Mar 31, 2016
Independent Auditorâs. Report
The Members,
Zicom Electronic Security Systems Limited
I. Report on the Financial Statements
We have audited the accompanying standalone financial statements of Zicom Electronic Security Systems Limited (hereinafter referred to as ''the Company''), comprising of the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended along with the Significant Accounting Policies and other explanatory information forming an integral part thereof.
II. Management''s Responsibility for the Financial Statements The Company''s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 (''the Act'') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and in accordance with the accounting principles generally accepted in India. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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.
III. Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and 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 true and fair view 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 Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our audit opinion.
IV. Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.
V. 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 the paragraph 3 and 4 of the order.
2. As required by section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2013;
e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the director is disqualified as on March 31, 2016, from being appointed as a director in terms of section 164(2) of the Act.;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in ''Annexure B''; and
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. The Company has transferred the required amount / unclaimed dividend amount to the Investor Education and Protection Fund (IEPF) within the requisite timeline as given under the Companies Act and the Rules made there under .
Annexure A referred to in the Independent Auditors'' Report
(Referred to in paragraph (V).1. of our report of even date)
In terms of the information and explanations given to us and the books and records examined by us and on the basis of such checks as we consider appropriate, we further report as under:
1) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed assets.
b) As explained to us, the fixed assets have been physically verified by the management as per a phased programme of verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the Company''s books of accounts.
c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
2) As explained to us, the management has conducted physical verification of inventory at reasonable intervals during the year.
In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on such verification between physical inventories and the book records which were material in relation to the operations of the Company have been properly dealt with in the Company''s books of account.
3) According to the information and explanations provided to us and as per the records examined by us, during the year, the Company has granted unsecured loans to four bodies corporate representing the parties listed in the register maintained under Section 189 of the Act. The aggregate maximum and closing balances of these parties are Rs.10, 762.03 Lacs and Rs. 10,762.03 Lacs respectively.
a) In our opinion, the rate of interest wherever applicable and other terms and conditions of the aforesaid loans are not prima facie prejudicial to the interests of the Company.
b) Based on the information and explanations provided to us, in our opinion, the parties to whom the above loans were given are (i) regular in repayment of principal and interest, as applicable (ii) there was no overdue principal as at the close of the year and (iii) reasonable steps were taken by the Company to recover the loans.
4) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans and investments made.
5) According to the information and explanations given to us, the Company has not accepted any deposits from the public.
6) The Central Government has not prescribed maintenance of cost records under section (1) of section 148 of the Act.
7) According to the information and explanations provided to us and on the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Value Added Tax, Customs Duty, Service Tax, Cess and other statutory dues during the year with the appropriate authorities. As at the year end, there are no undisputed dues remaining payable for a period of more than six months from the date they became payable.
As per explanations provided to us and according to the records of the Company, the following are the particulars of disputed dues on account of Value Added Tax (Sales Tax) and Works Contract Tax that have not been deposited:
Name of the Statute |
Nature of Dues |
Amount (Rs.in Lacs) |
Period to which the amount relates |
Forum where the dispute is pending |
CST Act |
Diff Tax for C forms dues |
1.37 |
2010 - 2011 |
DCTO . Salt Lake Circle. Kolkatta |
CST Act |
Diff Tax for C forms dues |
0.73 |
2011 - 2012 |
DCTO . Salt Lake Circle. Kolkatta |
MVAT Act |
Dues due to set off disallowance and 25% interest under Amnesty scheme. |
19.12 |
2011 - 2012 |
LTU E624- Mazgaon Mumbai |
CST Act |
Dues payable due to set off reduction on stock transfers and C forms liability |
17.45 |
2012 - 2013 |
LTU E624- Mazgaon Mumbai |
CST Act |
Dues payable due to set off reduction on stock transfers and C forms liability |
10.17 |
2013 -2014 |
LTU E624- Mazgaon Mumbai |
CST Act |
Dues towards disputed Vat and CST liability on account of disallowance of stock transfers |
176.17 |
2013 - 2014 |
CTO. Indore . City Circle |
8) Based on our audit procedures, books of account and as explained to us, we are of the opinion that, during the year, the Company has not defaulted in repayment of dues to any financial institution or bank. No debentures were issued or were outstanding during the year.
9) As per the records and based on the explanations provided to us, in our opinion, the money raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied by the Company for the purpose for which they were obtained.
10) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.
11) According to the information and explanations given to us and based on our examination of the records of the Company, 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 to the Act.
12) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
13) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act. Details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
14) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
15) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
16) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
Annexure B referred to in the Independent Auditors'' Report
(Referred to in paragraph (V).2(f). of our report of even date) Report on the Internal Financial Controls under Clause (i) of subsection 3 of Section 143 of the Companies Act, 2013 (''the Act'')
We have audited the internal financial controls over financial reporting of Zicom Electronic Security Systems Limited (hereinafter referred to as ''the Company''), as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls The Company''s Board of Directors 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 (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the ''Guidance Note'') and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, 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 were established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an internal financial controls system in place over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016 however it needs to be further strengthened, 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 Shyam Malpani & Associates
Chartered Accountants
Firm Registration No. 120438 W
Shyam Malpani
Proprietor
Membership No. F- 34171
Chicago, dated May 27, 2016
Mar 31, 2015
We have audited the attached financial statements of Zicom Electronic
Security Systems Limited (hereinafter referred to as the Company),
comprising of the Balance Sheet as at 31st March 2015, the Statement of
Profit and Loss and the Cash Flow Statement for the year then ended
along with the Significant Accounting Policies and other explanatory
information forming an integral part thereof.
II. Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters in
section 134(5) of the Companies Act, 2013 ("the Act") with respect to
the preparation of these financial statements that give a true and fair
view of the financial position, financial performance and cash flows of
the Company in accordance with the Accounting Standards referred to in
Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014 and in accordance with the accounting principles generally
accepted in India. This responsibility also includes the maintenance of
adequate accounting records in accordance with the provision of the Act
for safeguarding of the assets of the Company and for preventing and
detecting the 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 internal financial control, 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.
III. Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and 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 true and fair view 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 Company's Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a reasonable basis for our audit opinion.
IV. Emphasis of matter
We draw attention to Note No. 25.8 regarding Trade Receivables of Rs.
63.23 Lacs due from a customer against which no provision towards
recovery has been considered necessary in the Company's books, since
the management is confident of recovering the entire amount in near
future, thus overstating the Trade Receivables and understating the
Provisions and Profit for the year by the same extent.
Our opinion is not qualified in the above matter.
V. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at 31st March 2015 and its profit and its cash flows for the year ended
on that date
VI. Report on Other Legal and Regulatory Requirements
1. 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
purpose of our audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards specified
under section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164(2) of the Act.;
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
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.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
ANNEXURE REFERRED TO IN THE INDEPENDENT AUDITORS' REPORT
In terms of the information and explanations given to us and the books
and records examined by us and on the basis of such checks as we
consider appropriate, we further report as under:
1) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
As explained to us, the fixed assets have been physically verified by
the management as per a phased programme of verification. In our
opinion, the frequency of verification is reasonable having regard to
the size of the Company and the nature of its fixed assets. The
discrepancies noticed on such verification were not material and have
been properly dealt within the Company's books of accounts.
2) As explained to us, the management has conducted physical
verification of inventory at reasonable intervals during the year.
In our opinion, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
In our opinion, the Company is maintaining proper records of inventory.
The discrepancies noticed on such verification between physical
inventories and the book records which were material in relation to the
operations of the Company have been properly dealt with in the
Company's books of account.
3) According to the information and explanations provided to us and as
per the records examined by us, during the year, the Company has
granted unsecured loans to three bodies corporate representing the
parties listed in the register maintained under Section 189 of the Act.
The aggregate maximum and closing balances of these parties are Rs.
6,504.16 Lacs and Rs.6,504.16 Lacs respectively.
In our opinion, the rate of interest wherever applicable and other
terms and conditions of the aforesaid loans are not prima facie
prejudicial to the interests of the Company.
Based on the information and explanations provided to us, in our
opinion, the parties to whom the above loans were given are (i) regular
in repayment of principal and interest, as applicable (ii) there was no
overdue principal as at the close of the year and (iii) reasonable
steps were taken by the Company to recover the loans.
4) In our opinion and according to the information and explanations
provided to us, having regard to the explanations that some of the
items of plant and equipments purchased are of special nature and
suitable alternative sources do not exist for obtaining comparable
quotations, the internal control procedures are commensurate with the
size of the Company and the nature of its business, for the purchase of
inventory, other fixed assets and for the sale of goods and provision
of services. During the course of our audit, we have not come across
any major weakness in the internal controls prevailing in the Company.
5) According to the information and explanations given to us, the
Company has not accepted deposits as per the directives issued by
Reserve Bank of India and the provisions of Sections 73 to 76 or any
other relevant provisions of the Act and the rules framed there under.
6) The Central Government has prescribed maintenance of cost records
under section (1) of section 148 of the Act. The Company during the
year under review not used its manufacturing facility and hence the
said clause was not applicable.
7) According to the information and explanations provided to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-tax, Value Added Tax, Customs Duty,
Wealth Tax, Service Tax, Cess and other statutory dues during the year
with the appropriate authorities. As at the year end, there are no
undisputed dues remaining payable for a period of more than six months
from the date they became payable.
As per explanations provided to us and according to the records of the
Company, there are no disputed dues on account of provident Fund,
Investor Education and Protection Fund, Employees' State Insurance,
Income-tax, Value Added Tax, Customs Duty, Wealth Tax, Service Tax,
Cess and other statutory dues that have not been deposited.
8) The Company does not have accumulated losses at the end of the
current financial year nor has it incurred any cash losses in the
current / immediately preceding financial year.
9) Based on our audit procedures, books of account and as explained to
us, we are of the opinion that, during the year, the Company has not
defaulted in repayment of dues to any financial institution or bank. No
debentures were issued or were outstanding during the year.
10) According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by a subsidiary from bank to the extent of Rs. 48,001.99 Lacs. In
our opinion, the terms and conditions of such guarantees are not prima
facie prejudicial to the interests of the Company.
