AUDITORS
TO THE MEMBERS OF EVERONN EDUCATION LIMITED
1. We have audited the attached Balance Sheet of M/s Everonn Education Limited as
at 31st March 2012, the Statement of Profit and Loss and the Cash flow Statement for the
year ended on that date annexed thereto. 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 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 our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 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 of the said order to the
extent they are applicable to the company.
4. Further to our comments in the annexure referred to in Paragraph 3 above, we report
that:
a) We have obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purpose of our audit.
b) In our opinion, proper books of account as required by law have been kept by the
company, so far as it appears from our examination of such books.
c) The Balance Sheet, the Statement of Profit and loss and the Cash Flow statement
referred to in this report are in agreement with the books of accounts of the Company.
d) In our opinion, the Balance Sheet, the Statement of Profit and loss and the 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 with the exception of
Accounting Standard 28 on Impairment of Assets, Accounting Standard -13 on Investments.
e) Attention is invited to the following:
i) Note No.2.41 of Financial Statements regarding non Provision of Diminution in Value
of Investments in Subsidiaries which have incurred losses and whose Networth has been
partially eroded, for the reasons stated therein.
ii) Note No.2.48 of Financial Statements regarding non ascertaining complete
particulars (including interest payable) on dues to Micro, Small and Medium Enterprises if
any under MSMED Act, 2006, provision if any to be made is not ascertainable at this stage.
iii) Note No.2.49 of Financial Statements with regard to non receipt of Confirmation of
Balance from Debtors including Dues from Government Companies, Creditors, Loans and
Advances and Other Liabilities. These amounts are subject to adjustments if any, after
reconciliation and identification of doubtful debts / advances, which are not
ascertainable at this stage.
iv) Note No.2.50 of Financial Statements with regard to non provision of impairment
loss pending completion of assessment. The impact if any on the financial statements is
not ascertainable at this stage.
In all the cases referred to above, effect on financial statements is not
ascertainable. We do not express independent opinion on these matters.
f) On the basis of written representations received from the directors, as on 31st
March 2012 and taken on record by the Board of Directors, we report that none of the
director is disqualified as on 31st march 2012 from being appointed as a director in terms
of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.
5. Subject to our comments vide para 4(e) above, 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 notes thereon and schedules attached thereto,
give the information required by the Companies Act 1956, in the manner so required and
present a true and fair view, in conformity with the accounting principles generally
accepted in India.
i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st
March 2012;
ii) in the case of the Statement of Profit and Loss, of the Loss for the year ended on
that date; and
iii) in the case of the Cash flow statement, of the Cash flows for the year ended on
that date;
|
For M/s. P. Chandrasekar |
|
Chartered Accountants |
|
(FRN 000580S) |
|
P. Chandrasekaran |
| Place : Bangalore |
Partner |
| Date : 13th August 2012 |
Membership No.: 026037 |
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 3 of our report of even date)
i. (a) The Company is maintaining records showing full particulars, including
quantitative details and situation of fixed assets. However comprehensive description of
assets, their current location and accumulated depreciation needs to be updated in the
asset records.
(b) The Company has not carried out physical verification of fixed assets during the
year. The company does not have a regular program of physical verification of its fixed
assets. In our opinion the periodicity of physical verification is not reasonable. Fixed
Assets lying with third parties are also subject to confirmation.
(c) The management has also represented that no substantial part of fixed assets have
been disposed off during the year, to affect the going concern.
ii. Having regard to the nature of the Company`s business / activities, clause 4(ii) of
CARO is not applicable to the Company. There is no inventory being held by the company.
iii. (a) According to the information and explanations given to us, during the period
under review, the company has availed loans from subsidiaries listed in the Register
maintained under section 301 of the Companies Act, 1956, the Outstanding Balance as on
31st March 2012 is Rs.17,84,170 (`000) and the maximum amount involved during the period
is Rs.20,33,652 (`000). There are no written terms and conditions for repayment and
interest on loans. Hence the availment of loan is prima facie not prejudicial to the
interest of the company. In respect of the said loans, the same are repayable on demand
and there are no overdue amounts.
