Fame India Ltd Merged Auditor Reports

FAME INDIA LIMITED ANNUAL REPORT 2011-2012 AUDITORS REPORT 1. We have audited the attached Balance Sheet of Fame India Limited (the Company) as at 31 March 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 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 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 paragraph 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to above, we report that: (i) 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. (ii) 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. (iii) 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. (iv) 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. (v) On the basis of written representations received from the directors, as on 31 March 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. (vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, 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: a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2012; b) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For Patankar & Associates Chartered Accountants Firm Reg. No. 107628W (Sanjay Agrawal) Partner Mem. No. 049051 Place: Pune Dated: 24 May 2012 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT TO THE MEMBERS OF FAME INDIA LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2012. In terms of the Companies (Auditors Report) Order, 2003, on the basis of information and explanations given to us and the books and records examined by us in the normal course of audit and such checks as we considered appropriate, to the best of our knowledge and belief, we state as under: 1. The Company has maintained proper records showing full particulars including situation of fixed assets. However, the Company is in the process of updating the quantitative details. The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies have been noticed on such verification. Fixed assets disposed of during the year were not substantial and therefore do not affect the going concern assumption. 2. Inventories were physically verified by the management at reasonable intervals during the year. In our opinion, 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. In our opinion, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of inventories as compared to book records. 3. The Company has taken loan from its holding company which is covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 120,000,000 and the loan is repaid during the year. In our opinion, the rate of interest and other terms and conditions on which this loan was taken are not prima-facie prejudicial to the interest of the Company. The Company was regular in payment of interest. The Company has given interest free advance to one its wholly owned subsidiary company which is covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year-end balance is Rs. 9,384,585. In our opinion, the terms and conditions on which this loan was granted are not prima-facie prejudicial to the interest of the Company. In the opinion of the management the same may not be recoverable and hence the entire amount has been provided for as on 31 March 2012. 4. In our opinion, there are generally adequate internal control procedures commensurate with the size of the Company and nature of its business for purchase of inventory and fixed assets and for sales and services. During the course of our audit, no major weakness has been noticed in the internal control systems in respect of these areas. 5. In our opinion, there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956. 6. 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 and hence the provisions of clause 4(vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. 7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 8. The Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for activities of the Company. 9. The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Cess, Entertainment Tax and other material statutory dues applicable to it. Provisions of Excise Duty are not applicable to the Company. No undisputed amounts payable in respect of Income-tax, Wealth-tax, Sales- tax, Service tax, Customs Duty, Excise Duty and Cess were in arrears, as at the end of the year, for a period of more than six months from the date they became payable. There are no dues of Income-tax, Sales-tax, Wealth-tax, Service-tax, Customs Duty, Excise Duty or Cess, which have not been deposited with the appropriate authorities on account of disputes, except the following: Name of the Nature of Dues Amount Period to which Forum where Statute Rs. the amount dispute is related pending Income-tax Act TDS on certain 1,131,839 Financial year Commissioner of payments 2009-2010, 2010- Income-tax 2011 and 2011- (Appeals), 2012 (upto Mumbai. December 2011) In respect of levy of service tax on renting of immovable properties, see note no. 31 in the notes to the financial statements. 10. The Companys accumulated losses as at the end of the financial year are less than fifty percent of its net worth. The Company has not incurred cash losses during the current year and in the immediately preceding financial year. 11. The Company has not defaulted in repayment of dues to banks. 12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities. 13. 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. 14. The Company is not dealing or trading in shares, securities, debentures and other investments and hence the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. 15. The Company has not given any guarantee for loans taken by others from banks or financial institution during the year. 16. The term loans taken by the Company have been applied for the purpose for which they were raised. 17. The funds raised on short term basis have not been used for long term investment by the Company. 18. During the year the Company has not made any preferential allotment of shares to parties covered in the register maintained under section 30I of the Companies Act, 1956. 19. There are no debentures issued and outstanding during the year and hence the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. 20. We have verified the end use of money raised during the year through the rights issue of equity shares as disclosed in note no. 32 to the financial statements. 21. No fraud on or by the Company was noticed or reported during the course of our audit. For Patankar & Associates, Chartered Accountants, Firm Reg. No. 107628W (Sanjay Agrawal) Partner Mem. No. 049051 Place: Pune Dated: 24 May 2012