matters specifi ed in
paragraphs 4 and 5 of the said Order to the extent applicable.
Further to our comments in the annexure referred to above, we report
that:
i. We have obtained all the information and explanations, which, to the
best of our knowledge and belief were necessary for purpose of the
audit;
ii. In our opinion, proper books of accounts have been kept as required
by law so far as appears from our examination of those books;
iii. The balance sheet, statement of profi t and loss account and cash
fl ow statement dealt with by this report are in agreement with books
of account;
iv. In our opinion, balance sheet, statement of profi t 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 Companies Act, 1956 to the extent applicable excepting the Note
no. (vi) of the auditorÂs report relating to Accounting Standard 2.
v. On the basis of written representations received from directors, as
on 31st March 2013 and taken on record by the Board of Directors, we
report that, none of the Directors are disqualifi ed as on 31st March
2013 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
vi. Attention is invited to:
a. The company has valued inventory at the lower of cost or net
realizable value. The determination of realizable value of this
inventory is a technical matter and we have relied on the valuation
conducted by the technical experts in the management. We have not
conducted audit procedure for the same.
b. The company valued long term investments at cost as per the present
market conditions and as per valuation done by the valuer. Increase /
decrease in value is provided for, where the management is of the
opinion that the variation is permanent is nature. We have not
conducted audit procedure for the same.
c. The value of long term / short term loans and advances amounting to
Rs.150.84 crores is based on confi rmation from management as to
recoverability and consequent implications of ASÂ28 and the value of
Secured creditors amounting to Rs. Nil crores and Current Liabilities
amounting to Rs.81.85 lacs is subject to confi rmation.
vii. The effect of the qualifi cations in Item (vi) above on the profi
t of the company cannot be ascertained owing to the non quantifi able
and non-ascertainable causes for the same.
viii. In our opinion and to the best of our information and according
to the explanation given to us, subject to the effect on the fi nancial
statements of the matter referred to in the preceding para vi & vii the
said accounts given the information required by the Companies 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 Balance Sheet, the state of affairs of the company as
at 31st March, 2013
b. in the case of Statement of Profi t and Loss account, of the profi t
for the year ended on that date; and
c. in the case of cash fl ow statement, of the cash fl ows for the year
ended on that date.
ANNEXURE TO AUDITORSÂ REPORT OF EVEN DATE
1. FIXED ASSETS
a) The Company has maintained proper records showing full particulars
including quantitative details and the situation of fi xed assets, on
the basis of available information.
b) According to the explanations given to us, all the fi xed assets
have been physically verifi ed by the management during the year, which
in our opinion is reasonable, having regard to the size of the Company
and the nature of its assets. Due to the fact that, the Company is in
the process of reconciling physical assets with the book records, we
have no comments to offer with regard to material discrepancies, if
any, arising on such verifi cation.
2. INVENTORIES
The company has valued inventory at the lower of cost or net realizable
value. The determination of realizable value of this inventory is a
technical matter and is based on the estimates of management. We have
not conducted audit procedures for the same.
3. LOANS TO/FROM 301 PARTIES
According to the records of the company and information and
explanations given to us, the company has not taken any loans, secured
or unsecured, from companies, fi rms or other parties listed in the
register maintained under Section 301 of the Act. The company has not
granted loan free of interest to company covered in the register
maintained under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchase of inventory, fi xed assets and with regard to sale of the
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control.
5. TRANSACTIONS COVERED BY SECTION 301
a. Based on the audit procedure applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the Company has entered all transactions that need to be
entered into the register maintained under section 301 of the Companies
Act, 1956.
b. In our opinion and according to the information and explanation
given to us, the transaction made in pursuance of contract or
arrangements entered in the registers maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs.5,00,000/-in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6. The Company has not accepted any deposit from the public and
consequently, the directives issued by the Reserve Bank of India, the
provisions of section 58A and 58AA of the Companies Act, 1956 and the
rules framed there under are not applicable.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. According to the information and explanation given to us, the
Central Government has not prescribed the maintenance of cost records
by the Company under section 209 (1) (d) of the Companies Act 1956.
9. STATUTORY DUES
According to the information and explanation given to us there are no
dues of income tax, wealth tax, sales tax, custom duty, excise duty and
cess which have not been deposited on account of any dispute except in
the following cases.
Income Tax:
Pentamedia Graphics Limited has obtained a direction/order dt.
