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Net 4 India Ltd.

BSE: 532912 Sector: IT
NSE: NET4 ISIN Code: INE553E01012
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VOLUME 300
52-Week high 2.96
52-Week low 1.01
P/E
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 1.01
Sell Qty 12725.00

Net 4 India Ltd. (NET4) - Auditors Report

Company auditors report

TO THE MEMBERS OF

NET 4 INDIA LIMITED

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of NET 4 INDIALIMITED (the Company) which comprise the balance sheet as at 31 March 2016 thestatement of profit and loss and the cash flow statement for the year then ended and asummary of significant accounting policies and other explanatory information.

MANAGEMENT S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that are operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

AUDITOR S RESPONSIBILITY

Our responsibility is to express an opinion on the 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 performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on the auditors judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company s preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company s Directors as well as evaluating the overall presentationof the financial statements.

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 FOR QUALIFIED OPINION

• During the financial year 2013-14 the Company had defaulted in repayment ofprinciple and interest thereon of Term Loan taken from State Bank of India (SBI). Theamount outstanding as on 31st Mar 2016 is Rs. 2334.16 Lacs. This loan hadbeen classified as Non performing Assets (NPA) by the Bank. There is no provision madeduring the current year for interest against such loans. The status of this loan hasremained the same during the current financial year. State Bank of India (SBI) has alsofiled legal case before the P.O. (Presiding Officer) and Registrar against the Company.The above figure has been taken on the basis of audited financial statements for the yearended on 31st March 2015. There is no communication received from bank in thisregard.

• During the financial year 2013-14 the Company had defaulted in repayment ofprinciple and interest thereon of Working Capital Loan taken from State Bank of India(SBI) and State Bank Travancore (SBT). The amount outstanding as on 31st Mar2016 is Rs. 11378.73 Lacs. There is no provision made during the current year forinterest against such loans. This loan had been classified as Non performing Assets (NPA)by the Bank. The status of this Credit facility has remained the same during the currentfinancial year. State Bank Travancore (SBT) has also filed legal case before the P.O.(Presiding Officer) against the Company. The above figure has been taken on the basis ofaudited financial statements for the year ended on 31st March 2015. There isno communication received from bank in this regard.

• Unsecured loan has been taken from one of the Shareholders i.e. Ms. SuzanneSurendra Pal of Rs. 205 Lacs from Sep 2013 by the Company. But the same has not beenrepaid during the current financial year. There is no provision made during the currentyear for interest against such loans. Further it is a contravention of Section 74 of theCompanies Act 2013.

• Unsecured Loan taken from IBM India Pvt. Ltd. is Rs. 39.23 Lacs as per the booksof accounts as on 31st March 2016. There is no repayment of the same duringthe current financial year. There is no provision made during the current year forinterest against such loans. The above figure has been taken on the basis of auditedfinancial statements for the year ended on 31st March 2015. There is nocommunication received from IBM India Pvt. Ltd. in this regard.

• Fixed Deposit amounting to Rs. 1066.59 Lacs were due for repayment as on 31stMarch 2016. There is no provision in the books during the year for penalty and damagesfor contravention of provision of fixed deposits as laid down in Companies Act 2013. Thecompany had applied for a scheme of reschedulement to the H ble company laws board in Dec2014 and has been following instructions for repayment of the company law board from timeto time. Further the management has indicated further substantial payment has been madesubsequent to 31st Mar 2016 till date of this report.

• In respect of various loans as stated above there is interest payable of Rs.1251.71 Lacs for the previous years outstanding in the books as on 31.03.2016.

• Income Tax demand of Rs. 1286.98 Lacs from A.Y. 2004-05 to A.Y. 2011-12 notdeposited and appeals has been filed against this demand or in the process of filing.Income Tax Return from A.Y. 2012-13 to A.Y. 2014-15 has also not been filed by theCompany.

• Service Tax amounting to Rs.1170 Lacs (approx) up to 31st March2016 not deposited by the Company but further reconciliation is required on account ofcenvat credit sales return etc to arrive at the correct amounts and Service Tax Returnhas also not been filed by the Company during the year.

• As per Books of accounts Tax deduction at source (TDS) amounting to Rs. 109.60Lacs as on 31st March 2016 not deposited by the Company. TDS Return has alsonot been filed by the Company during the year except the first quarter in respect ofSection 194I of the Income Tax Act 1961. In some cases TDS has also not been deducted.

