Auditor Report of Wintac Ltd.
Mar 31, 2018
Report on the Ind AS Financial Statements:
We have audited the accompanying Ind AS financial statements of Wintac Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements:
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Ind AS financial statements that give a true and fair view of the state of affairs (financial position), loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility:
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance 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 Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion:
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at March 31, 2018, and its loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter:
Attention has been invited Note 46 of the financial statements, for the reasons stated in the said note despite the networth of the Company is substantially eroded, the management doesn''t find any material uncertainty which may cast significant doubt on the Company''s ability to continue as going concern. We have not qualified our opinion on the same.
Other Matters:
The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Ind As financial statements, are based on the the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended March 31, 2017 and March 31, 2016 dated May 29, 2017 and May 28, 2016 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us. Our opinion is not modified on this matter.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by the section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the statement of Profit and Loss, the Cash Flow Statement and Statement of Changes in the Equity dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under section 133 of the Act.
e. On the basis of the written representations received from the directors as on March 31, 2018 taken on the record by the Board of Directors, none of the directors is disqualified as on that date from being appointed as a director in terms of section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
g. With respect to other matters to be included in the Auditors report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us,
i) The Company has disclosed its pending litigations which would impact its financial position in note 35 of the Ind AS financial statements.
ii) The Company did not have any long-term contracts as required under the applicable law or accounting standards, and also not entered into any derivative contracts, accordingly no provision is required to be made in respect of material foreseeable losses.
iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of Property, Plant & Equipment ("PPE").
b) Based on the information and explanation received from the management, PPE is physically verified once in three years which is considered reasonable.The Company had carried out such physical verification in financial year 2015 - 2016 and no material discrepancies found on such verification.
c) According to the information and explanation given to us by the Company, title deed of all immovable properties are held in the name of the Company, except for cases reported in additional information to note 3 a. of the financial statements.
2. The management during the year has physically verified the inventory at reasonable intervals. The discrepancies that were noticed during the physical verification of Inventory were not material and the same has been properly adjusted in the books of account.
3. The Company has not granted any loans to the parties covered in the register maintained under section 189 of the Act. Accordingly, clause 3(iii) of the Order is not applicable.
4. In our opinion and according to information and explanation furnished to us, the Company has not made any investments or given guarantees which require compliance of provisions of Section 185 and 186 of the Act, Accordingly, clause 3 (iv) of the Order is not applicable.
5. The Company has not accepted any deposits as applicable under the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other provisions of the Act and rules framed under. Accordingly, the provisions of clause 3(v) of the said Order are not applicable.
6. To the best of our knowledge and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 148 of the Act as the Company is not engaged in any manufacture of the goods. Accordingly, the provisions of clause 3(vi) of the said Order are not applicable.
7. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities as at March 31, 2018 concerned for a period of more than six months from the date they became payable excepting certain delays in payment of TDS, GST and other indirect taxes.
b) According to the records of the Company and according to the information and explanation given to us, there are certain dues outstanding on account of any disputes in respect of income tax, service tax, customs duty or excise duty or value added tax refer note 35 a and b of the Ind AS financial statements. The summary is given below:
|
Name of the statute |
Nature of the dues |
Amount (Rs. in Lakhs.) |
Period to which the amount relates |
Forum where dispute is pending |
|
The Central Excise Act,1944 |
Valuation of physician samples. |
44.95 |
2005-2006 |
CESTAT, Bengaluru |
|
The Central Excise Act,1944 |
Penalty demanded under 209A of the central excise rules |
2.00 |
CESTAT, Ahmedebad |
|
|
The Finance Act,1994 |
Tax demanded on export of technical services. |
254.87 |
2013-2016 |
Commissioner appeals |
|
The Central Sales Tax Act,1956 |
Difference in sales taxfor nonsubmission of statutory forms |
2.33 |
2003-04 |
DCST, Navi Mumbai |
|
The Income Tax Act,1961 |
Appeal against order of rectification passed by AO |
38.26 |
AY 2001-02 |
High court of Karnataka |
|
Name of the statute |
Nature of the dues |
Amount (Rs. in Lakhs.) |
Period to which the amount relates |
Forum where dispute is pending |
|
The Income Tax Act,1961 |
Appeal against order of assessment |
7.11 |
AY 2011-12 |
ITAT, Bengaluru |
|
The Income Tax Act,1961 |
Fringe Benefit tax |
5.24 |
2008-09 |
ITAT, Bengaluru |
|
The Central Excise Act,1944 |
Excise duty on sale of brands to Recon Health care pvt Ltd |
400.00 |
2001-02 |
Supreme court of India |
|
Karnataka Sales Tax Act,1957 |
KVAT input refund withheld by department |
29.34 |
2012-13 |
ACCT LVO (065) |
|
Employees'' Provident Funds & Miscellaneous Provisions Act,1952 |
Levy of damages for delay in remittance of PF dues |
32.37 |
1996-2013 |
Tribunal |
8. The Company has not defaulted in repayment of loans taken from banks. The Company has not borrowed from financial institutions or government or has issued debentures.
9. In our opinion based on the information and explanation given to us, the Company, it has not raised any moneys by way of initial public offer or further public offer (including debt instruments and term loans. Accordingly, the provisions of clause 3(ix) of the said Order are not applicable.
10. According to the information and explanation given to us, there are no frauds reported by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the year. Accordingly, the provisions of clause 3(x) of the said Order are not applicable.
11. According to the information and explanation given to us, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Act.
12. The Company is not a Nidhi Company. Accordingly, the provisions of clause 3(xii) of the said Order are not applicable.
13. In our opinion and according to the information and explanation given to us and as represented to us by the management, all transactions with the related parties are in compliance with section 177 and 188 of the Act and the details have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.
14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3(xiv) of the said Order are not applicable.
15. As represented to us by the management and according to the information and explanation given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3(xv) of the said Order are not applicable.
16. According to the information and explanation given, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause 3(xvi) of the Order is not applicable to the Company.
Report on the Internal Financial Controls 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 Wintac Limited ("the Company") as of March 31, 2018 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 ("the Act").
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") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting:
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion:
In our opinion, the Company, in all material respects, has an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India".
FOR B.K.RAMADHYANI & CO LLP
Chartered Accountants
(FRN 002878S/S200021)
Place: Bengaluru (CA C R Deepak)
Date : May 23, 2018 Partner M.No: 215398
Mar 31, 2017
TO THE MEMBERS OF WINTAC LIMITED
REPORT ON THE FINANCIAL STATEMENTS
1) We have audited the accompanying financial statements of WINTAC LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2017, 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.