15.07.2010 (W.P. No.2357/10) from the High Court of Madras to dispose
off all the issues and appeals pertaining to the AYs 1997-98 to 2007-08
where the Company have claimed refunds. The issues and appeals are on
various stages with the Income Tax department. Pentasoft Technologies
Limited has obtained a direction/order dt. 18.12.2009 (W.P.
No.25120/2009) from the High Court of Madras to dispose off all the
issues and appeals pertaining to the AYs 1998-99 to 2006-07 where
Pentasoft have claimed refunds. The issues and appeals are on various
stages with the Income Tax department.
The volume of claims /refunds cannot be quantifi ed.
10. The Company neither has accumulated losses at the end of the fi
nancial year nor has it incurred any losses during the fi nancial year
covered by our audit or in the immediately preceding fi nancial year.
11. As explained to us, the Company has not granted any loans &
advances on the basis of security by way of pledge of shares,
debentures and other securities.
12. The Company is not a chit fund or nidhi, mutual benefi t fund,
society. Accordingly, clause 4(xiii) of Companies (Auditors Report)
Order, 2003 is not applicable.
13. According to the information and explanation given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly, clause 4(xiv) of Companies (Auditors
Report) Order, 2003 is not applicable.
14. According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks or fi
nancial institutions, the terms and conditions whereof, in our opinion,
are not prima-facie prejudicial to the interest of the company.
15. The Company has not raised any new term loan during the year.
16. According to the information and explanation given to us and on an
overall examination of the Balance Sheet of the Company, we report
that, short term funds have not been used for long term purposes.
17. The company has not issued any debentures. Accordingly clause
4(xix) of Companies (Auditors Report) Order, 2003 is not applicable.
18. No monies have been raised by way of public issue.
19. In our opinion and according to the information and explanation
given to us, no fraud on or by the Company has been noticed or reported
during the year, that causes the fi nancial statement to be materially
misstated.
For Sudhindran & Co
Chartered Accountants
CA P.SUDHINDRAN
PARTNER
Place : Chennai Membership No.32100
Date : 29.05.2013 Firm Registration No.006019S
Mar 31, 2012
We have audited the attached Balance Sheet of Pentamedia Graphics
Limited as at 31st March 2012, the Profit & Loss Account and also 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2003 (as
amended) hereinafter referred to as "the order" issued by the
Central Government of India in terms of sub section (4A) of section 227
of the Companies Act, 1956, hereinafter referred to as the "the
Act" we enclose in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the said Order to the extent applicable.
Further to our comments in the annexure referred to above, we report
that:
i. We have obtained all the information and explanations, which, to
the best of our knowledge and belief were necessary for purpose of the
audit;
ii. In our opinion, proper books of accounts have been kept as
required by law so far as appears from our examination of those books;
iii. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with books of account;
iv. In our opinion, balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 to the extent applicable excepting the Note no.
(vi) of the auditor's report relating to Accounting Standard 2.
v. On the basis of written representations received from directors, as
on 31st March 2012 and taken on record by the Board of Directors, we
report that, none of the Directors are disqualified as on 31st March
2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
vi. Attention is invited to:
a. The company has valued inventory at the lower of cost or net
realizable value. The determination of realizable value of this
inventory is a technical matter and we have relied on the valuation
conducted by the technical experts in the management. We have not
conducted audit procedure for the same.
b. The company valued long term investments at cost as per the present
market conditions and as per valuation done by the valuer. Increase /
decrease in value is provided for, where the management is of the
opinion that the variation is permanent is nature. We have not
conducted audit procedure for the same.
c. The value of long term / short term loans and advances amounting to
Rs.163.02 crores is based on confirmation from management as to
recoverability and consequent implications of AS-28 and the value of
Secured creditors amounting to Rs. Nil crores and sundry creditors
amounting to Rs.0.17 crores is subject to confirmation.
vii. The effect of the qualifications in Item (vi) above on the profit
of the company cannot be ascertained owing to the non quantifiable and
non-ascertainable causes for the same.
viii. In our opinion and to the best of our information and according
to the explanation given to us, subject to the effect on the financial
statements of the matter referred to in the preceding para vi & vii the
said accounts given the information required by the Companies 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 Balance Sheet, the state of affairs of the company
as at 31st March, 2012,
b. in the case of Profit and Loss account, of the profit for the year
ended on that date; and
c. in the case of cash flow statement, of the cash flows for the year
ended on that date.
