We have audited the accompanying financial statements of M/s MAHAVEER
INFOWAY LIMITED, Hyderabad which comprise the Balance Sheet as at 31st
March 2012, and the statements of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the company in accordance with
accounting standards referred to in sub section (3C) of Section 211 of
the Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of financial statements that give a true
and fair view and are free from material misstatement whether due to
fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our auditing accordance
with the standards on Auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatements of the financial statements,
whether due to fraud or error. In making those risk assessments the
auditor considers internal control relevant to the company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made
by management, as well as evaluating the overall presentation of the
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
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
gives a true and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
b) in the case of the Statement of Profit and Loss Account, of the
Profit for the year ended on that date; and
c) in case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
As required by the Companies (Auditor''s Report) Order, 2003 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.
Further to our comments in the Annexure referred to above, we report
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
ii. 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
iii. The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet and Profit and Loss Account
dealt with by this report comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956.
v. 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 Companies Act, 1956;
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our report of even date)
1. a. The Company is in the process of updating records to show full
quantitative details and situation of fixed assets.
b. All the assets have not been physically verified by the management
during the year but there is a regular program of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. No material discrepancies were noticed on
c. No substantial part of Fixed Assets has been disposed off during
2. a. The physical verification of inventory, as per the management''s
certificate, has been
conducted at reasonable intervals by the management.
b. The procedures for physical verification of inventory 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 and any
discrepancies noticed on physical verification are being properly dealt
in the books of accounts.
3. According to the information and the explanations given to us the
regarding whether company has granted or taken any loans, secured or
unsecured to or from Companies, firms or other parties covered in the
register maintained under section 301 of the Act.
a) The company has given unsecured loans to five parties covered in the
register maintained under section 301 of Companies Act, 1956. The
yearend balance of such loan is Rs.1,19,71,958/-
b) In our opinion, the rates of interest for above loans are not prima
facie, prejudicial to the interest of the company. However, the above
loans include Rs. 4,16,970/- given to directors and Rs. 28,69,201/- to
subsidiary company as interest free loans. Tenure and repayment terms
have not been specified for such loans.
c) The company has taken unsecured loans from four parties covered in
the register maintained under section 301 of Companies Act, 1956. The
yearend balance of such loans are Rs. 27,28,321/-
d) The above loans taken from directors and relatives of directors are
interest free loans and the tenure, repayment terms have not been
specified for such loans.
e) According to the information and explanation given to us, the tenure
and repayment terms not been specified for the above mentioned loans.
Consequently we are unable to comment on paragraph 4(iii) ( c),(d) &
(g) of the order.
4. In our opinion and according to the information and explanations
given to us, the internal control procedures with regard to inventory
and fixed assets and for sale of goods are being strengthened to be
commensurate with the size of the Company and the nature of the
5. a) In our opinion, and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that section.
b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in 5(a) above and exceeding the value of Rs.5
lakhs with any party during the year have been made at
prices which are reasonable having regard to the prevailing market
prices at the relevant time.
6. The Company has not accepted deposits from the public and the
provisions of Section 58A and 58AA of the Act, rules framed there under
and other relevant directives issued by the Reserve Bank of India are
not applicable to the Company.
7. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business. However, the
scope and extent of internal audit need to be enlarged having regards
to complexity and expanded operation of the company.
8. The Company is not required to maintain the cost records as
prescribed by the Central Government under clause (d) of sub-section
(1) of section 209 of the Companies Act.
9. In respect of statutory dues:
a) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, sales tax, and
cess were in arrears, as at 31st March 2012 for a period of more than
six months from the date they became payable.
10. The Company has not incurred cash loss during the current
financial Year and the previous financial year and there are no
accumulated losses as on the balance sheet date.
11. According to the information and explanation given to us, the
company has not defaulted in repayment of dues to a financial
institution or bank.
12. According to the information and explanations given to us, the
company has not granted loans and advances on the basis of security by
way of pledge of share, debentures and other securities.
13. According to the information and explanations given to us, the
company has not given any guarantees for loans taken by others from
bank or financial institutions.
14. The term loans were applied for the purpose for which the loans
15. The funds raised by the Company on short-term basis have not been
used for long-term investment and vice versa.
16. The Company has not made Preferential Allotment of shares to
parties and companies covered in the register maintained U/s.301 of the
Act during the year.
17. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities
and therefore Paragraph 4 (xii) of the order relating to maintenance of
documents and records is not applicable.
18. The provisions of special statute applicable to Chit Fund, Nidhi
or Mutual Benefit Fund/ Societies are not applicable to the Company and
therefore Paragraph 4(xiii) of the order is not applicable.
19. The Company is not dealing or trading in shares, securities,
debentures or other investments and therefore Paragraph 4(xiv) of the
order is not applicable.
20. During the year covered by our Audit Report, the Company has not
raised any money by public issue and therefore Paragraph 4(xx) of the
order is not applicable.
21. During the course of our examination of books and records of the
company, carried out in accordance with the auditing standards
generally accepted in India, we have neither came across any instance
of fraud on or by the company was noticed or reported during the year,
nor have we been informed of any such case by the management of the
(CA. N.KALYANA SUNDAR)
Partner, M.No :- 204247
KALYANA & Co.,
Place : Hyderabad Chartered Accountants
Date: 29.05.2012 FRN: 007095S