1. We have audited the attached Balance Sheet of SPLASH MEDIA WORKS
LTD. as at 31st March, 2007 and also the Profit and Loss Account and
Cash Flow Statement of the Company 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 material misstatement. An audit
includes examining, on a test basis, evidences 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) Order, 2003, issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we give in an Annexure attached
hereto a statement on matters specified in the said Order.
4. Further to our comments in the Annexure referred to above, we
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
b) 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
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) 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, to the extent applicable, except Accounting
Standard 15-Accounting for retirement benefits in the financial
statement of Employees, as all these benefits are accounted on cash
(e) On the basis of the written representations received from the
Directors and taken on record by the Board of Directors, we report that
none of the directors is disqualified as on 31st March, 2007 from being
appointed as a Director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
(f) 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
notes thereon particularly note No. ( 6 ) regarding accounting of
Gratuity and Bonus on cash basis; give the informations required by the
Companies Act, 1956 in the manner so required,
(i) In the case of Balance Sheet, of the state of affairs of the
Company as at 31 st March, 2007
(ii) In the case of the Profit and Loss account, of the profit of the
Company for the year ended on that date, and
(iii) In the case of Cash Flow Statement of the Cash Flow for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Annexure referred to in paragraph 3of the Auditors Report to the
Members of SPLASH MEDIA WORKS LTD. for the year ended 31st March, 2007.
(i) (a) The Company has maintained proper records to show full
particulars, including quantitative details and situation of fixed
(b) As per Companys policy, verification of fixed assets is being
conducted in a phased programme by the management designed to cover all
assets over a period of One year, which in our opinion is reasonable
having regard to the size of the Company and the nature of assets. The
verification of assets as per this programme has been carried out. The
discrepancies noticed on such verification were not material and have
been properly dealt with in the books of account.
(c) As the Company has not disposed off any Fixed Assets during the
year, paragraph 4(i)(c) of the Companies (Auditors Report) Order, 2003
(hereinafter referred to as the Order) is not applicable.
(ii) (a) During the year, the inventories have been physically verified
by the management. In our opinion, the frequency of verification is
reasonable in relation to size of the Company and nature of its
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of the record of inventories, we
are of the opinion that, the Company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of
inventories as compared to book records were not material and have been
properly dealt with in the books of account.
(iii) (a) According to the information and explanations given to us,
the Company has not taken loan from companies, firms or other parties
covered in the register maintained under section 301 of the Companies
Act, 1956 during the year. The Company has not granted any Loan to
companies firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
(b) Since the company has neither taken or nor given any Loans from/to
above parties, the clause relating to terms and conditions of loan,
repayment of loan and overdue amount etc. does not apply.
(iv) 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 purchases of
inventories, fixed assets, and with regard to the sale of goods.
(v) According to the information and explanations given to us, there
were no transactions with related parties , therefore the question of
entering the same into the register maintained in pursuance of section
301 of the Companies Act, 1956 and comparison of prices of the
transactions with transactions entered into with other parties does not
(vi) In our. opinion and according to the information and explanations
given to us, the Company has not accepted any Deposits from Public in
contravention of provision of section 58A and 58AAofthe Companies Act,
1956 and the Companies (Acceptance of deposits) Rules, 1975. We are
informed, that no order has been passed by the National Company Law
(vii) The Company has an in house internal audit system, which in our
opinion, is reasonable considering size and nature of its business.
(viii) As informed to us, the Central Government has not prescribed the
maintenance of cost records under Section 209(1 )(d) of the Companies
Act, 1956 in respect of the activities of the Company and. therefore
such accounts and records have not been made and maintained by the
(ix) (a) According to the records of the company and information and
explanations given to us and as certified by Directors, the Company has
been generally regular in depositing the undisputed statutory tax and
duties with the appropriate authorities. There are no undisputed
statutory dues as referred to above as at 31st March, 2007 which are
outstanding for a period of more than six months from the date they
become payable, except professional tax payable by the company on
(b) According to the records of the Company and information and
explanations given to us, there are no dues in respect of income tax,
wealth tax, excise duty, customs duty and cess, which have not been
deposited on account of any dispute.
(x) The Company has neither accumulated losses as at March 31,2007 nor
has it incurred any cash losses during the financial year ended on that
date or in the immediately preceding financial year
(xi) As no loan has been taken by the company from any banks, financial
institutions or Debenture holders, the question of repayment of dues to
banks, financial institutions or Debenture holders does not arise.
(xii) As Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities,
paragraph 4(xii) of the Order is not applicable.
(xiii) As the Company is not a chit fund / nidhi / mutual benefit funds
/ society to which the provisions of special statute relating to chit
fund are applicable, paragraph 4(xiii) of the Order is not applicable.
(xiv) As the Company is not dealing or trading in shares, securities,
debentures and other investments so clause (xiv) of the said order is
applicable to the company.
(xv) The Company has not given any guarantee in respect of loans taken
by others from banks or financial institutions.
(xvi) The Company has not taken any Term Loan during the year.
(xvii) No funds have been raised by the Company for Short Term or Long
(xviii) As the Company has not made preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year, paragraph 4(xviii) of the Order is not
(xix) As the Company has not issued any debentures during the year,
paragraph 4(xix) of the Order is not applicable.
(xx) Since the Company has not raised money by way of public issue
during the year, paragraph 4(xx) of the Order is not applicable.
(xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that, no fraud on or by
the Company has been noticed or reported during the course of our audit
during the year.
For ABN & Co.
(S. C. Kabra)
Date :- 3/9/2007.