1. FIXED ASSETS
a) The Company has maintained proper records showing full particulars
including quantitative details and the situation of fixed assets, on
the basis of available information.
b) According to the explanations given to us, all the fixed assets have
been physically verified by the management during the year, which in
our opinion is reasonable, having regard to the size of the Company and
the nature of its assets. Due to the fact that, the Company is in the
process of reconciling physical assets with the book records, we have
no comments to offer with regard to material discrepancies, if any,
arising on such verification.
2. INVENTORIES
The company has valued inventory at the lower of cost or net realizable
value. The determination of realizable value of this inventory is a
technical matter and is based on the estimates of management. We have
not conducted audit procedures for the same.
3. LOANS TO/FROM 301 PARTIES
According to the records of the company and information and
explanations given to us, the company has not taken any loans, secured
or unsecured, from companies, firms or other parties listed in the
register maintained under Section 301 of the Act. The company has
granted loan free of interest to company covered in the register
maintained under section 301 of the Companies Act, 1956. However the
terms & condition under which the loan has been granted are not
prima-facie prejudicial to the interest of the company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchase of inventory, fixed assets and with regard to sale of the
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control.
5. TRANSACTIONS COVERED BY SECTION 301
a. Based on the audit procedure applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the Company has entered all transactions that need to be
entered into the register maintained under section 301 of the Companies
Act, 1956.
b. In our opinion and according to the information and explanation
given to us, the transaction made in pursuance of contract or
arrangements entered in the registers maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs.5,00,000/-in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6. The Company has not accepted any deposit from the public and
consequently, the directives issued by the Reserve Bank of India, the
provisions of section 58A and 58AA of the Companies Act, 1956 and the
rules framed there under are not applicable.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. According to the information and explanation given to us, the
Central Government has not prescribed the maintenance of cost records
by the Company under section 209 (1) (d) of the Companies Act 1956.
9. STATUTORY DUES
According to the information and explanation given to us there are no
dues of income tax, wealth tax, sales tax, custom duty, excise duty and
cess which have not been deposited on account of any dispute except in
the following cases.
Income Tax:
The Company has obtained stay orders against Income Tax demands and
have been in touch with the Income Tax Department to settle the issues
regarding demands and refunds. The volume of claims/ refunds cannot be
quantified now.
10. The Company neither has accumulated losses at the end of the
financial year nor has it incurred any losses during the financial year
covered by our audit or in the immediately preceding financial year.
11. The settlement due to EXIM Bank (CP No. 243 of 2008), Dhanalakshmi
Bank assigned to Pridhvi Assets Reconstruction vide O.A No. 95 of 2003
and AXIS Bank assigned to Phoenix Assets Recovery Construction vide OA
Nos. 7 of 2004 & 76 of 2005 which is pending before the Debt Recovery
Tribunal (DRT) have been settled by using the proceeds from the dis-
investment of Mayajaal Entertainment Ltd equity shares as per the order
of Company Law Board, Chennai, dated 01.03.2011 and said shares have
been extinguished vide corporate action taken by the company through
NSDL on 21.04.2011.
12. As explained to us, the Company has not granted any loans &
advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. The Company is not a chit fund or nidhi, mutual benefit fund,
society. Accordingly, clause 4(xiii) of Companies (Auditors Report)
Order, 2003 is not applicable.
14. According to the information and explanation given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly, clause 4(xiv) of Companies (Auditors
Report) Order, 2003 is not applicable.
15. According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks or
financial institutions, the terms and conditions whereof, in our
opinion, are not prima-facie prejudicial to the interest of the
company.
16. The Company has not raised any new term loan during the year.
17. According to the information and explanation given to us and on an
overall examination of the Balance Sheet of the Company, we report
that, short term funds have not been used for long term purposes.
18. The company has not issued any debentures. Accordingly clause
4(xix) of Companies (Auditors Report) Order, 2003 is not applicable.
19. No monies have been raised by way of public issue.
20. In our opinion and according to the information and explanation
given to us, no fraud on or by the Company has been noticed or reported
during the year, that causes the financial statement to be materially
misstated.
for M/s.Sudhindran & Co
Chartered Accountants
CA. P.Sudhindran,
Partner
Place: Chennai Mem No.032100
Date : 27.07.2012 Firm Registration No. 006019S
Mar 31, 2011
We have audited the attached the Balance Sheet of Pentamedia Graphics
Limited as at 31st March 2011, the Profit & Loss Account and also 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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2003 (as
amended) hereinafter re- ferred to as "the order" issued by the Central
Government of India in terms of sub section (4A) of section 227 of the
Companies Act, 1956, hereinafter referred to as the "the Act" we
enclose in the Annexure a statement on the maters specified in
paragraphs 4 and 5 of the said Order to the extent applicable.
