1. We have audited the attached Balance Sheet of M/s Everonn Education
Limited as at 31st March 2012, the Statement of Profit and Loss 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
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the annexure a statement on the
matters specified in paragraphs 4 of the said order to the extent they
are applicable to the company.
4. Further to our comments in the annexure referred to in Paragraph 3
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 purpose of our
b) In our opinion, proper books of account as required by law have been
kept by the company, so far as it appears from our examination of such
c) The Balance Sheet, the Statement of Profit and loss and the Cash
Flow statement referred to in this report are in agreement with the
books of accounts of the Company.
d) In our opinion, the Balance Sheet, the Statement of Profit and loss
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 with the exception of Accounting Standard 28 on
Impairment of Assets, Accounting Standard -13 on Investments.
e) Attention is invited to the following:
i) Note No.2.41 of Financial Statements regarding non Provision of
Diminution in Value of Investments in Subsidiaries which have incurred
losses and whose Networth has been partially eroded, for the reasons
ii) Note No.2.48 of Financial Statements regarding non ascertaining
complete particulars (including interest payable) on dues to Micro,
Small and Medium Enterprises if any under MSMED Act, 2006, provision if
any to be made is not ascertainable at this stage.
iii) Note No.2.49 of Financial Statements with regard to non receipt of
Confirmation of Balance from Debtors including Dues from Government
Companies, Creditors, Loans and Advances and Other Liabilities. These
amounts are subject to adjustments if any, after reconciliation and
identification of doubtful debts / advances, which are not
ascertainable at this stage.
iv) Note No.2.50 of Financial Statements with regard to non provision
of impairment loss pending completion of assessment. The impact if any
on the financial statements is not ascertainable at this stage.
In all the cases referred to above, effect on financial statements is
not ascertainable. We do not express independent opinion on these
f) On the basis of written representations received from the directors,
as on 31st March 2012 and taken on record by the Board of Directors, we
report that none of the director is disqualified as on 31st march 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act 1956.
5. Subject to our comments vide para 4(e) above, in our opinion and to
the best of our information and according to the explanations given to
us, the said financial statements, read together with the notes thereon
and schedules attached thereto, give the information required by the
Companies Act 1956, in the manner so required and present 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 31st March 2012;
ii) in the case of the Statement of Profit and Loss, of the Loss for
the year ended on that date; and
iii) in the case of the Cash flow statement, of the Cash flows for the
year ended on that date;
ANNEXURE TO THE AUDITORS'' REPORT
(Referred to in paragraph 3 of our report of even date)
i. (a) The Company is maintaining records showing full particulars,
including quantitative details and situation of fixed assets. However
comprehensive description of assets, their current location and
accumulated depreciation needs to be updated in the asset records.
(b) The Company has not carried out physical verification of fixed
assets during the year. The company does not have a regular program of
physical verification of its fixed assets. In our opinion the
periodicity of physical verification is not reasonable. Fixed Assets
lying with third parties are also subject to confirmation.
(c) The management has also represented that no substantial part of
fixed assets have been disposed off during the year, to affect the
ii. Having regard to the nature of the Company''s business /
activities, clause 4(ii) of CARO is not applicable to the Company.
There is no inventory being held by the company.
iii. (a) According to the information and explanations given to us,
during the period under review, the company has availed loans from
subsidiaries listed in the Register maintained under section 301 of the
Companies Act, 1956, the Outstanding Balance as on 31st March 2012 is
Rs.17,84,170 (''000) and the maximum amount involved during the period
is Rs.20,33,652 (''000). There are no written terms and conditions for
repayment and interest on loans. Hence the availment of loan is prima
facie not prejudicial to the interest of the company. In respect of the
said loans, the same are repayable on demand and there are no overdue
(b) According to the information and explanations given to us, during
the period under review, the company has granted loan to Subsidiaries
listed in the Register maintained under Section 301 of the Companies
Act, 1956. The outstanding balance as on 31st March 2012 is
Rs.17,12,407 (''000) and the maximum amount involved during the period
is Rs.19,49,917 (''000.) There are no stipulated terms and condition on
either the interest rate or the repayment schedule. However the rate of
interest and the interest free nature where applicable and other terms
and conditions of such loans are not, prima facie, prejudicial to the
interest of the company. The interest rate charged by the company is
lesser than the Standard Rate as specified by the Reserve Bank of
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are customized and are of special nature and suitable
alternative sources are not readily available for obtaining comparable
quotations. Additional strengthening of the internal control procedures
with regard to purchase of fixed assets is recommended so as to be
commensurate with the current size of the Company and nature of its
business. However, the management has represented that it is taking
reasonable steps to correct the said weaknesses and we have not
observed any other continuing failure to correct major weaknesses in
v. According to the informations and explanations given to us, we are
of the opinion that transactions that need to be entered in the
register maintained under Section 301 of the Companies Act, 1956 have
been generally so entered.
