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Odyssey Video Communications Ltd.

BSE: 517465 Sector: Media
NSE: N.A. ISIN Code: INE342B01016
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Odyssey Video Communications Ltd. (ODYSSEYVIDEO) - Auditors Report

Company auditors report

ODYSSEY VIDEO COMMUNICATIONS LIMITED ANNUAL REPORT 2004-2005 AUDITORS' REPORT TO THE MEMBERS OF ODYSSEY VIDEO COMMUNICATIONS LIMITED 1. We have audited the attached balance sheet of Odyssey Video Communications Limited as at 31st March 2005, 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 (Auditor's 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 (3 C) 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 2005 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2005 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 (1)(g) of the Companies Act of 1956, since an application has been made to the Debenture holders seeking Rephasement of Repayment / Redemption and waiver of interest and resultantly these amounts are not due for Redemptions. However no communication has been received with regard to the rephasement or otherwise. g. The accounts of this company has been drawn on Going Concern Basis which is dependent upon the management's belief as to the revival of the operations and profitability arising on account of h. Comprehensive review of the operational efficiency and management's steps on diversification and obtaining contracts on consultancy basis i. One time settlement and resultant waiver of interest/penal interest for secured lenders j. Efforts to obtain a favorable order from high count 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. c. In the case of the Balance Sheet, of the state of affairs of the Company as at 31.03.2005; and d. 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 (Sathyanarayana Murthi) Partner Membership No. 200/24248 Bangalore Date: 25th August 2005 ANNEXURE TO THE AUDITOR'S REPORT (AS REFERRED TO IN PARA 4 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. d) None of the fixed assets have been revalued during the year. 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 inventory, fixed assets and with regard to the sale of goods and 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 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. 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 (Auditor's 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. However, the company being a service company, it is not require to maintain cost records. 9. a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident 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, 13.54 lacs were in arrears, as at 31st March, 2005 for a period of more than 6 months from the date they become payable. 10. In our opinion, the accumulated losses of the company are more than fifty percent of its net worth and has also incurred loss during the immediately preceding 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 a bank. There is a secured loan which is negotiated for one time settlement in respect of overdue redemption Debentures along with interests thereon as referred to in Para 4 of this Audit 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 (Auditor's 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 (Auditor's 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 (Auditor's Report) Order, 2003 are not applicable to the company. 15. The Company has not given guarantees for loans taken by others from a bank in an earlier year. Hence the provisions of clause 4(xv) of the Companies (Auditor's Report) Order, 2003 is not applicable 16. The company has not obtained term loans during the year from the company's 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. No long-term funds have been used to finance short term assets except permanent working capital. 18. According to the information and explanation given to us, the company has not made an issue capital during the year and hence provision (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 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 (Sathyanarayana Murthi) Partner Membership No. 200/24248 Bangalore Date: 25th August 2005