11) As per the records and based on the explanations provided to us, in
our opinion, the term loans were applied by the Company for the purpose
for which they were obtained.
12) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Shyam Malpani & Associates
Chartered Accountants
Firm Registration No. 120438 W
Shyam Malpani
Proprietor
Membership No. F- 34171
Mumbai, dated 27th May, 2015
Mar 31, 2014
We have audited the attached financial statements of Zicom Electronic
Security Systems Limited (hereinafter referred to as the Company),
comprising of the Balance Sheet as at March 31, 2014, the Statement of
Profit and Loss and the Cash Flow Statement for the year then ended
along with the Significant Accounting Policies and other explanatory
information forming an integral part thereof.
II. Managements Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956 (hereinafter referred to as the Act), 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
and in accordance with the accounting principles generally accepted in
India. This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
III. Auditors Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the Auditor's judgment, including assessment of the
risks of material misstatement of the financial statements, whether due
to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing opinion on the effectiveness of the Company's
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by the management, as well as evaluating the overall
financial statement presentation.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a reasonable basis for our audit opinion.
1. As required by the Companies (Auditor's Report) Order, 2003 as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Act, we enclose in the Annexure a statement on
the matters specified in paragraph 4 of the said Order, to the extent
applicable to the Company during the year under review.
2. Further to our comments in the Annexure referred to in 1. above, as
required by Section 227(3) of the Act, we report as follows:
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in subsection (3C) of Section 211 of
the Act, read with the General Circular 15/2013 dated September 13, 2013
of the Ministry of Corporate Affairs in respect of Section 133 of
Companies Act, 2013;
(e) On the basis of written representations received from the
respective directors as on March 31, 2014 and taken on record by the
Board of Directors, none of the directors is disqualified as on March
31, 2014 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
V. Opinion
Matter of Emphasis
We draw attention to Note No. 25.8 regarding Trade Receivables of '
63.24 Lacs due from a customer against which no provision towards
recovery has been considered necessary in the Company's books, since
the management is confident of recovering the entire amount in near
future, thus overstating the Trade Receivables and understating the
Provisions and Profit for the year by the same extent.
Our opinion is not qualified in the above matter
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 31,2014;
(b) In the case of the Statement of Profit and Loss, of the Profit of
the Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the Cash flows of the
Company for the year ended on that date.
ANNEXURE REFERRED TO IN THE INDEPENDENT
AUDITORS' REPORT
(Referred to in paragraph (IV).1. our report of even date)
In terms of the information and explanations given to us and the books
and records examined by us and on the basis of such checks as we
consider appropriate, we further report as under:
1) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
As explained to us, the fixed assets have been physically verified by
the management as per a phased programme of verification. In our
opinion, the frequency of verification is reasonable having regard to
the size of the Company and the nature of its fixed assets. The
discrepancies noticed on such verification were not material and have
been properly dealt with in the Company's books of accounts.
No portion of the fixed assets has been disposed off during the year by
the Company.
2) As explained to us, the management has conducted physical
verification of inventory at reasonable intervals during the year.
In our opinion, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
In our opinion, the Company is maintaining proper records of inventory.
The discrepancies noticed on such verification between physical
inventories and the book records which were material in relation to the
operations of the Company have been properly dealt with in the
Company's books of account.
3) According to the information and explanations provided to us and as
per the records examined by us, during the year, the Company has
granted unsecured loans to three bodies corporate representing the
parties listed in the register maintained under Section 301 of the Act.
The aggregate maximum and closing balances of these parties are '
2,868.28 Lacs and ' 2,275.46 Lacs respectively.
In our opinion, the rate of interest wherever applicable and other
terms and conditions of the aforesaid loans are not prima facie
prejudicial to the interests of the Company.
Based on the information and explanations provided to us, in our
opinion, the parties to whom the above loans were given are (i) regular
in repayment of principal and interest, as applicable (ii) there was no
overdue principal as at the close of the year and (iii) reasonable
steps were taken by the Company to recover the loans.
During the year, the Company has not taken any loan secured or
unsecured from the parties covered in the register maintained under
Section 301 of the Act.
4) In our opinion and according to the information and explanations
provided to us, having regard to the explanations that some of the
items of plant and equipments purchased are of special nature and
suitable alternative sources do not exist for obtaining comparable
quotations, the internal control procedures are commensurate with the
size of the Company and the nature of its business, for the purchase of
inventory, other fixed assets and for the sale of goods and provision
of services. During the course of our audit, we have not come across
any major weakness in the internal controls prevailing in the Company.
5) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under Section 301 of the Act
have been so entered.
In our opinion, the transactions made in pursuance of such contracts or
arrangements have been made at reasonable prices having regard to the
prevailing market prices at the relevant time.
6) As per the records verified and based on explanations given to us,
the Company has not accepted any deposits from the public within the
meaning of Sections 58A, 58AA or any other relevant provisions of the
Act and the rules framed there under.
7) In our opinion, the Company has a formal internal audit system.
However, the same needs to be strengthened, both in respect of scope
and coverage, in order to make it commensurate with the size of the
Company and nature of its business.
