We have audited the attached Balance Sheet of Shree Ashtavinayak Cine
Vision Limited as at March 31, 2011 Profit and Loss account for the
period ended on that date annexed thereto, and Cash Flow Statement of
the Company for the period 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 these
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 the 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 of
As required by the Companies (Auditors'' 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
(a) we have obtained all the information and explanation, which to the
best of our knowledge and belief were necessary for the purpose of our
(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
(c) the balance sheet and profit and loss account dealt with by this
report are in agreement with the books of account;
(d) in our opinion, the Balance sheet and profit and loss account read
with notes there on dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act 1956.
(e) on the basis of written representations received from the
Directors, as on the dated of balance sheet, and taken on record by the
board of directors, we report that none of the directors is
disqualified as on the said date from being appointed as a director in
terms of clause (g) of sub-section (1) of section 274 of the Companies
(f) in our opinion, and to the best of 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 accounting principles generally
accepted in India.
(i) in case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
(ii) in case of Profit and Loss Account, of the loss of the Company for
the period ended on that date.
(ii) in case of Cash Flow Statement, of the cash flow of the Company
for the period ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE IN CASE
OF SHREE ASHTAVINAYAK CINE VISION LIMITED
(i) (a) The Company is maintaining proper records showing full
particulars of, including quantitative details and situation, of fixed
(b) The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over
a period of three years. In our opinion, this periodicity of physical
verification is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
(c) The Company has not disposed substantial portion of its fixed
assets during the period; accordingly the going concern status of the
Company is not affected.
(ii) As explained by the Management, the production of films requires
various types, qualities and quantities of materials, consumables and
inputs in different denominations generally pertaining to the specific
films under production. Due to multiplicity and complexity of items,
many of which are used across various films under production at the
same time, it is not practicable to maintain the stock register, as the
process of making films is not amenable to it. All the purchases of
films related consumable/ consumables are treated as consumed. In view
of this, the Company does not maintain inventory register and also does
not carry out physical verification of inventory. Hence information
relating to clause (ii) (a) and (b) of the order has not been given.
(iii) (a) As explained to us, the Company has granted interest free
unsecured loan(s), to THREE companies (100% Subsidary in India) covered
in the register maintained under section 301 of the Act.
The amount involved at the balance sheet date was Rs. 0.25 Million, and
maximum amount so involved Rs. 0.25 Million.
(b) The terms and conditions of unsecured loans granted by the Company
are not prima-facie prejudicial to interest of the Company.
(c) As explained to us, the said loan(s) are demand loans; and hence
the sub-clause dealing with receipt of the principal amount and
interest on regular basis is not applicable.
(d) Since the loan(s) granted are in nature of demand loan(s), the
sub-clause dealing with overdue amount more than rupees one lakh is not
(e) The Company has taken unsecured loans from two parties covered in
the register maintained under section 301 of the Act; some of which are
interest free. The amount involved at end of the year in aggredgate was
R s . 764.56 Million,and the maximum amount involved in the transaction
was R s . 764.56 Million.
(f) Other terms and conditions of unsecured loans taken by the company,
are prima facie not prejudicial to interest of the Company.
(g) The loans taken are repayable on demand. As informed, the Company
has paid the loan amount as and when demanded by the lender, thus there
has been no default on the part of the Company.
(iv) In our view, there is an adequate internal control system
commensurate with the size of the Company and nature of its business,
for the purchase of inventory and fixed assets, and for sale of goods
and services, though, the Company does not maintain any physical
inventories or sales of goods owing to the nature of its business. In
our view, there has been no continuing failure to correct major
weakness in internal control systems of the Company.
(v) According to the information and explanation given to us and on the
basis of representation received from the Management, the transactions
that need to be entered into register maintained under section 301 of
the Companies Act, 1956 have been so entered and the transactions made
in pursuance of such contracts or arrangements have been made at prices
which are reasonable having regard to the prevailing market prices at
the relevant time.
(vi) In our opinion, the Company has complied with the provisions of
section 58A and section 58AA or any other provisions of the Companies
Act, 1956 and the rules made there under. We have been informed by the
management that there has been no order passed by the Company law Board
or National Company Law Tribunal or Reserve Bank of India or any Court
or any other Tribunal on the Company with respect to compliance of the
provisions of section 58A or 58AA or any other provisions of the
Companies Act 1956.
(vii) On the basis of internal audit reports broadly reviewed by us, we
are of the opinion that, the coverage of internal audit functions
carried out by an Internal Auditor of the Company is adequate and
commensurate with the size of the Company and nature of its business.
(viii) We have been informed by the management that, the Central
Government has not prescribed the method of maintenance of cost records
u/s. 209 (1) (d) of the Companies Act, 1956 to the industry to which
the Company pertains.
(ix) (a) We have been informed by the management that, the Company is
generally regular in depositing all undisputed statutory dues with the
appropriate authorities and there have been no material arrears of
outstanding dues as at the last day of this financial period for more
than six months from the date they became payable except income-tax and
tax deducted at source as mentioned in Note No. 5.9 of Notes on
Tax deducted at source Rs. 25.94
Income-tax for Assessent Year 2010-11 Rs. 23.67
(b) In our opinion and according to the information and explanation
given to us, there are no dues of Income tax, Sales tax, Wealth Tax,
and Service tax, Custom Duty, Excise Duty or Cess, as applicable to it
which have not been deposited on account of any dispute.
(x) According to the information and explanation given to us, the
accumulated losses at the end of the financial period are not in excess
of fifty percent of net worth of the Company. The Company has incurred
cash losses during the period, and not incurred cash losses in the
immediately preceding financial period.
(xi) As informed to us by the management, the Company is to pay amount
due but unpaid on account of principal and interest amount of Rs. 77.79
million to the financial institution for a period more than two months.
(xii) As informed 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; accordingly, there is no necessity as to maintaining
documents and records in this respect.
(xiii) The provisions of any special statute in respect of chit fund,
nidhi, mutual benefit funds or societies are not applicable to the
(xiv) The Company has not dealt or traded in shares, securities,
debentures and other investments; hence maintenance of records for the
same does not arise.
(xv) The management has informed us that, the Company has not given any
guarantee for loans taken by others from any bank or financial
(xvi) As per the explanation given by the management, the term loans
were applied for the purposes for which they were obtained.
(xvii) As explained to us by the management, there were no funds that
were raised on a short-term basis, which have been applied for
(xviii) 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.
(xix) The Company has not issued any debentures; hence no security or
charges have been created in respect of the same.
(xx) The Company has not made any public issues of shares; hence
disclosure requirement as to end utilization of public issue money is
(xxi) As informed by the management, there has not been noticed or
reported any fraud on or by the Company during the period.
FOR SHAH, SHAH & SHAH
Firm Regd. No: 116457W
Mumbai: May 27, 2011