We have audited the attached Balance Sheet of Fomento Resorts and
Hotels Ltd, as at 31st March, 2012, and also the Profit and Loss
Statement and the Cash Flow Statement for the year ended on that date
annexed thereto. These Financial Statements are the re- sponsibility of
the Company''s 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 ac- cepted 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 as-
sessing the accounting principles used and significant estimates made
by Manage- ment, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
2. As required by the Companies (Auditor''s Report) Order, 2003, as
amended (''the order''), 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 Order.
3 Further to our comments in the Annexure referred to in paragraph 2
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
(b) In our opinion, proper books of account as required by law have
been kept by the Convoy so far as appears from our examination of those
(c) The Balance Sheet, Profit and Loss Statement and Cash Flow
Statement dealt with by this report are in agreement with the books of
(d) In our opinion, the Balance Sheet, Profit and Loss Statement and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards re- ferred 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 31st March, 2012 and taken on record by the Board of
Directors, we report that none of the Directors 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 Compa- nies 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 informa- tion 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;
(1) in the case of the Balance Sheet, of the State of affairs of the
Company as at 31st March, 2012;
(2) in the case of the Profit and Loss Statement, of the profit for the
year ended on that date; and
(3) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
STATEMENT REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE TO THE
SHAREHOLDERS OF FOMENTO RESORTS AND HOTELS LIMITED
I. (a) The Company has maintained proper records showing full
particulars including quan- titative details and situation of fixed
(b) As explained to us considering the nature of fixed assets, the same
have been physi- cally verified by the Management at reasonable
intervals during the year which in our opinion is reasonable. No
material discrepancies were noticed on such verification.
(c) During the year no substantial part of fixed assets have been
disposed off by the Company. Therefore, the provisions of clause 1 (c)
of the aforesaid Order, in our opinion, are not applicable to the
II (a) The inventory has been physically verified by the Management
during the year. In our
opinion, the frequency of verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventories 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. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
III (a) The Company has not granted any loans secured or unsecured to
or other parties covered in the register maintained under Section 301
of the Act.
(b) Since the Company has not granted any loans as stated in paragraph
III (a) above, Clause iii(b) to clause iii(d) of the order are not
(c) The Company has taken interest free unsecured loans amounting to
Rs. 1123.91 lakhs (Maximum amount outstanding during the year
Rs.1123.91 lakhs) from two Companies listed in the register maintained
under section 301 of the Companies Act, 1956.
(d) Since the loans taken are interest free and without stipulation as
to their repayment are prima facie not prejudicial to the interest of
(e) In view of our comment in paragraph III (d) above, clause III (f) &
(g) of the order is not applicable.
IV In our opinion and according to the information and explanations
given to us, there is 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. Further during the course of our audit, we have
neither come across nor have we been informed of any continuing failure
to correct major weak- nesses in internal control system.
V (a) To the best of our knowledge and belief and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements that need to be entered in
the register maintained under Section 301 of the Companies Act, 1956
have been so entered.
(b) According to the information and explanations given to us,
transactions made in pursuance of Contracts or arrangements entered in
the register maintained under Section 301 of the Companies Act, 1956
and exceeding the value of rupees five lakhs in respect of any party
during the year, have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
VI In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
as defined under section 58A, 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed there under. Further,
during the course of our audit we have neither come across nor have we
been informed of any order passed under the aforesaid Section by the
Company Law Board or National Company Law Tribunal or RBI or any Court
or any other Tribunal.
VII In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
VIII The Central Government has not prescribed maintenance of cost
records under section 209 (1)(d) of the Companies Act, 1956 for the
IX (a) The Company is regular in depositing with appropriate
authorities undisputed Statu-
tory dues including provident fund, investor education and protection
fund, employ- ees state insurance, income tax, sales tax, wealth tax,
service tax, customs duty, excise duty, cess and other material
statutory dues applicable to it. According to the information and
explanations given to us, there are no undisputed amounts payable in
respect of income tax, wealth tax, service tax, sales tax, customs
duty, excise duty and cess which were outstanding as at 31st March,
2012 for a period of more , than six months from the date they became
(b) According to the information and explanations given to us, the
following are the dis- puted statutory dues which have not been
deposited on account of disputed matters pending before the appropriate
(Rs. in lakhs)
Name of the Statute Forum where dispute is Pending Amount
1.Expenditure Tax Act i) High Court of Bombay,
Panaji Bench, Goa. Rs.6,76.88
2.Income Tax Act ii) Commissioner of Income
Tax(Appeals), Panaji,-Goa. Rs. 5.04
X The Company has no accumulated losses. The Company has not incurred
cash losses during the financial year covered by our report and in the
immediately preceding finan- cial year.
XI In our opinion and according to the information and explanations
given to us, the Com- pany has not defaulted in repayment of dues to
financial institutions or Banks. Further the Company has not issued any
debentures and as such reporting regarding default in repayment of the
same does not arise.
Xil The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other similar
XIII In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of Clause XIII of the
aforesaid Order 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 XIV of the aforesaid Order are not applicable to
XV The Company has not given any guarantee for the loans taken by
others from banks or financial institutions during the year.
XVI The Company has not obtained any term loans. Therefore the
provisions of clause XVI of order are not applicable to the company.
XVII According to the information and explanations given to us and on
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
XVIII The Company has not raised any money by issue of shares during
the year. Therefore, the provisions of Clause XVIII of the aforesaid
Order are not applicable to the Company.
XIX The Company has not issued any debentures during the year under
audit. Accordingly, the provisions of Clause XIX of the aforesaid Order
are not applicable to the Company.
XX The Company has not raised any money by way of public issue during
the year. Therefore, the provisions of Clause XX of the aforesaid Order
are not applicable to the Company.
XXI During the course of our examination of books of account carried
out in accordance with generally accepted auditing practices, we have
neither come across any instance
xxII of fraud on or by the Company nor have we been informed of any
such case by the Management.
Firm Regd. No. 000199S
MOHAN B. PYATI
M. No. 203120
Place: Margao, Goa
Date :14th July, 2012