Report on the Financial Statements
We have audited the accompanying financial statements of Den Networks
Limited, (''the Company'') which comprise the Balance Sheet as at 31
March, 2013, the Statement of Profit and Loss and the Cash Flow
Statement forthe yearthen ended, and a summary ofthe significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true & fair view ofthe financial
position, financial performance & cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211
(3C) of the Companies Act, 1956 (the Act) & 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 ofthe financial statements
that give a true & fair view & are free from material misstatements,
whetherdueto fraud orerror.
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 ofthe risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal controls relevant to
the Company''s preparation and fair presentation ofthe financial
statements in orderto design audit procedures that are appropriate in
the circumstances, but not forthe purpose of expressing an opinion on
the effectiveness of the Company''s internal control. An audit also
includes evaluating the appropriateness ofthe accounting policies used
and the reasonableness ofthe accounting estimates made by the
Management, as well as evaluating the overall presentation ofthe
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 the Balance Sheet, of the state of affairs ofthe
Company as at 31 March, 2013;
(b) in the case ofthe Statement of Profit and Loss, ofthe profit ofthe
Company forthe year ended on that date; and
(c) in the case ofthe Cash Flow Statement, ofthe 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 (the
Order) issued by the Central Government in terms of Section 227(4A)
ofthe Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 ofthe Order.
2. As required by Section 227(3) ofthe 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
(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
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
(d) In ouropinion, the Balance Sheet, the Statement of Profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211 (3C) ofthe Act.
(e) On the basis of the written representations received from the
directors as on 31 March, 2013taken on record bythe Board of Directors,
none of the directors is disqualified as on 31 March, 2013 from being
appointed as a director in terms of Section 274(1 )(g) ofthe Act.
I. Having regard to the nature of the Company''s
business/activities/result, clauses ii, x, xiii, xiv and xix of
Companies (Auditor''s Report) Order, 2003 are not applicable.
ii. In respect of its fixed assets:
a. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. According to the information and explanations given to us, the
Company has a regular programme of physical verification to cover all
fixed assets in a phased manner over a period of three years other than
settop boxes which are in possession of the customers/ third parties
and distribution equipment comprising overhead and underground cables.
Management is ofthe view that it is not possible to verify these assets
due to their nature and location. In accordance with this program,
certain fixed assets were verified during the year and no material
discrepancies were noticed on such verification. In our opinion, other
than for physical verification of set top boxes and distribution
equipment referred to above, the frequency of verification of fixed
assets is reasonable.
c. The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status ofthe Company.
iii. The Company has neither granted nor taken any loans, secured or
unsecured, to/from to companies, firms or other parties listed in the
register maintained underSection 301 ofthe Companies Act, 1956.
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the capital
items purchased are of special nature and suitable alternative sources
are not readily available for obtaining comparable quotations, there is
an adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
fixed assets and the sale of goods and services. During the course of
our audit, we have not observed any major weakness in such internal
v. In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
a. The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
b. Having regard to the explanation that comparative quotations were
not available for some services of a specified nature that were
purchased during the year, such transactions in excess ofRs. 5 lakhs in
respect of any party, have been made at prices which are prima facie
reasonable having regard to the prevailing market prices at the
vi. According to the information and explanations given to us, the
Company has not accepted any deposits from the public during the year,
within the meaning of Sections 58A and 58AA or any other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975.
vii. In our opinion, the internal audit functions carried out during
the year by firm of Chartered Accountants appointed by the Management
have been commensurate with the size ofthe Company and the nature of
viii. We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1 )(d) ofthe
Companies Act, 1956 and are ofthe opinion that, prima facie, the
prescribed cost records have been maintained. We have, however, not
made a detailed examination ofthe cost records with a view to determine
whetherthey are accurate or complete.
ix. According to the information and explanations given to us in
respect ofstatutory dues:
a. The Company has generally been regular in depositing its undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Wealth Tax, ServiceTax, Customs Duty, Cess and
other material statutory dues applicable to it with the appropriate
authorities. According to information and explanations given to us, the
Company''s operations did not give rise to any Excise Duty & Investor
Education and Protection Fund.
b. There are no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Cess and other material statutory dues in
arrears as at 31 March, 2013 for a period of more than six months from
the date they became payable.
c. Details of dues of Sales tax which have not been deposited as on 31
March, 2013 on account of disputes are given below:
Name of Nature of Forum where
Statute Dues Dispute is
UP Value Value Additional
Added Tax Act, added tax Commissioner
Name of Statute Period to which Amount Involved
the Amount Pending Relates (Rs. in million)
UP Value Added Tax
Act, 2008 April 2012 to 51.03
According to the information and explanations given to us, there are no
amounts of Income Tax, Wealth Tax, Service Tax, Customs Duty, and Cess
which have not been deposited on account of any disputes.
x. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions.
xi. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
the way of pledge of shares, debentures and other securities.
Accordingly, the provisions of clause 4(xii) of the Order are not
applicable to the Company.
xii. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantee given by the
Company fora loan taken by its subsidiary company from a bank is not
prima facie prejudicial to the interest ofthe Company.
xiii. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
xiv. In our opinion and according to the information and explanations
given to us and on an overall examination ofthe Balance Sheet ofthe
Company, we report that funds raised on shortterm basis have, prima
facie, not been used during the year for long term investment.
xv. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301
ofthe Companies Act, 1956.
xvi. The Management has disclosed the end use of money raised by public
issues in the notes to the financial statements and we have verified
xvii. To the best of our knowledge and according to the information
and explanations given to us, no fraud by the Company and no fraud on
the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
(Registration No. 015125N)
New Delhi Partner
30 May, 2013 (Membership No. 87104)