1. We have audited the attached Balance Sheet of Landmarc Leisure
Corporation Ltd., as at 30th September 2006, the Profit and Loss Account
and 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.
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 of matenal misstatement. An audit indudes
examining, on a test basis, evidence supporting the amount 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) Order 2003, as
amended by the Companies (Auditors Report) (Amendment) Order 2004
issued by the Central Government in terms of Section 227 (4A) of the
Companies Act, 1956, we enclose in the Annexure a statement of the
matters specified in paragraphs 4 and 5 of the said Order, to the
extent applicable to the Company during the year under review.
4. Further to our comments in the Annexure referred to in Para 3
above, we report as follows:
(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 the law
have been kept by the Company so far as it appears from our examination
of those books;
(iii) The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the Books of
Accounts;
(iv) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the
extent applicable;
(v) On the basis of written representations received from the concerned
directors and taken on record by the Board of Directors, we report that
none of directors is disqualified as on 30th September, 2006 from being
appointed as a director in terms of Section 274 (1) (g) of the
Companies Act, 1956 as on the said date;
(vi) Subject to Note No. II. 3 (a) and (b) regarding non-provision in
the accounts towards doubtful recovery of certain Sundry Debtors and
Loans and Advances amounting to Rs 15.40 Lacs and Rs. 300.00 Lacs
respectively, since the management is hopeful of their full recovery /
performance, having consequential effect on the Loss for the year,
Provisions, Sundry Debtors and Loans and Advances to the extent
mentioned as above, in our opinion and to the best of our information
and according to the explanations given to us, the said accounts, read
together with the Significant Accounting Policies and other Notes to
Accounts in Schedule-15. 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 30 September 2006,
(b) In the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date and
(c) In the case of the Cash Flow Statement, of the Cash Flows of the
Company for the year ended on that date.
Annexure to the Auditors Report (Referred to in paragraph 3 of our
report of even date)
In terms of the information and explanations given to us and the books
and records examined by us and on the basis of such checks as we
considered appropriate, we further report as under:
(i) As explained to us, the Company is still in the process of updating
its Fixed Assets Register to show full particulars, including
quantitative details and situation of fixed assets. As explained to us,
these fixed assets have been physically verified by the management at
reasonable intervals during the year and that no material discrepancies
were noticed on such verification.
No significant part of fixed assets has been disposed off by the
Company during the year under review.
(ii) There was no inventory with the Company at any time during the
year under review.
(iii) The Company has taken (interest-free) unsecured loans/deposits
from 5 (five) bodies corporate and other loans (interest bearing)
routed through an individual, all being the parties covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum balance outstanding at any time during the year in respect of
the said loans / deposits was Rs. 636.61 Lacs and the balance as at the
end of the year was Rs. 515.16 Lacs. Also, during the year Company has
repaid Rs. 91.83 Lacs to 2 (two) of the aforesaid parties.
In our opinion, the rate of interest wherever applicable and other
terms and conditions in respect of the above loans / deposits were not
prima-facie prejudicial to the interests of the Company. In our
opinion, the Company is generally regular in re-payment of interest as
well as the principal in respect of the aforesaid loans. There were no
overdue principal or interest in respect of the same as at the close of
the year.
In respect of other loans / deposits, we were explained that the same
are repayable on demand. Due to the above reason, there cannot be any
overdue element in respect of the same at any time during the year.
The Company has not granted any loans to the parties listed in the
Register maintained under Section 301 of the Companies Act, 1956 during
the year under review.
(iv) In our opinion, there are internal control procedures for the
provision of services by the Company. However, the same need to be
further strengthened to make them adequate and commensurate with the
size of the Company and the nature of its business. There has been no
purchase of inventory or sale of goods by the Company during the year
under review. Also, during our review, we have not come across any
major weaknesses in the internal controls.
(v) Transactions that need to be entered into with the parties listed
in the Register maintained under Section 301 of the Companies Act, 1956
have been so entered. In our opinion, the said transactions during the
year under review have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the purview of the directives issued by the Reserve Bank of India and
the provisions of Sections 58A and 58AA of the Companies Act, 1956 and
the rules framed there under. As per the opinion obtained by the
Company, certain unsecured loans accepted by the Company in the earlier
years from a bank were continued to be routed through the accounts of
the respective individual in whose name they were obtained, for
administrative reasons and therefore, the said loans are outside the
purview of the scope of Section 58-A of the Companies Act, 1956.
(vii) The Company has appointed an internal auditor with effect from
1st April 2006. Upon perusal of the report submitted by the said
internal auditor for the period ended 30th September 2006, we are of
the opinion that the scope and coverage of the internal audit needs to
be substantially strengthened to make it commensurate with the size of
the Company and nature of its business.
(viii) As explained to us, the maintenance of cost records has not been
prescribed by the Central Government for the Company under Section
209(1 )(d) of the Companies Act, 1956.
(ix) As per the records verified by us, the Company is generally
regular in depositing the undisputed statutory dues involving Provident
Fund, Employees State Insurance, Income tax, Service Tax and Value
Added Tax with the appropriate authorities during the year under
review. However certain arrears of Service tax and Fringe Benefit Tax,
due for more than six months were outstanding from the date they became
payable, as at the dose of the year amounting. to Rs. 9,815 and Rs.
62,084 respectively. The latter amount was, however, paid before
approval of the accounts by the Board of directors. The provisions of
the statutes governing Wealth Tax, Customs Duty, Investor Education and
Protection Fund, Excise Duty and Cess are, as explained to us, not
applicable to the Company during the year under review.
As explained to us and as per the records verified by us, there are no
dues of Value Added Tax, Income tax, Customs Duty, Wealth tax, Excise
Duty, Service Tax or Cess, which have been disputed and lying pending
as at the close of the year with the Company.
(x) As per the accounts verified by us, the Companys accumulated
losses at the end of the current financial year are more than fifty per
cent of its net worth. Also, the Company has incurred cash losses in
the current financial year amounting to Rs.20,44,464 (Previous year Rs.
38,96,068).
(xi) As per the records verified by us, the Company has not defaulted
in repayment of dues in respect of loans taken from banks.
(xii) As per the records verified by us, the Company has not granted
loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) The provisions of special statutes applicable to chit fund /
nidhi / mutual benefit fund /societies are not applicable to the
Company during the year under review.
(xiv) In respect of Investments, proper records have been maintained by
the Company for the transactions and timely entries have been made
therein. The shares, securities and debentures have been held by the
Company in its own name except to the extent of the exemption, if any,
granted under Section 49 of the Companies Act, 1956.
(xv) As per the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from bank or
financial institutions.
(xvi) No Term Loans were obtained by the Company during the year under
review.
(xvii) In our opinion, the funds raised by the Company on short-term
basis have been used only for the purpose intended and not for
long-term investment.
(xviii) The Company has not made any preferential allotment of equity
shares during the year under review.
(xix) The Company has not issued any Debentures and hence no securities
are required to be created in respect thereof.
(xx) No money has been raised by way of public issue by the Company
during the year under review.
(xxi) As per the books examined by us and based on the explanations
given to us no fraud on or by the Company has been noticed or reported
during the year.
For Malpani & Associates
Chartered Accountants
Shyam Malpani
Proprietor
Membership No.F-34171
