Mar 31, 2010
1. We have audited the attached Balance Sheet of VINTAGE CARDS &
CREATIONS LIMITED as at March 31, 2010, the Profit and Loss Account and
the Cash Flow Statement of the Company for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Companys Management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, issued
by the Central Government of India in terms of section 227 (4A) of the
Companies Act, 1956, we annex hereto a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit except for the items mentioned in d (i) to (v) below.
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 such
books.
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) We further report that:
i) All balances of debtors, creditors, advances given, current
liabilities and fixed deposits pledged with the sales tax authorities
are subject to confirmation, reconciliation and consequential
adjustments, if any.
ii) In absence of proper records, we are unable to comment on the
valuation of the inventories. We have placed the reliance on the
management representation in this regard.
iii) The Company had received Rs.91.00 lacs from various parties and
had shown it as equity share application money. In absence of any Board
resolution or any other documentation we are unable to comment on the
nature of these amounts received and the treatment of the same in
computation of EPS.
iv) The company has not taken approval of Central Government for
payment of Managerial Remuneration (Rs.22.80 Lacs).
v) Refer Schedule S - Note No. 14 of Notes to Accounts: The Company is
yet to issue Convertible Warrants till the date of this report.
e) In our opinion, the Balance Sheet, the Profit and Loss Account 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 Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, and subject to (d) above, the said
accounts read with the 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 March 31, 2010;
ii) in the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date; and
iii) in the case of the Cash Row Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on March 31,2010 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
March 31,2010, from being appointed as a Director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
Annexure to the Auditors Report
As required by the Companies (Auditors Report) Order, 2003, issued by
the Central Government of India in terms of section 227 (4A) of the
Companies Act, 1956, we further report that:
1. Fixed Assets:
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets, except in
case of Disposal of Fixed Assets.
b) As per information and explanations given to us and in our opinion,
the fixed assets have not been physically verified by the management at
reasonable intervals. Due to this, we are unable to comment on whether
any material discrepancies were noticed and if so, whether the same
have been properly dealt with in the books of account.
c) In our opinion and as per the information and explanations given to
us, there was no significant disposal of fixed assets during the year
to affect the going concern assumption.
2. Inventory:
a) The company has not conducted physical verification of inventory
during the year. Due to this we are unable to comment on whether the
procedures of physical verification of stock are reasonable and
adequate in relation to the size of the company and the nature of Its
business.
b) The Company has not maintained proper records of inventory. In
absence of proper records, we are unable to comment about the
discrepancies, if any, between the physical stock and book stock.
3. Loans and Advances:
a) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to companies,
firms or other parties listed in register maintained under section 301
of the Companies Act, 1956.
b) The question of commenting on the rates of interest and other terms
and conditions of the loans granted being prejudicial to the interest
of the Company, receipt of regular principal and interest and
reasonable steps taken for recovery of principal and interest does not
arise.
c) The Company has taken loans from its wholly owned subsidiary
company. In respect of the said loans, the maximum amount outstanding
at any time during the year is Rs.1.04 lacs and the year-end balance is
Rs.0.86 lacs.
d) As informed to us, the loans taken from the wholly owned subsidiary
company were interest free loans.
e) In respect of loan taken from subsidiary company, we are unable to
comment upon the regularity in payment of principal amount, as the
terms of repayment have not been stipulated.
4. In our opinion, internal control system of the Company needs to be
strengthened in order to be commensurate with the size of the Company
and the nature of its business, for the purchases of inventory, fixed
assets and for the sale of goods and services. Further, on the basis of
our examination of the books and records of the Company, and according
to the information and explanation given to us, we have not observed
any continuing failure to correct major weakness in the internal
control system except in the areas of inventory and fixed assets.
5. a) According to the information and explanation given to us, we are
of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that section.
b) In our opinion and according to the information and explanation
given to us, the contracts or arrangements entered in to the register
maintained under section 301 of Companies Act, 1956 are reasonable
having regard to the prevailing market prices at the relevant time and
there are no transaction exceeding the value of Rs.5,00,000/- in
respect of any party during the year.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from the public within the
meaning of section 58A, 58AA, or any other relevant provisions of the
Companies Act, 1956 and the rules framed there under.
