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TO THE MEMBERS,
M/S HELIOS AND MATHESON INFORMATION TECHNOLOGY LIMITED
Report on financial statements
we have audited the accompanying financial statements of HELIOS AND MATHESON INFORMATION TECHNOLOGY LTD (THE COMPANY), which comprise the balance sheet as at September 30, 2013 and the statement of profit and loss and cash flow statement for the year ended and a summary of significant accounting policies and other explanatory information.
Managements responsibility for the financial statements
management is responsible for 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 standards referred to in subsection (3c) of section 211 of the companies act, 1956 ("the act"). this responsibility includes the design, implementation and maintenance of internal control 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.
our responsibility is to express an opinion on these financial statements based on our audit. we conducted our audit in accordance with the standards on auditing issued by the institute of chartered accountants of india. 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 control relevant to the companys preparation and fair presentation of the financial statements 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 management, 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.
in our opinion and to the best of our information and according to the explanations given to us, the 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:
a) in the case of the balance sheet, of the state of affairs of the company as at September 30, 2013;
b) in the case of the profit and loss account, of the profit for the period ended on that date; and
c) in the case of the cash flow statement, of the cash flows for the period ended on that date.
Report on other legal and regulatory requirements:
1. as required by the companies (auditors report) order, 2003 (the order) issued by the central government of india in terms of sub-section (4a) of section 227 of the act, we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the order.
2. as required by section 227(3) of the act, 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, statement of profit and loss, and cash flow statement dealt with by this report are in agreement with the books of account.
d) in our opinion, the balance sheet, statement of profit and loss and cash flow statement comply with the accounting standards referred to in subsection (3c) of section 211 of the companies act, 1956;
e) on the basis of written representations received from the directors as on September 30, 2013 and taken on record by the board of directors, none of the directors is disqualified as on September 30, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the companies act, 1956.
f) since the central government has not issued any notification as to the rate at which the cess is to be paid under section 441a of the companies act, 1956 nor has it issued any rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.
|for venkatesh & co|
|place : chennai||ca.v.dasaraty|
|date : november 29, 2013||partner|
ANNEXURE TO INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under the heading of "report on other legal and regulatory requirements" section of our report of even date)
As required by the companies (auditors report) order, 2003 issued by the central government in terms of section 227 (4A) of the companies act, 1956 and on the basis of such checks of the books and records of the company, as we considered appropriate and according to the information and explanations given to us during the course of the audit, we report that,
1. a. the company is maintaining proper records showing full particulars, including quantitative details and situations of fixed assets.
b. the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.
c. no fixed assets have been disposed off during the year and the going concern concept is not altered.
2. the companys nature of operations does not require it to hold an inventory and accordingly clause 4 (ii) of the companies auditors report order 2003 is not applicable.
3. a. the company had not taken loan covered in the register maintained u/s.301 of the companies act, 1956.
b. the company has granted interest free advances to three of its subsidiaries covered in the register maintained u/s 301 of the act without any stipulation as to repayment. the maximum amount of such loan during the year was Rs. 78,32,46,155/- and the year-end balance was Rs. 64,48,13,548/-
c. in our opinion the terms and conditions on which loans have been taken from / granted to companies listed in the register maintained under section 301 are not, prima facie, prejudicial to the interest of the company.
d. there is no overdue amount in respect of advances granted to companies listed in the register maintained under section 301 of the companies act,1956
4. in our opinion and according to the information and explanation given to us there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of fixed assets and for the sale of services. no instances of continuing failure to correct major weakness in internal control were noticed by us during the course of audit.
5. a. in respect of contractual arrangements entered in the register maintained in pursuance of section 301 of the companies act and to the best of our knowledge and belief and according to the information and explanation given to us, where each of such transaction made in pursuance of contract or arrangement, is in excess of rs.5 lacs in respect of each party, transaction have been made at prices which are prima facie reasonable having regard to prevailing market prices at the relevant time.
b. in respect of sale of services to parties listed in the register maintained u/s.301 of the companies act, 1956 these transactions have been made at prices which are prima facie reasonable having regard to prevailing market prices at the relevant time.
6. the company has accepted deposits from public. the provision of section 58a & 58aa of the companies act, 1956 and the rules made there under are complied with.
7. in our opinion the company has an internal audit system commensurate to the size of the company and the nature of business.
8. the central government has not prescribed maintenance of any costing records for the services of the company under section 209(1)(d) of the companies act, 1956.
9. a. according to the information and explanation given to us, and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, vat, customs duty, excise duty, cess and other material statutory dues as applicable, have generally been regularly deposited by the company during the year with appropriate authorities. according to the information and explanation given to us, there are no arrears of outstanding statutory dues as mentioned above as at 30th September, 2013 for a period of more than 6 months from the date they became payable.
b. according to the information and explanations produced to us, there are no dues in respect of sales tax, customs duty, excise duty and cess that have not been deposited with appropriate authorities on account of any dispute.
a. in respect of assessment year 2006-2007, the company has been served with a demand of Rs. 1,94,98,583/- against which the company has gone on appeal to the commissioner of income tax (appeals) and the company has paid Rs . 25,00,000/- against the demand.
b. in respect of assessment year 2008-09, the company has been served with a demand of Rs. 15,94,66,361/- against which the company has gone on appeal to the commissioner of income tax (appeals) and the company has paid Rs . 3,67,00,000/- against the demand.
c. in respect of assessment year 2009-2010, the company has been served with a demand of Rs. 2,47,10,740/- against which the company has gone on appeal to the commissioner of income tax (appeals) and the company has paid Rs . 1,15,00,000/- against the demand.
d. in respect assessment year 2010-11, the company has been served with a demand of Rs. 74,84,380/- against which the company has gone on appeal to the commissioner of income tax (appeals) and the company has paid Rs. 30,00,000/- against the demand.
e. the company has filed an appeal before commissioner of central excise (appeals) disputing the service tax levy or demand of Rs. 3,93,720 and the company has paid under protest of Rs. 1,90,000/- towards demand.
10. the company has no accumulated losses at the end of 30th September, 2013, the company has not incurred cash losses during the financial year on that date and in the immediately preceding financial year.
11. the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.
12. the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. hence we do not comment on the adequacies of securities and documents.
13. the company is not a nidhi or mutual benefit fund or a society.
14. the company is not dealing or trading in shares, securities, debentures and other investments and therefore, we do not comment on the maintenance of proper records.
15. the company has not given any guarantee for loans taken by others from bank or financial institutions except in the case of guarantee given to its subsidiary company, the terms and conditions, whereof, in our opinion are not prejudicial to the interest of the company.
16. the company has not obtained term loans during the year and as per the records of the company .
17. as per the records of the company funds raised on short term basis were not used for long term investments and vice versa.
18. during the year the company has allotted 25,00,000 fully paid up equity shares against convertible warrants to the promoters after receipt of the remaining 75% of allotment money of Rs. 5,48,25,000 in terms of sebi guidelines on preferential allotment .
19. no debentures were issued by the company. hence we have nothing to comment on the security or charges created on debentures.
20. no funds were raised from public issues during the year.
21. during the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us we have neither come across any instance of significant fraud on or by the company, noticed or reported during the year nor have we been informed of such case by the management.
|for venkatesh & co|
|place : chennai||ca. v.dasaraty|
|date : november 29, 2013||partner|