We have audited die attached Balance Sheet of the MEGA FIN (INDIA)
LIMITED as at 31st March, 2012 and also the Profit and Loss Account and
the Cash Flow Statement 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
the financial statements based on our audit.
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 test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
1) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for die purpose of our
2) In our opinion, proper books of accounts as required by law have
been kept by the company as far as appears from our examination of the
3) The Balance Sheet and Profit and Loss account dealt with by this
report are in agreement widi the books of account.
4) In our opinion, die Balance Sheet and the Profit and Loss account
dealt with by die report are in compliance in all material aspect widi
die accounting standard referred to in Section 211 (3C) of the
Companies Act, 1956.
5) On die basis of written representation received from die directors
as at 31.03.2012 and taken on record by the board of directors, we
report that none of the directors of the Company are disqualified as on
31.03.2012 from being appointed as director under Sec. 274 (1) (g) of
the Companies Act, 1956.
6) The financial statements have been prepared by the management on a
going concern basis even though the company has substantial accumulated
losses, its activity is stand still and has eroded its net worth as
explained in Note No. 17 in respect of which we are unable to express
an opinion wither the Company can now operate as a going concern
7) With respect to Loans & Advances of Rs. 223.57 Lacs and Sundiy
Debtors of Rs. 188.86Lacs which are outstanding for a long period,
where there are no repayments/ interest recovery as explained in Note
No. ”8.2”, “8.3”, “9.1” and “9.2” respectively, we are
unable to formulate an opinion on the recoverability of the amount due.
8) Attention is invited to Note No. 7.1 regarding the shares, which are
neither transferred in the name of the Company nor the Company is
holding the shares with valid transfer deed and as such we are unable
to formulate an opinion on the veracity of the said shares.
9) Attention is invited to Note No. 16 regarding non appointment of
Company Secretary and Managing Director as required by Section 383A and
Section 269respectively of Companies Act, 1956.
10) We further report that resultant impact of observation made by us
in paragraph 6 tolO above on the loss for the year and current assets,
Investments, liabilities and balance in profit & loss account at the
year end, on the cash flow statement are unascertainable and
accordingly cannot be commented upon by us.
11) Subject to whatever stated or observed in paragraph no. (6) to (10)
above, in our opinion, and to die best of our information and according
to the explanations given to us, the said accounts read widi the 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 the case of the Balance Sheet, of die state of affairs of die
Company as at 31st March, 2012;
ii) in the case of the Profit and Loss account, of die Loss for the
year ended on diat date and
iii) in die case of cash flow statement of die cash flow for die year
ended on that date.
12) As required by the Companies (Auditor''s Report) Order, 2003(as
amended) issued by the Central Government of India in terms of Section
227(4A) of the Companies Act, 1956 (hereinafter referred to as the
‘said Order'')and in our opinion and on the basis of such checks as
we considered appropriate we further report that:
i) According to the information and explanations given to us, in the
absence of any Fixed Assets and having regard to the Company''s
business, the reporting on clause 4(i), 4(ii)(a), 4(ii)(b) and 4(ii)
(c) of die said Order are not applicable.
ii) a) The Company has not taken secured/unsecured loan from parties
covered in the register maintained u/s 301 of the Companies Act, 1956.
The Company has granted interest free loan to parties covered in
register maintained U/s 301 of the Companies Act, 1956. There is only
one Company covered in the register maintained u/s 301 of the Companies
Act, 1956 to which Company has granted loan .And the maximum amount
involved during die year for loan given to Mega Capital Broking Pvt Ltd
was Rs 9,731/- and the year end balance of loans granted to such party
was Rs 9,731/-.
b) The above loans are given interest free & there are no stipulations
as to repayment of loans, clause (b), (c) & (d) of clause No. 4(iii)
are not commented upon.
ii) According to the information and explanations given to us there are
generally adequate internal control procedures commensurate with die
size of the company and the nature of its business. During the course
of our audit, we have not observed any continuing failure to correct
major weakness in internal controls.
iii) a) In our opinion and according to the information and
explanations given to us, diere are no contracts and arrangements die
particulars of which need to be entered in die register maintained
under section 301 of the Companies Act, 1956.
b) Sub-clause (b) of clause 4(v) of die said order is not applicable.
iv) In our opinion and according to explanations given to us, die
company has not accepted deposits from public during die year.
v) During die year review, due to absence of business operations there
was no formal internal audit systems. However Company''s control
procedure ensures reasonable internal checking of its financial and
vi) According to the information and explanation given to us,
maintenance of cost records has not been prescribed by the Central
Government under section 209 (1) (d) of the Companies Act, 1956, hence
the question of reporting under clause 4(viii) of the said Order does
vii) a)According to the records of the Company, the Company is regular
in depositing with die appropriate authorities undisputed statutory
dues including Income Tax, Sales Tax, Wealdi Tax, Service Tax, Custom
Duty, Excise Duty, cess & odier material statutory dues applicable to
it. As there are no employees on pay roll of the Company, Provision of
Fund, and Employees State Insurance Scheme are not applicable and also
provisions of Investor Education & Protection Fund are not applicable.
b) As per records of the Company and according to the information and
explanation given to us, no undisputed amount payable in respect of
Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty Excise
Duty & Cess as at 31.03.2012 for a period more than six months from the
date they become payable.
c) As per records of the Company and according to the information and
explanation given to us, there are no dues of Income Tax, Wealth Tax,
Sales Tax, Service Tax, Customs Duty Excise Duty and cess which have
not been deposited on account of any dispute.
viii) In our Opinion, the accumulated losses of the company are more
than fifty , percent of the Net worth. The Company has incurred cash
losses during the financial year covered by our audit as well as in the
immediately preceding financial year.
ix) The Company has not borrowed from a financial institution or a bank
and has not issued any debentures. Therefore clause 4 (xi) of the said
Order is not applicable.
x) According to information & explanations given to us the Company has
not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
xi) The Company is not a chit fund or a nidhi / mutual benefit fund /
society. Therefore, the provision of clause 4 (xiii) of die said Order
is not applicable to the Company.
xii) According to the information and explanations given to us, the
Company is not dealing in or trading in shares, securities, debentures,
and other investments. The shares are held by the Company in its own
name, except where die company is not holding the share certificates
along widi valid transfer deeds (Refer Note No. HV
7./'').and also our
qualification in Para 8 of the report.
xiii) According to the information and explanations given to us, the
Company has not given any guarantees for loans taken by others from
banks or financial institutions.
xiv) The Company has not obtained term loans during the year and no
amounts are outstanding.
xv) On the basis of information and explanation given thus and as on
overall examination of the Balance Sheet & the cash flow statement of
the Company, We report that no funds raised on short term basis have
been used during the year for the long term investment.
xvi) 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. Accordingly, the question of reporting
on whether die price at which such shares have been issued is
prejudicial to the interest of the company does not arise.
xvii) The Company has not issued any debentures during the year and no
amounts are outstanding. Accordingly question of creating a security
for such debentures does not arise.
xviii) The Company has not raised any money by public issues during the
Accordingly, the question of disclosure of end use of such monies does
xix) According to die information and explanation given to us, no fraud
on or by die Company has been noticed or reported during die course of
For S. K SHETH & CO.
FIRM REG No.:110074W
Place : Mumbai (SHARAD K. SHETH)
Date : 21st May,2012 PROPRIETOR
Membership No: 34061