Management''s Responsibility for the Financial Statements
2) The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Rule 7 of the Companies (Accounts) Rules,2014 in respect of Section 133 of the Companies Act, 2013 in so far as applicable to the Company. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3) Our responsibility is to express an opinion on these financial statements based on our audit.
4) We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
5) We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
6) An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
7) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
8) 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, of the state of affairs of the Company as at 31st March 2017, and its loss and cash flows for the year ended on that date.
Emphasis of Matter
9) Your attention is drawn to the following Notes forming Part of the Financial Statements for the year ended 31-03-2017:
a) Note 28.11 a) of the Financial Statements that these Financial Statements also give the information as required to be given under Part III of Schedule III of the Companies Act,2013 in consolidated financial statements of interest in the sole associate
b) Note 19.1 A) detailing claims against the Company not acknowledged as debts (including demands of about Rs.135.92 lakhs (excluding interest and penalty) upheld by the lower appellate authorities and contested by the Company) in respect of which the management expects favourable orders,
Our opinion is not qualified in respect of the above matters.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
10) As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Accounting Standards in material aspects in so far as applicable to the Company.
e) We report that as on 31st March 2017, no director of the Company is disqualified from being appointed as a director under Section 164 (2) of the Companies Act, 2013 by virtue of the directorship in this Company. In respect of directorships in other companies, we have relied on the written representations made by the directors, in the prescribed form to the Board and taken on record that they are not subject to disqualification under the said section.
f) During the course of our audit of the financial statements we have observed that the company has internal financial controls though some of these controls are in our opinion not adequate or could have been better deployed or monitored to improve their effectiveness. As required by the auditing standards the perceived deficiencies in these controls which were considered significant have been duly communicated to the Management and the Audit Committee of the Board. We have however not carried out an audit of internal financial controls with an objective of expressing a view on the adequacy or effectiveness of these controls. Had we performed more extensive procedures on internal control we may have identified more such deficiencies to be included in our communication or concluded some of the deficiencies need not in fact have been communicated.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Notes 19.1 A) and 19.1 B) to the financial statements;
ii) The Company has not entered into derivative contracts. Further, with regard to the Long Term Contracts entered into by the Company we are informed that there will be no material foreseeable losses arising from those contracts.
iii) There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company.
The company has provided requisite disclosures in Note 28.12 to its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December,2016 which as explained therein are derived from the books and records of the company.
11) As required by the Companies (Auditors'' Report) Order 2017, issued by the Government of India in terms of subsection (11) of Section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
ANNEXURE REFERRED TO IN PARAGRAPH 11 OF OUR REPORT OF EVEN DATE RE: WINTAC LIMITED
1) Fixed Assets:
a) The Company is maintaining proper records which show full particulars of the fixed assets including quantitative details and their situation.
b) As informed to us by the management, the fixed assets have been verified once in three years which is considered reasonable. The last of such verification was carried out in the year 2015-16 and no material discrepancies found on such verification .
c) The title deeds of the immovable properties are in the name of the Company. However attention is drawn to Note 9.1 a) regarding disputes regarding title of its land at Sarjapur Road where claimant is holding Khatha in his name.
2) Inventory
a) According to the information and explanations furnished to us, physical verification has been conducted by the management during the year/as at the yearend of inventory in its possession. The stock in the possession of third parties has also been verified by the management and supported by certificates furnished by them and/or other relevant documents. Materials in transit have been taken as per records. In our opinion the frequency of verification is reasonable considering the size of the Company and nature of its business.
b) As informed to us, the discrepancies noticed on such physical verification as compared to the book records were not material and have been properly dealt with in the books of account.
3) Loans to parties covered in the Register maintained under Section 189
The Company has not given any loans to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. Hence our reporting on the matters specified in clause (iii) paragraph 3 of the order does not arise.
4) Compliance of Section 185 and 186 of the Companies Act, 2013 with respect to Loans and Investments.
The Company has not made any loans or investments or given guarantees or provided security which require compliance of Section 185 and 186 of the Act.
5) Fixed Deposits:
The Company is not found to have accepted any deposits to which the provisions of Section 73 to 76 the Companies Act, 2013 are applicable. No order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
6) Cost Records:
The Company is not required to maintain cost records in terms of the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148 of the Companies Act, 2013.
7) Statutory Dues:
a) The Company is generally found to be depositing the undisputed statutory dues (as ascertained and provided in its books) in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales Tax, Excise Duty, Customs Duty, Service Tax, etc. though there may be some delay. There are no undisputed tax dues outstanding for more than six months as on the balance sheet date.
b) Regarding disputed statutory dues, we are informed that Note 19.1 gives full particulars of dues not deposited on account of dispute/ settlement proceedings.
c) There are no dues to the Investor Education and Protection Fund.
8) Loan :
The Company has taken a drop line overdraft facility as referred to in Note 3 and balance as on 31.03.2017 is within the limit.
9) End use of Funds
The money raised by drop line overdraft facility from the Bank were applied for the purposes for which the facility was granted.
10) Frauds
No fraud on or by the Company was noticed or reported during the year under report.
11) Managerial Remuneration
The Managerial Remuneration paid to its Managing Director is within the limits specified under Section 197 read with Schedule V of the Companies Act.
12) Related Party Transactions
All transactions with the related parties effecting during the year are in compliance with section 177 and 188 of the Companied Act, 2013 and has been disclosed in Note 28.1 to the Financial Statement as required by AS-18 "Related Parties" which is the applicable Accounting Standard.
13) Private Placements
No private placement or preferential allotment of the shares or debentures were made during the year.
14) Non cash transactions with Directors:
The Company has not entered into any non cash transactions with the Directors.
15) Registration with RBI
The Company is not required to be registered with the Reserve Bank of India under Section 45 - IA of the Reserve Bank of India Act, 1934.
FOR RAO AND SWAMI
Chartered Accountants
(FRN 003105S)
Place: Bengaluru (H. Anil Kumar)
Date : 29th May, 2017 Partner M. No: 022329
Mar 31, 2016
INDEPENDENT AUDITOR''S REPORT TO THE MEMBERS OF WINTAC LIMITED
REPORT ON THE FINANCIAL STATEMENTS
1) We have audited the accompanying financial statements of WINTAC LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, 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.
Management''s Responsibility for the Financial Statements
2) The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Rule 7 of the Companies (Accounts) Rules,2014 in respect of Section 133 of the Companies Act, 2013 in so far as applicable to the Company. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3) Our responsibility is to express an opinion on these financial statements based on our audit.
4) We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
5) We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
6) An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
7) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
8) 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, of the state of affairs of the Company as at 31st March 2016, and its loss and cash flows for the year ended on that date.
