1. We have audited the attached Balance Sheet of Educomp Solutions
Limited (''the Company'') as at March 31, 2011 and also the Profit and
Loss account and the cash flow statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company''s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those 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 (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004,
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of ''The Companies Act, 1956'' of India (the ''Act'') 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, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the paragraph 3 above, we report that:
i. 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;
ii. 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;
iii. The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, profit and loss account and 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.
v. On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
vi. 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;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2011;
b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure to Auditor''s Report
[Referred to in paragraph 3 of the Auditors'' Report of even date to the
members of Educomp Solutions Limited on the Financial Statements for
the year ended 31st March 2011]
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The company has a phased program of physical verification to cover
all its assets over a period of 3 years, which in our opinion is
reasonable having regard to the size of the company and nature of its
assets. Some of the fixed assets of the company were physically
verified by the management during the year and as informed no material
discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the company during the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification carried
out at the end of the year.
(iii) (a) As informed, the Company has not granted any loans, secured
or unsecured to companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly clauses (iii)(b), (iii)(c) and (iii)(d) of paragraph 4 of
the Order are not applicable to the Company.
(b) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956.
Accordingly clauses (iii)(f) and (iii)(g) of paragraph 4 of the Order
are not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct weakness
in internal control system of the company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Companies Act, 1956 that need to be
entered into the register maintained under section 301 have been so
entered.
(b) We are unable to comment if the transactions made with the parties
listed in section 301 of the Companies Act, 1956, in pursuance of such
contracts or arrangements exceeding value of Rupees Five Lakhs have
been entered into during the financial year at prices which are
reasonable having regard to the prevailing market prices at the
relevant time as there are no market prices comparable to those
transactions, however are considered to be proprietary in nature as
explained by the management of the company.
(vi) The company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
there under.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) The Central Government of India has not prescribed the
maintenance of cost records under clause (d) of sub-section (1) of
Section 209 of the Act for any of the products/business activities of
the company.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees'' state
insurance, sales-tax, wealth-tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to it.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) According to the information and explanation given to us, there are
no dues of wealth tax, service tax, customs duty, excise duty and cess
which have not been deposited on account of any dispute. According to
the information and explanation given to us, disputed sales tax and
income tax that have not been deposited are as follows:
Name of Statue Nature of
Dues Amount
Disputed Amount paid Period to
which
relates Forum where
the
(Rs.) (Rs.) dispute is
pending
Uttar Pradesh
Value VAT 21,64,000 9,73,800 2009-10 Commissioner
Uttar
Added Tax Pradesh
Income Tax
Act, 1961 Income
Tax 5,85,91,285 1,24,00,000 2007-08 CIT(A)
Total 6,07,55,285 1,33,73,800
(x) In our opinion and according to the information and explanations
given to us, the company does not have accumulated losses. Further, the
company has not incurred cash losses during the financial year covered
by our audit and the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution and banks.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the company.
(xvi) In our opinion, the term loans have been applied for the purpose
for which the loans were raised.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
company has not made preferential allotment of shares to parties and
companies covered in the register maintained under section 301 of the
Act.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) During the year covered by our audit report, the company has not
raised any money by way of public issue.
(xxi) 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
fraud on or by the company, noticed or reported during the year, nor
have we been informed of such case by the management.
For Anupam Bansal & Co. For Haribhakti & Co.
Chartered Accountants Chartered Accountants
Firm No: 009864N FRN No.103523W
Anupam Bansal Raj Kumar Agarwal
Proprietor Partner
M. No.: F-87699 Membership No.74715
Place: Gurgaon
Date: May 30, 2011
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