We have audited the attached Balance Sheet of M/s. Kirloskar Multimedia
Limited, Regd. Off: Kempapura, HAF Post, Bangalore - 560 024 as at 31st
March 2012 and the Profit and Loss account for the year ended on that
date together with the Schedules and Notes thereon annexed thereto.
These financial statements are the responsibility of the Management of
the Company. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in India. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are prepared, in all material respects, in accordance with
an identified financial reporting framework and are free of material
mis-statements. 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 statements presentation. We believe that our audit provides
a reasonable basis of our opinion, and report that:
1. As required by the Companies (Auditor''s Report) Order, 2003 (CARO -
2003) as amended by the Companies (Auditor''s Report) Order (Amendment)
2004, issued by the Central Government of India in terms of Sub-section
(4A) of Section 227 of the Companies Act 1956, and on the basis of such
checks and verification of books and records as we considered
appropriate and as per the information and explanations given to us
during the course of our audit, we report as follows on the matters
specified in paragraphs 4 & 5 of the said Order:
i a. The Company has maintained proper records showing all particulars,
including quantitative details and situation of fixed assets.
b. According to the information and explanations given to us, the
fixed assets have been physically verified by the management at
reasonable intervals which, in our opinion, is reasonable, having
regard to the size of the Company and nature of the assets. No material
discrepancies were noticed on such verification.
c. In our opinion, the Company has not disposed off a substantial part
of its Fixed Assets during the year and the going concern status of the
Company is not affected.
ii The Company is a Service Company, primarily rendering information
technology services - multimedia. Further, as informed to us, the
Company does not hold any physical inventories. Thus paragraph 4(ii)
of the Order is not applicable.
iii We are informed that the Company has not taken / granted any loans,
secured or unsecured, from/to Companies, Firms or other parties listed
in the register maintained under Section 301 of the Companies Act,
iv In our opinion, and according to the information and explanation
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and the sale of
services. During the year, there were neither purchase of inventories
and sale of services.
v According to the information and explanations given to us, there are
no transactions and arrangements, the particulars of which need to be
entered into the Register maintained under Section 301 of the Companies
vi The Company has not accepted any deposits from the public within the
meaning of Section 58A, 58AA or any other relevant provisions of the
Companies Act, 1956 and the rules framed there under.
vii The Company does not have an Internal Audit System commensurate
with its size and nature of business.
viii The Central Government has not prescribed maintenance of cost
records under Section 209(1)(d) of the Companies Act, 1956, for the
products of the Company.
xi a. The Company is generally regular in depositing undisputed
statutory dues including Provident
Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Cess and any other Statutory
dues with the appropriate authorities, except Rs. 82,987 being fines
and penalty payable to ESIC which are outstanding as at 31.03.2012 for
a period of more than six months from the date they became payable.
b. According to the information and explanations given to us and on the
basis of our examination of the accounts, there are no disputed amounts
of Income Tax / Sales Tax / Service Tax / Customs Duty / Excise Duty /
Cess as on 31 March 2012 except a claim against the Company by the
Income Tax Department towards Income Tax and Interest amounting to Rs.
3.93 Lakhs for which the Company has not made any provision in the
Books of Accounts..
x The Company is registered for a period not less than 5 years and
accumulated losses at the end of the financial year are not less than
50% of its net worth. However, the Company has incurred cash losses
during the financial year and in the immediately preceding financial
xi The Company has defaulted in the repayment of working capital
facilities extended by Central Bank of India and in redemption of
non-convertible debentures issued to KSFC. As on 31.03.2012, these
amounts are outstanding, as disclosed in the financial statements, to
the bank and financial institution and are overdue.
xii As the Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities,
the question of reporting on Clause No. 4(xii) of the Order does not
xiii The provisions of any special statute applicable to Chit Fund,
Nidhi, Mutual Benefit Fund or Societies are not applicable to the
xiv The Company is not dealing or trading in shares, securities,
debentures and other investments. Accordingly, Caluse 4(xiv) of the
Order is not applicable.
xv According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks and other financial institutions. Accordingly, Clause 4(xv) of
the Order is not applicable.
xvi The Company has not raised any Term Loans during the year.
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
investment of the Company.
xviii The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956, during the year.
xix The Company has not issued any debentures during the year and hence
the question of creating securities for the debentures issued does not
xx The Company has not made any public issue during the year and as
such, reporting on Clause No 4(xx) of the Order does not arise.
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 and reported during the year, nor
have we been informed of such case by the Management.
2. Further to our report in paragraphs (1) above subject to:
(i) Note number 4.4, regarding non provision of interest in respect of
facilities from Central Bank of India till date and its consequential
effects on the losses of the Company; and
(ii) Note number 14, regarding not obtaining confirmation of balances
in respect of secured loans, liabilities,
deposits, margin money deposits with banks and other loans and advances
and its consequential effect
on the losses of the Company; and
(iii) Note number 15, regarding non provision for the claim against the
Company by Tata Finance Limited till date and its consequential effects
on the loses of the Company; and
(iv) Note number 16, regarding non provision for the claim against the
Company by the Income Tax Department towards Income Tax and Interest
amounting to Rs. 3.93 Lakhs and its consequential effects on the losses
of the Company.
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 the Profit and Loss Account referred to in
this report are in agreement with the books of account;
(d) In our opinion and subject to various observations made in the
above paragraphs, the Balance Sheet and Profit and Loss Account dealt
with by this report have been prepared in compliance with the
applicable Accounting Standards referred to in sub-section (3C) of the
Companies Act, 1956;
(e) On the basis of written representations received from the Directors
of the Company as at 31st March 2012 and taken on record by the Board
of Directors, none of the Directors is disqualified as on 31st March
2012 from being appointed as Director of the Company under Clause (g),
Sub-Section (i) 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 Balance Sheet and Profit and Loss
Account read together with the Schedules and the Notes thereon give the
information required by the Companies Act of 1956 in the manner so
required and give a true and fair view:
(i) in so far as it relates to the Balance Sheet, of the State of
Affairs of the Company as at 31st March 2012 and
(ii) in so far as it relates to the Profit and Loss Account, of the
losses of the Company for the year ended on that date.
for DIVAKARA & ASSOCIATES.,
Firm Regn No. 000763S
PLACE : Bangalore (Sd/-)
POLALI DIVAKAR RAO
DATE : May 31, 2012
Membership No. 23377