| 1. We have audited the attached Balance Sheet of DOLPHIN HOTELS
LIMITED, HYDERABAD (A.P) as at 31st March, 2011 and also the Profit and
Loss Account 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 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
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 (as
amended), issued by the Central Government of India in terms of
sub-section (4A) 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.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
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.
iii) The Balance Sheet, Profit and Loss Account and Cash Flow statement
dealt with by this report are in agreement with the books of account.
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 representations received from the Directors,
as on 31st March, 2011 and taken on record by the Board of Directors,
we report that, none of the Directors is disqualified as on 31st March,
2011 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 read in conjunction
with the Schedules annexed therewith and subject to Note No. 1 and 3 of
Schedule 19B give 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, 2011;
b) in the case of the profit and loss account, of the Profit of the
Company for the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, the management has physically verified most of
the fixed assets during the year and 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 the assets. No material
discrepancies were noticed on such verification.
c) During the year the Company has not disposed off any substantial
part of fixed assets that would affect the going concern status of the
Company.
2. a) 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, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company is maintaining proper records of inventory.
The discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a) During the year, the Company has neither granted nor taken any
loans, secured or unsecured to/from Companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956.
b) In view of our comment in paragraph 3(a) above, (III) (b), (c), (d),
(e) and (f) of paragraph 4 of the aforesaid order are not applicable to
the Company.
c) However, as the terms of repayment have not been stipulated in
respect of loans taken in earlier years, we are not in a position to
make any specific comment regarding the repayment of principal and also
interest.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system.
5. a) In our opinion and according to the information and explanations
given to us, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have
been entered in the register to be maintained under that section
b) In respect of transactions made in pursuance of such contracts or
arrangements exceeding value of rupees five lakhs entered in to during
the year ,in the absence of any comparable quotes, we are unable to
comment whether the transactions were made at prevailing market prices
at the relevant time.
6. The Company has not accepted any deposits from the public. Hence
the provisions of Section 58A and 58AA or any other relevant provisions
of the Companies Act, 1956, and the Companies (Acceptance of Deposits)
Rules, 1975, do not apply to this Company.
7. In our opinion, the Company has an internal audit system. However
the scope in our opinion needs to be enlarged so as to make it
commensurate with the size and nature of the Company's business.
8. The Central Government has not prescribed the maintenance of cost
records under section 209(1) (d) of the Companies Act, 1956 for the
activities of the Company.
9. a) According to the records of the Company, apart from certain
instances of delays, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees' State
Insurance, Income- tax, Sales Tax, Wealth Tax, Service Tax, Custom
Duty, Excise Duty, Cess and other material statutory dues applicable to
it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty and Cess were in arrears as at
March 31, 2011 for a period of more than six months from the date they
became payable except the following.
S.
No. Nature of the dues Amount (Rs) Date of Payment
1. Sales Tax 6,56,015 Not yet paid
2. AP VAT 1,13,380 Not yet paid
3. Fringe Benefit Tax 42,857 Not yet paid
4. Property Tax 9,91,556 Not yet paid
c) According to the records of the Company and the information and
explanations given to us, the dues of Sales Tax, Income Tax, Custom
Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have not
been deposited on account of dispute are as follows:
Sl. Nature of Amount Period to
which Forum where dispute
No. the dues Rs the amount
relates is pending
01 Sales Tax 1,78,248 1990-91 AP STAT, Visakhapatnam
02 Sales Tax 1,44,816 1997-98 AP STAT, Visakhapatnam03
03 Sales Tax 8,81,831 1998-99 AP STAT, Visakhapatnam
04 Sales Tax 91,204 1999-00 AP STAT, Visakhapatnam
05 Sales Tax 4,44,056 2001-02 AP STAT, Visakhapatnam
06 AP VAT 13,08,862 2009-10 Commissioner of
Commercial Taxes, A.P.
10. The accumulated losses of the Company as at the end of the
financial year under reference are more than fifty percent of net worth
of the Company The Company has not incurred any cash losses during the
financial year covered by our audit 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 any
financial institutions and banks.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi/mutual benefit
fund/society. Therefore, the provisions of clause 4(xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
14. The Company has maintained proper records for transactions and
contracts relating to dealing or trading in other investments. As
explained to us timely entries have been made therein and the other
Investments have been held by the Company in its own name to the extent
applicable.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
16. According to the information and explanations given to us the
Company has not obtained any term loans during the year.
17. In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that no funds raised on short-term basis have been
used for long-term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19. During the year, the Company has not issued any debentures,
therefore the question of creating security or charge in respect
thereof does not arise.
20. During the year, the Company has not made any public issue and
therefore the question of disclosing the end use of money raised by
public issue does not arise.
21. Based upon the audit procedures performed and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported during the year.
for BRAHMAYYA & CO.,
Chartered Accountants
Firm's Registration Number : 000513S
(P. CHANDRAMOULI)
Place : Hyderabad, Partner
Date : 06.09.2011. Membership No. 25211 | 