We have audited the attached Balance Sheet of Asit C Mehta Financial
Services Limited as at 31st March 2010, the Profit and Loss account
and also the Cash Flow statement 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.
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 management, as well as evaluating the overall financial statement
We believe that our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditors Report) Order, 2003 (as
amended) 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 & 5
of the said Order.
Further to our comments in the Annexure referred to above, we report
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
(ii) 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
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
(iv) 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 sub-section (3C) of the section 211
of the CompaniesAct, 1956;
(v) On the basis of written representations received from the
directors, as on 31 * March 2010 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the
significant accounting policies and notes thereon 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2010;
(b) m the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors Report (Referred to in paragraph 3 of our
Report of even date)
(1) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) The Company has a regular programme of physical verification of its
fixed assets under which all fixed assets are verified in a phased
manner over a period 3 years. In our opinion, this periodicity of
physical verification is reasonable having regarded to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) No fixed assets were disposed of during the year, and therefore, do
not affect the going concern assumption.
(2) (a) As explain to us, inventories were physically verified during
the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanation
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
(3) (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act,1956 except an unsecured
interest free loan to its subsidiary company. The maximum balance of
loan granted to the company was Rs.5.5 lacs and the balance outstanding
at the year-end was Rs. NIL.
(b) The other terms and conditions on which loans have been granted to
the subsidiary and other Company are not, prima-facie, prejudicial to
the interest of the Company.
(c) The company is regular in recovering the Principal amount as
(d) There is no overdue amount of loans granted to company or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956.
(e) The company had not taken any loans, Secured or unsecured, from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
(4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to Purchase of fixed assets and with regard to the
sale of services. During the course of our audit, we have not observed
any continuing failure to correct major weaknesses in internal
controls. In our opinion and according to the information and
explanations given to us, there is no purchase of inventory and sale of
goods during the year and therefore, clause 4(iv) of the Order, to that
extent, is not applicable to the Company.
(5) (a) According to the information and explanations provided by the
management, the contracts or arrangements that needs to be entered into
the register maintained under section 301 of the Companies Act, 1956
have been so entered.
(b) According to the information and explanation given to us , where
each of such transactions, is in excess of Rs.5 lakhs in respect of any
party, the transaction have been made at prices which are prima facie,
reasonable having regard to the prevailing market prices at the
relevant time, except that in respect of sale of services, no
comparison of prices could be made available to us since the Company
informed us that there are no prevailing market prices/ alternate
sources of supply.
(6) The Company has not accepted any deposits from the public and
consequently the directives issued by the Reserve Bank of India, the
provisions of sections 58Aand 58AAor any other relevant provisions of
the Act and the Rules framed thereunder are not applicable.
(7) In our opinion, the internal audit function carried out during the
year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the Company and nature of its
(8) According to information and explanations given to us, the Central
Government has not prescribed the maintenance of cost records under
clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956
in respect of the service activities carried on by the Company and
therefore, clause 4(viii) of the Order is not applicable.
(9) (a) According to records of the Company, and on the basis of our
examination of the books of account, the company is regular in
depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education & protection fund, income
tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess
and other material statutory dues applicable to it. Further, since the
Central Government has till date not prescribed the amount of cess
payable under section 441A of the Companies Act, 1956, we are not in a
position to comment upon the regularity or otherwise of the company in
depositing the same..
(b) According to the information and explanations given to us, there
are no disputed amounts payable in respect of income tax, wealth tax,
service tax, sales tax, customs duty, excise duty and cess. Details of
disputed dues in respect of Foreign Exchange Regulation Act and Service
Tax which have not been deposited as on March 31, 2010 on account of
any dispute are given below.
Name of the
Statute Nature of Dues Amount (Rs.) Period to which the
Exchange Contravention of FERA 10,000,000 1994-95
Service Tax Service tax on
Brokerage 6,798,386/- 1996-2000
Name of the Statue Forum where the dispute is pending
Regulation Act,1973 Appellate Tribunal Foreign Exchange
Service Tax Commissioner of Central Excise
(10) The Company does not have any accumulated losses at the end of the
financial year. The company has not incurred cash losses during the
financial year covered by our audit and the immediately preceding
(11) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
bank and the Company has not issued any debentures and hence clause 4
(xi) of the Order, to that extent, is not applicable.
(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 security by way of pledge of shares, debentures and other
(13) In our opinion, the company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the company.
(14) In our opinion, the company has maintained proper records of
transactions and contracts in respect of its dealing in shares,
securities, debentures and other investments and timely entries have
been made therein. The aforesaid shares, securities, debentures and
other investments have been held by the Company in its own name, except
to the extent of the exemption granted under Section 49 of the
(15) In our opinion, the terms and conditions on which the company has
given guarantees for loans taken by its Wholly Owned Subsidiary from
banks are not prejudicial to the interest of the company.
(16) In our opinion, term loan availed by the company were, prima
facie, applied by the Company for the purpose for which the loans were
(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 funds of Rs. 1,15,76,567/- raised on short-term basis have been
used for long-term investment.
(18) The Company has not made preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Act.
(19) The Company has not issued any debentures. Accordingly, clause
4(xix) of the Order is not applicable.
(20) The Company has not raised any money by way of public issue during
(21) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For MANEK & ASSOCIATES
Mumbai (SHAILESH MANEK)
Dated: May 27, 2010 Proprietor
Membership No.: 34925