ANNUAL REPORT 2005-2006
THE MEMBERS OF
INANI SECURITIES LIMITED
1) We have audited the attached Balance Sheet of INANI SECURITIES LIMITED
as at 31st March, 2006 and also the Profit and Loss Account for the year
ended as on that date annexed thereto and Cash Flow Statement for the year
ended on that date. 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 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 from 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 presentation. We believe that our audit
provides a reasonable basis for our opinion.
3) As required by the Companies (Auditors' Report) (Amendment) Order, 2004
(hereinafter referred to as 'the Order') issued by the Central Government
of India in terms of section 227(4A) of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4 and 5
of the said Order.
4) Further to our comments in the Annexure referred to in Para 3 above, we
i) we have obtained all the information and explanations, which to the best
of our knowledge and belief were necessary for the purposes of our audit;
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 those books;
iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
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 Section 211 of the Companies
v) on the basis of written representations received from the directors, as
on 31st March, 2006, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2006 from
being appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act. 1956: and
vi) in our opinion and to the best of our information and according to the
explanation given to us, the said financial statements read together with
the Significant Accounting Policies, give the information required by the
Companies Act, 1956 it 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, 2006;
b) in the case of the Profit and Loss Account, the profit for the year
ended on that date; and
c) in the case of the Cash Flow Statement, the cash flows for the year
ended on that date.
PLACE : HYDERABAD For G.D. UPADHYAY & CO
DATE : 19-08-2006 Chartered Accountants
Membership No. 27187
ANNEXURE TO THE AUDITORS' REPORT
Annexure referred to in paragraph 3 of our report dated : 19th August, 2006
to the members of Inani Securities Limited on the financial statements for
the year ended 31st March, 2006.
1. a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed Assets.
b) The Company has phased programme of physical verification of its fixed
assets which, in our opinion, is reasonable having regard to the size of
the Company and the nature of its assets. In accordance with such
programme, the management has physically verified fixed assets during the
year and no material discrepancies were noticed on such verification.
c) In our opinion, a substantial part of fixed assets has not been disposed
off by the Company during the year.
2) a) The stock of securities and units held by the Company in
dematerialized form in NSDL/CDSL is verified with the confirmation
certificate received from them. The stock of securities and units held in
physical form is physically verified with respective share certificates.
b) The existing procedures of reconciliation of stock followed by the
management at periodical interval are reasonable and adequate in relation
to the size of the Company and nature of its business.
c) The Company is maintaining proper records of its inventory and no
material discrepancies were noticed on the reconciliation as mentioned
above, as compared with book records.
3) In respect of loans, secured or unsecured granted/taken by Company
to/from Companies, firms and other parties covered in the register
maintained under section 301 of the Companies Act, 1956.
a) The Company has granted unsecured loans to 2 parties covered in the
register maintained under section 301 of the Companies Act, 1956. The year-
end outstanding balance of such loans granted was Rs. 631.00 lacs and the
maximum amount involved during the year was Rs. 1053.00 lacs.
b) In our opinion, the rate of interest and other terms and conditions of
such loans are not prima facie prejudicial to the interest of the Company.
c) In respect of the aforesaid loans, the parties are repaying the
principal amounts as stipulated and are also regular in payment of
interest, where applicable.
d) In respect of the aforesaid loans granted, there is no overdue amount
more than Rupees One Lakh.
e) The Company has taken unsecured loans from one party covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved was Rs. 882.00 lacs.
f) In our opinion and according to the information and explanations given
to us, the rate of interest and other terms and conditions on which loans
have been taken from Companies, firms or other parties listed in the
register maintained under Section 301 of the Companies Act, 1956 are not,
prime facie, prejudicial to the interest of the Company.
g) The Company is regular in repaying the principal amount and payment of
4) In our opinion and according to the information and explanations given
to us the internal control procedure for purchase of fixed assets, shares
and securities, units and corporate bonds and company's money market
operations are commensurate with the size of the company and its nature of
5) a) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered into the register
maintained under section 301 of the companies Act, 1956 have been so
b) In our opinion and according to the information and explanations given
to us, having regard to the comments in (a) above, 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
five lakh rupees in respect of any party during the year have been made at
prices, which are reasonable having regard to the prevailing market prices
at the relevant time.
6) The Company has not accepted any deposits from the public and
consequently, the directive issued by the Reserve Bank of India, the
provisions of sections 58A and 58AA of the Companies Act, 1956 and the
rules framed there under are not applicable.
7) In our opinion, the Company has an internal audit system commensurate
with its size and nature of its business.
8) According to the 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 services carried out by the Company.
9) a) According to the information and explanations given to us, 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
Income Tax, Sales Tax, Service Tax, Investor Education and Protection Fund,
Wealth Tax and any other material Statutory dues applicable to it. As per
information and explanations given to us, the Provident Fund Act and
Employees State Insurance Act are not applicable to the company. However,
pending adjustments of refunds of earlier Assessment years and
rectification of the Assessment Orders the Company has not paid undisputed
Income Tax Liability of the following Assessment years.
SI.No. Period to which Income Tax Amount
it relates Assessment Year
1 2001-02 2002-03 129705
2 2002-03 2003-04 408360
3 2003-04 2004-05 58349
4 2004-05 2005-06 21318
Total : 617732
b) According to the information and explanations given to us, no undisputed
dues payable in respect of Sales Tax, Income Tax, Service Tax, Wealth Tax,
Customs Duty and Cess were outstanding at 31st March, 2006 for a period of
more than six months from the date they became payable.
10) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the current financial
year in the immediately preceding financial year.
11) In our opinion, and according to the information and explanations given
to us, the Company has not defaulted in repayment of dues to any financial
institution/bank and the Company has not obtained any borrowings by way of
12) The Company has not granted loans and advances on the basis of security
by way of pledge of shares, debentures and other securities accordingly,
clause 4(xii) of the Order is not applicable.
13) The Company is not a chit fund, nidhi, mutual benefit fund or a
society. Accordingly, clause 4(xiii) of the Order is not applicable.
14) The Company has maintained proper records of transactions and contracts
in respect of trading in shares, debentures, and other securities and
timely entries have beer made therein. The investments are held by the
company in its own name, except for certain shares which are lodge for
transfer or are pending for rectification of bad deliveries or are pledged
with barks and financiers.
15) According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from banks or
financial institutions. Accordingly, clause 4(xv) of the Order is not
16) In our opinion and according to the information and explanations given
to us, the term loans were applied for the purpose for which the loans were
17) On the basis of an overall examination of the Balance Sheet and Cash
Flow Statement of the Company, no funds raised on short-term basis have
been used for long term investment and vice versa.
18) The company has not made any preferential allotment of shares to
parties and Companies covered in the register maintained under section 301
of the Companies Act, 1956 during the year.
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 through a public issue during the
21) Based upon the audit procedures performed and on the basis of
information and explanations provided by the management, we report that no
fraud on or by the Company has been noticed or reported during the course
of our audit.
PLACE : HYDERABAD. For G.D. UPADHYAY & CO
DATE : 19-08-2006 Chartered Accountants,
Membership No. 27187