Emphasis of Matter
9) Your attention is drawn to the following Notes forming Part of the Financial Statements for the year ended 31-03-2016:
a) Note 28.11 a) of the Financial Statements that these Financial Statements also give the information as required to be given under Part III of Schedule III of the Companies Act,2013 in consolidated financial statements of interest in the sole associate
b) Note 19.1 A) detailing claims against the Company not acknowledged as debts (including demands of about Rs.142.38 lakhs (excluding interest and penalty) upheld by the lower appellate authorities and contested by the Company) in respect of which the management expects favourable orders,
Our opinion is not qualified in respect of the above matters.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
10) As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Accounting Standards in material aspects in so far as applicable to the Company.
e) We report that as on 31st March 2016, no director of the Company is disqualified from being appointed as a director under Section 164 (2) of the Companies Act, 2013 by virtue of the directorship in this Company. In respect of directorships in other companies, we have relied on the written representations made by the directors, in the prescribed form to the Board and taken on record that they are not subject to disqualification under the said section.
f) During the course of our audit of the financial statements we have observed that the company has internal financial controls though some of these controls are in our opinion not adequate or could have been better deployed or monitored to improve their effectiveness. As required by the auditing standards the perceived deficiencies in these controls which were considered significant have been duly communicated to the Management and the Audit Committee of the Board. We have however not carried out an audit of internal financial controls with an objective of expressing a view on the adequacy or effectiveness of these controls. Had we performed more extensive procedures on internal control we may have identified more such deficiencies to be included in our communication or concluded some of the deficiencies need not in fact have been communicated.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Notes 19.1 A) and 19.1 B) to the financial statements;
ii) The Company has not entered into derivative contracts. Further, with regard to the Long Term Contracts entered into by the Company we are informed that there will be no material foreseeable losses arising from those contracts.
iii) There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company.
11) As required by the Companies (Auditors'' Report) Order 2016, issued by the Government of India in terms of subsection (11) of Section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
ANNEXURE REFERRED TO IN PARAGRAPH 11 OF OUR REPORT OF EVEN DATE
RE: WINTAC LIMITED
1) Fixed Assets:
a) The Company is maintaining proper records which show full particulars of the fixed assets including quantitative details and their situation.
b) As informed to us by the management, though there is no formal program for periodic verification of fixed assets, the Management has conducted physical verification of these fixed assets during the year after the previous verification carried out is 2012-13 and no material discrepancies were found on such verification. The periodicity of verification is considered reasonable.
c) The title deeds of the immovable properties are in the name of the Company. However attention is drawn to Note 9.1 a) regarding disputes regarding title of its land at Sarjapur Road where claimant is holding Khatha in his name.
2) Inventory
a) According to the information and explanations furnished to us, physical verification has been conducted by the management during the year/as at the year end of inventory in its possession. The stock in the possession of third parties has also been verified by the management and supported by certificates furnished by them and/or other relevant documents. Materials in transit have been taken as per records. In our opinion the frequency of verification is reasonable considering the size of the Company and nature of its business.
b) As informed to us, the discrepancies noticed on such physical verification as compared to the book records were not material and have been properly dealt with in the books of account.
3) Loans to parties covered in the Register maintained under Section 189
The Company has not given any loans to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. Hence our reporting on the matters specified in clause (iii) paragraph 3 of the order does not arise.
4) Compliance of Section 185 and 186 of the Companies Act, 2013 with respect to Loans and Investments.
The Company has not made any loans or investments which require its verification of Section 185 and 186 of the Act.
5) Fixed Deposits:
The Company is not found to have accepted any deposits from the public under the provisions of the Companies Act, 2013. In respect of deposits accepted under the provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975 the same have been repaid on maturity. No order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
6) Cost Records:
The Company is not required to maintain cost records in terms of the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148 of the Companies Act, 2013.
7) Statutory Dues:
a) The Company is generally found to be depositing the undisputed statutory dues (as ascertained and provided in its books) in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales Tax, Excise Duty, Customs Duty, Service Tax, etc. though there may be some delay. There are no undisputed tax dues outstanding for more than six months as on the balance sheet date.
b) Regarding disputed statutory dues, we are informed that Note 19.1 gives full particulars of dues not deposited on account of dispute/ settlement proceedings.
c) There are no dues to the Investor Education and Protection Fund.
8) Loan :
The Company has taken a drop line overdraft facility as referred to in Note 3 and balance as on 31.03.2016 is within the limit.
9) End use of Funds
The money raised by drop line overdraft facility from the Bank were applied for the purposes for which the facility was granted.
10) Frauds
No fraud on or by the Company was noticed or reported during the year under report.
11) Managerial Remuneration
The Managerial Remuneration paid to its Managing Director is within the limits specified under Section 197 read with Schedule V of the Companies Act. The approval of the shareholders for the reappointment and remuneration to the Managing Director which is effective from February 1st 2016, is to be obtained in the ensuing Annual General Meeting.
12) Related Party Transactions
All transactions with the related parties effecting during the year are in compliance with section 177 and 188 of the Companied Act, 2013 and has been disclosed in Note 28.1 to the Financial Statement as required by the applicable Accounting Standard.
13) Private Placements
No private placement or preferential allotment of the shares or debentures were made during the year.
14) Non cash transactions with Directors:
The Company has not entered into any non cash transactions with the Directors.
15) Registration with RBI
The Company is not required to be registered with the Reserve Bank of India under Section 45 - IA of the Reserve Bank of India Act, 1934.
FOR RAO AND SWAMI
Chartered Accountants
(FRN 003105S)
Place: Bengaluru (H. Anil Kumar)
Date : 28th May, 2016 Partner M.No: 022329
Mar 31, 2015
Report on the Financial Statements
1) We have audited the accompanying financial statements of WINTAC
LIMITED ("the Company"), which comprise the Balance Sheet as at 31st
March, 2015, the Statement of Profit and Loss, the Cash Flow Statement
for the year then ended, and a summary of the significant accounting
policies and other explanatory information.
Management's Responsibility for the Financial Statements
2) The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
notified under the Companies Act, 1956 read with General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of Section 133 of the Companies Act, 2013 in so far as
applicable to the Company. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
3) Our responsibility is to express an opinion on these financial
statements based on our audit.
4) We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
5) We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
6) An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
7) We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
financial statements.
Opinion
8) 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, of the state of affairs of the Company as
at 31st, March 2015, and its loss and cash flows for the year ended on
that date.
Emphasis of Matter
9) Your attention is drawn to the following Notes forming Part of the
financial Statements for the year ended 3103-2015 :
a. Note 19.1 detailing claims against the company not acknowledged as
debts (including demands of about ' 267.62 lakhs (excluding interest
and penalty) upheld by the lower appellate authorities and contested by
the company) in respect of which the management expects favourable
orders,
b. Note 28.11 (b) that management's assessment of the impact from the
ongoing review/ reconciliations will not be significant, Our opinion is
not qualified in respect of the above matters.