• As per books of accounts Provident Fund amounting to Rs. 6.75 lacs as on 31stMarch 2016 not deposited by the Company. PF Challan till Oct 2015 has been filed by theCompany.

• Employees State Insurance (ESI) amounting to Rs. 3.16 Lacs as per Books as on 31stMarch 2016 not deposited by the Company. Consequently challan and return in respect ofthis has also not been filed by the Company during the year.

• As per the information and explanation received from the Management the Companyis registered under the Delhi VAT UP VAT Maharastra VAT Karnatka VAT Tamil Nadu VATand Andhra Pradesh VAT but during the year no transactions were made by the company andaccordingly no VAT Liability has been arised during the year. However the company has notfiled VAT Return in any of the above VAT authorities during the year.

• Professional Tax amounting to Rs. 0.72 Lacs as per Books as on 31stMarch 2016 not deposited by the Company. Consequently challan and return in respect ofthis has also not been filed by the Company during the year.

• Company has not made any provisions for the employee s benefits i.e. forGratuity or Leave Encasement etc. during the year of audit.

• The Company has not provided bank accounts balance confirmation as on 31stMarch 2016 in respect of some bank accounts.

• The Company has written off bad debts amounting to Rs. 708.24 Lacs during theyear and makes provision for bad and doubt full debts amounting to Rs. 146.32 Lacs duringthe year. Due to the written off bad debts or provision of bad debts the profit for theyear at 31st March 2016 has been reduced by that amounts. Accordingly the netassets at 31st March 2016 have also been reduced by the bad debts amounts.

• The Company has booked Loss on Redundant Assets of Rs. 968.40 Lacs during theyear.

• As per AS-29 "Provisions Contingent Liabilities and ContingentAssets" the Company is mandatorily required to make provisions for Audit Fee but thesame has not provided in the books of accounts for the year ended 31st March2016.

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters describes in the Basis for QualifiedOpinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity 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 31stMarch 2016;

b) in the case of the Statement of Profit and Loss of the Loss for the year ended onthat date; and

c) in the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.

OTHER MATTER

As per statutory records produced before us and explanations given us our comments areas follows;

• The Composition of Board of Directors is not in terms of SEBI (ListingObligations and Listing Requirements) Regulations 2015.

• There was no Independent Directors in the company leading to non-compliance ofthe provisions of the SEBI (Listing Obligations and Listing Requirements) Regulations2015 as well as section 149 of the Companies Act 2013.

• There was no Internal Auditor s as required under section 138 of the CompaniesAct 2013.

• There was no Women director in the Board of the Company leading tonon-compliance of the applicable provisions. However the Company has women director from02nd Nov 2014 to 05th Dec 2015.

• There was no Audit Committee as required under section 177 of the Companies Act2013 and in terms of SEBI (Listing Obligations and Listing Requirements) Regulations2015.

• There was no Nomination and Remuneration Committee as required under section 178of the Companies Act 2013 and in terms of SEBI (Listing Obligations and ListingRequirements) Regulations 2015.

• There was no Shareholder s and Investor Grievance Committee for the year in theCompany.

• There was no compliance as required by the Regulation 24 of the SEBI (ListingObligations and Listing Requirements) Regulations 2015 i.e. corporate governancerequirements with respect to subsidiaries companies.

• Non Compliance of provisions relating to public deposit i.e. repayment ofdeposits accepted before commencement of this act i.e. 01.04.2014 as per section 74 of theCompanies Act 2013. Since the company has accepted public deposit before 01.04.2014which were due for repayment as on 31st Mar 2016. However the company hasfiled scheme of reschedulement of fixed deposits in Dec 2014 and has been repaying fixeddeposit to the holders as per the directions of the Company Law board from time to time.

• The company has litigations filed against it under various courts or authoritieslike Delhi High Court Arbitration and Registrar for various matters like recovery ofdebts winding up petition etc. As per available information & explanation providedby the management the exact quantum of amount on these cases cannot be ascertained.However almost all the cases involve disputed amounts and have been adequatelychallenged.

• Sundry Debtors and Sundry Creditors are subject to balance confirmation.

