1. We have audited the attached Balance Sheet of ESSKAY TELECOM
LIMITED as at 31st March, 2007 and also the Profit & Loss Account and
the Cash Flow Statement 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 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 misstatements. 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 statements
pres- entation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2005
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 in paragraphs 4 and 5 of the said
4. Further to our comments in the annexure referred to above, we
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
b) In our opinion, proper books of account as required by law have been
kept by the Com- pany, so far as appears from our examination of those
c) The Balance Sheet and Profit and Loss account dealt with by this
report are in agreement with the books of account;
d) 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;
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 of the Company is disqualified as on
March 31, 2007 from being appointed as director in terms of clause (g)
of sub-section (1) of section 274 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 read together with
notes thereon 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
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 case of the Cash Flow Statement, of the Cash Flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Annexure referred to in paragraph 3 of the Auditors Report to the
Members of Esskay Telecom Ltd. on the accounts for the year ended March
(i) . (a) The company has maintained proper records to show full
particulars, including quantitative details and situation of its fixed
(b) We have been informed that the fixed assets of the company are
physically verified by the management at reasonable intervals and the
procedure of such verification, in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Discrepancies noticed on such verification, which were not material,
have been properly dealt with in the books of account;
(c) No Substantial part of Fixed Assets has been disposed off by the
company during the year under review.
(ii) (a) Physical verification of inventory (Shares & Securities) has
been conducted at reasonable intervals by the management during the
(b) In our opinion, 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 has maintained proper records of inventory and
discrepancies noticed on physical verification, which were not
material, have been properly dealt with in the books of account;
(iii) (a) The company has not granted unsecured/secured loans to
companies, firms or other parties covered in the register maintained
under section 301 of the Act and accordingly paragraphs iii (b), (c)
and (d) are not applicable
(b) The company has not taken any secured/unsecured loan from
companies, firms or other parties covered in the register maintained
under section 301 of the Act and accordingly paragraphs iii (f) and (g)
of the Order are not applicable.
(iv) 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 the purchase of
inventory and fixed assets and for the sale of goods and services.
During the course of our audit, no major weakness has been noticed in
the underlying internal controls.
(v) (a) According to the information and explanations given to us, the
particulars of contracts or arrangements that need to be entered into a
register in pursuance of section 301 of the Act have been duly entered;
(b) Aforesaid transactions have been made at prices which are
reasonable having regard to the prevailing market prices at the
(vi) The company has not accepted any deposits under the provisions of
section 58A and 58AA or any other relevant provisions of the Act and
the rules framed there under.
(vii) The company has an internal audit system commensurate with its
size and nature of its business;
(viii) Maintenance of cost records has not been prescribed by the
Central Government under clause (d) of sub-section (1) of section 209
of the Act.
(ix) (a) According to the books and records as produced and examined by
us in accordance with generally accepted auditing practices in India
and also based on Management representations, undisputed statutory dues
in respect of Provident Fund, Employees State Insurance dues, Investor
Education and Protection Fund, Income Tax, Wealth Tax, Service Tax,
Sales Tax, Custom Duty, Excise duty, Cess and other material statutory
dues have generally been regularly deposited by the company during the
year with appropriate authorities. There are no undisputed statutory
dues as referred to above as at 31 st March, 2007 outstanding for a
period of more than six months from the date they became payable.
(b) According to the records of the company and information and
explanations given to us, there are no dues of Sales Tax, Income Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess, which have
not been deposited on account of any dispute.
(x) The company has no accumulated losses as at 31 st March, 2007, and
it has not incurred any cash loss during the financial year ended on
that date or in the immediately preceding financial year.
(xi) According to the records of the company, it has not defaulted in
repayment of its dues to any financial institution or bank or to
debenture holders as at the balance sheet date.
(xii) According to the information and explanations given to us, the
company has not granted any loans or advances on the basis of security
by way of pledge of shares, debentures and other investments.
(xiii) In our opinion, considering the nature of activities carried on
by the company during the year, the provisions of any special statute
applicable to chit fund/nidhi/mutual benefit fund/societies are not
applicable to it.
(xiv) The Company is maintaining proper records for purchases of
shares, securities, debentures and other investments and timely entries
have been made therein. The Shares, securities, debentures and other
investments have been held by the company in its own name except to the
extent, exemption has been granted under section 49 of the Companies
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) We have been informed by the management that no term loans have
been raised during the year.
(xvii) According to information and explanations given to us by the
management the funds raised on short-term basis have not been used for
(xviii)The company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Act.
(xix) The company has not issued any debentures.
(xx) The company has not raised any money through a public issue during
(xxi) Based upon the audit procedure performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our audit
for the year ended 31 st March, 2007.
For A. K. BASU&CO.
(A. K. BASU)
Place : Kolkata Proprietor
Dated : 30th June, 2007 Membership No. 5887