Report on Other Legal and Regulatory Requirements
10) As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books
c) The Balance Sheet, the Statement of Profit and Loss dealt with by
this Report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards notified under the Companies Act, 1956 read with
General Circular 15/2013 dated 13th September 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013
in so far as applicable to the Company.
e) We report that as on 31st March 2015, no director of the company is
disqualified from being appointed as a director under Section 164 (2)
of the Companies Act, 2013 by virtue of the directorship in this
company In respect of directorships in other companies , we have relied
on the written representations made by the directors, in the prescribed
form to the Board and taken on record, that they are not subject to
disqualification under the said section.
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)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Notes 9.1(a),
9.1 (b) and 19 to the financial statements;
ii. The Company has not entered into derivative contracts. Further,
with regard to the Long Term Contracts entered into by the Company we
are informed that there will be no material foreseeable losses arising
from those contracts.
iii. There are no amounts required to be transferred to the Investor
Education and Protection Fund by the Company.
11) As required by the Companies (Auditors' Report ) Order 2015, issued
by the Government of India in terms of subsection (11) of Section 143
of the Companies Act,2013, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order to the extent
applicable.
ANNEXURE REFERRED TO IN PARAGRAPH 10 OF OUR REPORT OF EVEN DATE
RE: WINTAC LIMITED
1) Fixed Assets:
a) The company is maintaining proper records which show full
particulars of the fixed assets including quantitative details and
their situation..
b) Though there is no formal programme for periodic verification of
fixed assets, the periodicity of verification is considered reasonable
taking into consideration the management had carried out the physical
verification of fixed assets during the financial year 2012-13 (and had
passed necessary entries to reflect the factual position) and we are
informed that the next round of physical verification will be carried
out in financial year 2015-16.
2) Inventory
a) According to the information and explanations furnished to us,
physical verification has been conducted by the management during the
year/as at the year end of inventory in its possession. The stock in
the possession of third parties has been verified by the management
with reference to certificates furnished by them and/or other relevant
documents. Materials in transit have been taken as per records. In our
opinion the frequency of verification is reasonable considering the
size of the company and nature of its business.
b) In our opinion, the procedures of physical verification of stock are
reasonable and adequate in relation to the size of the company and
nature of its business.
c) The company has a system of maintaining proper records for
inventory. As informed to us, the discrepancies noticed on physical
verification as compared to the book records were not material and have
been properly dealt with in the books of account.
3) Loans to parties covered in the Register maintained under Section
189
The company has not given any loans to companies, firms or other
parties covered in the Register maintained under Section 189 of the
Companies Act, 2013.
4) Internal Control for the purchase of inventory and fixed assets and
for the sale of goods and services.
The company has an internal control system for the purchase of
inventory and fixed assets and for the sale of goods and services, of
moderate strength, which as informed to us is adequate because of the
size of the company and management oversight. In our opinion the
controls in force require proper documentation and the areas of
segregation of duties and staffing require strengthening.
5) Fixed Deposits:
The company is not found to have accepted any deposits from the public
under the provisions of the Companies Act,2013. In respect of deposits
accepted under the provisions of the Companies Act, 1956 and the
Companies (Acceptance of Deposit) Rules, 1975 the same are being repaid
on maturity. No order has been passed by the Company Law Board,
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal.
6) Cost Records:
The Company is not required to maintain cost records in terms of the
Companies ( Cost Records and Audit ) Rules,2014 prescribed by the
Central Government under Section 148 of the Companies Act,2013.
7) Statutory Dues:
a) The company is generally found to be depositing the undisputed
statutory dues ( as ascertained and provided in its books ) in respect
of Provident Fund, Employees' State Insurance, Income tax, Sales Tax,
Excise Duty, Customs Duty, Service Tax, etc. though there may be some
delay. There are no undisputed tax dues outstanding for more than six
months as on the balance sheet date.
b) Regarding disputed statutory dues, we are informed that Note 19.1
gives full particulars of dues not deposited on account of dispute/
settlement proceedings.
c) There are no dues to the Investor Education and Protection Fund.
8) Whether accumulated loss exceeds fifty percent of the Net Worth:
As per the financial statements under report:
a) The accumulated loss as at the end of the financial year does exceed
fifty percent of the Net Worth.
b) The company has incurred cash loss during the financial year covered
by our audit and in the previous financial year.
9) Frauds
No fraud on or by the company was noticed or reported during the year
under report.
FOR RAO AND SWAMI
Chartered Accountants
(FRN 003105S)
Date : 22nd May, 2015 (H.Anil Kumar)
Place : Bengaluru. Partner M. no : 022329
Mar 31, 2013
Report on the Financial Statements
1. We have audited the accompanying financial statements of Wintac
Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013 and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Board''s Responsibility for the Financial Statements
2. The Board of Directors of the company is responsible for the
preparation of these financial statements that give a true and fair
view of the financial position, financial performance and cash flows of
the Company in accordance with the Accounting Standards referred to in
sub- section (3C) of section 211 of the Companies Act, 1956 ("the
Act"). This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We have conducted our audit in
accordance with the Standards on Auditing issued by the Institute of
Chartered Accountants of India. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s 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. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the 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, 2013;
(b) in the case of the Statement of Profit and Loss , of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
7. Your attention is drawn to the following Notes forming Part of the
financial Statements for the year ended 31-03-2013 :
(a) Note 1.7 giving the reasons for not recording the redemption of
Preference shares on 17.02.2013 pending (earlier of) receipt of
Preference share certificate / expiry of notice period.
(b) Note 19.1 detailing claims against the company not acknowledged as
debts (including demands of about Rs. 267.01 lakhs (excluding interest)
upheld by the lower appellate authorities and contested by the company)
in respect of which the management expects favourable orders.
(c) Note 28.10 b) that management''s assessment of the impact from the
ongoing reconciliations will not be significant.
(d) Note 20.1 regarding method followed for recognition of revenue from
Formulation Development Fee.
Our opinion is not qualified in respect of the above matters.
Report on Other Legal and Regulatory Requirements
8. As required by the Companies (Auditor''s Report) Order, 2003
("the Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
9. As required by section 227(3) of the Act, we report that:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books
(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account
(d) in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
(e) We report that no director of the company is disqualified from
being appointed as a director under Section 274(1)(g) of the Companies
Act,1956 by virtue of the directorship in this company. In respect of
disqualification which could arise from directorships in other
companies, representations have been received from the Directors and
taken on record by the Board, that they are not subject to
disqualification u/s. 274(1 )(g) of the Companies Act, 1956 as on March
31st, 2013.
