ETC Networks Ltd merged Auditor Reports

ETC NETWORKS LIMITED ANNUAL REPORT 2008-2009 AUDITORS REPORT To The Members, ETC Networks Limited 1. We have audited the attached Balance Sheet of ETC Networks Limited (the Company) as at March 31, 2009, and also 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 or, our audit. 2. We conducted our audit in accordance with the 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) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (the Act), and on the basis of such checks as: we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in paragraph 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 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, Profit and Loss account and Cash Flow statement dealt with Lby 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 Section 211 (3C) of the Act. (e) On the basis of written representations received from the Directors and taken on record by the Board, we report that none of the Directors is disqualified as at March 31, 2009 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 read together with the significant accounting policies and notes to accounts as per Schedule 16, 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: i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2009. ii) In the case of the Profit and Loss account, of the Profit for the year ended on that date; and iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For MGB & Co. Chartered Accountants Hitendra Bhandari Partner Membership No.: 107832 Mumbai, June 16, 2009 Annexure referred to in Paragraph (3) of our report to the members of ETC Networks Limited on the accounts for the year ended March 31, 2009. 1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. (b) According to the information and explanations given to us, the fixed assets except decoders lying with third parties are physically verified by the management as per the phased program of verification and no material discrepancies were noticed on such verification. In our opinion, the frequency of such verification is reasonable having regard to the size of the company and nature of its assets. (c) In our opinion, the fixed assets disposed off during the year were not substantial. 2) (a) The inventory has been physically verified by the management at reasonable intervals during the year. (b) 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. (c) In our opinion, the Company has maintained proper records of inventory and no material discrepancies were noticed on physical verification as compared to the book records. 3) (a) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. (b) 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 Act. 4) In our opinion and according to the information and explanations given to us, 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 inventory, fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal control system in respect of the aforesaid areas. 5) According to the information and explanations given to us, there are no contracts or arrangements the particulars of which are required to be entered into the register in pursuance of Section 301 of the Act. 6) The Company has not accepted any deposits from the public during the year. 7) The Company has an internal audit system commensurate with its size and nature of its business. 8) We are informed that the Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Companys activities. 9) According to the records of the Company examined by us and information and explanations given to us: (a) The Company has been generally regular except delay in few cases in depositing its Statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, VAT, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and others as applicable. There are no undisputed amounts payable in respect of the aforesaid dues which have remained outstanding as at March 31, 2009 for a period of more than six months from the date they became payable. (b) There are no disputed amounts on account of Sales Tax, VAT, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited, except Income Tax as under: Name of the Statute & Amount Period to Forum where dispute Nature of the Dues (Rs.) which the is pending amount relate The Income Tax Act, 1961: Income Tax 5,068,119 A.Y. 2003-2004 Commissioner of Income Tax 293,815 A.Y. 2004-2005 Income Tax (Appeals) Income Tax Penalty 756,780 A.Y. 2003-2004 10) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the current financial year or in the immediately preceding financial year. 11) On the basis of our examination of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to debenture holders. 12) According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. 13) The Company is not chit fund or a nidhi/mutual benefit fund/society. 14) The Company is not dealing in or trading in shares, securities, debentures and other investments. 15) According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from bank or financial institution. 16) According to the information and explanations given to us, the debentures raised during the year have been applied for the purposes for which they were raised. 17) On the basis of overall examination of the Balance Sheet and Cash Flows of the Company and related information as made available to us, we report that no short-term funds have been utilized for long-term investments. 18) The Company has not made preferential allotment of shares to companies/firms/parties covered in the register maintained under Section 301 of the Act. 19) The Company has created securities for secured debentures issued during the year except pledge of investment (debentures of Cornershop Entertainment Company Private Limited) and assignment of rights under agreement with Taleem Research Foundation for which extension has been granted by the debenture holders. 20) The Company has not raised any money by way of public issue during the year. 21) Based on the audit procedures and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year. For MGB & Co. Chartered Accountants Hitendra Bhandari Partner Membership No.: 107832 Mumbai, June 16, 2009