Further to our comments in the annexure referred to above, we report
that:
i. We have obtained all the informati on and explanations, which, to
the best of our knowledge and belief were necessary for purpose of the
audit;
ii. In our opinion, proper books of accounts have been kept as required
by law so far as appears from our examinati on of those books;
iii. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with books of account;
iv. In our opinion, balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 to the extent applicable excepting the Note no.
(vi) of the auditor's report relating to Accounting Standard 2.
v. On the basis of written representations received from directors, as
on 31st March 2011 and taken on record by the Board of Directors, we
report that, none of the Directors are disqualified as on 31st March
2011 from being appointed as a director in terms of clause (g) of sub-
secton (1) of section 274 of the Companies Act, 1956;
vi. Attention is invited to:
a. The company has valued inventory at the lower of cost or net
realizable value. The de- terminaton of realizable value of this
inventory is a technical mater and we have relied on the valuation
conducted by the technical experts in the management. We have not
conducted audit procedure for the same.
b. The company valued long term investments at cost as per the present
market conditions and as per valuation done by the valuer. Increase /
Decrease in value is provided for, where the management is of the
opinion that the variation is permanent in nature. We have not
conducted audit procedure for the same.
c. The value of loans and advances amounting to Rs. 136.08 crores is
based on confirmation from management as to recoverability and
consequent implications of ASÃ28 and the value of Secured creditors
amounting to Rs. 40.19 crores, unsecured creditors amount- ing to Rs.
30.70 crores and sundry creditors amounting to Rs. 0.24 crores is
subject to confirmati on.
vii. The effect of the qualifications in Item (vi) above on the profit
of the company cannot be ascertained owing to the non quantifiable and
non-ascertainable causes for the same.
viii. In our opinion and to the best of our information and according
to the explanation given to us, subject to the effect on the financial
statements of the mater referred to in the preced- ing para vi & vii
the said accounts given the information required by the Companies 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 Balance Sheet, the state of affairs of the company as
at 31st March, 2011,
b. in the case of Profit and Loss account, of the profit for the year
ended on that date; and
c. in the case of cash flow statement, of the cash fiows for the year
ended on that date.
ANNEXURE TO AUDITORS' REPORT OF EVEN DATE
1. FIXED ASSETS
a) The Company has maintained proper records showing full particulars
including quantitative details and the situation of fixed assets, on
the basis of available information.
b) According to the explanations given to us, all the fixed assets have
been physically verifed by the management during the year, which in
our opinion is reasonable, having regard to the size of the Company and
the nature of its assets. Due to the fact that, the Company is in the
process of reconciling physical assets with the book records, we have
no comments to offer with regard to material discrepancies, if any,
arising on such verification.
2. INVENTORIES
The company has valued inventory at the lower of cost or net realizable
value. The determination of realizable value of this inventory is a
technical mater and is based on the estimates of management. We have
not conducted audit procedures for the same.
3. LOANS TO/FROM 301 PARTIES
According to the records of the company and information and
explanations given to us, the company has not taken any loans, secured
or unsecured, from companies, firms or other partes listed in the
register maintained under Section 301 of the Act.
The company has granted loan to company covered in the register
maintained under section 301 of the Companies Act, 1956. No interest
was charged on the above loans during the year under report. To this
extent, the terms in connection with these loans are, prima facie,
prejudicial to the interests of the company. Though no payment terms
have been stipulated, management is of the opinion that recovery of the
said loans / advances will not pose a problem.
4. In our opinion and according to the information and explanations
given to us, there are ad- equate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets and with regard to sale of the
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control.
5. TRANSACTIONS COVERED BY SECTION 301
a. Based on the audit procedure applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the Company has entered all transactions that need to be
entered into the register maintained under section 301 of the
Companies Act, 1956.
b. In our opinion and according to the information and explanation
given to us, the transaction made in pursuance of contract or
arrangements entered in the registers maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/-in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6. The Company has not accepted any deposit from the public and
consequently, the directives issued by the Reserve Bank of India, the
provisions of section 58A and 58AA of the Companies Act, 1956 and the
rules framed there under are not applicable.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. According to the information and explanation given to us, the
Central Government has not prescribed the maintenance of cost records
by the Company under section 209 (1) (d) of the Companies Act 1956.
