| We have audited the accompanying financial statements of JAIN STUDIOS
LIMITED which comprise the Balance Sheet as at 31st March, 2015, the
Statement of Profit and Loss, the Cash Flow Statement for the year
then ended, and a summary of the significant accounting policies and
other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these financial statements that give a
true and fair view of the financial position, financial performance
and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of
the Companies(Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under
the provisions of the Act and the Rules made thereunder. We conducted
our audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on whether the Company has in place an adequate
internal financial controls system over financial reporting and the
operating effectiveness of such controls. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company's
Directors, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act 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 March 31,2015;
b) in the case of the Profit and Loss Account, of the profit/ loss 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of sub-
section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. Further to our comments in the annexure, as required by Section 143
(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes 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
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
2015 from being appointed as a director in terms of Section 164 (2) of
the Act.
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and to the best of our
information, to the extent applicable and according to the
explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements -Refer note 2.27 to the
financial statements.
ii. the Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts.
iii. there has been no situation requiring transfer of funds to the
Investor Education and Protection Fund by the Company.
(g) attention is invited to:
a. The company has made no provision in the accounts, for the custom
duty saved amounting to Rs 351.48 lacs, interest thereon and penalties
which may be levied by the office of Directorate General Of Foreign
Trade on account of non fulfillment of the export obligation, as per
EPCG scheme against which a sum of Rs 274.21 lacs are lying deposited
with custom department.
b. One time settlement with SASF (OTS) -Refer note no. 2.3 to the
financial statements.
In respect of one time settlement (OTS) arrived at with SASF, SASF
vide its letter dated 12th February 2015 and 5th March 2015
respectively denied the further extension and revoked the OTS and
subsequent modifications thereof including reversal of waiver of dues
and restoration of the original liability as per the terms of loan
agreement and adjustment of payment received by SASF from the company
towards the dues. The same has not been effected in the accounts book
as the company is hopeful to get the OTS restored. (Benefits availed
under OTS amount Rs. 1120.59 lacs)
As explained to us the company is discussing the matter with SASF
authority.
ANNEXURE TO INDEPENDENT AUDITORS' REPORT
The Annexure referred to in our report to the member s of JAIN STUDIOS
LIMITED for the year ended on 31st March, 2015:
(i) a. The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. The company has a regular program of physical verification of its
fixed assets by which these assets are verified in a phased manner
over a period of three years.
In accordance with this certain assets are verified during the year
and some discrepancies were found which were immaterial in nature.
Having regard to nature of asset and size of company, periodicity of
physical verification is reasonable.
ii. a. The company has a regular program of physical verification of
inventory by which inventories are verified twice in a year. Having
regard to nature of its business and size of company, periodicity of
physical verification is reasonable.
b. The procedure of physical verification followed by company is
reasonable having regard to nature of its business and size of the
company.
c. According to explanation and information given to us and on
examination of records,
The company is maintaining proper records of inventory and any
material discrepancies which were observed on physical verification
has been properly dealt in the books of account.
iii. The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act 2013:
a) According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
no outstanding on account unsecured loan as on 31-03-2015 to
companies, firms or other parties covered in the register maintained
under Section 189 of the Companies Act, 2013 ("the Act").
iv. In our opinion and according to information and explanation given
to us, there is an adequate internal control system commensurate with
its size of the company and inventory and fixed assets and for the
sale of goods and services. We have not observed any major weakness in
the internal control system during the course of our audit.
v. The Company has not accepted any deposits from the public covered
under section 73 to 76 of the Companies Act, 2013 and the rules framed
there under and the directives issued by RBI.
vi. In our opinion, maintenance of cost records under section 148(1)
of the Act is not applicable to the company.
vii. a. According to our information and explanation given to us and
from examination of records of the company, the company is not regular
in depositing undisputed statutory dues including provident fund,
employees' state insurance, income tax, duty of customs, service tax,
value added tax, cess and any other statutory dues with the
appropriate authorities and there are undisputed statutory dues which
remain in arrear for a period of more than six month as on 31st March
2015.
Nature of Dues Amount of Dues
Central sales tax (UP) Rs.12,62,756
Provident Fund Rs.10,65,584
TDS Rs.48,31,413
Bonus Payable Rs.14,83,679
Interest on TDS Payable Rs. 5,19,484
b. Details of Sales Tax, Income Tax, Wealth Tax, Service Tax, Excise
Duty and Cess which have not been deposited on account of dispute are
given below:
viii. Accumulated losses of the Company at the end of the financial
year do not exceed 50% of its net worth (as per Balance Sheet
including Revaluation Reserve). However company has incurred cash loss
of Rs.16896 thousand during the current financial year though there
was cash profit of Rs. 20311.2 thousands in the immediate preceding
financial year.
ix. In our opinion, and on the basis of our audit procedures and
according to information and explanation given to us, the company has
defaulted in repayment of Term Loan taken from IDBI (refer note no.
2.3).
x. The company has given Corporate guarantee on behalf of following
companies for the loan taken from given below financial institutions
or banks.
xi. The company has not obtained any term loan xii. No fraud was
noticed, on or by the company from any financial institutions, Bank
and during the year. NBFC.
For GIRI & BANSAL
Chartered Accountants
(N. P. BANSAL)
Place: New Delhi Partner
Date : 28th May, 2015 Membership No.: - 080319
FRN: 0877 |