deccan chronicle holdings ltd Auditors report

DECCAN CHRONICLE HOLDINGS LIMITED ANNUAL REPORT 2010-2011 AUDITORS REPORT TO THE MEMBERS OF DECCAN CHRONICLE HOLDINGS LIMITED 1. We have audited the attached balance sheet of Deccan Chronicle Holdings Limited (the Company) as at 31st March 2011,the profit and loss account and the cash flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 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 (the Order), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the Act), 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 and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act, to the extent applicable; (e) on the basis of written representations received from the directors, as on 31st March 2011, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act; (f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts 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: (ii) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2011; (ii) in the case of the profit and loss account.of the profit of the Company for theyear ended on that date; and (iii) in the case of cash flow statement of the cash flows of the Company for theyear ended on that date. For C B Mouli & Associates Chartered Accountants (Firms Registration No. 2140S) Mani Oommen Partner M.No.24046 Place: Secunderabad Date : August 13, 2011 Annexure to the Auditors Report Annexure referred to in paragraph 3 of our report of even date to the members of Deccan Chronicle Holdings Limited. We report that: 1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. 2. The Company has a regular program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner. Accordingly, certain assets were verified by Management during the year. No material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. 3. Fixed assets disposed of during theyear were not substantial, and therefore, do not affect the going concern assumption. 4. Inventory, have been physically verified by the management at regular intervals. In our opinion, the frequency of verification is reasonable. 5. The procedures for the 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. 6. The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. 7. The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. 8. In our opinion and according to the information and explanations given to us and having regard to the explanation that purchase of certain items of inventories and fixed assets are for the Companys specialized requirements and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of advertisement space. The activities of the Company do not involve the sale of services. We have not observed any major weakness in the internal control system during the course of our audit. 9. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section. 10. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. 11. The Company has not accepted any deposits from the public. 12. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 13. The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products manufactured/services rendered by the Company. 14. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has been generally regular in depositing with the appropriate authorities amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth tax, Customs duty, Cess and other material statutory dues. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund, excise duty and service tax. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, EmployeesState Insurance, Income tax, Sales tax, Wealth tax, Customs duty, Cess and other material statutory dues were in arrears as at 31 March 2011 for a period of more than six months from the date they became payable. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund, excise duty and service tax. 15. According to the information and explanations given to us, there are no dues of Income tax, Sales tax, Wealth tax, Customs duty and Cess which have not been deposited with the appropriate authorities on account of any dispute. As explained to us, the Company did not have any dues on account of excise duty and service tax. 16. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. 17. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or to any financial institutions or to debenture holders. 18. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 19. In our opinion, and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society. 20. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. 21. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. 22. In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised. 23. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that thefunds raised on short-term basis have not been used for long-term investment. 24. The Company has not made any preferential allotment of shares to companies/firms/parties covered in the register maintained under Section 301 of the Companies Act, 1956. 25. According to the information and explanations given to us, the Company has created security or charge in respect of debentures issued during theyear. 26. As informed to us, the Company has not raised any money during theyear by public issues. 27. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit. For C B Mouli & Associates Chartered Accountants (Firms Registration NO.2140S) Mani Oommen Partner M.No.24046 Place: Secunderabad Date : August 13, 2011