9. STATUTORY DUES
According to the information and explanation given to us there are no
dues of income tax, wealth tax, sales tax, custom duty, excise duty and
cess which have not been deposited on ac- count of any dispute except
in the following cases.
Income Tax:
i. The Company has fled a writ petition no. 2357/2010 in High Court of
Madras for a refund of Rs. 62 crores against the Income Tax demands of
Rs. 112.51 crores as mentioned in their notice dated 05.02.2009 and has
obtained stay till the disposal of all issues mentioned in the above
writ petition from the High Court of Madras vide order dated 15.07.2010
and the court has instructed the Income- tax department to furnish the
details from the AY 1995-96 to 2006-07.
ii. The Company has also obtained the order dated 11.01.2010 from the
High Court of Madras, directing the Income Tax Department to process
the revised returns fled by the company as per the modified composite
scheme of amalgamation and arrangement between Pentamedia Graphics
Limited and its subsidiaries as on 01.01.2004. The response from the
Income Tax Department is awaited.
iii. Regarding Pentasoft Technologies Limited the Company has fled a
writ petition no. 25120/2009 in High Court of Madras for a refund of
Rs. 18 crores against the Income Tax demands of Rs. 89.97 crores as
mentioned in their notice dated 19.01.2009 and obtained a absolute stay
from the High Court of Madras vide order dated 18.12.2009.
10. The Company neither has accumulated losses at the end of the
financial year nor has it incurred any losses during the financial year
covered by our audit or in the immediately preceding financial year.
11. Though the Company has defaulted in repayment of the following
dues, with interest to banks, it has contested in DRT / High Court
towards settlement of Loans.
i) The secured loans availed from Bank of India, Oriental Bank of
Commerce, HSBC by Pentamedia Graphics Limited and Corporation Bank,
United Western Bank by Pentasoft Technologies Limited (Pentasoft
Technologies Ltd merged with Pentamedia Graphics Ltd w.e.f 01.10.2008
as per Hon'ble High Court of Madras order dated. 03.08.2009), have been
settled and the pettttons before Debt Recovery Tribunal(DRT) have been
disposed of "as settled".
ii) The following bank dues are pending before DRT for disposal:
a) Rs. 24.97 crores to Axis Bank (UTI Bank) by Pentamedia Graphics
Limited
b) Rs. 14. 85 crores to Axis Bank (UTI Bank) by Pentasoft Technologies
Limited
c) Rs. 10.80 crores to Dhanalakshmi Bank Ltd by Pentasoft Technologies
Limited.
iii) UPS Capital Business is claiming an amount of Rs. 19.85 crores in
respect of Pentamedia Graphics Ltd. The company petition is pending
with High Court of Madras for orders.
The above amount due to Banks/Insttutons does not include any interest
that may accrue on the principal amount due from 01.04.2005.
The representations are based on information provided by the
management. The ultimate liability that may arise is not
ascertainable.
Further it is not possible to ascertain the contingent liability in
this regard with respect to Accountng Standard 29.
12. As explained to us, the Company has not granted any loans &
advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. The Company is not a chit fund or nidhi, mutual benefit fund,
society. Accordingly, clause 4(xiii) of Companies (Auditors Report)
Order, 2003 is not applicable.
14. According to the information and explanation given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly, clause 4(xiv) of Companies (Auditors
Report) Order, 2003 is not applicable.
15. In our opinion, the terms and conditions on which, the Company has
not given guarantee for loans taken by others from banks or financial
institution.
16. The Company has not raised any new term loan during the year.
17. According to the information and explanation given to us and on an
overall examination of the Balance Sheet of the Company, we report
that, short term funds have not been used for long term purposes.
18. The company has not issued any debentures. Accordingly clause
4(xix) of Companies (Auditors Report) Order, 2003 is not applicable.
