To
The Members of
GEMINI COMMUNICATION LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of GEMINI COMMUNICATIONS LIMITED
which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Managements Responsibility for the (Standalone) Financial Statements
The Companys Board of Directors is responsible for the matters in section 134(5) of
the Companies Act, 2013 ("the Act") with respect to the preparation of these
financial statements that give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards specified under Section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2016. This
responsibility also includes the maintenance of adequate accounting records in accordance
with the provision of the Act for safeguarding of the assets of the Company and for
preventing and detecting the frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of internal financial control, that
were operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or
error.
Auditors Responsibility
Our responsibility is to express an opinion on these (Standalone) financial statements
based on our audit. We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in the audit report
under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement. An audit involves performing
procedures to obtain audit evidence about the amounts and disclosures in the financial
statements.
The procedures selected depend on the auditors judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal financial control
relevant to the Companys preparation of the financial statements that give true and fair
view in order to design audit procedures that are appropriate in the circumstances. An
audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by Companys Directors, as well as
evaluating the overall presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion on the financial statements
Basis for Qualified Opinion
We draw attention to the following matters in the Notes to the financial statements:
a) Note 23 in the financial statement which indicates that the Company has accumulated
losses and its Net worth has been fully/substantially eroded, the Company has incurred a
net cash loss during the current year and previous year(s) and, the Company current
liabilities exceeded its current assets as at the balance sheet date. These conditions,
along with other matters set forth in Note 23, indicate the existence of a material
uncertainty that cast significant doubt about the Companys ability to continue as a going
concern. However, the financial statements of the Company have been prepared on a going
concern basis for the reasons stated in the said
b) Note 24 to the financial statements which, describes the uncertainty related to the
outcome of the lawsuit filed against the Company the impact on the financial statement
could not be ascertained.
c) Note 25 in the financial statements which indicates a un favorable decree in the
case against Merrill Lynch Limited for conversion on FCCB into unlisted equity share
capital, the financial statements do not include any adjustments that might result from
the outcome of this decree, as the decree was after the Balance Sheet date. As required
Under IND AS 10 "Contingencies and Events Occurring after the Balance Sheet
Date" assets and liabilities should be adjusted for events occurring after balance
sheet date that provides additional evidence to assist the estimation of amounts relating
to conditions existing at the balance sheet date.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the Basis for Qualified
Opinion paragraph above, the aforesaid Standalone financial statements 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, of the state of
affairs of the Company as at 31st March, 2017, and its profit/loss and its cash flows for
the year ended on that date.
a) In the case of the Balance Sheet, of the state of affairs of the Company as at March
31, 2017;
b) In the case of the Statement of Profit and Loss, of the profit 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
as amended, issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, we give in the "Annexure A" a statement on the matters
specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that
3. we have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purpose of our audit;
4. in our opinion proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books;
c. the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account
d. in our opinion, the aforesaid (Standalone) financial statements comply with the
Accounting Standards specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2016.
e. On the basis of written representations received from the directors as on March 31,
2017 taken on record by the Board of Directors, none of the directors is disqualified as
on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the
Act.
f. With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure B".
g. With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2016, in our opinion
and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial
position in its financial statements Refer Note 22 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
|
For V VISWANATHAN & ASSOCIATES |
|
Chartered Accountants |
| Place Chennai |
Firm Registration No-013713S |
| Date 15/04/2017 |
V VISWANATHAN |
|
Membership No. 228990 |
Report on other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) order, 2016 ("the Order"),
issued by the central Government of India in terms of sub-section (11) of section 143 of
Companies Act, 2013, we give in the Annexure a statement on the matters specified in
paragraphs 3 an d4 of the order, to the extent applicable. As required by Section 143(3)
of the Act, we report that:
i. a) The Company has generally maintained proper records showing full particulars
including quantitative details and situation of fixed assets. The Fixed Assets have been
physically verified by the management in a phased manner, designed to cover all the items
over a period of three years, which in our opinion, is reasonable having regard to the
size of the company and nature of its business. Pursuant to the program, a portion of the
fixed asset has been physically verified by the management during the year and no material
discrepancies between the books records and the physical fixed assets have been noticed.
b) The title deeds of immovable properties are held in the name of the company. Except
the cases where SARFASI Act action has been taken by Bank , we are unable to verify all
the title deeds.
c) The Company has physically verified the fixed assets during the year which, in our
opinion, is reasonable having regard to the size of the Company and nature of its assets.