(b) According to the information and explanations given to us, during the period under
review, the company has granted loan to Subsidiaries listed in the Register maintained
under Section 301 of the Companies Act, 1956. The outstanding balance as on 31st March
2012 is Rs.17,12,407 (`000) and the maximum amount involved during the period is
Rs.19,49,917 (`000.) There are no stipulated terms and condition on either the interest
rate or the repayment schedule. However the rate of interest and the interest free nature
where applicable and other terms and conditions of such loans are not, prima facie,
prejudicial to the interest of the company. The interest rate charged by the company is
lesser than the Standard Rate as specified by the Reserve Bank of India.
iv. In our opinion and according to the information and explanations given to us,
having regard to the explanations that some of the items purchased are customized and are
of special nature and suitable alternative sources are not readily available for obtaining
comparable quotations. Additional strengthening of the internal control procedures with
regard to purchase of fixed assets is recommended so as to be commensurate with the
current size of the Company and nature of its business. However, the management has
represented that it is taking reasonable steps to correct the said weaknesses and we have
not observed any other continuing failure to correct major weaknesses in internal
controls.
v. According to the informations and explanations given to us, we are of the opinion
that transactions that need to be entered in the register maintained under Section 301 of
the Companies Act, 1956 have been generally so entered.
vi. The company has not accepted deposits from the public, under the directives issued
by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and
the rules framed there under.
vii. According to the informations and explanations given to us the company has
Internal audit system commensurate with the size and nature of the business. The Scope of
Internal Audit needs to be enhanced considering the risk assessments carriedout by the
Company. The Internal Audit System same needs to be adequately strengthened with regard to
scope and coverage and the volume of transactions.
viii. The maintenance of cost records has not been prescribed by the Central Government
under clause (d) of sub-section (1) of section 209 of the Act.
ix. (a) According to the information and explanations given to us, the company has been
depositing undisputed statutory dues with few delays including Employees Provident Fund,
Employees` State Insurance, Investor Protection fund, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Income Tax, TDS, Professional Tax and any other statutory dues
with the appropriate authorities during the year.
(b) According to the information and explanations given to us, no undisputed amounts
payable in respect of income tax, service tax etc were in arrears as at 31.03.2012 for a
period of more than six months from the date they became payable excepting;
| Particulars |
Amount (Rs. in ‘000) |
| Income Tax for the AY 2010-11 |
7845.26 |
| Income Tax for the AY 2011-12 |
1,61,042.50 |
| Professional Tax for the Earlier Years |
1018.93 |
| Professional Tax for the Half Year Ended 30.09.2011 |
221.14 |
| Service Tax Interest for the FY 2009-10 |
10,314.15 |
| Service Tax Interest for the FY 2010-11 |
1,579.58 |
| Service Tax Interest for the FY 2011-12 |
67.12 |
(c) According to the information and explanations made available to us and on the basis
of examination of records of the Company, the dues of Excise Duty, Sales Tax and Income
Tax as at 31st March 2012 which have not been deposited on account of any dispute are as
follows.
| Name of the Statute (Nature of the Dues) |
Period to which the amount relates |
Forum where matter is pending |
Amount (Rs. in `000) |
| Income Tax for AY 2009-10 |
FY 2008-09 |
CIT(A) |
2,13,046 |
| Service Tax Since FY 2006-07 |
Since FY 2005-06 |
DGCEI |
9,400 |
x. The Company has no accumulated losses at the end of the year and has not sustained
cash losses during the current financial year covered under our audit, and also in the
immediately preceding financial year.
xi. As per the information and explanations made available to us, the company has not
defaulted in repayment of dues to financial institutions or banks.