19. No monies have been raised by way of public issue.
20. In our opinion and according to the information and explanation
given to us, no fraud on or by the Company has been noticed or reported
during the year, that causes the financial statement to be materially
misstated.
for M/s.Sudhindran & Co
Chartered Accountants
CA. P. Sudhindran
Partner
Firm Reg.No. 006019S,
M. No : 032100
Place : Chennai
Date : 04.08.2011
Mar 31, 2010
We have audited the attached the Balance Sheet of Pentamedia Graphics
Limited as at 31st March 2010, the Profit & Loss Account and also the
Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
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 the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As required by the Companies (Auditors Report) Order, 2003 (as
amended) hereinafter referred to as "the order" issued by the Central
Government of India in terms of sub section (4A) of section 227 of the
Companies Act, 1956, hereinafter referred to as the "the Act" we
enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order to the extent applicable.
Further to our comments in the annexure referred to above, we report
that:
i. We have obtained all the information and explanations, which, to the
best of our knowledge and belief were necessary for purpose of the
audit;
ii. In our opinion, proper books of accounts-have been kept as required
by law so far as appears from our examination of those books;
iii. The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with books of account;
iv. In our opinion, balance sheet, profit and loss atcount and cash
flow statement dealt with by this report comply with the Accounting
SttMldards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 to the extent applicable excepting the Note no.
(vi) of the auditors report relating to Accounting Standard 2.
v. On the basis of written representations received from directors, as
on 31st March 2010 and taken on record by the Board of Directors, we
report that, none of the Directors are disqualified as on 31st March
2010 from being appointed as a director in terms of era use (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
vi. Attention is invited to:
a. The company has valued inventory at the lower of cdst or net
realizable value. The determination of realizable value of this
inventory is a technical matter and we have relied on the valuation
conducted by the technical experts in the management. We have not
conducted audit procedure for the same.
b. The value of loans and advances amounting to Rs. 4 2 crores (S based
on confirmation from management
as to recoverability and consequent implications of Aç-28 arid the
value of Secured creditors amounting to Rs.19 crores and sundry
creditors amounting to Rs.8 crores is subject to confirmation.
vii. The effect of the qualifications in Item (vi) above on the profit
of the company cannot be ascertained owing to the nonquantifiable and
non-ascertalrtable causes for the same.
viii.In our opinion and to the best of our inforrhation and according
to the explanation given to us, subject to the effect on the financial
statements of the matter referred to in the preceding para vi & vii the
said accounts given the information required by the Companies 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 Balance Sheet, the state of affairs of the company
as at 31st March, 2010,
b. in the case of Profit and Loss account, of the profit for the year
ended on that date; and
c. in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO AUDITORS REPORT OF EVEN DATE
1. FIXED ASSETS
a) The Company has maintained proper records showing full particulars
including quantitative details and the situation of .fixed assets, on
the basis of available information.
b) According to the explanations given to us, all the fixed assets have
been physically verified by the management during the year, which in
our opinion is reasonable, having regard to the size of the Company and
the nature of its assets. Due to the fact that, the Company Is in the
process of reconciling physical assets with the book records, we have
no comments to offer with regard to material discrep- ancies, if any,
arising on such verification.
2. INVENTORIES
The company has valued inventory at the lower of cost or net realizable
value. The determination of realizable value of this inventory is a
technical matter and is based on the estimates of management. We have
not conducted audit procedures for the same.
3. LOANS TO/FROM 301 PARTIES
According tothe records of the company and information and
explanations given to us, the company has not taken any loans, secured
or unsecured, from companies, firms or other parties listed in the
register maintained under Section 301 of the Act. The company has
granted loan free of interest to company covered in the register
maintained under section 301 of the Companies Act, 1956. However the
terms & condition under which the loan has been granted are not
prima-facie prejudicial to the Interest of the company.
4. In our opinion and according to the information and explanations
given to us, there are adequate Internal control systems commensurate
with the size of the Company and the nature of Its business with regard
to purchase of Inventory, fixed assets and with regard to sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses In internal control.
5. TRANSACTIONS COVERED BY SECTION 301
a) Based on the audit procedure applied by us and according to the
information and explanations pro- vided by the management, we are of
the opinion that the Company has entered all transactions that need to
be entered into the register maintained under section 301 of the
Companies Act, 1956.
b) In our opinion and according to the information and explanation
given to us, the transaction made in pursuance of contract or
arrangements entered In the registers maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs.00,000/-in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
6. Scheme of Amalgamation
Consequent to the merger of Pentasoft Technologies Limited with the
company as per the order of Honble High Court of Madras dated 3rd
August 2009 (w.e.f. 01.10.2008) after the approval of the shareholders,
creditors, court held EGM dated on 11th February 2009 and 24(f)
approved by Bombay Stock Exchange Limited dated 25th November 2008, the
company issued 38511595 equity shares of Rs/- each to the shareholders
of Pentasoft Technologies Limited and 128760443 equity shares of Rs.1
each to the agreed secured creditors of Pentasoft Technologies Limited
on 18th September 2009. These shares were listed in Bombay Stock
Exchange on 6th February 2010.
