| We have audited the accompanying financial statements of LINAKS
MICROELECTRONICS Limited, which comprise the Balance Sheet as at March
31, 2014, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
MANAGEMENT RESPONSIBILITIES FOR THE FINANCIAL STATEMENT Management is
responsible for 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
Standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control 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.
AUDITORS' RESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 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 control relevant to the Company's
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness
of the entity's internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the 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 31st March, 2014;
b) in the case of the Profit and Loss Account, of the loss for the
period from Oct.1,2013 to 31st March, 2014
c) in the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENT;
1. As required by the Companies (Auditor's Report) Order, 2003
("the Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. Further, to our comments referred to in paragraph (1) above and
subject to followings (refer note no. 3(i) to (iv) of Notes to Accounts
attached to and forming part of Balance Sheet):
That no interest is provided on funded CST& UPTT and Statutory dues of
PF & ESI in view of sanctioned rehabilitation scheme.
That no provision is made for depreciation on Fixed Assets as these
were not put to use during the above said period).Further no provision
is made for loss on account of discarded/obsolete Plant and Machinery.
That no provision is made for loss due to diminution in value of
inventory holdings.
3. As required by section 227(3) of the Act, 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 appears from our examination of those
books
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS' REPORT (Referred to in Paragraph 1 of our
report of even date)
(i) (a) The company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b) The fixed assets have been physically verified by the management at
reasonable intervals; No material discrepancies were noticed on such
verification;
(c) No substantial part of fixed assets have been disposed off during
the year,
(ii) (a) Physical verification of inventory has been conducted at
reasonable intervals by the management;
(b) The procedures of physical verification of inventory followed by
the management is reasonable and adequate in relation to the size of
the Company and nature of its business;
(c) The company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification;
(iii) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. However company has taken interest free
unsecured loan from its managing director. The terms and conditions are
not prejudicial to the interest of the company.
(iv) There is an adequate internal control procedure commensurate with
the size of the company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
(v) There is no transaction that needs to be entered into in the
register in pursuance of Section 301 of the Act.
(vi) The company has not accepted any deposits from the public,
(vii) The company has an internal audit system commensurate with its
size and nature of its business, which needs to be strengthened.
(viii) Since company is not in production no cost audit records are
being maintained.
(ix) Due to financial crunch the company was not regular in depositing
old P.F. dues Rs. 3.54 Lac (Previous year Rs.10.50 Lac). However, upto
date payment of ESI has been paid by the company . No provisions for
gratuity has been made and will be paid as and when becomes due.
(b) Sales Tax assessment under appeal is Rs 63.35 Lac (Previous year
Rs. 63.35 Lac) a list is enclosed in Notes on Account under the head
contingent liabilities, without considering interest thereon.
(x) The company has incurred cash losses in the year for Rs 6.57lac and
in the Preceding financial year for Rs. 10.37 Lac.
(xi) In our opinion and as per the explanation given to us, the company
is under rehabilitation under the scheme sanctioned by the Board of
Industrial and Financial Reconstruction (BIFR). During the year the
Company has been settling its statutory dues as per the schedule
drawn-up in the Rehabilitation Scheme.
(xii) The company has not granted any loans and advances on the basis
of security.
(xii) The company is not a chit fund company.
(xiii) The company is not trading or dealing in shares, securities,
debenture and other investments.
(xiv) The company has not given any guarantee for loans taken by
others.
(xv) The company has not applied for any term loan during the year.
(xvi) The fund raised on short-term basis has not been used for
long-term investments and vice versa.
(xvii) The company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act.
(xviii) The company has not issued any debentures.
(xix) The company has not raised any money by public issues during the
year.
(xx) No fraud on or by the company has been noticed or reported during
the year.
For: S. R. Gupta & Co.
Chartered Accountants
Place : Lucknow V.K. Gupta
Date :30.05.14 (Partner)
M. No. 14745
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