xii. According to the information and explanations given to us, the company has not
granted any loan or advance on the basis of Security by way of pledge of shares,
Debentures and other securities.
xiii. The provisions of Clause 4(xiii) of the Order relating to Chit Funds / Nidhi are
not applicable to the company.
xiv. In our opinion, the company is not dealing in or trading in shares, securities,
debentures and other investments.
xv. According to the information and explanations given to us, the Company has given
guarantee towards loans taken by others from banks and financial institutions for which no
counter guarantee has been obtained from the parties.
xvi. According to the information and explanations given to us, the Company has used
the Term Loan availed during the current year for the purpose for which it was availed.
xvii. According to the Cash flow statement and other records examined by us and based
on the information and explanations given to us, on an overall basis, funds raised on
short term basis have not been used for Long term Investment.
xviii. According to the information and explanations given to us, the Company has
during the year made allotment of shares to Debenture holders and other parties on
preferential basis. The issue price of shares so allotted has been determined in
accordance to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
Hence, it is not prejudicial to the interests of the company.
xix. The Company has not issued debentures during the year and therefore the question
of creating security or charge in respect thereof does not arise.
xx. The Company has not raised any funds by means of public issue during the current
year and hence the question of disclosing the end-use of money raised by way of public
issue does not arise.
xxi. Based on the audit procedures performed and on the basis of representation
obtained from the management, we report that no instance of fraud on or by the company
have been noted or reported by the management during the year.
|
For M/s. P. Chandrasekar |
|
Chartered Accountants |
|
(FRN 000580S) |
|
P. Chandrasekaran |
| Place : Bangalore |
Partner |
| Date : 13th August 2012 |
Membership No.: 026037 |
ADDENDUM TO DIRECTORS’ REPORT
Management reply to Auditors Qualifications
Note No.2.41 of Financial Statements regarding non Provision of Diminution in Value of
Investments in Subsidiaries which have incurred losses and whose Networth has been
partially eroded, for the reasons stated therein.
Reply:- The investments in subsidiaries are strategic in nature which are of
permanent nature and the current business and potential of future business in these
subsidiaries are extremely positive. Hence no provision has been made in the books for any
diminution in value for the investments made in certain subsidiaries.
The Company has not considered diminution in these investments.
Note No.2.48 of Financial Statements regarding non ascertaining complete particulars
(including interest payable) on dues to Micro, Small and Medium Enterprises if any under
MSMED Act, 2006, provision if any to be made is not ascertainable at this stage.
Reply:- The Company has sought written confirmation from all its vendors to let us
know if they are either micro, small or medium enterprises. Once these details are
updated, particulars of dues to micro, small and medium enterprises could be ascertained.
Note No.2.49 of Financial Statements with regard to non receipt of Confirmation of
Balance from Debtors including Dues from Government Companies, Creditors, Loans and
Advances and Other Liabilities. These amounts are subject to adjustments if any, after
reconciliation and identification of doubtful debts / advances, which are not
ascertainable at this stage.
Reply:- Confirmation is an ongoing process. The confirmations from government
parties are invariably get delayed.
We are continuously reviewing and reconciling the same. Any adjustment, if any, which
may arise out of the reconciliation process, shall be considered accordingly.
Note No.2.50 of Financial Statements with regard to non provision of impairment loss
pending completion of assessment. The impact if any on the financial statements is not
ascertainable at this stage.
Reply : We are in the process of third party valuation to assess the impairment
losses if any. The Financial implication, if any, on the same will be provided
appropriately at later stage.
The Company has not carried out physical verification of fixed assets during the year.
The company does not have a regular program of physical verification of its fixed assets.
In our opinion the periodicity of physical verification is not reasonable. Fixed Assets
lying with third parties are also subject to confirmation.
Reply : During the year, the company implemented a turnkey project in Gujarat in a
short span of time. However, Company has taken adequate steps to resume the physical
verification of fixed assets and the same shall be completed during the year.
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