southpole securities ltd Auditors report

SOUTHPOLE SECURITIES LIMITED ANNUAL REPORT 2006-2007 AUDITORS REPORT TO THE MEMBERS OF SOUTHPOLE SECURITIES LIMITED 1. We have audited the attached Balance Sheet of Southpole Securities Limited (the Company) as at 31st March, 2007, the Profit and Loss Account and Cash Flow Statement of the Company 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 have conducted our audit in accordance with auditing standards generally accepted in India. These 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 paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to 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 purposes 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, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; d) in our opinion, the Balance Sheet, the Profit and Loss Account and the 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; e) on the basis of written representations received from the directors, as on March 31, 2007 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2006 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956; f) in our opinion and to the best of our information and according to the explanations given to us, the said accounts 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; (i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2007 (ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. For Ashish & Associates Chartered Accountants Ashish Shah Place: Ahmedabad Proprietor Date : 30th June 2007 M. Ship No. 100756 ANNEXURE TO AUDIT REPORT: (Referred to in paragraph 3 of our report of even date): The Annexure referred to in the auditors report to the members of Southpole Securities Limited (the. Company) for the year ended March 31, 2007. We report that: 1. In respect of Fixed Assets: (a) The Company has generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Assets given on lease have been physically verified by the Management in accordance with a regular programme, which in our opinion is reasonable and no material discrepancies between the book records and physical verification were noticed. As per the information and explanation given to us, there is no substantial disposal of fixed assets during the year. 2. In respect of loan granted/taken by the company from the parties listed in the register maintained in pursuance of Section 301 of Companies Act, 1956. (a) The Company has granted unsecured loan to three Companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 210.49 lacs and the year- end balance of the loans granted to such parties was Rs. 210.49 lacs. (b) In our opinion and on the basis of the information given to us, the rate of interest (if any) and other terms anal conditions on which loans have been granted to such Companies listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prejudicial to the interest of the Company. (c) On the basis of information and explanation given to us, the receipt of principal amounts and interest (if any) are also regular. (d) On the basis of information and explanation given to us, in case where the overdue amount of such loans granted is more than Rs. One lacs, the company has taken reasonable steps for the recovery of the principal amount and interest (if any). (e) The Company has taken unsecured loan from two Companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1.68 lacs and the year-end balance of the loans taken from such parties was Rs. 1.68 Lacs. (f) In our opinion and on the basis of the information given to us, the rate of interest (if any) and other terms and conditions on which loans have been taken from such Companies and other parties listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie prejudicial to the interest of the Company. (g) On the basis of information and explanations given to us, the company is generally regular in repaying the principal amount and interest (if any). 3. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of fixed assets, plant and machinery, equipment, and other assets. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls system. 4. According to the information and explanation given to us, the Company has not accepted any deposits as defined under the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the rules framed there under. 5. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business. 6. Statutory and Other Dues: (a) According to the information and explanations given to us, the company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employee State Insurance Fund, Income-tax, Sales-tax, Wealth Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues with the appropriate authority. (b) According to the information and explanations given to us, there are no cases of non-deposit with appropriate authorities of disputed dues in respect of income-tax, sales-tax, excise duty, custom duty, wealth tax, service tax and Cess except Rs. 22.09 lacs disputed Income Tax Demand, for which the company has filled the appeal before CIT/(A)/ITAT. 7. The Company has accumulated losses at the end of the financial year, which are less, then 50% of its net worth and has incurred cash losses in the financial year and in the financial year immediately preceding financial year. 8. To the best of our knowledge 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. 9. The nature of the companys business/activities for the year are such that the requirements of clauses (ii), (v), (viii), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), and (xx) of paragraph 4 of the Order are not applicable to the company. For Ashish & Associates Chartered Accountants Ashish Shah Place: Ahmedabad Proprietor Date : 30th June 2007 M. Ship No. 100756