7. The Company has not accepted any deposit from the public and
consequently, the directives issued by the Reserve Bank of India, the
provisions of Section 58A and 58AA of the Companies Act, 1956 and the
rules framed there under are not applicable.
8. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
9. According to the information and explanation given to us, the
Central Government has not prescribed the maintenance of cost records
by the Company under section 209 (1) (d) of the Companies Act 1956.
10. STATUTORY PUES
i. As per the notice dated 05.02.2.009 issued by the Income Tax
Department Chennai the total Tax demand of Pentamedia Graphics Ltd
amounts to ?112,51 crores. The company being an 100% EOU under
STPI/EHTP scheme has contested various issues and has obtained stay
order from the High Court of Madras restraining the Income Tax
department from taking any action till the disposal of all
issues/appeals. The company has also obtained the Court order from the
High Court of Madras, directing the Income Tax department to process
the revised returns filed by the company pursuant to the Court order
dated 17.12.2007. ii. As per the notice dated 19.01,2009 issued by the
Income Tax Department Chennai the total tax demand of Pentasoft
Technologies Ltd amounts to Rs.89.97 crores. The Company being an 100%
EOU under STPI/EHTP scheme had gone on appea? against the various
issues and has subsequently obtained stay brderfrom the High Court of
Madras restraining the Income Tax department from taking any action
till the disposal of all issues/appeals. It is not possible to
ascertain the contingent liability in this regard with respect to
Accounting Standard 29.
11. The Company neither has accumulated losses at the end of the
financial year nor has it incurred any losses during the financial year
covered by our audit or in the immediately preceding financial year.
12. Though the Company has defaulted in repayment of the following dues
,with interest to banks, it has contested in DRT / High Court towards
settlement of Loans.
i) Dhanalakshrni Bank has approached the Debts Recovery Tribunal (DRT)
to settle the dues. The claim of Dhanalakshmi Bank in respect of
Pentasoft Technologies Ltd amounting to Rs. 10.80 crores is being con-
tested by the company.
ii) The claim of Axis Bank (UTI) is Rs. 24.97 crores and Rs. 14.85
crores with regard to Pentamedia &
Pentasoft Technologies Ltd respectively are being contested by the
company.
iii) FIB (EXIM BANK) is claiming an amount of Rs. 19.85 crores in
respect of Pentamedia Graphics Ltd. In this connection the companys
petition is pending with High Court of Madras and is being actively
defended by the company.
The above amount due to Banks/Institutions.,does not include any
interest that may accrue on the principal amount due from 01.04.2005.
The representations are based on information provided by the
management. The ultimate liability that
may arise is not ascertainable.
Further it is not possible to ascertain the contingent liability in
this regard with respect to Accounting Standard 29
13. As explained to us, the Company has not granted any loans &
advances on the basis of security by way of pledge of shares,
debentures and other securities.
14. The Company is not a chit fund or nidhi, mutual benefit fund,
society. Accordingly, clause 4(xlli) of Companies (Auditors Report)
Order, 2003 is not applicable.
15. According to the information and explanation given to us, the
Company is not dealing or trading In shares, securities, debentures and
other investments. Accordingly, clause 4(xiv) of Companies (Auditors
Report) Order, 2003 is not applicable.
16. In our opinion, the terms and conditions on which, the Company has
not given guarantee for loans taken by others from banks or financial
institution.
17. The Company has not raised any new term loan during the year.
18. According to the information and explanation given to us and on an
overall examination of the Balance Sheet of the Company, we report
that, short term funds have not been used for long term purposes.
19. The company has not issued any debentures. Accordingly clause
4(xix) of Companies (Auditors Report) Order, 2003 is not applicable.
20. No monies have been raised by way of public issue.
21. In our opinion and according to the information and explanation
given to us, no fraud on or by the Company has been noticed or reported
during the year, that causes the financial statement to be materially
misstated.
for M/s.Sudhindran & Co
Chartered Accountants
Place : Chennai CA. P.Sudhindran
Date : 10.08.2010 Partner
Mem. No. 032100
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article