(f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE REFERRED TO IN PARAGRAPH 8 OF OUR REPORT OF EVEN DATE
RE: WINTAC LIMITED
1) Fixed Assets:
a) The company is maintaining proper records which shows full
particulars including quantitative details and location of the fixed
assets..
b) After many years the management has carried out the physical
verification of fixed assets during the year and compared with the book
records. Material discrepancies were noticed on such verification and
necessary entries have been passed in the books to reflect the factual
position. Attention is drawn to Note 9.5 on the Accounts. In our
opinion all assets must be verified at least once in every three years.
c) As substantial part of the fixed assets has not been disposed during
the year, our reporting under Clause 4 (i) (c) of the order does not
arise.
2) Inventory
a) According to the information and explanations furnished to us,
physical verification has been conducted by the management during the
year/as at the year end of inventory in its possession. The stock in
the possession of third parties has been verified by the management
with reference to certificates furnished by them and/or other relevant
documents. Materials in transit have been taken as per records. In our
opinion the frequency of verification is reasonable considering the
size of the company and nature of its business.
b) In our opinion, the procedures of physical verification of stock are
reasonable and adequate in relation to the size of the company and
nature of its business.
c) The company has a system of maintaining proper records for inventory
at factory in respect of raw materials and finished goods. In respect
of other items and inventory with third parties the system requires to
be strengthened. As informed to us, the discrepancies noticed on
physical verification as compared to available book records are not
material and have been properly dealt with in the books of account. In
respect of stores and consumables, the balance is as per inventory
taken and valued by the management. In respect of goods lying with
third parties the balances are taken as per declarations received.
3) Loans from/to parties listed in the Register maintained under
Section 301 of the Companies Act, 1956:
According to the information and explanations furnished to us, no loans
secured or unsecured, have been granted or obtained from companies,
firms or other parties listed in the Register maintained under Section
301 of the Companies Act, 1956 except for inter corporate deposits
aggregating to Rs. 252,93 lakhs during the year obtained from a company
in which a director of the company is a director. The balance in the
said account as on 31-03-2013 is Rs.15.05 lakhs. No interest has been
paid on the deposit and in terms of the information furnished to us the
other terms and conditions are not prejudicial to the interests of the
company. As informed to us no amount is overdue for repayment.
4) Internal Control for the purchase of inventory and fixed assets and
for the sale of goods and services.
According to the information and explanations furnished to us, taking
into consideration that some items are of special nature for which
comparative alternative quotations cannot be obtained there are prima
facie adequate internal control procedures commensurate with the size
of the company and nature of its business for the purchase of inventory
and fixed assets and for the sale of goods and services. While no major
failure to correct weaknesses in internal control in the above areas
have been identified, other than need to strengthen system of record
keeping of inventory for items other than raw materials and finished
goods as reported in paragraph 2 (c) above, the procedures and controls
have not been documented and the accounting processes still require to
be streamlined.
5) Transactions that need to be entered in the register maintained
under Section 301 of the Companies Act, 1956:
a) Our audit has not disclosed any transaction exceeding the value of
five lakh rupees during the financial year in respect of any party that
needs to be entered in the register maintained under Section 301 and
not having been so entered.
b) As explained to us the transactions have been made at prices which
were reasonable having regard to the prices which were reasonable
having regard to the prevalent market price at the relevant time.
6) Fixed Deposits:
The company has generally complied with the provisions of Sections 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposit) Rules, 1975 with regard to deposits accepted from the public.
No order has been passed by the Company Law Board, National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
7) Internal Audit:
An external firm of Chartered Accountants has done the internal audit
for the year under review. The internal audit system needs to be
strengthened through proper follow up so as to be commensurate with the
size of the company and nature of its business.
8) Cost Records: .
We have broadly reviewed the system for maintenance by the company of
books of account pursuant to the order made by the Central Government
for maintenance of cost records under Section 209(1 )(d) of the
Companies Act, 1956, and are of the opinion that prima facie the system
provides for generation/maintenance of prescribed accounts and records.
However we have not made a detailed examination to determine whether
these records are accurate and complete.
9) Statutory Dues:
a) The company is generally found to be depositing the undisputed
statutory dues (as ascertained and provided in its books )in respect of
Provident Fund, Investor Education & Protection Fund, Employees''
State Insurance, Income tax, Sales Tax, Excise Duty, Customs Duty,
Service Tax, etc. though there may be some delay. As per the books,
arrears outstanding for period of more than six months from the date
they became payable are Rs. .09 lakh towards PF and Rs. 9.96 lakh in
respect of Excise Duty.
b) Regarding disputed statutory dues, we are informed that Note 19.1
gives full particulars of dues not deposited on account of dispute/
settlement proceedings.
10) Whether accumulated loss exceeds fifty percent of the Net Worth:
As per the financial statements under report:
a) The accumulated loss as at the end of the financial year does not
exceed fifty percent of the Net Worth.
b) The company has incurred cash loss during the financial year covered
by our audit and in the previous financial year.
11) Defaults in repayment of debts to Financial Institutions etc.
The company has no dues to any bank or financial institution as at the
end of the year. The company has not issued debentures.
12) The company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Hence our reporting under Clause 4 (xiii) of the Order does not arise.
13) The Company is not a Chit fund I Nidhi / Mutual fund. Hence our
reporting on matters specified in Clause 4 (xiii) of the Order does not
arise.
14) The company is not dealing or trading in shares, securities,
debentures and other investments. Hence our reporting on the matters
specified in Clause 4 (xiv) of the Order does not arise.
15) Guarantees given on behalf of others:
In our opinion, the terms and conditions on which the company had given
guarantee in the usual course of business, for working capital finance
taken by its associate from a bank are not prejudicial to the interest
of the company.
16) Application of Term Loans:
As per our information the term loans availed during the year had been
applied/are in the process of being applied for the purposes for which
they had been obtained. However they have since been pre-closed out of
the proceeds of the preference issue.
17) Funding of Investments:
The long term investments held by the company are backed by long term
funds. The company is not holding any short term investments.
18) The company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under section
301 of the Act and hence our reporting whether the price at which the
shares have been issued is prejudicial to the interest of the company
does not arise.
19) The company has not issued any debentures. Hence our reporting on
whether any security or charge has been availed in respect thereof does
not arise.
20) The company has not made any public issue for management to
disclose the end use thereof and our verification of the same.
21) Frauds:
According to the information and explanations furnished to us no fraud
on or by the company has been noticed or reported during the year.
