we have audited the attached balance sheet of helios and matheson
information technology limited as at 30th September, 2012, the profit
and loss account and also the cash flow statement of the company 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
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 to support the financial statement
amounts and disclosures in the financial statements, an audit also
includes assessing the accounting principles used in preparation of
financial statements, assessing significant estimates made by
management in the preparation of financial statements and evaluation
the overall financial statement presentation, we believe that our audit
provides a reasonable basis for our opinion.
we report that:
1. as required by the companies (auditor''s report) order, 2003 issued
by the central government of india in terms of subsection 4a of section
227 of companies act, 1956, we annex hereto a statement on the matters
specified in paragraphs 4 & 5 of the said order.
2. further to our comments in the annexure referred to above in
paragraph 1 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 appears from our examination of the
c. the balance sheet and profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
d. in our opinion, the profit and loss account and balance sheet are
compiled in accordance 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 directors, as
on 30th September, 2012 and taken on record by the board of directors,
we report that none of the directors of the company are disqualified,
as on 30th September, 2012, from being appointed as director of the
company under 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 balance sheet and profit and
loss account read together with other notes and accounting policies
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:
i. in the case of the consolidated balance sheet, of the state of
affairs of the company as at 30th September, 2012;
ii. in the case of the consolidated profit and loss account, of the
profit for the period ended on that date; and
iii. in the case of the consolidated cash flow statement, of the cash
flows of the period ended on that date.
annexure to auditors'' report
annexure referred to in paragraph 1 of the auditors'' report on the
accounts of helios & matheson information technology limited, for the
year ended 30th September, 2012
1. a. the company is maintaining proper records showing full
particulars, including quantitative details and situations of fixed
b. the fixed assets have been physically verified by the management at
reasonable intervals and no material discrepancies were noticed on such
c. no fixed assets have been disposed off during the year and the
going concern concept is not altered.
2. the company''s nature of operations does not require it to hold an
inventory and accordingly clause 4 (ii) of the companies auditors
report order 2003 is not applicable.
3. a. the company had taken loan from its wholly owned subsidiary
covered in the register maintained u/s.301 of the companies act, 1956.
the maximum amount involved during the year was Rs..1,00,00,000/- and
theyear-end balance of loan taken from such party is nil.
b. the company has granted interest free advances to three of its
subsidiaries covered in the register maintained u/s 301 of the act
without stipulation as to repayment, the maximum amount during the year
was Rs..46,17,76,686/- at the year-end balance of advance given to such
parties was Rs..46,17,76,686/-
c. in our opinion the terms and conditions on which loans have been
taken from / granted to company listed in the register maintained under
section 301 are not, prima facie, prejudicial to the interest of the
d. the company is regular in repayment of the principal and interest
amounts wherever stipulated.
e. there are no overdue amount in respect of advances granted to
companies listed in the register maintained under section 301 of the
4. in our opinion and according to the information and explanation
given to us there is an adequate internal control procedure
commensurate with the size of the company and the nature of its
business, for the purchase of fixed assets and for the sale of
services, no instances of continuing failure to correct major weakness
in internal control where notice by us during the course of audit.
5. a. in respect of contractual arrangements entered in the register
maintained in pursuance of section 301 of the companies act and to the
best of our knowledge and belief and according to the information and
explanation given to us, where each of such transaction made in
pursuance of contract or arrangement, is in excess of Rs..5 lacs in
respect of each party, transaction have been made at prices which are
prima facie reasonable having regard to prevailing market prices at the
b. in respect of sale of services to parties listed in the register
maintained u/s.301 of the companies act, 1956 these transactions have
been made at prices which are prima facie reasonable having regard to
prevailing market prices at the relevant time.
6. the company has accepted deposits from public, the provision of
section 58a & 58aa of the companies act, 1956 and the rules made there
under are complied with.
7. in our opinion the company has an internal audit system
commensurate to the size of the company and the nature of business.
8. the central government has not prescribed maintenance of any
costing records for the services of the company under section 209(1)(d)
of the companies act, 1956.
9. a. according to the information and explanation given to us, and
according to the books and records as produced and by us, in our
opinion, the undisputed statutory dues including provided fund, income
tax, sales tax, wealth tax, service tax, vat , customs duty, excise
duty, cess and other material statutory dues as applicable, have
generally been regularly deposited by thecompany duringtheyearwith
appropriate authorities, according to the information and explanation
given to us, there are no arrears of outstanding statutory dues as
mentioned above as at 30th September, 2012 for a period of more than 6
months from the date they became payable
b. according to the information and explanations produced to us, there
are no dues in respect of sales tax, customs duty, excise duty and cess
that have not been deposited with appropriate authorities on account of
a in respect of assessment year 2006-2007, the company has been served
with a demand of Rs..1,94,98,583/- against which the company has gone
on appeal to the commissioner of income tax (appeals) and the company
has paid Rs..5,00,000/- and contested the demand.
b in respect of assessment year 2008-09, the company has been served
with a demand of Rs.15,94,66,361/- against which the company has gone on
appeal to the commissioner of income tax (appeals) and the company has
paid Rs..1,70,00,000/- and contested the demand.
c in respect a.y.2009-2010, the company has been served with a demand
of Rs..2,47,10,740/- against which the company has gone on appeal to
the commissioner of income tax (appeals) and the company has paid
Rs..45,00,000/- and contested the demand.
d the company has filed an appeal before commissioner of central excise
(appeals) disputing the service tax levy or demand of Rs..3,93,720 and
the company has paid under protest of Rs..1,90,000/- towards demand.
10. the company has no accumulated losses at the end of 30th
September, 2012, the company has not incurred cash losses during the
financial year on that date and in the immediately preceding financial
11. the company has not defaulted in repayment of dues to any
financial institution or bank or debenture holders.
12. the company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities,
hence we do not comment on the adequacies of securities and documents.
13. the company is nota nidhi or mutual benefitfund orasociety.
14. the company is not dealing or trading in shares, securities,
debentures and other investments and therefore, we do not comment on
the maintenance of proper records.
15. the company has not given any guarantee for loans taken by others
from bank or financial institutions except in the case of guarantee
given to its subsidiary company, the terms and conditions, whereof, in
our opinion or not prejudicial to the interest of the company.
16. the company has obtained term loans during the year and as per the
records of the company the term loans were applied for the purpose for
which they were raised.
17. as per the records of the company funds raised on short term basis
were not used for long term investments and vice versa.
18. during the year the company has issued convertible warrants to the
promoters and in terms of the issue and as per preferential guidelines
of sebi 25% of conversion price amounting to Rs..1,82,75,000/ - was
received by the company during the year.
19. no debentures were issued by the company, hence we have nothing to
comment on the security or charges created on debentures.
20. no funds were raised from public issues during the year.
21. 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
significant fraud on or by the company, noticed or reported during the
year nor we have been informed of such case by the management.
for venkatesh & co
place: chennai ca. v.dasaraty
date : february 05 , 2013 partner