Teledata Technology Solutions Ltd Auditor Reports

TELEDATA TECHNOLOGY SOLUTIONS LIMITED ANNUAL REPORT 2010-2011 AUDITORS REPORT To The Members of Teledata Technology Solutions Limited We have audited the attached Balance Sheet of Teledata Technology Solutions Limited (the Company) as at March 31,2011, and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date. 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. 1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance 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 principle used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 2. 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 and on the basis of such checks we considered appropriate, and according to the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said Order to the extent applicable to the company. 3. Further to our opinion comments in the annexure referred to in paragraph (2) above, and subject to:- a) Note No. 2(b) of schedule P regarding compliance of filing necessary forms with Registrar of Companies for increase in authorized capital during the year 2009-10; b) Note No. 18 in Schedule P regarding pending allotment of Shares of Rs. 6334.98 Lakhs shown under SAMPA in subsidiaries for over three years; 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 accounts as required by law have been kept by the Company so far as appear from our examinations of those books and proper return adequate for the purpose of audit have been received from the branches not visited by us.; c) the Balance Sheet and the Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts; d) in our opinion, the Balance Sheet, Profit and Loss Accounts and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of Companies Act, 1956. e) on the basis of written representations received from the directors, as on 31st March, 2011, and taken on record by the Board of Directors of the Company, we report that none of the directors is disqualified as on 31 st March, 2011 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956. 4. In our opinion and to the best of our information and according to the explanation given to us, the accounts read together with the notes thereon give a true and fair view in conformity with the accounting principles generally accepted in India:- a) in the case of Balance Sheet, of the state of affairs of the Company as at March 31,2011; b) in the case of Profit and Loss account, of the loss for the year ended on that date; and c) in the case of Cash Flow Statement, of the cash flow of the year ended on that date. For S Ramachandran & Co., Chartered Accountants Firm No. 006775S Ramachandran S Partner Membership No: 18355 Place : Chennai Date : 05-09-2011. ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph (2) of our report of even date) 1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information b) The fixed assets of the Company have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and nature of its assets. c) The Company during the year has not disposed any of its fixed assets 2. In our opinion the valuation and maintenance of records of inventories is not applicable to the present activities of the company. Therefore, clause (ii) of paragraph 4 of the order is not applicable to the company. 3. (A) a. According to the information and explanation given to us, the company has granted interest free unsecured loans to 5 parties covered in the register maintained under section 301 of the companies act, 1956. The maximum balance outstanding during the year was Rs.4322.72 Lakhs and the year end balance of the loan was Rs.3992.41 Lakhs. b. As explained to us by the management the other terms and conditions of the above said loans are not prejudicial to the interest of the company c. The principal amount has notfallen due in this year as the same is payable on demand. (B) a. According to the information and explanations given to us, the company has taken interest free unsecured loans from 3 parties covered in the registered maintained under section 301 of the companies act, 1956. The maximum balance outstanding during the year was Rs.71.61 lakhs and the balance outstanding during the year was Rs.71.55 lakhs. b. As explained to us by the management the other terms and conditions of the above said loans are not prejudicial to the interest of the company c. The principle amount has not fallen due for repayment. 4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of business. 5. a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into in the register maintained under section 301 of the companies act, 1956 have been so entered. b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under section section 301 of the companies act, 1956 aggregating during the year to Rs.500,000/- or more in respect of any party during the year have been made at prices which in the opinion of the management are reasonable having regard to prevailing market prices at relevant time. This being technical matter we have relied on management assessment. 6. In our opinion and according to the information and explanations given to us, the company has not accepted deposits from public as per provisions of section 58A and 58AA or any other relevant provisions of companies act, 1956. Accordingly, the provisions of clause 4(vi) of the companies (Auditors Report) order, 2003 is not applicable to the company. There are no orders from the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any other Tribunal. 7. The company does not have any internal audit. However, the internal control that exists is commensurate with the size and operation of the company. 8. The central government has not prescribed maintenance of cost records u/s 209(1)(d) of the companies act, 1956 for the company. 9. a. According to the information and explanations given to us, undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other statutory dues have not been regularly deposited with the appropriate authorities b. According to the information and explanations given to us, the company is not regular in depositing undisputed statutory dues in respect of income tax, sale tax, wealth tax, service tax, customs duty, excise duty, cess were in arrears, as at March 31,2011 for the period of more than six months from the date they became payable. Statement of Arrears of statutory dues outstanding for more than 6 months is given below: (Rs. in lakhs) Name of A B C D E the Statute IT/TDS 6.69 July-Sep10 31.05.2011 6.69 NIL Provident 4.16 Aug & Sep10 - - 4.16 Fund A - Amount B - Period to which the amount relates C - Date of Payment D - Amount Paid E - Balance Payable c. According to the information and explanations given to us, there are no dues of sales tax, wealth tax, service tax, customs duty and excise duty/cess which have not been deposited on account of any dispute. 10. Based on the audit procedures and according to the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institutions or banks during the year. 11. The company has no accumulated losses at the end of the financial year and has incurred cash loss during the financial year under Audit and also incurred cash loss in the immediate preceding financial year. 12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion, the company is not a chit fund or a Nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the companies (Auditors Report) orders 2003 is not applicable to the company. 14. The company has not dealt or traded in shares, securities, debentures or other investments during the year. All securities and other investments have been held by the company in its own name. 15. As per information and explanations given to us, the company has given corporate guarantees which in our opinion are not prima facie prejudicial to the interest of the company. 16. In our opinion and according to the information and explanations given to us, the company has availed working capital loan from banks and portion of the amount was utilized for purpose other than working capital. 17. In our opinion and according to the information and explanations given to us, and on overall examination of balance sheet of the company, we are of the opinion that, no funds raised on short-term basis, have been used for long-term investments. 18. The company has not made preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. 19. In our opinion and according to the information and explanations given to us, the company has not issued any secured debentures during the period covered under our report. Accordingly provisions of clause 4(xix) of the companies (Auditors Report) Order, 2003 are not applicable to the company. 20. The company has raised money by way of Global Depository Receipts during the previous financial year. The management has disclosed the end use of money raised by the said GDR Issue (Refer Note No.2 (a) on Schedule P and the same has been verified by us. 21. Based on the audit procedures performed and information and explanations given by the management, we report no material fraud on or by the company has been noticed or reported during the course of audit. For S Ramachandran & Co., Chartered Accountants Firm No. 006775S Ramachandran S Partner Membership No: 18355 Place : Chennai Date : 05-09-2011.