7. In our opinion, the Company needs to strengthen the internal audit
system considering the size of the Company and the nature of its
business.
8. As informed to us, the Central Government has not prescribed the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, for any of the products of the Company.
9. Statutory Dues
a) According to the information and explanation given to us, and as per
records of the Company, in our opinion the Company is not regular in
depositing undisputed statutory dues, including dues pertaining to
Investor Education and Protection Fund, Provident Fund, Employees
State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Value Added Tax,
Service Tax, Custom Duty, Cess and any other material statutory dues as
applicable with the appropriate authorities. We have been informed that
the undisputed dues in respect of Income Tax, Profession Tax, Sales
Tax, Employees State Insurance and Provident Fund were in arrears, as
on March 31, 2010 for a period of more than six months from the date
they became payable. The details are as follows:
Name of Statute Nature of dues Period to which Amount Rs.
amount relates
Income Tax Act,
1961 TDS on Salary 2006-07 2,69,700
2007-08 6,46,223
2008-09 5,81,229
2009-10 3,83,724
TDS on Rent 2006-07 3,24,088
2007-08 62,724
2008-09 1,59,051
2009-10 12,321
TDS on contracts 2006-07 4,697
2007-08 1,77,125
2008-09 1,17,911
2009-10 14,642
TDS on Professional Fees 2007-08 2,39,613
2008-09 1,72,564
2009-10 33,160
TDS on Commission 2007-08 40,086
2008-09 38,303
2009-10 11,347
TDS on Royalty 2006-07 25,923
2007-08 16,64,850
2008-09 7,63,500
Tax Collected at
Source 2008-09 1,196
Various Sales
Tax Acts Sales tax dues Up to September 200946,51,817
Profession Tax
Act, 1975 Profession Tax 2007-08 1,35,000
2008-09 91,190
2009-10 25,115
Employees
Provident Fund
and Provident Fund dues 2006-07 6,86,971
Miscellaneous
Provisions
Act, 1952 2007-08 6,22,314
2008-09 4,20,777
2009-10 1,10,811
Employees State
Insurance Act ESIC dues 2007-08 7,219
2008-09 26,309
2009-10 12,751
Service Tax Service Tax Payable 2006-07 18,96,313
2007-08 22,40,311
Research and
Development
Cess R&D Cess Upto September
2009 5,54,950
b) According to the information and explanations given to us, there are
no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Value Added
Tax, Customs Duty, Excise Duty or Cess outstanding on account of any
dispute other than the following:
Name of Statute Amount (Rs.) Forum where dispute is pending
Sales Tax Act 27,34,595 Assistant Commissioner of
Commercial Taxes
Sales Tax Act 20,71,218 Maharashtra Sales Tax Tribunal
Income Tax Act 15,53,557 Commissioner (Appeals)
10. According to the information and explanations given to us, the
Company has accumulated losses as at the end of the financial year
which exceed fifty per cent of Its net worth and It has Incurred cash
losses in the current financial year and the Immediately preceding
financial year.
11. According to the information and explanations given to us and
based on the documents and records produced before us, there has been
no default in the repayment of dues to banks. There are no dues to
financial institutions or debenture holders.
12. According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted any loans or advances on the basis of security by way of
pledge of shares, debentures or other securities.
13. In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to chit fund and nidhi / mutual benefit
fund / societies.
14. In our opinion and according to the information and explanations
given to us, the Company does not deal or trade in shares, securities,
debentures and other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. The Company has not taken any new term loan during the year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet, the Cash Flow Statement
and other records examined by us, the Company has not used funds raised
on short-term basis for long term investment.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies act, 1956 during the year.
19. According to the information and explanations given to us, during
the year covered by our audit report, the Company has not issued any
secured debentures.
20. The Company has not raised any money through a public issue during
the year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instances of
material fraud on or by the Company, noticed or reported during the
year, nor have been informed of such case by management.
FOR HIMANSHU PATEL & ASSOCIATES
CHARTERED ACCOUNTANTS
(Firm Regn. No.: 127319W)
CA. Himanshu J. Patel
Membership No: 118924.
Date: May 30, 2010
Place: Pune.
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