1. We have audited the attached Balance Sheet of MPS LIMITED (the
Company) as at 31st December, 2010, the Profit and Loss Account and
the Cash Flow Statement of the Company for the year ended on that date,
both 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 the 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003 (CARO)
issued by the Central Government 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 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(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
audit;
(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
those books;
(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956;
(e) We refer to Note No III (8c) of Schedule 19, regarding the
provision for bonus amounting to Rs. 13 lacs to the Managing Director
of the Company for the year ended 31st December, 2010, which is subject
to approval of the Central Government to comply with Section 309 read
with Schedule XIII of the Companies Act, 1956.
(f) Without qualifying our opinion, we draw attention to:
(i) Note No II (5b) of Schedule 19 regarding the non-provision of
service tax demand, against which the Company has filed an appeal with
the concerned authorities.
(ii) Note No II (5c) of Schedule 19 regarding the disallowance of
service tax claimed by the Company against which an appeal has been
filed with the respective authorities.
(g) Except for matters referred to in paragraphs (e) above, and read
together with matters referred in paragraph (f) above, in our opinion
and to the best of our information and according to the explanations
given to us, the said accounts 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 Balance Sheet, of the state of affairs of the
Company as at 31st December, 2010;
(ii) in the case of the Profit and Loss Account, of the loss of the
Company for the year ended on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31st December, 2010 taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st December,
2010 from being appointed as a director in terms of Section 274(1 )(g)
of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS'' REPORT (Referred to in paragraph 3 of our
report of even date)
(i) Having regard to the nature of the Company''s
business/activities/result, clauses 4(vi), 4(viii), 4(x), 4(xii),
4(xiii), 4(xiv), 4(xv), 4(xvi), 4(xviii), 4(xix), 4(xx) of CARO are not
applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) Most of the fixed assets were physically verified during the year
by the Management in accordance with a regular programme of
verification which, in our opinion, provides for physical verification
of all the fixed assets at reasonable intervals. According to the
information and explanation given to us, no material discrepancies were
noticed on such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) The Company is engaged in the business of providing typesetting
and data digitisation and the inventories given in the financial
statements represent incomplete jobs. In our opinion and according to
the information and explanations given to us, the Company has
maintained proper record of its incomplete jobs.
(iv) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
(v) 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 fixed assets and for the rendering of services. During
the course of our audit, we have not observed any major weakness in
such internal control system. The activities of the Company do not
involve purchase of inventory and sale of goods.
(vi) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) There are no transactions, in aggregate, in excess of Rs. 5 lacs in
respect of any party.
(vii) In our opinion, the internal audit function carried out during
the year by a Company, appointed by the management, has been
commensurate with the size of the Company and the nature of its
business.
(viii) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-tax, Sales Tax, VAT, Wealth Tax,
Service Tax, Custom Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities, though there has
been a slight delay in a few cases.
(b) There were no undisputed amounts payable in respect of Investor
Education and Protection Fund, Provident Fund, Employees'' State
Insurance, Income-tax, Sales tax, VAT, Wealth Tax, Service Tax, Custom
Duty, Cess and other material statutory dues in arrears as at 31st
December, 2010 for a period of more than six months from the date they
became payable.
(c) Details of dues of Income-tax, Sales Tax, VAT, Wealth Tax, Service
Tax, Cess which have not been deposited as on 31st December, 2010 on
account of disputes are given below:
Statute Nature of Dues Forum where Dispute
is pending
Income Tax Act, 1961 Income Tax demands of Income Tax Appellate
erstwhile subsidiary Tribunal, Chennai
Income Tax Act, 1961 Income Tax demands Deputy Commissioner
of Income Tax, Chennai
Income Tax Act, 1961 Income Tax demands Deputy Commissioner
of Income Tax, Chennai
Income Tax Act, 1961 Income Tax demands of Commissioner of Income
erstwhile subsidiary Tax (Appeals), Chennai
Section 66A of Finance Service Tax demands Customs and Excise
Act Service Tax Appellate
Tribunal, Bengaluru
Section 66A of Finance Service Tax demands Customs and Excise
Act Service Tax Appellate
Tribunal, Bengaluru
Section 66A of Finance Service Tax demands Customs and Excise
Act Service Tax Appellate
Tribunal, Bengaluru
Section 66A of Finance Service Tax demands Customs and Excise
Act Service Tax Appellate
Tribunal, Bengaluru
Section 66A of Finance Service Tax demands Customs and Excise
Act Service Tax Appellate
Tribunal, Bengaluru
Statute Period to which the Amount involved
amount relates (Rs. in Lacs)
Income Tax Act, 1961 Asst Year 2003-04 5.21
Income Tax Act, 1961 Asst Year 2007-08 529.81
Income Tax Act, 1961 Asst Year 2007-08 73.70
Income Tax Act, 1961 Asst Year 2003-04 1.56
Section 66A of Finance July,03 to Dec,06 227.77
Act
Section 66A of Finance January,07 to 39.54
Act September,07
Section 66A of Finance August, 07 to 5.29
Act September,07
Section 66A of Finance October,07 to 99.99
Act September,08
Section 66A of Finance October,07 to 9.66
Act December,07
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks.
(x) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no fraud on the
Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No. 008072S)
Bhavani Balasubramanian
Partner
(Membership No. 22156)
Place: Mumbai
Date: 13th July, 2011
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