AUDITORS
TO THE MEMBERS OF DHANUS TECHNOLOGIES LIMITED
1. We have audited the attached Balance Sheet of Dhanus Technologies Limited (the
Company) as at 31st December, 2011 and also the Statement of Profit and Loss
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 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) 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 above, we report that:
a) We have obtained all the information and explanations, which to the best of our
knowledge and belief were necessary for the purpose of our audit.
b) In our opinion, proper books of account as required by law have been kept by the
company so far as appears from our examination of such books, subject to Note No.1.2. (a)
and (b).
c) The Balance Sheet, statement of Profit and Loss and cash flow statement dealt with
by this report are in agreement with the books of account, subject to Note No. 1.2. (a)
and (b).
d) In our opinion, the Balance Sheet, statement of Profit and Loss 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 AS-6 -
"Depreciation", AS-9 - "Revenue Recognition", AS-10 - "Fixed
Assets", AS-22 - "Deferred Taxes" and AS-28 - "Impairment of
Assets".
e) The effects of non reconciliation of Trade receivables, exceeding over a period of
six months, and as well as payables, the effects on profit/loss is not quantifiable. The
quantum of bad debts involved in the Trade Receivables are not yet confirmed, the effect
to that extent on profit/loss is not quantifiable.
f) Reference to Note No.1.2.(a) and (b) and Para (e) above regarding revenue
recognition under AS-9 - "Revenue Recognition" issued by the Institute of
Chartered Accountants of India and also expense recognition, the effects on profit/loss is
not quantifiable.
g) Non application of AS-28 - "Impairment of Assets" to the value of assets
including fixed assets, trade receivables and loans and advances, the effect of which is
not quantifiable from a mark to market perspective. The physical verification, valuation
of fixed assets and updating of fixed assets register is yet to be completed. Also tests
of impairment, ownership and valuation of fixed assets - Tangible are under completion and
we are unable to express opinion on the same.
h) Investments in, M/s Borusan Telekom, Turkey amounting to 1 million USD and M/s.
Sreeven Infocom Limited amounting to Rs. 2,50,00,000/-, is, in our opinion, irrecoverable.
i) On the basis of the written representations received from the directors, as on
December 31, 2011 and taken on record by the Board of Directors, we report that none of
the directors is disqualified as on 31st December, 2011 from being appointed as
a director in terms of clause [g] of sub-section [1] of Section 274 of the Companies Act,
1956.
j) The company has not provided for the cess payable under Sec.441A of the Companies
Act, 1956 as the notification regarding rate and mode of payment has not received.
5. Subject to clauses [b] to [h] above, the cumulative effect of which is not
quantifiable and the effect of which results in our inability to express an opinion on the
same, 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:
i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st
December, 2011,
ii) in the case of the statement of Profit and Loss, of the Loss of the company for the
year ended on that date and
iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that
date.
|
For P C ACHARYA & Co |
|
Chartered Accountants |
|
Firm Registration No: 009628S |
|
P C ACHARYA |
| Place : Chennai |
Partner |
| Date : March 21, 2012 |
Membership No: 210719 |
Annexure referred to in paragraph 3 of our Report of even date
In terms of the information and explanation given to us and the books and records
examined by us in the normal course of audit and to the best of our knowledge and belief,
we state as under:
1. a) The company is in the process of maintaining proper records showing full
particulars including quantitative details, value and the situation of fixed assets.
b) The fixed assets of the company have been physically verified by the management at
reasonable intervals. We have relied on Management Representations for physical
verification and valuation of fixed assets (Refer Auditors Report Para 4 (g) above) and
accounting for discrepancies thereon.
c) During the year the Company has not disposed off substantial part of the fixed
assets and the going concern status of the company is not affected.
2. a) According to the information and explanations given to us, inventories have been
physically verified during the year by the management. We have relied on Management
Representations for physical verification, inventories valuation of finished goods and
Work-in-Progress.
b) We have relied on management representations for discrepancies in inventory check.
3. a) In our opinion, the company has not granted any loans, secured or unsecured to
the companies, firms or other parties covered in the register maintained under section 301
of the Companies Act, 1956. As such, the clauses iii (b), iii (c) and iii (d) of paragraph
4 of the order are not applicable to the company.
b) In our opinion, the company has not taken any loans, secured or unsecured from the
companies, firms or other parties covered in the register maintained under Section 301 of
the Companies Act, 1956. As such, the clauses iii (f) and iii (g) of paragraph 4 of the
order are not applicable to the company.
4. In our opinion and according to the information and explanations given to us, there
are adequate internal control procedures; however the same is not fully commensurate with
the size of the company and the nature of its business with regard to purchase of
inventories including components, plant and machinery, equipment and other assets and with
regard to the sale of goods. The Internal control requires elaborate strengthening.
