1. We have audited the attached Balance Sheet of SHYAM TELECOM LIMITED
as at 31st March, 2011, and also the Profit & Loss Account and the cash
flow statement of the Company 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
these financial statements based on our audit.
2. We conducted our audit in accordance with the 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 the 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, 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
4. Further to our comments in the Annexure referred to in paragraph 3
above, 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 purposes 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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit & 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;
(e) On the basis of written representations received from the directors
as on 31st March, 2011 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March
2011 from being appointed as a director in terms of clause (g) of
sub-section (I) of section 274 of the Companies Act, 1956;
(f) In our opinion, and to the best of our information and according to
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 the accounting principles
generally accepted in India:
i. in the case of the Balance Sheet, of the state of affairs of the
company as at 31st, March, 2011;
ii. in the case of the Profit and Loss Account, of the Profit for the
year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
(Referred to in paragraph 3 of our report of even date)
i) The Company has maintained records showing full particulars,
including quantitative details and situation of fixed assets. The fixed
assets covering significant value have been physically verified by the
management during the year, which in our opinion is reasonable, having
regard to the size of the Company and the nature of its business. On
the basis of the information and explanations given by the management,
no material discrepancies have been noticed on such verification.
Substantial Part of fixed assets have been disposed off on account of
technical obsolescence during the year. However this has not affected
going concern status of the company.
ii) In our opinion, the Management at reasonable intervals has
physically verified the inventories of the Company in its possession.
Stocks in the possession and custody of the third parties have been
verified by the Management with regard to confirmation or statement of
account or correspondence of the third parties or subsequent receipt of
goods. The procedures of physical verification of inventory of the
Company followed by the Management are reasonable and adequate in
relation to the size of the Company and nature of its business. The
company is maintaining proper records of inventory
iii) The Company has not granted any loans, secured or unsecured to
Companies, firms or other parties as covered in the register maintained
under section 301 of the Companies Act, 1956.
The Company has not taken any secured loans from Companies, firms and
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. In respect of unsecured loan taken from a
Company covered in the register maintained under section 301 of the
Companies Act, 1956, the rate of interest and other terms and
conditions of loan are prima facie are not prejudicial to the interest
of the Company. The maximum amount outstanding at any time during the is
Rs.33.98 crores and year end balance Rs. 33.98 crores. The principal and
interest amount is repayable on demand.
iv) In our opinion and according to the information 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 the
purchase of inventory, fixed assets and for the sale of goods and
services. During the course of Audit, no major weakness has been
noticed in the internal control systems.
v) 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 Act have been entered into the register
maintained under Section 301 of the Companies Act, 1956.
According to the information and explanations given to us the
transaction made in pursuance of such contracts or arrangements
exceeding value of Rs. Five Lacs have been entered into during the
financial year at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
vi) To the best of our knowledge and according to the information and
explanations given to us, the Company has not accepted any deposits
covered under Section 58 A and 58 AA or any other relevant provisions
of the Companies Act, 1956.
vii) To the best of our knowledge and as per the information and
explanations given to us, the Company has a reasonable internal audit
system, being carried by a firm of Chartered Accountants, commensurate
with its size and nature of its business.
viii) On the basis of records produced, we are of the opinion that
prima facie, the cost records and accounts prescribed by the Central
Government under section 209(l)(d) of the Companies Act, 1956, have
been maintained in respect of a division to which it is applicable.
However, we have not nor we are required, carried out any detailed
examination of such accounts and records.
ix) To the best of our knowledge and according to the information and
explanations given to us, the Company is generally regular in
depositing undisputed statutory dues including Investor Education and
Protection fund, Employee State Insurance, Provident Fund, Wealth Tax,
Custom Duty, Excise Duty, Service Tax, Cess and any other statutory
dues, where applicable with the appropriate authorities However some
delays have been noticed in depositing Income Tax, ESI & Provident
According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Custom Duty and Excise Duty were outstanding as at 31 -03-20II for
a period of more than six months from the date they became payable.
Further according to the information and explanations given by the
management, there were no disputed dues of sales tax, income tax,
custom duty, wealth tax, excise duty, service tax and cess.
x) The Company has no brought forward losses and has not incurred any
cash losses during the financial year. However there was cash loss of
Rs. 2.76 crores in the immediate preceding financial year.
xi) On an examination of the records of the company & information &
explanation given to us, the company has not defaulted in the repayment
of dues to any financial institutions or bank or debenture holder as at
the balance date.
xii) On the basis of verification of accounts and records maintained by
the Company and to the best of our knowledge & belief, the Company has
not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
xiii) In our opinion, and to the best of our information and according
to the explanation by the management, we are of the opinion that the
company is neither a chit fund nor a nidhi/mutual benefit society.
xiv) To the best of our knowledge and according to information given to
us, the Company is not dealing or trading in shares, debentures and
other securities, except certain shares and units of mutual fund were
traded during the year.
xv) To the best of our knowledge and according to the information and
explanation given to us, the Company has not given guarantee for loans
taken by others from Banks/ Financial Institutions.
xvi) To the best of our knowledge and according to the information and
explanations given to us, no term loans were taken by the company
during the year.
xvii) According to the Cash Flow Statement and other records examined
by us and information and explanations given to us, on an overall
basis, funds raised on short-term basis have, prima facie, not been
used during the year for long-term investment.
xviii) According to the information & explanations given to us, the
Company has not made any preferential allotment of shares during the
year to parties and companies covered in the Register maintained under
section 301 of the Companies Act, 1956.
xix) According to the information & explanations given to us the
Company has not issued any debentures during the year.
xx) According to the information & explanations given to us, the
Company has not raised any money by Public Issue during the year.
xxi) Based upon the audit procedure performed and information and
explanation given by the management we report that no fraud on or by
the Company has been noticed or reported during the year.
For MEHRA GOEL & CO.
PLACE: NEW DELHI PARTNER
DATED: 1 st August 2011 M.No. 6102