| 1. We have audited the attached balance sheet of Odyssey Video
Communications Limited as at 31st March 2006, Profit & Loss Account for
the year ended on that date annexed there to. These Financial
Statements are the responsibility of the Companies 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 also
includes assessing the Accounting Principles used and significant
estimates made by the 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 subsection (4A) of section
227 of the Companies Act 1956, we enclose in the annexure a statement
on the matters specified in the paragraph 4 & 5 of the said Order.
4. Further to our comments in the annexure referred to above we report
that:
a. We have obtained all the information and explanations, which to best
of our knowledge and belief were necessary for the purposes of our
Audit.
b. In our opinion, proper books of Accounts as required by law have
been kept by the Company, so far as appears from our examination of
those books.
c. The Companies balance Sheet, Profit & Loss Account dealt with by
this Report are in agreement with the books of account.
d. In our opinion the Balance Sheet, Profit & Loss Account with by this
report comply substantially in all material respects with the mandatory
Accounting Standards referred to in sub-section (3C) of section 211 of
the Companies Act 1956 as may be applicable.
e. On the basis of written representation received from the directors
as on 31st March 2006 and taken on record by the Board of Directors, we
report that none of the directors are disqualified as on 31st March
2006 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 knowledge and according to the
information and explanations given to us the Debentures are due for
Redemption of which Rs. 1,50,00,000 is due for the period of exceeding
one year. However the Company is of the opinion that the amount due for
Redemption and also over due interest does not lead to disqualification
under section 274 (l)(g) of the Companies Act of 1956, since the
company is contesting the maintainability of the claim.
g. The accounts of this company has been drawn on Going Concern Basis
which is dependent upon the managements belief as to the revival of
the operations and profitability arising on account of:
i. Comprehensive review of the operational efficiency and managements
steps on diversification and obtaining contracts on consultancy basis.
ii. Non-maintainability of claims by the financial institutions
including interest/penal interest for secured lenders based on the
legal opinion.
iii. Efforts to obtain a favorable order from high court of Bombay and
repossessing the confiscated goods imported under EPCG Scheme along
with waiver of the fine, export obligations and refund of pre deposit
of Rs. 30.50 lacs.
We are not in a position to express any independent opinion in this
regard
5. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts (read with Para 4
above) give the information required by the Companies Act, 1956 in the
manner so required and subject to:
a. Non-obtainment of confirmation of balances, as a result of which we
have placed reliance on the balances shown in the books of the Company
as well as recoverability of debit balances.
b. Pending litigation in respect of an asset purchased under the EPCG
Scheme, and
c. Non-maintainability of the claims by Financial Institutions
i. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31.03.2006; and
ii. In the case of the Profit & Loss Account, of the loss for the year
ended on that date.
For B.K. Ramadhyani & Co.;
Chartered Accountants
(R.Satyanarayana Murthi)
Partner
Membership No. 200/24248
Bangalore
Date: 29.09.2006
ANNEXURE TO THE AUDITORS REPORT
(AS REFERRED TO IN PARA 3 OF OUR REPORT TO THE MEMBERS OF ODYSSEY VIDEO
COMMUNICATIONS LIMITED)
1. a. The fixed asset records maintained by the Company need to be
updated to show full particulars including descriptions, quantitative
details and location of fixed assets.
b. All these assets have not been physically verified by the management
during the year but there is a programme of verification which in our
opinion, is reasonable having regard to the size of the company & the
nature of its assets. Pending updating of the book records, we are
unable to comment on discrepancies.
c. During the year there has been no significant sale/disposal of
fixed assets.
2. There is no inventory since the company is a service company and not
a manufacturing or trading company.
3. To the best of our knowledge, the company has not granted/taken any
loans, Secured or Unsecured from/to companies, firms and other parties
covered in the register maintained under section 301 of the Companies
Act 1956.
4. In our opinion and according to the information and explanations
given to us the internal control system needs to be improved to make
the same commensurate with the size of the company and the nature of
its business with regard to purchases of services, fixed assets and
with regard to the sale of services. During the course of our audit, we
have not observed any continuing failure to correct major weakness in
the internal controls.
5. According to the information and explanations given to us, we are of
the opinion that there are no like transactions made in pursuance of
contracts or arrangements that need to be entered into the register
maintained under section 301 of The Companies Act, 1956.
6. The Company has not accepted any deposits from the public, hence in
our opinion the provisions of section 58A and section 58AA of The
Companies Act, 1956 and relevant provisions of the Act are not
applicable. According to the company, no order has been passed by the
Company Law Board or Reserve Bank of India or any other Tribunal.
Therefore, the provisions of paragraph 4(vi) of the Companies
(Auditors Report) Order, 2003 are not applicable to the company.
7. In our opinion, the company does not have an Internal Audit system
commensurate with the size and nature of its business.
8. The Central Government has prescribed for the maintenance of cost
records under section 209(1)(d) of The Companies Act, 1956.
9. a) The company is generally regular in depositing with appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, professional tax, cess and
other internal statutory dues applicable to it. There has been a delay
in remittance of statutory dues applicable to the company in certain
months.
b) According to the information and explanations given to us, no
disputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty, excise duty.
c) According to the information and explanations given to us there are
no undisputed amounts payable in respect of income tax, wealth tax,
sales tax, customs duty, excise duty, except service tax of Rs. 15.76
lacs were in arrears, as at 31st March, 2006 for a period of more than
6 months from the date they become payable, which is since paid.
10. In our opinion, the accumulated losses of the company are more than
fifty percent of its net worth and has not incurred cash losses in such
financial year and in the immediately preceding financial year.
11. In our opinion, and according to the information and explanations
given to us the company has not defaulted in repayment of dues to
financial institution, bank, or debenture holders. There is a secured
in respect of overdue redemption Debentures along with interests
thereon which the company is contesting the maintainability of the
claim, as referred to in Para 4 (f) of Auditors Report.
12. The company has not granted loans and advances on the basis of
security by way of pledge of shares, Debentures and other securities.
Therefore the provisions of paragraph 4(xii) of the Companies
(Auditors Report) Order, 2003 are not applicable to the company.
13. In our opinion, company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore the provisions of paragraph 4(xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
company.
14. In our opinion the company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of paragraph 4(xiv) of the Companies (Auditors Report)
Order, 2003 are not applicable to the company.
15. In our opinion, and according to the information and explanations
given to us the Company has not given guarantees for loans taken by
others from a bank or financial institutions in an earlier year. Hence
the provisions of clause 4(xv) of the Companies (Auditors Report)
Order, 2003 is not applicable.
16. The company has not obtained term loans during the year from the
companys bankers.
17. According to the information and explanation given to us and on an
overall examination of the balance sheet of the company, we report that
funds raised on short term basis have not been used for long term
investment.
18. According to the information and explanation given to us, the
company has not made an issue capital during the year and hence
provision of clause 4(xviii) regarding preferential allotment is not
applicable.
19. According to the information and explanation given to us, there are
no debenture issued by the company and hence provisions of clause
4(xix) regarding creation of securities are not applicable.
20. There was no public issue of capital, debenture, etc during the
year and hence provisions of paragraph of clause 4(xx) regarding end
use of money are not applicable.
21. According to the information and explanation given to us, no fraud
on or by the company during the year has been noticed or reported
during the course of our audit.
For B.K. Ramadhyani & Co.,
Chartered Accountants
(R.Satyanarayana Murthi)
Partner
Membership No. 200/24248
Bangalore
Date: 29.09.2006 | 