For RAO & SWAM
Chartered Accountants
(FRN003105S)
Place : BANGALORE (N.Ramesh)
Date : 31-05-2013 M No: 016153,
PARTNER
Mar 31, 2012
We have audited the attached Balance Sheet of WINTAC LIMITED as at 31st
March 2012 and also the Profit and Loss Account and Cash Flow Statement
of the company for the year ended on that date annexed thereto. These
financial statements are the responsibility of the management of Wintac
Limited. Our responsibility is to express an opinion on these financial
statements based on our audit.
We have conducted our audit in accordance with the generally accepted
auditing standards in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance whether the financial
statements are prepared, in all material respects, in accordance with
an identified financial reporting framework and are free of material
misstatements. An audit includes, examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
1. As required by the Companies (Auditors' Report) Order, 2003
issued by the Central Government in terms of sub section (4A) of
Section 227 of the Companies Act 1956, we enclose in Annexure- I a
statement on the matters specified in paragraphs 4 read with paragraph
5 of the said Order in so far as applicable to the company.
2. Further to our comments in Annexure-I referred to in paragraph 1
above we state that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
these books.
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
referred to in this report are in agreement with the books of account.
d. In our opinion the Balance Sheet, Profit and Loss Account and Cash
Flow Statement referred to in this report substantially comply with the
Accounting Standards referred to in Subsection (3C) of Section 211.
e. Without qualifying our opinion we draw your attention to the
following Notes forming part of the Accounts for the year ended 31sl
March, 2012 containing representations made by the management relied
upon by us in the absence of independent documentation/evidence - in
this regard and evidence to the contrary:
i Note 10.1 regarding non provision for diminution in value of
investment of Rs. 90,00,000 in the Joint Venture Company Medispec
Pharmaceutical (P) Ltd. though its net worth has fully eroded and that
no exposure is anticipated in respect of the corporate guarantee of Rs.
20 lakhs issued in favour of the joint venture company's bankers for
the reasons stated therein, Note 12.1 regarding balance of Rs.7,95,92,226
due from the aforesaid company, considered good for recovery. We are
unable to express our opinion on the same as it is contingent on future
performance of the said company. Further, the present arrangement with
the other company, which has resulted in the balance of Rs. 7,95,92,226
may require proper ratification from the joint venture partner, in view
of the expiry of original joint venture agreements and the subsidiary
agreements there under;
ii Note 12.2 (a) that provision of Rs. 283 lakhs now held is considered
adequate in respect of sum of Rs. 3,00,78,845 due from erstwhile
subsidiary;
iii Note 12.2 (b) that advance of Rs. 1,32,85,000 to Preference
shareholder is considered good;
iv Notes 19.1 detailing the claims against the company not acknowledged
as debts (including demands of nT 464.72 lakhs in respect of taxes and
penalties upheld by lower appellate authorities and under appeal by the
company), in respect of which the management expects favourable orders.
v Note 20.1 regarding method followed for recognition of revenue from
Formulation Development Fee.
vi Note 28.9 (a) regarding methodology of classification of assets and
liabilities as either long term or short term.
vii Note 28.9 (b) that Management's assessment of the impact from the
ongoing reconciliations will not be significant.
f. In our opinion and to the best of our information and according to
the explanations given to us, the accounts, read together with
accounting policies and notes forming part thereof, 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 so far as it relates to the Balance Sheet, of the state of affairs
of the company as at 31st March 2012;
ii In so far as it relates to the Profit and Loss Account, of the Loss
for the year ended on that date;
iii In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
3. We report that no director of the company is disqualified from
being appointed as a director under Section 274(1 )(g) of the Companies
Act, 1956 by virtue of the directorship in this company. In respect of
directorships in other companies representations have been received
from the Directors and taken on record by the Board, that they are not
subject to disqualification u/s. 274(1 )(g) of the Companies Act, 1956
as on 31st March 2012.
ANNEXURE REFERRED TO IN PARAGRAPH m OF OUR REPORT QF EVEN DATE RE:
WINTAC LIMITED
1) Fixed Assets:
a) The company is maintaining a Fixed Asset Register, which shows full
particulars including quantitative details and location of the fixed
assets recorded therein. However the same requires to be brought up to
date.
b) The physical verification of fixed assets and comparison with book
records has not been carried out during the year. In our opinion all
assets must be verified at least once in every three years and physical
verification should be properly documented.
Attention is drawn to Note 9.4 forming part of Accounts In the absence
of updated records and physical verification, we have relied upon the
representation of the management that the discrepancy in the fixed
assets requiring adjustment in the financial books will not be
material.
2) Inventory:
a) According to the information and explanations furnished to us,
physical verification has been conducted by the management during the
year/as at the year end of inventory in its possession. The stock in
the possession of third parties has been verified by the management
with reference to certificates furnished by them and/or other relevant
documents. Materials in transit have been taken as per records. In our
opinion the frequency of verification is reasonable considering the
size of the company and nature of its business.
b) In our opinion, the procedures of physical verification of stock are
reasonable and adequate in relation to the size of the company and
nature of its business.
c) The company has a system of maintaining proper records for inventory
except for stores to the extent of Rs. 43.26 lakh. As informed to us, the
discrepancies noticed on physical verification as compared to book
records are not material and have been properly dealt with in the books
of account. In respect of stores, the balance is as per inventory taken
and valued by the management. In respect of goods lying with third
parties the balances are taken as per declarations received. We are of
the opinion that system of maintaining records in respect of inventory
requires to be strengthened.
3) Loans from/to parties listed in the Register maintained under
S&ction 301 of the Companies Act, 1956:
According to the information and explanations furnished to us, no loans
secured or unsecured, have been granted or obtained from companies,
firms or other parties listed in the Register maintained under Section
301 of the Companies Act, 1956 except for an inter corporate deposit of
Rs. 400 lakh obtained in an earlier year from a company in which a
director of the company is a director and the balance in the said
account as on 31-03-2012 is.Rs. 39,11,616. The interest paid on the
deposit during the year is found to be reasonable and in terms of the
information furnished to us, the other terms and conditions are not
prejudicial to the interests of the company and the balance which is
repayable on demand has not been fallen due for repayment.
4) Internal Control for the purchase of inventory and fixed assets and
for the sale of goods
According to the information and explanations furnished to us, taking
into consideration that some items are of special nature for which
comparative alternative quotations cannot be obtained there are prima
facie adequate internal control procedures commensurate with the size
of the company and nature of its business for the purchase of inventory
and fixed assets and for the sale of goods. While no major failure to
correct weaknesses in internal control in the above areas have been
identified, the procedures and controls have not been documented and
the accounting processes still require to be streamlined.
