TO THE MEMBERS OF TWENTYFIRST CENTURY MANAGEMENT SERVICES LTD
Report on the Financial Statements
We have audited the accompanying standalone financial statements of TWENTYFIRST CENTURYMANAGEMENT SERVICES LIMITED ("the Company") which comprise the Balance Sheet asat 31st March 2015 the Statement of Profit and Loss and the Cash FlowStatement and a summary of the significant accounting policies and other explanatoryinformation for the year then ended.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition and financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act 2013 read with Rule 7 of the Companies (Accounts)Rules 2014.
This responsibility also includes maintenance of adequate accounting records inaccordance with the preparation of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and the disclosures in the financialstatements.
The procedures selected depend on the auditors judgment including the assessmentof the risks of material misstatement of the financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Companys preparation of the financial statements that give a trueand fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompanys Directors as well as evaluating the overall presentation of the financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
Basis of Opinion
Non Provision of Doubtful Loans & Advances amounting to Rs. 2272.22 lacs advancedto its subsidiary company.
We further report that had the observation made by us above been considered theprofit for the year would have been Rs. 217.28 lacs (as against the reported profitfigures of Rs. 2489.50 lacs) and profit after considering accumulated loss of previousyears would have been Rs. 33.33 lacs (as against reported figure of profit of Rs. 2305.55Lacs) and the balance of amount due from subsidiary company would have been Rs. Nil (asagainst the reported figure of Rs. 2272.22 lacs).
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion Paragraph above and Notes to Accounts the aforesaid standalone financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia:
(a) in the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2015
(b) in the case of the statement of Profit and Loss of the profit of the Company forthe year ended on that date
(c) in the case of the Cash Flow Statement of the cash flows of the Company for theyear ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2015 (the Order)issued by the Central Government of India in terms of sub section (11) of section 143 ofthe Act we give in the Annexure a statement on the matters specified in paragraphs 3& 4 of the Order.
2. 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 bestof our knowledge and belief were necessary for the purposes of our audit.
(b) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby 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 Statementdealt with by this Report are in agreement with the books of account.
(d) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above our opinion the aforesaid standalone financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014
(e) The matter described in the basis of qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the company.
.(f) On the basis of the written representations received from the directors as on 31stMarch 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2015 from being appointed as a director in termsof Section 164 (2) of the Act.
(g) In our opinion the internal financial controls over financial reporting of theCompany and the operating effectiveness of such controls are adequate.
(h) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion Paragraph above.
(i) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has not disclosed the impact of pending litigations of Income Tax Act1961on its financial position in its financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investors Education and Protection Fund by the company.
For Lakhani & Lakhani
(Firm Registration No.115728W)
Suhas Shinde (M.No. 117107)
Date : 16-05-2015
ANNEXURE TO THE AUDITORS REPORT
1. The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
The fixed assets of the company have been physically verified by the Management duringthe year and no material discrepancies were noticed on such verification. In our opinionthe verification is reasonable having regard to the size of the company and the nature ofits assets.
2. The company is primarily engaged in investing activities. Accordingly it does nothold any physical inventories. Thus paragraph 4(ii) of the Order is not applicable to thecompany.
3. The company has granted interest free loans of Rs. 2272.22 lacs to the companylisted in the register maintained under section 189 of the Companies Act 2013. But thesaid Loan advanced to subsidiary company amounting to Rs.2272.22 lacs is doubtful inrecovery.
4. In our opinion and according to the information and explanations given to us thereare adequate internal control systems commensurate with the size of the Company and thenature of its business for the purchase of fixed assets and Sale of services. The natureof the Companys activities is such that it does not involve purchase of inventoriesand sale of goods. During the course of our audit we have not observed any majorweaknesses in the internal control system of the Company and hence the question of anycontinuing failure to correct the same does not arise.
5. During the year under audit the company has not accepted any deposits from thepublic to which the provisions of Sections 73 to 76 or any other relevant provisions ofthe Companies Act 2013 and the rules framed there under apply.