8) The Central Government has prescribed maintenance of cost records
under clause (d) of section (1) of section 209 of the Act. The Company
during the year under review not used its manufacturing facility and
hence the said clause was not applicable.
9) According to the information and explanations provided to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees' State
Insurance, Income- tax, Value Added Tax, Customs Duty, Wealth Tax,
Service Tax, Cess and other statutory dues during the year with the
appropriate authorities. As at the year end, there are no undisputed
dues remaining payable for a period of more than six months from the
date they became payable.
As per explanations provided to us and according to the records of the
Company, the following are the particulars of disputed dues on account
of Value Added Tax (Sales Tax) and Works Contract Tax that have not
been deposited:
Name of the Nature of Dues Amount Period to Forum where
Statute (Rs in which the dispute
Lacs) the amount
relates is pending
Sales Tax Act VAT-Chandigarh 1.69 2011 - 2012 Deputy
Commissioner
Appeals
Sales Tax Act CST-Chandigarh 0.84 2011 - 2012 Deputy
Commissioner
Appeals
10) The Company does not have accumulated losses at the end of the
current financial year nor has it incurred any cash losses in the
current / immediately preceding financial year.
11) Based on our audit procedures, books of account and as explained to
us, we are of the opinion that, during the year, the Company has not
defaulted in repayment of dues to any financial institution or bank. No
debentures were issued or were outstanding during the year.
12) As explained to us, the Company has not granted loans and advances
on the basis of security by way of pledge of shares, debentures and
other securities during the year.
13) In our opinion the nature of activities of the Company does not
attract any special statute applicable to Chit fund and Nidhi / Mutual
Benefit Fund / Societies.
14) As per the records of the Company, the Company has not dealt with
or traded in shares, securities, debentures and other investments. The
investments of the Company are held in its own name.
15) According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by a subsidiary from banks to the extent of ' 41,508.75 Lacs. In
our opinion, the terms and conditions of such guarantees are not prima
facie prejudicial to the interests of the Company.
16) As per the records and based on the explanations provided to us, in
our opinion, the term loans were applied by the Company for the purpose
for which they were obtained.
17) On the basis of overall examination of the records and cash flows
of the Company, in our opinion, the funds raised on short-term basis
have not been used for long-term investment.
18) During the year, the Company has not made any preferential
allotment of equity shares to the parties covered in the Register
maintained under Section 301 of the Act.
19) As per the records verified, no debentures were issued or were
outstanding during the year.
20) During the year, the Company has not raised any money through
public issue.
21) Based upon the audit procedures performed and the information and
explanations provided by the management, we report that no fraud on or
by the Company has been noticed or reported during the course of our
audit.
For Shyam Malpani & Associates
Chartered Accountants
Firm Registration No. 120438 W
Shyam Malpani
Proprietor
Membership No. F- 34171
Mumbai, dated May 27, 2014
Mar 31, 2013
I. Report on the Financial Statements
We have audited the attached financial statements of Zicom
Electronic Security Systems Limited (hereinafter referred to as
the Company), comprising of the Balance Sheet as at March 31, 2013,
the Statement of Profit and Loss and the Cash Flow Statement for
the year then ended along with the Significant Accounting Policies
and other explanatory information forming an integral part thereof.
II. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956 (hereinafter referred to as 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.
III. Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the Auditor''s judgment, including 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 the management,
as well as evaluating the overall financial statement presentation.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a reasonable basis for our audit opinion.
IV. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Act, we enclose in the Annexure a statement on
the matters specified in paragraph 4 & 5 of the said Order, to the
extent applicable to the Company during the year under review.
2. Without qualifying our report we draw attention to
In respect of Sundry Debtors representing an opening amount of Rs. 105.56
Lacs due from the customer, the company has recovered its principle
amount during the year under review an amount of Rs. 42.33 Lacs being the
award from the Honourable Supreme Court of India in its favour.
The management is confident of recovering even the accrued interest on
the same which has been disclosed under the head Other Current Asset
amounting to Rs. 63.24 Lacs and hence no provision has been considered in
this regard.
3. Further to our comments in the Annexure referred to in 1. above, as
required by Section 227(3) of the Act, we report as follows:
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in subsection (3C) of Section 211 of
the Act;
(e) On the basis of written representations received from the
respective directors as on March 31, 2013 and taken on record by the
Board of Directors, none of the directors is disqualified as on March
31, 2013 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
V. Opinion
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 Profit of
the Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the Cash flows of the
Company for the year ended on that date.
Annexure referred to the Independent Auditors'' Report
(Referred to in paragraph 3 of our report of even date)
In terms of the information and explanations given to us and the books
and records examined by us and on the basis of such checks as we
consider appropriate, we further report as under:
1) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
As explained to us, the fixed assets have been physically verified by
the management as per a phased programme of verification. In our
opinion, the frequency of verification is reasonable having regard to
the size of the Company and the nature of its fixed assets. The
discrepancies noticed on such verification were not material and have
been properly dealt with in the Company''s books of accounts.
The Fixed assets disposed off during the year by the Company were not
substantial and therefore do not affect the going concern assumption.
