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PVP Ventures
BSE: 517556|NSE: PVP|ISIN: INE362A01016|SECTOR: Construction & Contracting - Real Estate
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« Mar 12
Auditor's Report (PVP Ventures) Year End : Mar '13
Report on the Financial Statements
 
 We have audited the accompanying financial statements of PVP Ventures
 (the Company), which comprises the Balance Sheet as at March, 31 2013
 and the Statement 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
 the Accounting Standards referred to in sub- section (3C) of section
 211 of the Companies Act, 1956 (the Act). This responsibility includes
 the design, implementation and maintenance of internal control relevant
 to the preparation and fair presentation of the financial statements
 that give a true and fair view and are free from material misstatement,
 whether due to fraud or error.
 
 Auditor''s Responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with the
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatements.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosure in the financial statements. These
 procedures selected depend on the auditor''s judgment, including the
 assessment of the risk of material misstatement of the financial
 statements, whether due to fraud or error. In making those risk
 assessment, 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 the management, as well as evaluating the overall
 presentation of the financial statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our qualified audit opinion.
 
 Basis for Qualified Opinion:
 
 Attention is drawn to the (a) Note 12 in notes to the financial
 statements with regard to the investment in equity shares of subsidiary
 companies at cost C54718.10 lakhs with provision for diminution in
 carrying value provided for C30358.10 lakhs, (b) investment in
 Redeemable Non-convertible Debentures of subsidiary company of
 C24832.00 lakhs, and (c) Note 13 in notes to the financial statements
 with regard to Unsecured Loans to subsidiary companies of C43660.75
 lakhs with provision for doubtful advances made for C5160.16 lakhs. The
 management is of the view that considering the market value of the
 assets and expected cashflows from the business of these subsidiary
 companies the provision already made are adequate.  However considering
 the networth of the subsidiary companies are negative, dependence on
 the parent to continue as a going concern and other related factors
 indicate that the existence of material uncertainty in carrying the
 value of investments and loans and advances at cost less provision
 already made. Hence we were unable to determine whether any adjustments
 to these amounts were necessary.
 
 Qualified Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, except to the possible effects of the matters
 described in Basis for Qualified Opinion paragraph, the financial
 statements give the information required by the Act 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, 2013;
 
 b) In the case of Statement of Profit and Loss, of the PROFIT for the
 year ended on that date; and
 
 c) In the case of Cash Flow Statement, of the Cash Flows for the year
 ended on that date
 
 Emphasis of Matter
 
 We draw attention to (a) Note 4 with regard to the waiver of Interest
 payable to the Debentures (parent company) (b) Note 12 with regard to
 the waiver of Interest receivable from Debentures (subsidiary company),
 and (c) Note 18 and Note 24.7 with regard to the Income Tax demands
 disputed before the authorities and payment of taxes under dispute,
 which describes the uncertainty related to the outcome of the Appeals
 filed against the Orders of the Authorities. Our opinion is not
 qualified in respect of these matters.
 
 Report on Other Legal and Regulatory Requirements
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 ( the
 Order), as amended, issued by the Central Government of India, in terms
 of sub-section (4A) of Section 227 of the Act, we give in the Annexure,
 a statement on the matters specified in paragraphs 4 and 5 of the
 Order.
 
 2.  As required by section 227(3) of the Act, we report that
 
 a.  We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b.  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;
 
 c.  the Balance Sheet, Statement of Profit and Loss, and the Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account;
 
 d.  except for the possible effects of the matter described in Basis
 for Qualified Opinion paragraph, in our opinion, the Balance Sheet,
 Statement of Profit and Loss, and Cash Flow statement comply with the
 accounting standards referred to sub-section (3C) of Section 211 of the
 Act;
 
 e.  on the basis of written representation received from the Directors
 as on March 31, 2013, and taken on record by the Board of Directors,
 none of the directors is disqualified as on March 31, 2013, from being
 appointed as a director, in terms of clause (g) of sub- section (1) of
 section 274 of the Act;
 
 f.  since the Central Government has not issued any notification as to
 the rate at which the cess is to be paid under section 441A of the Act,
 nor has it issued any Rules under the said section, prescribing the
 manner in which such cess is to be paid, no cess is due and payable by
 the Company.
 
 ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
 
 (Referred to in paragraph 1 of Report on Other Legal and Regulatory
 Requirements in our Independent Auditors'' Report of even date)
 
 1.  a.  In our opinion and according to the information and
 explanations given to us, the Company has maintained proper records
 showing full particulars, including quantitative details and situation
 of fixed assets.
 
 b.  As per the information and explanations provided to us, the Company
 has physically verified the fixed assets during this year and there is
 no material discrepancies noticed on such verification.
 
 c.  As per the information and explanation provided to us, the disposal
 of fixed assets has not affected the going concern.
 
 2.  a.  According to the information and explanations given
 
 to us, the management has conducted physical verification of inventory
 at reasonable intervals.
 
 b.  According to the information and explanations given to us the
 procedures of physical verification of inventory followed by the
 management is reasonable and adequate in relation to the size of the
 company and nature of its business.
 
 c.  According to the information and explanation given to us the
 company is maintaining proper records of inventory and there are no
 material discrepancies were noticed on physical verification.
 
