1. I have audited the attached balance sheet of M/s Kreon Finnancial
Services Limited as at 31st March, 2012 and also the profit & loss
account and 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. My responsibility is to
express an opinion on these financial statements based on my audit.
2. I conducted my audit in accordance with auditing standards
generally accepted in India. Those standards require that I 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 &
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by managements, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis for
3. As required by the companies order, 2003, issued by the central
govt. of India in terms of section 227 (4A) of the companies act, 1956,
I give in the annexure, a statement on the matters specified in
paragraphs 4 of the said order.
4. Further to my comments in the annexure referred to in Para 3 above,
I report that:
(a) I have obtained all the information and explanation, which to the
best of my knowledge and belief were necessary for the purpose of my
audit. In my opinion, proper books of accounts as required by law have
been kept by the company so far as appears from my examination of such
(b) the balance sheet, profit & loss account and cash flow statement
dealt with by this report are in agreement with the book of account.
(c) in my opinion, the balance sheet, profit & 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.
(d) On the basis of the written representation received from the
directors as on 31st March 2012 and taken on record by board of
directors, I 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 companies act, 1956. as
regards government nominee directors ,they are exempted from the
provision of section 274 (1) (g) in view of general circular issued by
the department of company affairs.
5. in my opinion and to the best of my information and according to
the explanation given to me, the said accounts read with significant
accounting policies and the other 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 India :
(i) in case of the balance sheet of the state of affairs of the company
as at 31st March, 2012;
(ii) in case of profit & loss account of the loss for the year ended on
that date, and
(iii) in case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGARAPH 3 OF OUR REPORT OF EVEN DATE RE:
KREON FINNANCIAL SERVICES LIMITED
(I) In respect of its fixed assets:
(a) The company has maintained proper records showing full particulars,
including quantitative details & situation of fixed assets.
(b) The company has physically verified certain assets during the year
in accordance with a programme of verification, which in my opinion
provides for physical verification of the fixed assets at reasonable
intervals. According to the information & explanation given to me no
material discrepancies were noticed on such verification.
(c) In my opinion & according to the information & explanation given to
me, the Company has not made any substantial disposals during the year.
(II) In respect of its inventories:
There are no inventory in the Company during the year.
(III) (a) The company has neither granted nor taken any loan, secured
or unsecured, to / from companies , firms and other parties covered in
the register maintained under section 301 of the Act.
(b) Since there are no such loans , the comments regarding terms and
conditions, repayments of the principal, interest thereon and overdue
amount are not required.
(IV) In my opinion and according to the information and explanation
given to me, there are adequate internal control procedures
commensurate with the size of the company and nature of its business.
(V) In my opinion and according to the information and explanation
given to me, there are no transactions made in pursuance of contracts
or arrangements entered in the register maintained under section 301 ,
exceeding the value of Rs 5 lakhs, in respect of any party during the
(VI) The company has not accepted any deposits from the public during
the period under review.
(VII) In my opinion, the company has adequate internal audit system
commensurate with the size of business.
(VIII) The Central Government has not prescribed maintenance of cost
records by the Company under section 209(1) (d) of the Act.
The company has been regular in depositing undisputed statutory dues,
including provident fund, investor education and protection fund,
employees'' state insurance, income-tax, sales- tax, wealth-tax, custom
duty, excise duty, cess and other statutory dues with the appropriate
authorities. According to the information and explanation given to me,
no undisputed amounts payable in respect of income tax, wealth tax,
sales tax, customs duty and excise duty were outstanding, at the year
end for a period of more than six months from the date they became
payable other than mentioned hereunder.
According to the records of the Company, there are no outstanding Sales
tax, Income tax act 1961, Customs duty, Wealth tax, excise duty on
account of any dispute other than following:
period Forum where Amount
to which the Act Nature of dues dispute is (Rs in
Madras High 30.68
Tax Act Income Tax Court - Stay
(X) The Company has made cash profit of Rs 4.89 lakhs during the year.
The company have accumulated losses of Rs 72.21 lakhs at the end of the
financial year to be adjusted against future profits.
(XI) Based on my audit procedures and on the information and
explanation given by the management, I am of the opinion that the
company has not defaulted in the repayment of dues to financial
institutions, banks and debenture holders.
(XII) According to the information and explanations given to me, the
company has given any loans and advances on the basis of security by
way of Pronotes, post dated instruments, pledge of shares, debentures
and other securities. The loans advanced are subject to confirmation.
(XIII) In my opinion the company is not a chit fund or nidhi/mutual
benefit fund/society. therefore, the provisions of clause 4(xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
(XIV) In my opinion the company is dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the company
has complied with provisions of clause 4(xiv) of the Companies
(Auditor''s Report) Order, 2003.
(XV) According to the information and explanations given to me, the
company has not given any guarantee for loans taken by others from bank
or financial institutions.
(XVI) There were no term loans obtained by the company during the year.
(XVII) According to the cash flow statement and other records examined
by me and the information and explanations given to me, on overall
basis, funds raised on short term basis have, prima facie, not been
used during the year for long term investment and vice versa, other
than temporary deployment pending application.
(XVIII) The company has made preferential allotment of 1122791 warrants
in the year 2012. During the year an amount of Rs.1,68,41,870/- have
been received towards the subscription the same.
(XIX) The company has not issued any debentures and no securities and
charges are required to be created.
(XX) The company has not raised any money by public issue during the
(XXI) To the best of my knowledge and belief and according to the
information explanation given to me, no fraud on or by the company was
noticed or reported during the year.
K SUBRAMANYAM & CO.,
Place : Chennai K SUBRAMANYAM
Date : 30.05.2012 PROPRIETOR
Membership No. 023663
Firm Regn No.004146S