1) We have audited the attached Balance Sheet of INANi SECURITIES
LIMITED as at 31st March, 2008 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 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 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
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 report that:
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
ii) In our opinion, proper book of accounts 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 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 Act, 1956; except Point no 10 of Schedule 17 regarding
provision of gratuity accounted on actual basis instead of actuarial
valuation as per AS-15 Employee Benefits and non-accounting of leave
encashment as per actuarial valuation as per AS 15Employee Benefits
issued by ICAI.
v) on the basis of written representations received from the directors,
as on 31st March, 2008, and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on March 31,
2008 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 explanations given to us, the said financial statements read
together with the Significant Accounting Policies, give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in confirmity 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, 2008;
b) in 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
Annexure referred to in paragaraph 3 of our report dated : 29th August,
2008 to the members of Inani Securities Limited on the financial
statements for the year ended 31st March, 2008
1) a) The Company has maintained proper record showing full particulars
including quantitative details of 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
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
dematerialised 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
b) The existing procedures of reconciliation of stock followed by the
man- agement 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 1 party covered in the
register maintained under section 301 of the Companies Act, 1956. The
year ended outstanding balance of such loans granted was Rs.252.43 Lacs
and the maximum amount involved during the year was Rs.2052.22 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
c) In respect of the aforesaid loans, the party is repaying the
principal amounts as stipulated and is 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 not taken any loans from the companies, firms or
other parties covered in the register maintained under Section 301 of
the Companies Act, 1956.As the company has not taken any loans, the
provisions of sub clause (e),(f) and (g) of clause (iii) of paragraph 4
of the Order are not applicable to the Company.
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 companys
money market operations are commensurate with the size of the company
and its nature of business.
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) The Company has internal checks and controls but does not have any
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 Assessment year
2003-04 amounting to Rs 408360 /
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,
2008 for a period of more than six months from the date they became
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 or 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 debentures.
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 been made therein. The investments
are held by the company in its own name, except for certain shares
which are pledged with banks and financers.
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 applicable.
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 obtained.
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.
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
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.
For G.D.UPADHYAY & CO
Place : Hyderabad Partner
Date : 29th August, 2008 Membership No : 27187