2) As explained to us, the management has conducted physical
verification of inventory at reasonable intervals during the year.
In our opinion, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
In our opinion, the Company is maintaining proper records of inventory.
The discrepancies noticed on such verification between physical
inventories and the book records which were material in relation to the
operations of the Company have been properly dealt with in the
Company''s books of account.
3) According to the information and explanations provided to us and as
per the records examined by us, during the year, the Company has
granted unsecured loans to bodies corporate and recovered in full
unsecured loans given in earlier years from three other bodies
corporate representing the parties listed in the register maintained
under Section 301 of the Companies Act, 1956. The aggregate maximum and
closing balances of these parties are Rs. 1,884.84 Lacs and Rs. 1,884.84
Lacs respectively.
In our opinion, the rate of interest wherever applicable and other
terms and conditions of the aforesaid loans are not prima facie
prejudicial to the interests of the Company.
Based on the information and explanations provided to us, in our
opinion, the parties to whom the above loans were given are (i) regular
in repayment of principal and interest, as applicable (ii) there was no
overdue principal as at the close of the year and (iii) reasonable
steps were taken by the Company to recover the loans.
During the year, the Company has not taken any loan secured or
unsecured from the parties covered in the register maintained under
Section 301 of the Companies Act, 1956.
4) In our opinion and according to the information and explanations
provided to us, having regard to the explanations that some of the
items of plant and equipments purchased are of special nature and
suitable alternative sources do not exist for obtaining comparable
quotations, the internal control procedures are commensurate with the
size of the Company and the nature of its business, for the purchase of
inventory, other fixed assets and for the sale of goods and provision
of services. During the course of our audit, we have not come across
any major weakness in the internal controls prevailing in the Company.
5) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under section 301 of the
Companies Act, 1956 have been so entered.
In our opinion, the transactions made in pursuance of such contracts or
arrangements have been made at reasonable prices having regard to the
prevailing market prices at the relevant time.
6) As per the records verified and based on explanations given to us,
the Company has not accepted any deposits from the public within the
meaning of Sections 58A, 58AA or any other relevant provisions of the
Companies Act, 1956 and the rules framed thereunder.
7) In our opinion, the Company has a formal internal audit system.
However, the same needs to be strengthened, both in respect of scope
and coverage, in order to make it commensurate with the size of the
Company and nature of its business.
8) The Central Government has prescribed maintenance of cost records
under clause (d) of section (1) of section 209 of the Companies Act,
1956. The Company during the year under review not used its
manufacturing facility and hence the said clause was not applicable.
9) According to the information and explanations provided to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income- tax, Value Added Tax, Customs Duty,
Wealth Tax, Service Tax, Cess and other statutory dues during the year
with the appropriate authorities. As at the year end, there are no
undisputed dues remaining payable for a period of more than six months
from the date they became payable.
As per explanations provided to us and according to the records of the
Company, the following are the particulars of disputed dues on account
of Value Added Tax (Sales Tax) and Works Contract Tax that have not
been deposited:
Name of the Statute Nature of Dues Amount
(? in Lacs)
Sales Tax Act Classification Dispute 0.22
Sales Tax Act Non-submission 0.69
of Statutory Forms
Sales Tax Act Levy of Penalty 1.38
Works Contract Tax Disallowance of WCT 1.64
TDS certificates
Sales Tax Act VAT-Karnataka 1.42
Name Period to
which Forum where the
the
amount
relates dispute is pending
Sales Tax Act 2002-2003 Deputy Commissioner Appeals
Sales Tax Act 2002-2003 Deputy Commissioner Appeals
Sales Tax Act 2002-2003 Assistant Commissioner Appeal
Sales Tax Act 2002-2003 Deputy Commissioner Appeals
Sales Tax Act 2007-2008 Joint Commissioner
Enforcement- Karnataka
10) The Company does not have accumulated losses at the end of the
current financial year nor has it incurred any cash losses in the
current / immediately preceding financial year.
11) Based on our audit procedures, books of account and as explained to
us, we are of the opinion that, during the year, the Company has not
defaulted in repayment of dues to any financial institution or bank. No
debentures were issued or were outstanding during the year.
12) As explained to us, the Company has not granted loans and advances
on the basis of security by way of pledge of shares, debentures and
other securities during the year.
13) In our opinion the nature of activities of the Company does not
attract any special statute applicable to chit fund and nidhi / mutual
benefit fund / societies.
14) As per the records of the Company, the Company has not dealt with
or traded in shares, securities, debentures and other investments. The
investments of the Company are held in its name.
15) According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by a subsidiary from bank to the extent of Rs. 29,974.16 Lacs. In
our opinion, the terms and conditions of such guarantees are not prima
facie prejudicial to the interests of the Company.
16) As per the records and based on the explanations provided to us, in
our opinion, the term loans were applied by the Company for the purpose
for which they were obtained.
17) On the basis of overall examination of the records and cash flows
of the Company, in our opinion, the funds raised on short-term basis
have not been used for long-term investment.
18) During the year, the Company has made preferential allotment of
equity shares to the parties covered in the Register maintained under
Section 301 of the Companies Act, 1956.
