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Videocon Industries

BSE: 511389  |  NSE: VIDEOIND  |  ISIN: INE703A01011  |  Consumer Goods - Electronic

Explore Videocon Indust connections « Sep 06
Auditor's Report Year End : Sep '08
1.  We have audited the attached Balance Sheet of VIDEOCON INDUSTRIES
 LIMITED, as at 30th September, 2008, Profit and Loss Account and also
 the Cash Flow Statement of the Company for the year ended on that date
 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 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, issued
 by the Central Government in terms of Section 227(4A) of the Companies
 Act, 1956, on the basis of such checks as considered appropriate and
 according to the information and explanations given to us during the
 course of the audit, we give in the Annexure hereto a statement on the
 matters specified in Paragraphs 4 and 5 of the said Order.
 
 4.  Attention is invited to Note No. B-9 of Schedule 15 regarding
 incorporation of the Companys share, in the operations of the joint
 ventures based on the statements received from the respective Operator.
 The Company has received the audited financial statements for the
 period upto 31st March, 2008 and un-audited financial statements for
 the period 1st April, 2008 to 30th September, 2008, in respect of Joint
 Venture Rawa Oil & Gas Field and un-audited statements for the period
 ended 30* September, 2008 in respect of other joint ventures on which
 we have placed reliance.  We have also placed reliance on technical /
 commercial evaluation by the management in respect of allocation of
 development cost to producing properties depletion of producing
 properties on the basis of proved remaining reserves and liability for
 abandonment costs.
 
 5.  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 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. Proper returns adequate for the purpose of our audit have
 been received from branches not visited by us. The branch Auditors
 Reports have been forwarded to us and have been appropriately dealt
 with;
 
 c) The Balance Sheet, Profit and Loss account and the Cash Flow
 Statement dealt with by the report are in agreement with the books of
 account.
 
 d) 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 Section 211 (3C) of the Companies Act, 1956.
 
 e) According to the information and explanations given to us and on the
 basis of written representations received from the directors as on 30th
 September, 2088 and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 30th September,
 2008 from being appointed as a director in terms of Section 274(1 )(g)
 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 financial statements, read together
 with the significant accounting policies, and 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 the state of affairs of the
 Company as at 30th September, 2008;
 
 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.
 
 ANNEXURE REFERRED TO THE AUDITORS REPORT
 
 Statement referred to in paragraph 3 of the Auditors Report of even
 date to the Members of VIDEOCON INDUSTRIES LIMITED on the financial
 statements for the year ended 30th September, 2008.
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As per the information and explanations given to us, physical
 verification of fixed assets, other than those under joint venture, has
 been carried out at reasonable intervals in terms of the phased
 programme of verification adopted by the Company and no material
 discrepancies were noticed on such verification. In our opinion, the
 frequency of verification is reasonable, having regard to the size of
 the Company and nature of its business.
 
 (c) In our opinion, during the year the Company has not disposed off
 substantial part of fixed assets.
 
 (ii) (a) As per the information and explanations given to us, the
 inventories (excluding stock of crude oil lying at extraction site with
 the Operator) have been physically verified during the year by the
 management. In our opinion, having regard to the nature and location of
 stocks, the frequency of the physical verification is reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, procedures of physical verification of inventory followed
 by the management are reasonable and adequate in relation to the size
 of the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. As per the
 information and explanations given to us, the discrepancies noticed on
 physical verification of stocks were not material in relation to the
 operations of the Company and the same have been properly dealt with in
 the books of account.
 
 (iii) (a) As per the information and explanations given to us, the
 Company has not granted or 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.
 
 (b) As 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,
 sub-clauses (b), (c), (d), (f) and (g) of Clause (iii) of paragraph 4
 of the Order are not applicable.  
 
 (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 with regard
 to purchases of inventory and fixed assets and for the sales of goods
 and services. During the course of our audit, we have not observed any
 continuing failure to correct the major weakness in the internal
 controls systems.
 
 (v) (a). Based on the audit procedures applied by us and according to
 the information and explanations provided by the management, 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 required to be maintained under that section.  
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under Section 301 of
 the Companies Act, 1956 and exceeding the value of Rupees Five lakh, in
 respect of any party during the year, have been made at prices which
 are reasonable having regard to prevalling market price at the relevant
 time.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of the provisions of Section 58A and 58AA or any other
 relevant provision of the Companies Act, 1956 and rules made there
 under.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 (viii) The Central Government has prescribed maintenance of the cost
 records under Section 209(1 )(d) of the Companies Act, 1956 in respect
 of the Companys products. As per the information and explanations
 provided to us, we are of the opinion that prima facie, the prescribed
 records have been made and maintained. We have however not made a
 detailed examination of the records with a view to determine whether
 they are accurate or complete.
 
