We have audited the accompanying financial statements of TWENTYFIRST
CENTURY MANAGEMENT SERVICES LIMITED (the Company), which comprise the
Balance Sheet as 31st March, 2014 and the Statement of Profit and Loss
and the Cash Flow Statement for the year then ended, and a summary of
at the significant accounting policies and other explanatory
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position and financial performance of the Company in accordance with
the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956 (the Act) and in accordance with the accounting
principles generally accepted in India. This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
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
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, 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, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
a. Non provision for Gratuity has been made in accounts, in the event
of any employee leaving the services by reason of death / incapability
/ retirement or resignation. Amount not ascertained.
b. Non Provision of Doubtful Loans & Advances amounting to Rs. 2134.90
lacs advanced to its subsidiary company.
We further report that, had the observation made by us in point (b) of
Para above been considered, the loss for the year would have been Rs.
2160.55 lacs (as against the reported loss figures of Rs. 25.65 lacs)
and accumulated loss would have been Rs.2318.85 Lacs (as against
reported figure of accumulated Loss of Rs. 183.95 Lacs) and the balance
of amount due from subsidiary company would have been Rs. Nil (as
against the reported figure of Rs. 2134.90 lacs),
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the above 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 Balance Sheet, of the state of affairs of the Company
as at 31st March 2014
b) In the case of the Statement of Profit & Loss, of the Loss of the
company for the year ended on that date.
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (th
eOrder) issued by the Central Government of India in terms of Section
227 (4A) of the Act, we give in the Annexure a statement on the matters
specified in paragraph 4 & 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 purposes of our
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
(c) The Balance Sheet and the Statement of Profit and Loss and Cash
Flow statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion the Balance Sheet and the Statement of Profit & Loss
comply with the Accounting Standards referred to in Section 211(3C) of
(e) On the basis of the written representations received from the
directors, as on 31st March 2014 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2014
from being appointed as a director in terms of section 274(1)(g) of the
ANNEXURE TO THE AUDITOR''S REPORT
1. The Company has maintained proper records showing full particulars,
including quantitative details and situations of fixed assets.
The fixed assets of the company have been physically verified by the
Management during the year and no material discrepancies were noticed
on such verification. In our opinion the verification is reasonable
having regard to the size of the Company and the nature of its assets.
As per the information and explanations given to us, during the year,
the company has not disposed off any substantial part of the fixed
assets that would affect the going concern.
2. The company is primarily engaged in investing activities.
Accordingly, it does not hold any physical inventories. Thus paragraph
4(ii) of the Order is not applicable to the company.
3. The company has taken interest free loans of Rs. 5.50 Lacs from
companies or firms listed in the register maintained under section 301
of the Companies Act 1956 and from company under the same management.
The company has granted interest free loans of Rs. 2152.76 lacs to the
companies listed in the register maintained under section 301 of the
Companies Act 1956. In our opinion the terms & conditions of said loan
is not prima facie prejudicial to the Interest of the Company. In our
opinion the terms & conditions of said loan is not prima facie
prejudicial to the Interest of the Company. But the Loan advanced to
subsidiary company amounting to Rs. 2134.90 Lacs is doubtful in
4. The Company has adequate internal control procedures commensurate
with its size and nature of business with regard to purchase of shares,
fixed assets and for the sale of shares, assets or equipments. We have
not observed any continuing failure to correct such internal control
5. The transactions that are required to be entered into the register
in pursuance of Section 301 of the act have been so entered.
In our opinion and according the information and explanations given to
us the transactions made in pursuance of contracts or arrangements
entered in the register maintained u/s 301 of the Companies Act 1956
and exceeding the value of Rs.5 Lacs in respect of any party during the
year have been made at prices which are reasonable, having regard to
prevailing market prices at the relevant time where such market prices
6. During the year under review, the company has not accepted any
deposits from the public to which the provisions of Section 58A of the
Companies Act, 1956 apply.
7. Company does not have any internal audit department, commensurate
with the size of the company and nature of its business.