19) As per the records verified, no debentures were issued or were
outstanding during the year.
20) During the year, the Company has not raised any money through
public issue.
21) Based upon the audit procedures performed and the information and
explanations provided by the management, we report that no fraud on or
by the Company has been noticed or reported during the course of our
audit.
For Shyam Malpani & Associates
Chartered Accountants
Firm Registration No. 120438 W
Shyam Malpani
Proprietor Membership No. F-34171
Mumbai, dated May 16, 2013
Mar 31, 2012
1) We have audited the attached Balance Sheet of Zicom Electronic
Security Systems Limited as at March 31, 2012, the statement of Profit
and Loss and the Cash Flow statement for the year ended on that date
annexed thereto. These financial statements are responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2) We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3) As required by the Companies (Auditors' Report) Order, 2003 as
amended by the Companies (Auditors' Report) Amendment Order, 2004
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order to the extent applicable to the company during the year.
4) Further to our comments in the Annexure referred to in Para 3 above,
we report as follows:
a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
our audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books;
c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
e) On the basis of written representations received from the directors,
as on March 31, 2012 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations provided to us, they said financial statements, read
with Significant Accounting Policies and Notes there on give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
ii) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
iii) in case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
In terms of the information and explanations given to us and the books
and records examined by us and on the basis of such checks as we
consider appropriate, we further report as under:
1) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
As explained to us, the fixed assets have been physically verified by
the management as per a phased programme of verification. In our
opinion, the frequency of verification is reasonable having regard to
the size of the Company and the nature of its fixed assets. The
discrepancies noticed on such verification were not material and have
been properly dealt with in the Company's books of accounts.
The Fixed assets disposed off during the year by the Company were not
substantial and therefore do not affect the going concern assumption.
2) As explained to us, the management has conducted physical
verification of inventory at reasonable intervals during the year.
In our opinion, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
In our opinion, the Company is maintaining proper records of inventory.
The discrepancies noticed on such verification between physical
inventories and the book records which were material in relation to the
operations of the Company have been properly dealt with in the
Company's books of account.
3) According to the information and explanations provided to us and as
per the records examined by us, during the year, the Company has
granted unsecured loan to a body corporate being a party covered under
the register maintained under Section 301 of the Companies Act, 1956.
The aggregate maximum and closing balances of these parties are Rs.
1,389.99 Lacs and Rs. 887.14 Lacs respectively.
In our opinion, the rate of interest wherever applicable and other
terms and conditions of the aforesaid loans are not prima facie
prejudicial to the interests of the Company.
Based on the information and explanations provided to us, in our
opinion, the parties to whom the above loans were given are (i) regular
in repayment of principal and interest, as applicable (ii) there was no
overdue principal as at the close of the year and (iii) reasonable
steps were taken by the Company to recover the loans.
During the year, the Company has not taken any loan, secured or
unsecured, from the parties covered in the register maintained under
Section 301 of the Companies Act, 1956.
4) In our opinion and according to the information and explanations
provided to us, having regard to the explanations that some of the
items of plant and equipments purchased are of special nature and
suitable alternative sources do not exist for obtaining comparable
quotations, the internal control procedures are commensurate with the
size of the Company and the nature of its business, for the purchase of
inventory, other fixed assets and for the sale of goods and provision
of services. During the course of our audit, we have not come across
any major weakness in the internal controls prevailing in the Company.
5) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under section 301 of the
Companies Act, 1956 have been so entered.
In our opinion, the transactions made in pursuance of such contracts or
arrangements have been made at reasonable prices having regard to the
prevailing market prices at the relevant time.
6) As per the records verified and based on explanations given to us,
the Company has not accepted any deposits from the public within the
meaning of Sections 58A, 58AA or any other relevant provisions of the
Companies Act, 1956 and the rules framed there under.
7) The Company has an internal audit system. However, In our opinion,
the same needs to be strengthened, both in respect of scope and
coverage, in order to make it commensurate with the size of the Company
and nature of its business.
8) The Central Government has prescribed maintenance of cost records
under clause (d) of section (1) of section 209 of the Companies Act,
1956. We have broadly reviewed the accounts and records of the Company
in this connection and are of the opinion, that prima facie, the
prescribed accounts and records have been made and maintained. We have,
however, not made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9) According to the information and explanations provided to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-tax, Value Added Tax,
Customs Duty, Wealth Tax, Service Tax, Cess and other statutory dues
during the year with the appropriate authorities. As at the year end,
there are no undisputed dues remaining payable for a period of more
than six months from the date they became payable.