• As per Para 17 of the AS-22 "Accounting for Taxes on Income" whereas enterprises has carry forward of losses under tax laws deferred tax assets should berecognized only to the extent that there is a reasonable certainty that sufficient futuretaxable income will be available against which such deferred tax assets can be realized.The company has amounting to Rs. 1287.20 Lacs deferred tax assets as per books but weare unable to find the convincing evidence that in future sufficient future taxable incomewill be available.

• A per our observation during audit Directors residing out of India have beenincurring expenses through Credit Card for which part payment is being made by theCompany. As per board resolution dated 23rd Aug 2013 the Company ismaintaining the office at London United Kingdom. For the part payment made by thecompany these expenses have been further booked in the Company s books of accounts but wehave not received all the supporting documents for the same.

• We are unable to find the status of the Micro and Small Enterprises to whom thecompany owes which are outstanding more than 45 days at 31st March 2016. Thisinformation as required to be disclosed under the Micro small and Medium EnterprisesDevelopment Act 2006.

Our opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor s Report) Order 2016 ("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 a statement on the matters specified in theparagraph 3 and 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 in 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 for 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 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act;

(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

(h) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

(i) With respect to the other matters to be included in the Auditor s 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 does have pending litigations which may have impact on its financialposition in its financial statements Refer Notes to the financial statements.

ii. The company did not have any long term contracts including derivatives contracts;as such the question of commenting on any material foreseeable losses thereon does notarise. iii. There were no amounts which were required to be transferred to InvestorEducation and Protection Fund. So question of delay in transferring the amount into abovefunds does not arise.

FOR LAXMI TRIPTI & ASSOCIATES

CHARTERED ACCOUNTANTS

FRN:-009189C

Sd/-

L.N. AGRAWAL

PARTNER

M.No.-078427

Place: Delhi

Date: 17.06.2016

ANNEXURE - A TO THE AUDITORS REPORT

Annexure A referred to Independent Auditors Report to the members of the Company on thestandalone financial statements for the year ended 31 March 2016 we report that:

i. (a) The Company has maintained proper records showing full particulars includingquantitative details. However in some cases situation of its fixed assets have not beenmentioned.

(b) As explained to us the physical verification of a major portion of fixed assets ason March 31 2016 was conducted by the management during the year which in our opinion isreasonable having regard to the size of the Company and the nature of its assets.According to the information and explanation given to us no material discrepancies werenoticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

ii. As explained to us the company has not purchased/sold goods during the year butthe company has some opening stocks which was physically verified at reasonable intervalby the management and no material discrepancies have been noticed on physical verificationof stocks as compared to book records.

iii. The Company has not granted any loans secured or unsecured to any companiesfirms Limited Liabilities Partnerships or other parties as covered in the registermaintained under section 189 of the Companies Act 2013 (the Act). Accordingly theprovisions of clause 3 (iii) (a) (b) and (c) of the order are not applicable.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

v. The Company has not accepted any deposits from the public covered under section 73to 76 of the Companies Act 2013 during the year. However public deposits were accepted inearlier years. Earlier deposits were governed by the provisions of Section 58A of theCompanies Act 1956 and the rules framed there under relating to the deposits accepted.The Company has defaulted in repayment of principal and interest thereon w.e.f. August2013.

During the financial year 2015-16 the company has paid amount of principle andinterest of Rs. 158.21 Lac. Total amount payable (due plus overdue amount) as on31.03.2016 is Rs. 1066.59 Lac. During the year the company had received 10 complaintsout of which all 10 complaints were resolved.

As per explanation and records produced the reason for defaults has been due to heavylosses resulting to cash crunch in the company leading to bouncing of cheques issuedtowards repayment of deposits (principal and interest).

The company filed a scheme with CLB for repayment of fixed deposits and as on 31stMar 2016 had been repaying fixed deposits as per the directions of the CLB. The Companyhas also made further payments and entered into settlement agreements with numerousdeposits holders that had approached the company for settlement. vi. As per information& explanation received by the management The Central Government has not prescribedthe maintenance of cost records under section 148(1) of the Act for any of the servicesrendered by the Company and hence this clause is not applicable to the company.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including employees state insuranceincome-tax sales tax value added tax duty of customs service tax cess and othermaterial statutory dues have not been regularly deposited during the year by the Companywith the appropriate authorities. However the company is paying regularly the amount ofprovident fund to the concerned authorities. According to the information and explanationsgiven to us there were outstanding statutory dues as on 31st of March 2016for a period of more than six months from the date they become payable which are asfollows;