5) Transactions that need to be entered in the register maintained
under Section 301 of the Companies Act, 1956:
a) Our audit has not disclosed any transactions exceeding the value of
five lakh rupees during the financial year in respect of any party that
need to be entered in the register maintained under Section 301 and not
having been so entered.
b) Hence our reporting whether each of such transactions have been madn
at prices which are reasonable having regard to the prevailing market
price for such goods, materials or services does not arise.
6) Fixed Deposits:
The Company has generally complied with the provisions of Sections 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposit) Rules, 1975 with regard to deposits accepted from the public.
No order has been passed by the Company Law Board, National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
7) Internal Audit:
An external firm of Chartered Accountants has done the internal audit
for the year under review. The internal audit system needs to be
strengthened through proper follow up so as to be commensurate with the
size of the company and nature of its business.
8) Cost Records:
We have broadly reviewed the system for maintenance by the company of
books of account pursuant to the order made by the Central Government
for maintenance of cost records under Section 209(1 )(d) of the
Companies Act, 1956, and are of the opinion that prima facie the system
provides for generation/maintenance of prescribed accounts and records.
However we have not made a detailed examination to determine whether
these records are accurate and complete.
9) Statutory Dues:
a) The company is generally found to be depositing the undisputed
statutory dues (as ascertained and provided in its books) in respect of
Provident Fund, Investor Education & Protection Fund, Employees' State
Insurance, Income tax, Sales Tax, Excise Duty, Customs Duty, Service
Tax, etc. though there may be some delay. As per the books, arrears
outstanding for period of more than six months from the date they
became payable are Rs. 7.79 lakh in respect of Excise Duty and Rs. 21.99
lakh in respect of Income Tax Deducted at Source.
b) Regarding disputed statutory dues, we are informed that Note 19
gives full particulars of dues not deposited on account of dispute/
settlement proceedings.
10) Whether accumulated loss exceeds fifty percent of the Net Worth:
As per the financial statements under report :
a) The accumulated loss as at the end of the financial year does not
exceed fifty percent of the Net Worth.
b) The company has incurred cash loss during the financial year covered
by our audit. The company has not incurred cash loss in the immediately
preceding financial year.
11) Loan Defaults :
The company has not defaulted in repayment of dues to its bankers. The
company has not borrowed from any financial institution nor issued
debentures.
12) Corporate Guarantees:
In our opinion, the terms and conditions on which the company had given
guarantee in earlier year, in the usual course of business, for working
capital finance taken by its associate from a bank are not prejudicial
to the interest of the company.
13) Application of Term Loans:
As per our information the term loans availed during the year have been
applied/are in the process of being applied for the purposes for which
they have been obtained.
14) Funding of Investments:
The long-term investments held by the company are backed by iong-term
funds. The company is not holding any short-term investments.
15) Preferential Allotment of Shares:
The company has not made any preferential allotment of shares during
the year.
16) Frauds:
According to the information and explanations furnished to us no fraud
on or by the company has been noticed or reported during the year.
17) Considering the nature of the company's business and the
transactions during the year, the provisions of clauses (i)(c),(xii),
(xiii), (xiv), (xviii), (xix) and(xx) of paragraph 4 of the Companies
(Auditor's Report) Order are not found applicable to the company for
the year under review.
For RAO & SWAM
Chartered Accountants
(FRN003105S)
Place : BANGALORE (N.Ramesh)
Date : 02-06-2012 M No: 16153, PARTNER
Mar 31, 2010
We have audited the attached Balance Sheet of WINTAC LIMITED as at 31st
March 2010 and also the Profit and Loss Account and Cash Flow Statement
of the company for the year ended on that date annexed thereto. These
financial statements are the responsibility of the management of Wintac
Limited. Our responsibility is to express an opinion on these financial
statements based on our audit.
We have conducted our audit in accordance with the generally accepted
auditing standards in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance whether the financial
statements are prepared, in all material respects, in accordance with
an identified financial reporting framework and are free of material
misstatements. An audit includes, examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
1. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government in terms of sub section (4A) of Section 227
of the Companies Act 1956, we enclose in Annexure-I a statement on the
matters specified in paragraphs 4 read with paragraph 5 of the said
Order in so far as applicable to the company.
2. Further to our comments in Annexure-I referred to in paragraph 1
above we state that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b. In our opinion, proper books of account as required by law have
been kept by the company so far as it appears from our examination of
these books.
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
referred to in this report are in agreement with the books of account.
d. In our opinion the Balance Sheet, Profit and Loss Account and Cash
Flow Statement referred to in this report substantially comply with the
Accounting Standards referred to in Subsection (3C) of Section 211.
e. Attention is invited to the following Notes forming part of the
Accounts for the year ended 31st March, 2010 (Schedule-R).
i Note 6 regarding non provision for diminution in value of investment
ofRs.90,00,000 in the Joint Venture Company Medispec Pharmaceutical (P)
Ltd. for the reasons stated therein, Note 7(a) regarding balance of
Rs.8,06,32,059 due from the aforesaid company, stated to be advance
given for developing and marketing specialty injectibles and share of
co-marketing expenses considered good for recovery and Note 9(a)
regarding corporate guarantee of Rs.30 lakhs issued in favour of the
joint venture companys bankers in respect of which no exposure is
anticipated. We are unable to express our opinion on the same. Further,
the present arrangement with the other company, which has resulted in
the balance of Rs. 8,06,32,059 may require proper ratification
from the joint venture partner, in view of the expiry of original joint
venture agreements and the subsidiary agreements there under.
ii Note 10 (a) that balances of major Debtors, Creditors and Advances
are subject
to confirmation /reconciliation. In respect of long outstanding
balances aggregating to Rs 91.99 lakh under Sundry Debtors and
Rs.417.67 lakh under advances ( including the advance referred to in
Note 7(b)), we are unable to determine whether the same are recoverable
and the adequacy of provision of Rs. 319 lakh now held for outstandings
under advances, pending outcome of the steps taken/ proposed to be
taken by the company to realise the dues.
The consequential effect of the above on the accounts could not be
ascertained.
f. In our opinion and to the best of our information and according to
the explanations given to us, subject to our reservations stated in para
2 (e) above andour observations in paragraphs 1(b)and 2(c) of the annexure
to thisreport, the accounts, read together with accounting policies and notes
forming part thereof, in particular Note 5 regarding Fixed assets
(including Capital work in Progress) Note 9(b) detailing the reasons
for non provision for sales tax pending the outcome of assessments and
appeals and Note 12 regarding method followed for recognition of
revenue from Formulation Development Fee, 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 so far as it relates to the Balance Sheet, of the state of affairs
of the company as at 31st March, 2010;
ii In so far as it relates to the Profit and Loss Account, of the
Profit for the yearended on that date;
iii In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
3. We report that no director of the company is disqualified from being
appointed as a director under Section 274(1)(g) of the Companies
Act,1956 by virtue of the directorship in this company. In respect of
directorships in other companies representations have been received
from the Directors and taken on record by the Board, that they are not
subject to disqualification u/s. 274(1)(g) of the Companies Act, 1956
as on March 31st, 2010.
