pentagon global solutions ltd Auditors report

PENTAGON GLOBAL SOLUTIONS LIMITED ANNUAL REPORT 2003-2004 AUDITORS REPORT TO THE SHAREHOLDERS I have audited the attached Balance Sheet of Pentagon Global Solutions Limited as at 30th June 2004 and the Profit and Loss Account for the period ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with auditing standards generally accepted in India. These standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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. I believe that my audit provides a reasonable basis for my opinion. 1. As required by the Manufacturing and Other Companies (Auditors Report) Order 1988, issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, I give in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said Order. 2. Further to my comments in the Annexure referred to in paragraph 1 above: (a) I have obtained all the information and explanations which, to the best of my knowledge and belief, were necessary for the purpose of the audit; (b) In my opinion, proper books of accounts as required bylaw have been kept by the Company so far as appears from my examination of those books; (c) The Balance Sheet and Profit and Loss Account referred to in this Report are in agreement with the books of accounts; (d) In my opinion the Profit & Loss Account and the Balance Sheet comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act. (e) On the basis of written representations received by us from the directors of the Company as at 30th June 2004 and taken on record by the Board of Directors, I report that no director is disqualified from being appointed as director of the Company under clause (g) of subsection (1) of Section 274 of the Companies Act, 1956 (f) In my opinion and to the best of my information and according to the explanations given to me, 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 : i. in the case of Balance Sheet, of the State of affairs of the Company as at 30th June 2004 and ii. in the case of Profit and Loss Account, of the LOSS for the period ended on that date. Place : Chennai K. Paras Chand Galada Date : 30th September 2004 Chartered Accountant ANNEXURE TO THE AUDITORS REPORT Matters referred to in Paragraph 1 of my Report of even date 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification. 2. None of fixed assets have been revalued during the period. 3. The procedures for physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. 4. No material discrepancies have been noticed on physical verification of stocks as compared to the books of record. 5. In my opinion, the valuation of stocks is fair and proper and in accordance with the normally accepted accounting principles. 6. In my opinion there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of stocks and other assets and with regard to the sale of the Course Materials. 7. The Company has not taken any loan from Companies, firms or other parties listed in the Register maintained u/s 301 / 370 B of the Act. 8. The Company has not given any loan to Companies, firms and other parties listed in Register maintained u/s 301/370 B of the Act. 9. The Company has paid advances in the nature of loans to employees who are repaying the same in accordance with the arrangements made with the Company 10. In my opinion and according to the information and explanations given to me, there has been no transaction for purchase of goods and materials and sale of goods, materials and services aggregating to Rs. 50,000 or more in value with parties listed in the Register maintained under S. 301 of the Act. 11. The Company is not a sick Company within the meaning of Sec. 3(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. 12. The Company did not have unserviceable or damaged stocks during the period. 13. In my opinion and according to the information and explanations given to me, the Company has complied with the provisions of Section 58A of the Companies Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public, except that the Company has not submitted the Return of Deposits as on 31st March 2004 within the prescribed time as required under rule 10 of the Deposit Rules. 14. The Company is not a manufacturing, mining ova processing Company, and therefore, does not produce any by products or generate any scrap. 15. In my opinion, the Company has an internal audit system commensurate with its size and the nature of its business. 16. There is a disputed amount of Rs.1,98,33,178/- claimed as Income-tax for the year 2000-01 which has been contested by the Company with the Appellate Authorities. Other than this there are no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty outstanding as at 30th June 2004 for a period of more than 6 months from the date they became payable. 17. According to the information and explanations given to me, no personal expenses of employees or directors have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practices. 18. According to the records of the Company, Provident Fund dues have been regularly deposited with the appropriate authorities. 19. The other items of the aforesaid Order are in my opinion, not applicable in the case of this Company. Place : Chennai K. Paras Chand Galada Date : 30th September 2004 Chartered Accountant