 (ix) (a) According to the information and explanations given to us and
 the records examined by us, the Company is regular in depositing with
 appropriate authorities undisputed statutory dues including Provident
 Fund, Investor Education and Protection Fund, Employees State
 Insurance, Income-tax, Sales-tax, Wealth-tax, Service-tax, Custom-duty,
 Excise-duty, Cess and other material statutory dues wherever
 applicable. According to the information and explanations given to us,
 no undisputed arrears of statutory dues were outstanding as at 30th
 September, 2008 for a period of more than six months from the date they
 became payable.
 
 (b) According to the records of the Company examined by us and
 information and explanations given to us, the particulars of dues of
 Sale-tax, Income-tax, Wealth-tax, Service-tax, Custom-duty,
 Excise-duty, Cess which have not been deposited on account of disputes,
 are given below:
 
 Nature of the Statute    Nature of the Dues   Amount  Forum where 
                                                       dispute is pending
                                           (Rupees in 
                                              Million)
 
 1. Customs Act, 1962     Customs Penalty        0.88  CESTAT
 
                          Customs Duty           2.61  Asst. Commissioner
 
                                                17.18  Dy. Commissioner
 
                                                 0.93  Commissioner 
                                                      (Appeals)
 
                                               213.86  CESTAT
 
                                                14.51  Supreme Court
 
 2. Central Excise  
    Act, 1944             Excise Penalty         0.07  High Court
 
                                                 3.20  Commissioner
 
                                                 2.46  CESTAT
 
                          Service Tax Demand    18.86  Addl. Commissioner
 
                                                 0.50  Asst. Commissioner
 
                                                 3.68  CESTAT
 
                                                 0.14  Commissioner
                                                      (Appeals)
 
                          Excise Duty Demand    45.07  Asst. Commissioner
 
                                                89.90  Joint Commissioner
 
                                                 0.29  Dy. Commissioner
 
                                                33.48  Commissioner
 
                                                 3.06  Commissioner
                                                      (Appeals)
 
                                                 5.00  Tribunal
 
                                                64.72  CESTAT
 
                         Education cess demand   2.27  High Court
 
                                                 5.38  High Court,
                                                       Andhra Pradesh
 
 3. Central Sales 
    Tax Act, 1956 and    Sales Tax Demands     282.55  Asst. Commissioner
    Sales Tax Acts of
    various states                               1.58  High Court
 
                                                16.96  Tribunal
 
                                                 1.31  Joint 
                                                       Commissioner 
                                                      (Appeal)
                         Service Tax and 
                         Education Cess         25.38  High Court,
                                                       Chennai
                         Demand
 
 4. Industrial 
    Dispute Act          Labour Cases & Other    4.72  Labour Court
 
 5. Foreign Exchange 
    Management Act,      Other                  46.70  Supreme Court
    1999
 
 6. Income Tax Act, 1961 Income Tax Demand     161.60  Dy. Commissioner
                                                       of Income Tax
 
                                                82.00  Joint Commissioner
                                                       of Income Tax
 
                                                15.20  Income Tax 
                                                       Appellate Tribunal
                                                 5.57
 
                                                90.58  Asst.Commissioner
                                                       of Income Tax
 
 (x) There are no accumulated losses as at 30th September, 2008. The
 Company has not incurred any cash losses during the year covered by our
 audit and the immediately preceding financial year.
 
 (xi) Based on our audit procedures and the information and explanations
 given by the management, we are of the opinion that the Company has not
 defaulted in repayment of dues to financial institutions, banks or to
 debenture holders during the year.
 
 (xii) Based on our examination of the records and the information and
 explanations given to us, the Company has not granted any loans and/or
 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 Company or
 nidhi/mutual benefit fund/society. Therefore the Clause (xiii) of
 paragraph 4 of the Order is not applicable to the Company.
 
 (xiv) The Company has maintained proper records of transactions and
 contracts in respect of dealing and trading in shares, securities,
 debentures and other investments and timely entries have generally been
 made therein. All shares, debentures and other securities have been
 held by the Company in its own name except to the extent of the
 exemption granted under Section 49 of the Companies Act, 1956.
 
 (xv) According to the information and explanations given to us, the
 terms and conditions of guarantees given by the Company for loans taken
 by others from banks or financial institutions are, prima fade, not
 prejudicial to the interest of the Company.
 
 (xvi) According to the information and explanations given to us, the
 term loans raised during the year were applied, on an overall basis,
 for the purposes for which the loans were obtained.
 
 (xvii) According to the information and explanations given to us and on
 our overall examination of the balance sheet of the Company, we report
 that the Company has not used funds raised on short term basis for long
 term investments.
 
 (xviii) 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) The Company has not issued any secured debentures during the
 year. The Company has created security in respect of debentures issued
 in earlier years.
 
 (xx) During the year the Company has not raised any money by way of
 public issue.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 year.
 
                     For KHANDELWAL JAIN & CO.        For KADAM & CO.
                        Chartered Accountants  Chartered Accountants
 
                            SHIVRATAN AGARWAL              U.S.KADAM
                                      Partner                Partner
                        Membership No.:104180   Membership No.:31055
 Place: Mumbai
 Date : February 26, 2009
Source : Religare Technova

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