As per explanations provided to us and according to the records of the
Company, the following are the particulars of disputed dues on account
of Value Added Tax (Sales Tax) and Works Contract Tax that have not
been deposited:
Name of
the Statute Nature of Dues Amount Period to
which the Forum where the
dispute is
(Rs. in
Lacs) amount
relates pending
Sales
Tax Act Classification
Dispute 0.22 2002 - 2003 Deputy
Commissioner
Appeals
Sales
Tax Act Non-submission
of Statutory
Forms 0.69 2002 - 2003 Deputy Commissioner
Appeals
Sales
Tax Act Levy of Penalty 1.38 2002 - 2003 Assistant
Commissioner
Appeals
Works
Contract
Tax Disallowance of
WCT TDS certi
ficates 1.64 2002 - 2003 Deputy Commis
sioner Appeals
Works
Contract
Tax Disallowance of
WCT TDS certi
ficates 2.18 2002 - 2003 Deputy Commis
sioner Appeals
Sales
Tax Act VAT-Karnataka 1.42 2007 - 2008 Joint Commissioner
Enforcement-
Karnataka
10) The Company does not have accumulated losses at the end of the
current financial year nor has it not incurred any cash losses in the
current / immediately preceding financial years.
11) Based on our audit procedures, books of account and as explained to
us, we are of the opinion that, during the year, the Company has not
defaulted in repayment of dues to any financial institution or bank. No
debentures were issued or were outstanding during the year.
12) As explained to us, the Company has not granted loans and advances
on the basis of security by way of pledge of shares, debentures and
other securities during the year.
13) In our opinion the nature of activities of the Company does not
attract any special statute applicable to chit fund and nidhi / mutual
benefit fund / societies.
14) As per the records of the Company, the Company has not dealt with
or traded in shares, securities, debentures and other investments. The
investments of the Company are held in its name.
15) According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by a subsidiary from bank to the extent of Rs. 16,776.70 Lacs. In
our opinion, the terms and conditions of such guarantees are not prima
facie prejudicial to the interests of the Company.
16) As per the records and based on the explanations provided to us, in
our opinion, the term loans were applied by the Company for the purpose
for which they were obtained.
17) On the basis of overall examination of the records and cash flows
of the Company, in our opinion, the funds raised on short-term basis
have not been used for long- term investment.
18) During the year, the Company has not made any preferential
allotment of equity shares to the parties covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19) As per the records verified, no debentures were issued or were
outstanding during the year.
20) During the year, the Company has not raised any money through
public issue.
21) Based upon the audit procedures performed and the information and
explanations provided by the management, we report that no fraud on or
by the Company has been noticed or reported during the course of our
audit.
For Malpani & Associates
Chartered Accountants
Firm Registration No. 120438 W
Shyam Malpani
Proprietor
Membership No. F-34171
Mumbai, dated May 17, 2012
Mar 31, 2010
1) We have audited the attached Balance Sheet of Zicom Electronic
Security Systems Limited as at March 31, 2010, related Profit and Loss
Account and the Cash Flow statement for the year ended on that date
annexed thereto. These financial statements are responsibility of the
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2) We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3) Without qualifying our report, we draw attention to Note no. 10 of
Schedule 16 of the financial statement. As on March 31, 2010, the
Company has Equity Investment of Rupees 4,101 Lacs in its wholly owned
subsidiary Zicom Retail Products Private Limited and has advanced
unsecured loan of Rupees 7,022 Lacs. The Said Subsidiary Company is
incurring Losses and its accumulated losses as of March 31, 2010 is Rs.
1,915 Lacs. As explained by the management, that they are confident of
generating greater business and improving profitability by the retail
expansion and creation of Retail Electronic Security Brand.
Accordingly management considers such diminution to be temporary in
nature and hence no provision is required for diminution in the value
of investments and in respect of Unsecured Loan.
4) As required by the Companies (Auditors Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
5) Further to our comments in the Annexure referred to above, we report
that:
a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were
necessary for the purposes of our audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Profit and Loss Account and the Cash Flow
statement dealt with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Profit and Loss Account and the
Cash Flow statement dealt with by this report comply with the
accounting standards referred to in sub- section (3C) of section 211 of
the Companies Act, 1956;
e) On the basis of written representations received from the directors,
as on March 31, 2010 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956;
f) In our opinion, and to the best of our information and according to
the explanations provided to us, the said financial statements read
with the notes thereon, give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
i) in the case of Balance Sheet, of the state of affairs of the Company
as at March 31, 2010;
ii) in the case of Profit and Loss account, of the profit for the year
ended on that date; and
iii) in case of the Cash Flow statement, of the cash flows for the year
ended on that date.
Annexure referred to the Auditors Report
(Referred to in paragraph 4 of our report of even date)
1) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
The fixed assets have been physically verified by the management as per
a phased programme of verification, except fixed assets having net
block value of Rupees 31,936,961, installed at customers place, which
are not physically verified. In our opinion, the frequency of
verification is reasonable having regard to the size of the Company and
the nature of its fixed assets. The discrepancies noticed on such
verification were not material and have been properly dealt with in the
books of accounts.
Fixed assets disposed off during the year were not substantial and
therefore do not affect the going concern assumption.
2) The management has conducted physical verification of inventory at
reasonable intervals.
In our opinion, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
The Company is maintaining proper records of inventory. The
discrepancies noticed on such verification between physical inventories
and the book records were not material in relation to the operations of
the Company and the same have been properly dealt with in the books of
account.