No material discrepancies were noticed on such verification.
ii.The procedures of physical verification of inventories followed by the company are
reasonable and adequate in relation to the size of the company and the nature of its
business. The Company maintaining proper records of inventory. The discrepancies noticed
on verification between the physical stock and the book records are not material.
iii. The company has granted interest free unsecured loans to subsidiary companies,
covered in the register maintained under section 189 of the Companies Act, 2013. The
Outstanding balance is Rs.6094.60 Lakhs. The other clauses are not applicable. In our
opinion and according to the information and explanations given to us, the company has
complied with the provisions of section 185 and 186 of the Companies Act, 2013 In respect
of loans, investments, guarantees, and security.
iv. In my opinion and according to the information and explanations given to me, there
is adequate internal control system commensurate with the size of the company and the
nature of its business with regard to purchase of fixed assets, Inventories and the sale
of services. The activities of the company do not involve purchase of inventory and the
sale of goods. During the course of my audit, I have not observed any continuing failure
to correct major weaknesses in the internal control system.
v. In my opinion and according to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year. Therefore, the
provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules
framed there under are not applicable to the Company. vi. According to the information and
explanations given to us, Rules made by the Central Government for the maintenance of cost
records under Section 148 of the Act, are Not Applicable.
vii. a) The Company is not generally regular in depositing undisputed statutory dues
relating to provident fund, income tax deducted at source, service tax and value added
tax. We are informed that the provisions of employees state insurance, wealth tax, duty
of customs, duty of excise, cess is not applicable to the company. As per the records
produced before us, there were undisputed statutory dues which were outstanding as on 31st
March 2017 for a period over six months from the date of same becoming payable, expect for
Provident Fund, Service Tax, Tax Deducted at Source. The entire list of undisputed
statutory dues could not be ascertained from the company as SARFASI Act action has been
taken.
b) According to the information and explanations given to us, there are no statutory
dues pending in respect of income tax, sales tax, value added tax, service tax, duty of
customs, wealth tax, duty of excise, cess on account of any dispute.
c) According to the information and explanations given to us, no amount is required to
be transferred to investor education and protection fund in accordance with the relevant
provisions of the Companies Act, 2013 and rules made there under. viii. The companys
accumulated losses at the end of the financial year are more than fifty per cent of its
net worth and it has incurred cash losses in this financial year
ix. The Company has not repaid principle amount of Rs. 17037.30 lakhs secured
borrowings from banks and has also not paid interest for the period ranging from more than
3 years Consequently Banks have declared the Assets as NPA. (Non-Performing Assets) and
SARFASI Act action has been taken into action.
x. In my opinion and 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.
xi. In my opinion, the term/project loans were applied for the purpose for which they
were raised. xii. According to information and explanations given to us by the management
which has been relied by us, no fraud on or by the Company has been noticed or reported
during the year.
Xiii. Based upon the audit procedures performed and the information and explanations
given by the management, the company has not raised moneys by way of initial public offer
or further public offer including debt instruments and term Loans. Accordingly, the
provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not
commented upon.
Xiv. Based upon the audit procedures performed and the information and explanations
given by the management, the company has not entered into any non-cash transactions with
directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of
the Order are not applicable to the Company and hence not commented upon.
xv. In our opinion, the company is not required to be registered under section 45 IA of
the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of
the Order are not applicable to the Company and hence not commented upon.
|
For V VISWANATHAN & ASSOCIATES |
|
Chartered Accountants |
| Place Chennai |
Firm Registration No-013713S |
| Date - 15/04/2017 |
V VISWANATHAN |
|
Membership No. 228990 |
Annexure B
"Annexure B" to the Independent Auditors Report of even date on the
Standalone Financial Statements of GEMINI COMMUNICATIONS LIMITED.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013. We have audited the internal financial controls over
financial reporting of GEMINI COMMUNICATIONS LIMITED as of March 31, 2017 in conjunction
with our audit of the standalone financial statements of the Company for the year ended on
that date.
Managements Responsibility for Internal Financial Controls.
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India. These responsibilities include
the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of its business,
including adherence to companys policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under
the Companies Act, 2013.
Auditors Responsibility.
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section
143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal
financial controls, both applicable to an audit of Internal Financial Controls and, both
issued by the Institute of Chartered Accountants of India.
Those Standards and the Guidance Note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether adequate
internal financial controls over financial reporting was established and maintained and if
such controls operated effectively in all material respects. Our audit involves performing
procedures to obtain audit evidence about the adequacy of the internal financial controls
system over financial reporting and their operating effectiveness. Our audit of internal
financial controls over financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk.
The procedures selected depend on the auditors judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or
error. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion on the Companys internal financial controls
system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2017, except non
proper maintenance of books of accounts and due to SARFASI Act action has been taken by
the Banks, based on the internal control over financial reporting criteria established by
the Company considering the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by
the Institute of Chartered Accountants of India
|
For V VISWANATHAN & ASSOCIATES |
|
Chartered Accountants |
|
Firm Registration No-013713S |
| Place Chennai |
V VISWANATHAN |
| Date - 15/04/2017 |
Membership No. 228990 |
+91-9892691696
