baid global ventures ltd Auditors report

CHISEL AND HAMMER (MOBEL) LIMITED (FORMERLY KNOWN AS LIVING ROOM LIFESTYLE LIMITED) ANNUAL REPORT 2009-2010 AUDITORS REPORT TO THE MEMBERS OF LIVING ROOM LIFESTYLE LIMITED 1. We have audited the attached Balance Sheet of LIVING ROOM LIFESTYLE LIMITED (Company) as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003, 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. 4. Further to our comments in the Annexure referred to in paragraph 3 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 Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 except for Accounting Standard 15 Employee Benefits the financial effect of which is not ascertainable. (e) On the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors of the Company are 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 given to us, the said accounts subject to paragraph 4(d) above give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010; (ii) In the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date; and (iii) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. For S.I. MOGUL ASSOCIATES Chartered Accountants Firm Registration No. 106513W S.I. Mogul Partner Membership No. 5572 Place: Mumbai Date : 09.06.2010. ANNEXURE TO THE AUDITORS REPORT LIVING ROOM LIFESTYLE LIMITED As referred to in paragraph 3 of our report of even date on the accounts for the year ended March 31, 2010: (i)(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, (b) As explained to us, physical verification of a major portion of fixed assets was conducted by the management during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. (c) During the year, the Company has disposed off all the fixed assets. However, the management of the Company plans to continue carrying on business and hence, it has not affected the going concern assumption. (ii)(a) The inventories have been physically verified by the management In our opinion, the frequency of verification is reasonable. (b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) In our opinion and according to the information and explanations given to us by the management, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account. (iii) The Company has not taken/granted any loans, secured or unsecured, from/to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, sub- clauses (b), (c), (d), (e), (f) and (g) of clause 4(iii) of the Companies (Auditors Report) Order, 2003 are not applicable. (iv) In our opinion and according to the information and explanations given to us by the management, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory, fixed assets and for sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control. (v) (a) To the best of our knowledge and belief and according to the information and explanations given to us by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion and according to the information and explanations given to us by the management, the transactions entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available. (vi) The Company has not accepted any deposits from the public to which the provisions of section 58A and section 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply. (vii) In our opinion, Company has an internal audit system commensurate with the size and nature of its business. (viii) According to the information and explanations given to us by the management, the Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company. (ix)(a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, Income tax, wealth tax, service tax, custom duty, cess and other material statutory dues applicable to it According to the information and explanations given to us, there are no undisputed amounts payable in respect of the above as at March 31, 2010 for a period of more than six months from the date on which they became payable. (b) According to the information and explanations given to us, there are no dues in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess that have not been deposited with the appropriate authorities on account of any dispute as at March 31, 2010. (x) The Company has accumulated losses of Rs.22,94,114 in the Profit & Loss Account at the end of the financial year and has incurred cash loss of Rs.34,76,191 during the financial year covered by our audit and no such loss in the immediately preceding financial year. (xi) According to the information and explanations given to us by the management, the Company has not defaulted in repayment of dues to banks and financial institutions. The Company has not issued any debentures. (xii) According to the information and explanations given to us by the management, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund /society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. (xiv) In our opinion and according to the information and explanations given to us by the management, 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 are not applicable to the Company. (xv) According to the information and explanations given to us by the management, the Company has not given any guarantees for loans taken by others from banks or financial institutions. (xvi) In our opinion and according to the information and explanations given to us by the management and based on an overall examination, the term loan has been applied for the purpose for which It was raised. (xvii) In our opinion and according to the information and explanations given to us by the management and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment. (xviii) According to the information and explanations given to us by the management, 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. (xix) In our opinion and according to the information and explanations given to us by the management the Company has not issued any secured debentures during the period covered by our report. Accordingly, the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. (xx) During the period covered by our audit report, the Company has not raised any money by public issues. (xxi) According to the information and explanations given to us by the management, no fraud on or by the Company has been noticed or reported during the course of our audit. For S.I. MOGUL ASSOCIATES Chartered Accountants Firm Registration No. 106513W S.I. Mogul Partner Membership No. 5572 Place: Mumbai Date : 09.06.2010.