3) According to the information and explanations provided to us and as
per the records examined by us, the Company has granted unsecured loans
to four parties covered in the register maintained under Section 301 of
the Companies Act, 1956 amounting to Rupees 781,080,801. The Maximum
balance outstanding during the year was Rupees 825,361,558.
In our opinion rate of interest and other terms and conditions are not
prima facie prejudicial to the interest of the Company.
In absence of repayment schedule of principal and interest, we are not
able to comment on the regularity of the same.
The Company has not taken any loan secured or unsecured from companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956.
4) In our opinion and according to the information and explanations
provided to us, having regards to the explanations that some of
the items of Plant and Equipments purchased are of special nature and
suitable alternative sources do not exist for obtaining comparable
quotations, the internal control procedures are commensurate with the
size of the Company and the nature of its business, for the purchase of
inventory, fixed assets and for the sale of goods and services. During
the course of our audit, no major weakness has been noticed in the
internal controls.
5) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under section 301 of the
Companies Act, 1956 have been so entered.
In our opinion and according to the information and explanations
provided to us, the transactions made in pursuance of such contracts or
arrangements have been made at reasonable prices having regard to the
prevailing market prices at the relevant time.
6) In our opinion and according to the information and explanations
provided to us, the Company has not accepted any deposits from the
public within the meaning of Section 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the rules framed thereunder.
7) The Company has internal audit system commensurate with the size and
nature of its business; however same needs to be strengthened.
8) According to the information and explanations given to us, the
Central Government has not prescribed for the maintenance of the cost
records under Section 209(1) (d) of the Companies Act, 1956, for any of
the products of the Company.
9) According to the information and explanations provided to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income-tax, Sales Tax, Customs Duty, Wealth
Tax, Service Tax, Cess and other statutory dues during the year with
the appropriate authorities. As on March 31, 2010, there are no
undisputed dues payable for a period of more than six months from the
date they became payable.
As at March 31, 2010, according to the records of the Company and the
information and explanation given to us, the following
are the particulars of disputed dues on account of Sales Tax that have
not been deposited:
Name of the
Statute Nature of Dues Amount in
Rupees Period to
which the Forum where the
amount
relates dispute is
pending
Sales Tax
Act Classification
Dispute 21,561 2002 -
2003 Deputy Commissioner
Appeals
Sales Tax
Act Non-submission of 68,967 2002 -
2003 Deputy Commissioner
Appeals
statutory forms
Sales Tax
Act Levy of Penalty 137,778 2002 -
2003 AssistantCommiss-
ioner Appeal
Works Con-
tract Tax Disallowance of 164,296 2002 -
2003 Deputy Commissioner
(Appeals)
WCT cert-ificate
Works Cont-
ract Tax Disallowance of 430,999 2002 -
2003 Deputy Commissioner
Appeal
WCT certificate 2003 -
2004
10) The Company does not have accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
11) Based on our audit procedures and as per the information and
explanations provided by the management, we are of the opinion that,
during the year the Company has not defaulted in repayment of dues to
any financial institution or bank. No debentures were issued or were
outstanding during the year.
12) Based on our audit procedures and according to the information and
explanations provided to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
13) In our opinion and according to the information and explanations
provided to us, the nature of activities of the Company does not
attract any special statute applicable to chit fund and nidhi / mutual
benefit fund / societies.
14) In our opinion and according to the information and explanations
provided to us, the Company is not dealing or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
15) According to the information and explanations provided to us and
the records examined by us, the Company has given guarantee for loan
taken by two of its subsidiaries from bank. In our opinion, terms and
conditions of guarantee are not prejudicial to the interest of the
Company.
16) According to the information and explanations provided to us and
the records examined by us, in our opinion, the term loans
were applied by the Company for the purpose for which they were
obtained.
17) According to the information and explanations provided to us and on
an overall examination of the records and cash flow statement of the
Company, in our opinion, the funds raised on short-term basis have not
been used for long-term investment.
18) During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the Register
maintained under Section 301 of the Companies act, 1956.
19) According to the information and explanations provided to us and
the records examined by us, no debentures were issued or were
outstanding during the year.
20) During the year, the Company has not raised any money through
public issue.
21) Based upon the audit procedures performed and the information and
explanations provided by the management, we report that no fraud on or
by the Company has been noticed or reported during the course of our
audit.
Notes:
A. Term loan referred in (1) above is secured by the first charge on
Plant & Machinery, Office Equipment and Equitable Mortgage of Land &
Building at Bandra (West), Mumbai and Office at Bangalore and second
charge by way of hypothecation of entire Stock, Book Debts and current
assets.
B. Working capital loan referred in (2) above and banking facilities
mentioned in clauses 2(a) and 2(b) of schedule 16 are secured by the
first charge ranking pari passu on the entire Stock, Book Debts and
current assets, and second charge on Plant & Machinery, Office
Equipment and Equitable Mortgage of Land & Building at Bandra (West)
Mumbai and Office at Bangalore. Further Secured by Term Deposit Receipt
of Rs. 124 Lacs of the company.
FOR P.RAJ & CO.
Chartered Accountants
P. S. Shah
Proprietor
Membership No. 44611
Firm Registration No. 108310W
Mumbai, August 14, 2010
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