ANNEXURE REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE
RE: WINTAC LIMITED
1) Fixed Assets:
a) The company is maintaining a Fixed Asset Register which shows full
particulars including quantitative details and location of the fixed
assets recorded therein. However the same requires to be brought up to
date.
b) The physical verification of fixed assets and comparison with book
records has not been carried out during the year. In our opinion all
assets must be verified at least once in every three years and physical
verification should be properly documented.
Attention is drawn to Note 5(e) forming part of Accounts ( Schedule-R)
In the absence of updated records and physical verification, we have
relied upon the representation of the management that the discrepancy
in the fixed assets requiring adjustment in the financial books will
not be material.
2) Inventory
a) According to the information and explanations furnished to us,
physical verification has been conducted by the management during the
year/as at the year end of inventory in its possession. The stock in
the possession of third parties has been verified by the management
with reference to certificates furnished by them and/or other relevant
documents. Materials in transit have been taken as per records. In our
opinion the frequency of verification is reasonable considering the
size of the company and nature of its business.
b) In our opinion, the procedures of physical verification of stock are
reasonable and adequate in relation to the size of the company and
nature of its business.
c) The company is maintaining proper records for inventory except for
stores to the extent of Rs. 37.05 lakh and goods lying with third
parties. The discrepancies noticed on such verification as compared to
book records are not material and have been properly dealt with in the
books of account. In respect of stores, the balance is as per inventory
taken and valued by the management. In respect of goods lying with
third parties the balances are taken as per declarations received. We
are of the opinion that system of maintaining records in respect of
goods lying with third parties and for stores require to be
strengthened.
3) Loans from/to parties listed in the Register maintained under
Section 301 of the Companies Act,1956:
According to the information and explanations furnished to us, no loans
secured or unsecured, have been granted or obtained from companies,
firms or other parties listed in the Register maintained under Section
301 of the Companies Act, 1956 except for an inter corporate deposit of
Rs. 400 lakh from a company in which a director of the company is a
director. The balance in the said account as on 31-03-2010 is
Rs.3,90,84,035. The interest paid on the deposit is found to be
reasonable and in terms of the information furnished to us the other
terms and conditions are not prejudicial to the interests of the
company. The interest has been paid upto date. The principal has not
fallen due for repayment.
4) Internal Control for the purchase of inventory and fixed assets and
for the sale of goods According to the information and explanations
furnished to us, taking into consideration that
some items are of special nature for which comparative alternative
quotations cannot be obtained there are prima facie adequate internal
control procedures commensurate with the size of the company and nature
of its business for the purchase of inventory and fixed assets and for
the sale of goods. While no major failure to correct weaknesses in
internal control in the above areas have been identified, the
procedures and controls have not been documented and the accounting
processes still require to be streamlined.
5) Transactions that need to be entered in the register maintained
under Section 301 of the Companies Act,1956:
a) Our audit has not disclosed any transactions exceeding the value of
five lakh rupees during the financial year in respect of any party that
need to be entered in the register maintained under Section 301 and not
having been so entered.
b) According to the information and explanations given to us, taking
into consideration that some items are of special nature for which
comparative alternative quotations cannot be obtained, each of these
transactions have been made at prices which are reasonable having
regard to the prevailing market price for such goods, materials or
services.
6) Fixed Deposits:
The company has generally complied with the provisions of Sections 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposit) Rules, 1975 with regard to deposits accepted from the public.
No order has been passed by the Company Law Board, National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
7) Internal Audit:
An external firm of Chartered Accountants has done the internal audit
for the year under review. The internal audit system needs to be
strengthened through proper follow up so as to be commensurate with the
size of the company and nature of its business.
8) Cost Records:
We have broadly reviewed the system for maintenance by the company of
books of account pursuant to the order made by the Central Government
for maintenance of cost records under Section 209(1)(d) of the
Companies Act, 1956, and are of the opinion that prima facie the system
provides for generation/maintenance of prescribed accounts and records.
However we have not made a detailed examination to determine whether
these records are accurate and complete.
9) Statutory Dues:
a) The company is generally found to be depositing the undisputed
statutory dues (as ascertained and provided in its books )in respect of
Provident Fund, Investor Education & Protection Fund, Employees State
Insurance, Income tax, Sales Tax, Excise Duty, Customs Duty, Service
Tax, etc. though there may be some delay. As per the books, arrears
outstanding for period of more than six months from the date they
became payable are Rs7.43 lakh in respect of Excise Duty and Rs 11.46
lakh in respect of Income Tax Deducted at Source.
b) Regarding disputed statutory dues, we are informed that Note 9 gives
full particulars of dues not deposited on account of dispute/
settlement proceedings.
10) Whether accumulated loss exceeds fifty percent of the Net Worth:
As per the financial statements under report before making adjustments
for our observations referred to in para 2(e) of our audit report:
a) The accumulated loss as at the end of the financial year does not
exceed fifty percent of the Net Worth.
b) The company has not incurred cash loss during the financial year
covered by our audit though it has incurred cash loss in the previous
financial year.
11) Loan Defaults
The company has not defaulted in repayment of dues to its bankers. The
company has not borrowed from any financial institution nor issued
debentures.
12) Corporate Guarantees:
In our opinion, the terms and conditions on which the company had given
guarantee in earlier year, in the usual course of business, for working
capital finance taken by its associate from a bank are not prejudicial
to the interest of the company.
13) Application of Term Loans:
As per our information the term loans availed during the year have been
applied/are in the process of being applied for the purposes for which
they have been obtained.
14) Funding of Investments:
The long term investments held by the company are backed by long term
funds. The company is not holding any short term investments.
15) Preferential Allotment of Shares:
The company has not made any preferential allotment of shares during
the year.
16) Frauds:
According to the information and explanations furnished to us no fraud
on or by the company has been noticed or reported during the year.
17)Considering the nature of the companys business and the
transactions during the year , the provisions of clauses (i)(c),(xii),
(xiii), (xiv), (xviii), (xix) and(xx) of paragraph 4 of the Companies
(Auditors Report) Order are not found applicable to the company for
the year under review.
For RAO & SWAMI
Chartered Accountants
(FRN003105S)
(N.Ramesh)
Palace : BANGALORE Mno: 16153
Date : 04-08-2010 PARTNER
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