8. We have been informed that Central Government has not prescribed
the maintenance of cost records under Section 209(1)(d) of the
Companies Act, 1956, in respect of any activities carried on by the
9. According to the information and explanations given to us, the
company has been regular in depositing Employees Provident Fund dues
and has also been regular in depositing undisputed income tax and other
applicable statutory dues with appropriate authorities.
According to the information and explanations given to us and the
records of the Company examined by us, the particulars of income tax as
at 31st March 2014 which have not been deposited on account of a
dispute pending are as under:
Name AY Nature Forum where Amount
of the of the disputes Disputed
Statute Dispute are pending
Income 1995 - Demand raised ACIT Company Rs.4.81
tax Act, 96 Subject to recti- Circle III (2) lacs
1961 fication by ACIT
Income 1996 - Rectification by ACIT Company Rs. 104.96
tax Act, 97 AO raised a Circle III (2) lacs
Company has to
34B waiver CCIT- I,
by he company,
Expecting a relief
of Rs. 45 lacs
Income 2003 - Diminution in the Madras High Nil
tax Act, 04 Value of stock Rs. Court
1961 1289 Lacs (Value
will ot be any
demand n this
issue only arrived
Will be reduced.
However the arrived
forward oss will
be useful or AY
Income 2005 - Assessment was CIT(A) III Rs. 35.15
tax Act, 06 re-opened for
1961 Time and order
relief u/s 115 JB
Income 2006 - B/F loss not ACIT Company Rs. 1.33
tax Act, 07 Considered, Circle III (2) lacs
Statute AY Nature Forum Where Amount Income
of Dispute the disputes Disputed
1961 2007 - Department has ITAT Rs.55.45
08 filed appeal before Lacs
Hon''ble ITAT on the
issue of Short Term
Capital gains @
30.99% instead of
Revision order by
AO has not consid
-ered the Rebate
Which is pending.
Income 2007 - Department issued CIT-Appeal III Rs.68.69
tax Act, 08 148 notice and the lacs
1961 assessment got
The same issue o
STCG @30.99% ]
instead of 15%
Company had filed
Appeal - III
Income 2009 - No demand, CIT Appeal III Nil
tax Act, 10 However penalty
1961 as been
addition u/s 14A
Appeal III it is
Income 2010 - Credit for Self CIT Company Rs. 13.28
tax Act, 11 Assessment Tax Circle III (2) lacs
1961 of Rs. 7.02 Lacs
has not been
Income 2011 - Intimation u/s CIT Company Rs. 830.20
tax Act, 12 143 (1) wrongly Circle III (2) lacs
1961 Passed, Credit for
Tax of Rs.182.04
Lacs has not been
yet to be field
10. The company has accumulated loss of Rs. 158.30 lacs till the
immediately preceding financial year, has incurred a loss of Rs. 25.65
lacs during the current financial year under this report.
11. On the basis of records examined by us and the information and
explanations given to us, the Company has not defaulted in repayment of
dues to financial institutions, banks or debenture holders.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion the company is not a Chit Fund or a Nidhi/Mutual
Fund/Society. Therefore the provisions of clause 4 (xiii) of the
companies (Auditor''s Report) Order, 2003 are not applicable to the
14. The Company has maintained proper records of transactions and
contracts in respect of trading in shares, debentures and other
investments and timely entries have been made therein.
15. According to the information and explanations given to us the
company has not given any guarantee for the loans taken by others from
banks or financial institutions.
16. According to the information and explanations given to us, the
company has not obtained any term loans during the year under review.
17. On the basis of an overall examination of the balance sheet of the
company, in our opinion and according to the information and
explanations given to us, funds raised on short term basis, have not
been used for long term investments.
18. The company has not made any preferential allotment of shares
during the year.
19. There are no secured debentures issued during the year.
20. The company has not raised any money by public issue during the
21. To the best of our knowledge and belief and according to the
information and explanations given to us no material fraud on or by the
company has been noticed or reported during the course of our audit.
For Lakhani & Lakhani
(Firm Registration No.115728W)
Suhas Shinde (M.No. 117107)
Date : 16-05-2014