Particulars Amount (Rs. in Lacs)
Service Tax (Approx) 877.36
Tax Deduction at Source (TDS) 53.35
Employees State Insurance (ESI) 1.60

(b) According to the information and explanations given to us there are no materialdues of duty of customs and duty of excise which have not been deposited with theappropriate authorities on account of any dispute. However according to information andexplanations given to us the following dues of income tax sales tax service tax andvalue added tax have not been deposited by the Company on account of disputes:

Name of the Statute Nature of dues Amounts (Rs. In lacs) Period to which the amount relates Forum where disputes in pending
Income Tax Act 1961 Income Tax 2.59 A.Y. 2004-05
Income Tax Act 1961 Income Tax 6.20 A.Y. 2005-06
Income Tax Act 1961 Income Tax 1.50 A.Y. 2006-07
Income Tax Act 1961 Income Tax 26.02 A.Y. 2008-09
Income Tax Act 1961 Income Tax 255.61 A.Y. 2009-10
Income Tax Act 1961 Income Tax 723.64 A.Y. 2010-11
Income Tax Act 1961 Income Tax 271.42 A.Y. 2011-12
Finance Act 1994 Taxability on SSL Certificate - Whether VAT applicable or Service Tax applicable 91.84 (Approx.) (Excluding Interest & Penalty) Mumbai High Court and Commissioner Appeals
Finance Act 1994 Service T ax applicability of Domain prior to July 2012 1141.64 (Approx.) (Excluding Interest & Penalty) From 2008-09 to 2011-12 Service Tax Department Indraprastha
Maharastra Value Added Tax Dispute regarding entitlement of Input VAT Credit (2010-11) 15.05 (Approx)(Excluding Interest and penalty) MVAT Department Mumbai
Maharastra Value Added Tax Liability created by Department 4.75 (Approx.) (Excluding interest & penalty) MVAT Department Mumbai

viii. Based on our audit procedures and on the information and explanations given bythe Management we are in the opinion that the company has been in default of dues ofloans or borrowings from banks during the year which are as follows;

Name of the Banks Principals including interest as on 31.03.2016 (Amt in Lacs)
SBI-65150 9436.21
SBT-65003 1517.14
SBT As Hoc 505.38
Term Loan _ Chennai Projects 2334.16
Interest Payable NPA_Liability 1251.71

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

FOR LAXMI TRIPTI & ASSOCIATES

CHARTERED ACCOUNTANTS

FRN:-009189C

Sd/-

L.N. AGRAWAL

PARTNER

M.No.-078427

Place: Delhi

Date: 17.06.2016

ANNEXURE - B TO THE INDEPENDENT AUDITORS REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of NET 4 INDIALIMITED ("the Company") as of 31 March 2016 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

Management s Responsibility for Internal Financial Controls

The Company s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company s internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified as at March 31 2016:

a. The Company did not have Internal auditor s as required by the Companies Act 2013which is one of the essential components of internal control with regards to thepotential for fraud when performing risk assessment.

b. The Company s internal control system for loans and liabilities statutory dues andreturns and repayment of fixed deposits were not operating effectively which couldpotentially result in the Company goes to the various legal cases for the above mentionedliability.

c. The Company does not has proper internal control system for collection of amountfrom its debtors or Trade receivable due to which heavy amount of bad debts are beingwritten off every year thereby resulting in the reduction of net profit and net assets ofthe company every year.

d. The company does not has proper internal control system for compliance of variousmatters as referred above in our "Other Matter" para as required by the SEBI(Listing Obligations and Listing Requirements) Regulations 2015 as well as Companies Act2013.

A material weakness is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is reasonable possibility thata material misstatement of the company s annual financial statements will not be preventedor detected on a timely basis.

In our opinion except for the effects/possible effects of the material weaknessesdescribed above on the achievement of the objective of the control criteria the Companyhas maintained adequate and effective internal financial controls system over financialreporting as at 31 March 2016 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2016standalone financial statements of the company and these material weaknesses do notaffect our opinion on the standalone financial statements of the Company.

FOR LAXMI TRIPTI & ASSOCIATES

CHARTERED ACCOUNTANTS

FRN:-009189C

Sd/-

L.N. AGRAWAL

PARTNER

M.No.-078427

Place: Delhi

Date: 17.06.2016