Prime Focus
BSE: 532748 | NSE: PFOCUS | ISIN: INE367G01020 | Media & Entertainment
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| Auditor's Report | Year End : Mar '09 |
1. We have audited the attached balance sheet of Prime Focus Limited (the Company) as at March 31, 2009 and also the profit and loss account and the cash flow statement for the year ended March 31, 2009 annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. 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 a 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 our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 (as amended) 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. 4. Without qualifying our opinion, we draw attention to Note 18(e) on Schedule 17. The Company had in the previous year issued Foreign Currency Convertible Bonds (FCCB) aggregating to USD 55 million. Subsequent to year-end, the Company has received a letter from the Reserve Bank of India CRBI) stating that it is not an eligible borrower to issue the Foreign Currency Convertible Bonds under External Commercial Borrowings (ECB) guidelines. The Company has obtained legal opinion confirming its eligibility and is in process of filing for compounding application with the RBI for the above mentioned matter and resultant compliances. The ultimate outcome of the matter cannot presently be determined, and no provision for any liability that may result has been made in the financial statements. 5. As more fully described in Note 18 to Schedule 17 to the financial statements, the Company has not revalued the FCCB of USD 55 million at the exchange rate prevailing as at March 31, 2009 and March 31, 2008, which in our opinion is not in accordance with Accounting Standard 11 The Effects of Changes in Foreign Exchange Rates and not provided for the premium payable on redemption of these FCCB. Had the Company revalued the bonds as at March 31, 2009, the profit for the year ended March 31, 2009 and the reserves as at that date would have been lower by Rs. 208.3 million and Rs. 219.0 million respectively and Foreign Currency Monetary Item Translation Difference account would have been Rs. 416.7 million. Further, had the Company provided for the premium on redemption, the securities premium as at March 31, 2009 would have been lower by Rs. 269.1 million. Consequent to the above, the FCCB balance at March 31, 2009 would have been higher by Rs. 904.8 million. 6. Further to our comments in the Annexure referred to above, we report that: 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 audit; 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 those books; iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account; iv. Subject to our comment in paragraph 5 above, in our opinion, the balance sheet, profit and 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; v. On the basis of the written representations received from the directors, as on March 31, 2009, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; vi. In our opinion and to the best of our information and according to the explanations given to us, subject to our comments in paragraph 5 above, 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; a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2009; b) in the case of the profit and loss account, of the profit for the year ended March 31, 2009; and c) in the case of cash flow statement, of the cash flows for the year ended March 31, 2009. Annexure referred to in paragraph [3] of our report of even date Re: Prime Focus Limited (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification. Accordingly, certain fixed assets have been physically verified by the management during the year. As informed, no material discrepancies were noticed on such verification. (c) There was no substantial disposal of fixed assets during the year. (ii) The Company does not have any inventory. Accordingly, the provisions of clause 4(ii) (b) and (c) of the Companies (Auditors Report) Order, 2003 (as amended) OCARO) are not applicable to the Company. (iii) As informed, the Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 (the Act). Accordingly clauses 4(iii) (b), (c), (d), (f) and (g) of CARO are not applicable to the Company. (iv) In our opinion and according to the information and explanations given to us, having regard to the fact that major purchase of fixed assets is of specialized equipments, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. However, the internal control system for the sale of film related services is inadequate since the Company does not have formal documentation with customers in few cases, which is an industry issue per management. (v) According to the information and explanations provided by the management, there are no contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under Section 301 of the Act. (vi) The Company has not accepted any deposits from the public. (vii) The Company has an internal audit system, the scope and coverage of which, in our opinion requires to be enlarged to be commensurate with the size and nature of its business. (viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act for the services of the Company. (ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees state insurance, income-tax, sales-tax, wealth-tax, service tax customs duty, cess have generally been regularly deposited with the appropriate authorities though there has been slight delay in a few cases. The provisions relating to excise duty are not applicable to the Company. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The provisions relating to excise duty are not applicable to the Company. (c) According to the records of the Company, there are no dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty and cess on account of any dispute. The provisions relating to excise duty are not applicable to the Company. (x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year. (xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders. (xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of CARO are not applicable to the Company. (xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the CARO are not applicable to the Company. (xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. (xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained. (xvii) According to the information and explanations given to us and on an 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. (xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. (xix) The Company has unsecured debentures outstanding during the year on which no security or charge is required to be created. (xx) The Company has not raised money by public issues during the year. (xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. For S. R. BATLIBOI & ASSOCIATES Chartered Accountants per Govind Ahuja Partner Membership No.: 48966 Place : Mumbai Date : June 30, 2009 |
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| Source : Religare Technova | |
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