vi. The company has not accepted deposits from the public, under the
directives issued by the Reserve Bank of India and the provisions of
sections 58A and 58AA of the Act and the rules framed there under.
vii. According to the informations and explanations given to us the
company has Internal audit system commensurate with the size and nature
of the business. The Scope of Internal Audit needs to be enhanced
considering the risk assessments carriedout by the Company. The
Internal Audit System same needs to be adequately strengthened with
regard to scope and coverage and the volume of transactions.
viii. The 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 information and explanations given to us, the
company has been depositing undisputed statutory dues with few delays
including Employees Provident Fund, Employees'' State Insurance,
Investor Protection fund, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Income Tax, TDS, Professional Tax and any other
statutory dues with the appropriate authorities during the year.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, service tax etc
were in arrears as at 31.03.2012 for a period of more than six months
from the date they became payable excepting;
Particulars Amount (Rs. in ''000)
Income Tax for the AY 2010-11 7845.26
Income Tax for the AY 2011-12 1,61,042.50
Professional Tax for the Earlier Years 1018.93
Professional Tax for the Half Year
Ended 30.09.2011 221.14
Service Tax Interest for the
FY 2009-10 10,314.15
Service Tax Interest for the FY 2010-11 1,579.58
Service Tax Interest for the FY 2011-12 67.12
(c) According to the information and explanations made available to us
and on the basis of examination of records of the Company, the dues of
Excise Duty, Sales Tax and Income Tax as at 31st March 2012 which have
not been deposited on account of any dispute are as follows.
Name of the
Statute Period to
which Forum where Amount
the Dues) the amount
relates matter is
pending (Rs. in ''000)
for AY 2009-10 FY 2008-09 CIT(A) 2,13,046
Since FY 2006-07 Since FY 2005-06 DGCEI 9,400
x. The Company has no accumulated losses at the end of the year and
has not sustained cash losses during the current financial year covered
under our audit, and also in the immediately preceding financial year.
xi. As per the information and explanations made available to us, the
company has not defaulted in repayment of dues to financial
institutions or banks.
xii. According to the information and explanations given to us, the
company has not granted any loan or advance on the basis of Security by
way of pledge of shares, Debentures and other securities.
xiii. The provisions of Clause 4(xiii) of the Order relating to Chit
Funds / Nidhi 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.
xv. According to the information and explanations given to us, the
Company has given guarantee towards loans taken by others from banks
and financial institutions for which no counter guarantee has been
obtained from the parties.
xvi. According to the information and explanations given to us, the
Company has used the Term Loan availed during the current year for the
purpose for which it was availed.
xvii. According to the Cash flow statement and other records examined
by us and based on the information and explanations given to us, on an
overall basis, funds raised on short term basis have not been used for
Long term Investment.
xviii. According to the information and explanations given to us, the
Company has during the year made allotment of shares to Debenture
holders and other parties on preferential basis. The issue price of
shares so allotted has been determined in accordance to SEBI (Issue of
Capital and Disclosure Requirements) Regulations, 2009. Hence, it is
not prejudicial to the interests of the company.
xix. The Company has not issued debentures during the year and
therefore the question of creating security or charge in respect
thereof does not arise.
xx. The Company has not raised any funds by means of public issue
during the current year and hence the question of disclosing the
end-use of money raised by way of public issue does not arise.
xxi. Based on the audit procedures performed and on the basis of
representation obtained from the management, we report that no instance
of fraud on or by the company have been noted or reported by the
management during the year.
For M/s. P. Chandrasekar
Place : Bangalore Partner
Date : 13th August 2012 Membership No.: 026037