6. We have been informed that Central Government has not prescribed the maintenance ofcost records under Section 148(1) of the Companies Act 2013 in respect of any activitiescarried on by the company.
7. According to the information and explanations given to us the company has beenregular in depositing Employees Provident Fund dues and has also been regular indepositing undisputed income tax and other applicable statutory dues with appropriateauthorities.
According to the information and explanations given to us and the records of theCompany examined by us the particulars of income tax as at 31st March 2015 which have notbeen deposited on account of a dispute pending are as under:
|Name of the Statute ||AY ||Nature of Dispute ||Forum where the disputes are pending ||Amount Disputed |
|Income tax Act 1961 ||1995 - 96 ||Demand raised subject to recti- fication by ACIT ||ACIT Company Circle III (2) ||Rs.4.81 lacs |
|Income tax Act 1961 ||1996 - 97 ||Rectification by AO raised a demand Company has to file rectification for the interest working ||ACIT Company Circle III (2) ||Rs. 104.96 lacs |
| || ||234B waiver petition filed by the company Expecting a relief of Rs. 45 lacs ||CCIT- I Chennai || |
|Income tax Act 1961 ||2003 - 04 ||Diminution in the value of stock Rs. 1289 Lacs (Value written off) However there will not be any demand on this issue only carried forward loss will be reduced. However the Carried forward loss will be useful for AY 2007-2008 demand. ||Madras High Court ||Nil |
|Income tax Act 1961 ||2005 - 06 ||Assessment was re-opened for third time and order dated 28.03.2013 AO rejected the Excess relief u/s 115 JB Jurisdiction is questioned ||CIT(A) III ||Rs. 35.15 lacs |
|Income tax Act 1961 ||2006 - 07 ||B/F loss not considered rectification filed ||ACIT Company Circle III (2) ||Rs. 1.33 lacs |
|Income tax Act 1961 ||2007 - 08 ||Department has filed appeal before Honble ITAT on the issue of Short Term Capital gains @ 30.99% instead of 15% . Revision order by AO has not consid- ered the Rebate which is pending. ||ITAT ||Rs.55.45 lacs |
|Income tax Act 1961 ||2007 - 08 ||Department issued 148 notice and the assessment got completed The same issue of STCG @30.99% instead of 15% assessment completed. Company had filed appeal before Commissioner Appeal - III ||CIT-Appeal III ||Rs.68.69 lacs |
|Income tax Act 1961 ||2009 - 10 ||No demand However penalty has been initiated for addition u/s 14A As penalty initiated the company has filed Appeal before Commissioner Appeal III it is pending ||CIT Appeal III ||Nil |
|Income tax Act 1961 ||2010 - 11 ||Credit for Self Assessment Tax of Rs. 7.02 Lacs has not been givenrectification field ||ACITCompany Circle III (2) ||Rs. 13.28 lacs |
|Income tax Act 1961 ||2011 - 12 ||Intimation u/s 143 (1) wrongly passed Rectification filed and it is pending ||ACIT Company Circle III (2) ||Rs. 830.20 lacs |
8. The company has accumulated loss of Rs. 183.95 lacs till the immediately precedingfinancial year but has earned profit of Rs. 2489.50 lacs during the current financial yearunder this report which writes off the accumulated loss of the company.
9. On the basis of records examined by us and the information and explanations given tous the company has not defaulted in repayment of dues to financial institutions banks ordebenture holders.
10. According to the information and explanations given to us the company has not givenany guarantee for the loans taken by others from banks or financial institutions.
11. According to the information and explanations given to us the company has notobtained any term loans during the year under review.
21. To the best of our knowledge and belief and according to the information andexplanations given to us fraud in the nature of misappropriation of uncleared demanddraft of Rs.
61.20 lakhs by an official of the company which was lying with his custody has beennoticed and reported during the course of our audit.
For Lakhani & Lakhani
(Firm Registration No.115728W)
Suhas Shinde (M.No. 117107)
Date : 16-05-2015