5. a) In our opinion and according to the information and explanations given to us, 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, the
transactions made in pursuance of contracts or arrangements entered in the register
maintained under Sec. 301 of the Companies Act. 1956 and exceeding the value of Rupees
five lakhs in respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public. The provisions of
Sections 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975 are not applicable to the Company.
7. In our opinion and according to the information and explanations given to us, the
company has an internal audit system commensurate with the size of the company and nature
of its business.
8. In our opinion, the Central Government has not prescribed the maintenance of Cost
Records under Section 209 (1) (d) of the Companies Act, 1956 for the services of the
company.
9. a) According to the records of the company, the company is irregular in depositing
undisputed statutory dues including Income tax along with TDS, Sales Tax, Service tax,
Provident Fund and other statutory dues with the appropriate authorities.
b) According to the information and explanations given to us, undisputed amount payable
in respect of Income Tax along with TDS, Sales Tax, Service tax and other statutory dues
were outstanding as at 31st December, 2011 for a period of more than six months
from the date they became payable. The amounts involved in all the statutory dues as
undisputed indicated above is not quantifiable, we are not in a position to comment on
this issue.
c) According to the records of the company, the dues outstanding of income tax, service
tax on account of dispute, are as follows:
| Name of the statute |
Nature of dues |
Amount (Rs. Lakhs) |
Period of which the amount relates |
Forum where dispute is pending |
| Income Tax Act, 1961 |
Income tax liability |
577.07 |
Assessment year 2006-2007 |
Income Tax Appellate Tribunal (ITAT) - Chennai Bench, Chennai |
| Income Tax Act, 1961 |
Income tax liability |
2009.19 |
Assessment year 2007-2008 |
Income Tax Appellate Tribunal (ITAT) - Chennai Bench, Chennai |
| Income Tax Act, 1961 |
Income tax liability |
4037.00 |
Assessment year 2008-2009 |
Commissioner of Income Tax (Appeals) -Chennai |
| Income Tax Act, 1961 |
Income tax liability |
3756.62 |
Assessment year 2009-2010 |
Commissioner of Income Tax (Appeals) -Chennai |
| Service Tax Act and Rules |
Service tax liability |
317.51 |
June 2007 till March 2011 |
Commissioner of Service Tax., vide show cause notice No.445/ 2011 dt, 12/10/2011. |
10. The company has neither accumulated losses as at 31st December, 2011 nor
has it incurred any cash losses during the financial year ended on that date or in the
immediately preceding financial year.
11. Based on our audit procedures and on the information and explanations given to us
by the management, the company has defaulted in both interest and principal on term loans
and cash credits availed from UCO Bank T-Nagar, Chennai. The recovery of the same loan
amounts is under the process of DRT (i.e., Debt Recovery Tribunal). Previously it was also
restructured for recovery of loans from the company.
12. According to the information and explanations given to us, the company has not
granted any loans and advances on the basis of security by way of pledge of shares,
debentures and other securities. However the Promoters stakes, as before pledged on the
above Uco Bank loan liabilities, has been realized and adjusted towards the loan amounts
by the Bank,
13. 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 (as amended) are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, clause 4[xiv] of Companies [Auditors
Report] Order, 2003 (as amended) are not applicable to the Company.
15. According to the information and explanations given to us, the Company has not
given any guarantee for loans taken by others from bank or financial institutions. We have
relied on management representations to report this clause.
16. Based on information and explanations given to us by the management, term loans
were applied for the purpose for which the loans were obtained. We have relied on
management representations to report this clause.
17. According to the information and explanation given to us and on overall examination
of the balance sheet of the company, short-term funds has not been applied for long term
purposes.
18. The Company has not made any preferential allotment of shares to parties or
companies covered in the register maintained under Section 301 of the Companies Act 1956,
and the price at which the shares have been issued are not prejudicial to the interest of
the company.
19. The Company has not issued any debentures during the year and therefore the
question of creation of charge or security does not arise. However the company during the
year has issued shares Warrants and converted the same to the equity share capital of the
company.
20. The Company has not raised any funds through public issue during the financial year
under report. However, the Company during the year under report has issued bonus shares by
capitalization of its reserves and surplus.
21. Based upon the audit procedures performed for the purpose of reporting the true and
fair view of the financial statements and as per the information and explanations given by
the management, we report that no fraud on or by the Company has been noticed or reported
during the year.
|
For P C ACHARYA & Co |
|
Chartered Accountants |
|
Firm Registration No: 009628S |
|
P C ACHARYA |
| Place : Chennai |
Partner |
| Date : March 21, 2012 |
Membership No: 210719 |
+91-9892691696
