1 We have audited the attached balance sheet of M/s Scanpoint Graphics
Limited, as at 31st March 2007 the profit and loss account for the year
ended on that date and also 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 the 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, 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) Order. 2003 issued
by. the Central Government of India in terms of sub-section i A) of
section 227 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, to the extent applicable
1 Further to our comments in the Annexure referred to above, we report
(i) We have obtained all the information and explanations, which the
best of our knowledge and belief were necessary for the purposes of our
(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 and proper returns adequate for the purposes of our audit
have been received from the branches not visited by us.
(iii) The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
(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;
(v) On the basis of written presentations received from the directors,
as on 31st March 2007 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;
(vi) In our opinion and to the best of our information and according to
the explanations given to us. the said accounts subject to.
i. No provision being made in respect of contingent liabilities (Note
No.2 of Schedule 17.)
ii. No provision being made for Joan and advances (Note No. 4 of
(vii) and read together with the Companys accounting policies and the
notes 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 31st March 2007
(b) in the case of the profit and loss account, of the profit to 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 Referred to in paragraph 3 of our Auditors Report of even
date on the financial statement for the year ended 31st March, 2007of
Scanpoint Graphics Limited.
On the basis of such checks as we considered appropriate and in terms
of the information and explanation given to us we state that:
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) All the assets have not been physically verified by the management
during the Year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. As informed No material discrepancies
were noticed on such verification.
(c) In our opinion, the company has not disposed off any Fixed Assets
during the year and going concern status of the Company is not affected
(ii) (d) As explained to us. the inventory has been physically verified
during the year by the management In our opinion the frequency of
verification is reasonable
(b) In our opinion and according to the information and explanations
given to us the procedure of physical verification of Inventories
followed by the management are reasonable at adequate in relation to
the same of the company and the nature of its business
(c) On the basis of our examina on of the records, the company is
maintaining proper records r*f inventory. The discrepancies noticed on
verification between the physical stocks and the records were not
material and the same have been properly dealt with in the books of
(iii) (a) According to the information and explanations given to us.
the Company has not granted any loan, secured of unsecured, to
companies, firms or other parties listed in the register maintained
under section 301 of companies Act, 1956.
(b) The Company has taken interest free unsecured loan from one company
listed in the register maintained under Section 301 of the Companies
Act, 1956. The amount involved during the year was Rs. 199.16 lacs.
(c) The rate of interest and other terms and conditions of loans taken
by the Company, secured or unsecured, are prima facie not prejudicial
to the interest of the Company.
(d) Since the loans taken from the party are repayable on demand,
question of regularity of repayment of principal amount does not arise.
(iv) In our opinion and 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 inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weaknesses in
(v) According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act. 1956 have
been so entered.,
(b) In our opinion and according to the information and explanations
given to us, 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 rupees five lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
during the year
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business
(viii) The Central Government has not prescribed maintenance of cost
records under section 209(1) (d) of the Companies Act, 1956 for the
products of the company
(ix) (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the company
is regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, employees state insurance,
income tax. sales tax, wealth tax. excise duty, cess and other
statutory dues applicable to it
(b) According to the information and explanations given to us, except
custom duty of Rs 49 60 lacs and Interest of 232.13 Lacs, accrued there
on no other undisputed amounts payable m respect of income tax. wealth
tax. sales tax, excise duty and cess were in arrears, as at for a
period of more than six months from the date they became payable
(c) According to the information and explanation given to us. there are
no dues of sales tax income tax. wealth tax. excise duty and cess which
have not been deposited on account any dispute except disputed stamp
duty on amalgamation of two private companies into the company value of
which is yet not assessed by the appropriate authority
In our opinion, the accumulated losses of the company are Rs 938 10
Lacs which is more than fifty percent of its net worth as on
31-03-2007. The company has not incurred cash losses during the
financial year 2006-2007 covered by our audit. However it as incurred
cash losses in immediately preceeding financial year 2005-2006
amounting to Rs. 28.31 Lacs (Including Interest payable Banks.
Financial institutions & others of Rs. 207.16 Lacs for financial year
(xi) In our opinion and according to the information and explanations
given to us, the company has defaulted in repayment of dues to
financial institutions of Rs. 18.83 lacs including Interest payable
thereon as on 31-03-2007.
(xii) As explained to 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) In our opinion, and according to the information and
explanations given to us the nature of activities of the company does
not attract any special statute applicable to chit fund and nidhi/
mutual benefit funds / societies.
(xiv) In our opinion, the company is not dealing in or trading In
shares, securities, debentures and other Investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order.
2003 are not applicable to the company.
(xv) According to the information and explanations given to us the
company has not given any bank guarantee for loans taken by others from
banks or financial institutions.
(xvi) The company has not obtained any term loans during the year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that the no funds raised on short-term basis have been used for
long-term investment and vice versa.
(xviii) The company has not made any issue of shares during the year.
(xix) The Company has not issued debenture during the year,
(xx) The Company has not made any public issue during the year.
(xxi) According to the information and explanations given to us. no
fraud on or by the company has beer noticed or reported during the
course of our audit.
For Manoj Acharya & Associates
Place: Ahmedabad Partner
Date : 30th June. 2007 45714