 3.  a.  According to the information and explanations given to us, the
 Company has granted, unsecured loans to five subsidiary companies, the
 parties covered in the register maintained under section 301 of the
 Companies Act, 1956. The total amount of outstanding as on the balance
 sheet date is H43660.75 lakhs, out which a sum of H5160.16 lakhs has
 already been provided for. It is also informed to us that these
 advances are interest free and recoverable on demand and therefore the
 other clause related to terms and conditions of loans, receipt of
 principal and overdue amounts are not applicable.
 
 b. According to the information and explanations given to us, the
 Company has taken unsecured interest free loans from three subsidiary
 companies, the parties covered in the register maintained under section
 301 of the Act. It is informed that these loans are repayable on demand
 and total outstanding as on the balance sheet date is H4753.32 lakhs.
 Therefore the rate of interest, terms and conditions, repayment are not
 applicable.
 
 4.  In our opinion and according to the in format ion and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the Company and the nature of its business, for
 purchases of inventory and fixed assets and for sale of goods and
 services. During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in internal controls
 systems.
 
 5.  a.  According to the information and explanations given to us, we
 are of the opinion that the particulars of contracts or arrangements
 referred to in section 301 of the Companies Act, 1956 have been entered
 in the register maintained under that section.
 
 b. In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements have been made at prices which are reasonable having
 regard to prevailing market prices at the relevant time.
 
 6.  In our opinion and according to the information and explanation
 given to us, the Company has not accepted deposits from public during
 this year. Therefore the provisions of section 58A, 58AA of the Act and
 any contravention of these provisions for the year under audit are not
 applicable.
 
 7.  The Company has an internal audit system commensurate with its size
 and nature of its business.
 
 8.  As per the information and explanations given to us, we are of the
 opinion that the Company has made and maintained the cost records
 pursuant to the Rules made by the Central Government under clause (d)
 of sub-section (1) of Section 209 of the Companies Act, 1956.
 
 9.  a.  According to the information and explanation given to us, the
 Company is depositing undisputed statutory dues with appropriate
 authorities, like Provident Fund, Investor Education and Protection
 Fund, Employee''s State insurance, Income-tax, Sales-tax, Wealth-tax,
 Service tax, Customs Duty, Excise Duty, Cess, wherever applicable,
 except few delays in depositing, P.F, In come Tax TDS a nd Service Tax
 remittances on reverse charge. There are no undisputed Statutory
 outstanding dues as at 31st March 2013 for a period of more than six
 months from the date they become payable.
 
 b. According to the information and explanation given to us, there are
 no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
 Duty, Excise Duty, Cess which have not been deposited on account of any
 dispute, except the Income Tax demands disputed before the CIT
 (Appeals), Chennai for the Asst year 2008-09 H16497.15 lakhs, and
 before ITAT, Hyderabad for the Asst year 2007-08 H819.31 lakhs.
 
 10.  In our opinion and according to the information and explanation
 given to us, the accumulated loss the Company as at the end of the
 financial year is more than 50% of its networth. The Company has not
 incurred cash losses during the financial year covered by our audit and
 the immediately preceding financial year.
 
 11.  In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to the
 financial institutions or banks or debenture holders.
 
 12.  In our opinion and according to the information and explanations
 given to us, the Company has not granted loans and advances on the
 basis of securities by way of pledge of shares, debentures and other
 securities.
 
 13.  In our opinion and according to the information and explanation
 given to us, the Company is not a chit fund or a nidhi / mutual benefit
 fund / society. Therefore, the provision of clause 4 (xiii) of the
 Companies (Auditor''s Report ) (Amendment) Order, 2004 are not
 applicable to the Company.
 
 14.  In our opinion and according to the information and explanation
 given to us, the Company is not dealing in or trading in shares,
 securities, debentures and other investments. Accordingly, the
 provisions of clause 4 (xiv) of the Companies (Auditor''s Report)
 (Amendment) Order, 2004 are not applicable to the Company.
 
 15.  In our opinion and according to the information and explanation
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions.
 
 16.  In our opinion and according to the in formation and explanation
 given to us, the Company has not obtained any term loans during the
 year.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that the no funds raised on short- term basis have been used for
 long-term investment.
 
 18.  According to the information and explanation given to us, the
 Company has not made allotment of shares during the year.
 
 19.  According to the information and explanation given to us, the
 Company has not issued any debentures during the year and hence
 creation of security for issue of debenture does not arise.
 
 20.  According to the information and explanation given to us, the
 Company has not raised money by public issue during the year and
 disclosure of end use of public issue does not arise.
 
 21.  According to the information and explanation given to us, no fraud
 on or by the Company has been noticed or reported during the course of
 our audit.
 
                                     For M/s CNGSN & ASSOCIATES
 
                                     CHARTERED ACCOUNTANTS
 
                                     Firm Registration No: 004915S
 
                                     Sd/- 
 
                                     R. THIRUMALMARUGAN 
 
                                     Partner 
 
                                     Membership No: 200102
 
 Camp: Hyderabad 
 
 Date: 27th May, 2013
Source : Dion Global Solutions Limited
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