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Pentamedia Graphics Ltd.

BSE: 500329 Sector: Media
NSE: PENTSFWARE ISIN Code: INE202A01022
BSE LIVE 15:23 | 07 Aug Stock Is Not Traded.
NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 0.71
PREVIOUS CLOSE 0.72
VOLUME 122863
52-Week high 0.90
52-Week low 0.53
P/E 24.00
Mkt Cap.(Rs cr) 30
Buy Price 0.72
Buy Qty 23360.00
Sell Price 0.74
Sell Qty 5891.00
OPEN 0.71
CLOSE 0.72
VOLUME 122863
52-Week high 0.90
52-Week low 0.53
P/E 24.00
Mkt Cap.(Rs cr) 30
Buy Price 0.72
Buy Qty 23360.00
Sell Price 0.74
Sell Qty 5891.00

Pentamedia Graphics Ltd. (PENTSFWARE) - Auditors Report

Company auditors report

to the members of pentamedia graphics limited report on the financial statements

We have audited the accompanying financial statements of Pentamedia Graphics Limited(the Company) which comprise the Balance Sheet as at March 31 2017 the statement ofProfit and Loss the Statement of Changes in Equity and Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.

Management's responsibility for the financial statements

The Company's Management is responsible for the matters stated in Section 134(5) of theCompanies Act 2013 (the Act) with respect to the preparation of these financialstatementsthatgive financialperformance and cashtrueandfairviewofthefinancialposition flows of the Company in accordance with theAccounting Standards notified under Section 133 of Companies Act 2013 read with rule 7 ofthe Companies (Accounts) Rules 2014 and in accordance with the accounting principlesgenerally accepted in India.

This responsibility includes the maintenance of adequate accounting records inaccordance with the provisions 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 financialcontrol that were operating effectively ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialmisstatement whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on these financialstatements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and the matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder and the Order under section 143(11) ofthe Act.

We conducted our audit of the financial statements in accordance with Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial the Company's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on the effectiveness ofthe internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by management aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(a) In the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2017

(b) In the case of Statement of Profit and Loss of the profit of the Company for theyear ended on that date; and (c) In the case of the Cash Flow Statement of the cash flowsof the Company for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by Section 143(3) of the Act we report that:

A. We have obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as appears from our examination of those books.

C. The Balance Sheet the Statement of Profitand Loss the statement of changes inequity and the Cash Flow Statement dealt with by this Report are in agreement withthe books of account.

D. In our opinion the Balance Sheet the Statement of Profit and Loss and the CashFlow Statement comply with Accounting Standards prescribed under section 133 of theAct as applicable.

E. On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of Section164(2) of the Act.

F. With respect to adequacy of the internal financial controls over the financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "annexure A". Ourrespectexpressesanunmodifiedopinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

G. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rule2014 in ouropinion and to the best of our information and according to the explanation given to us:

A) The Company has disclosed the impact of profit in Profit and Loss Account asreferred to Note to the financial statements.

B) The Company has provided requisite disclosures in the financial statements asregards its holding and dealings in specifiedbank Notes as defined in the NotificationS.O. 3407(E) dated November 8 2016of the the period from November 8 2016 to December 302016. Based on audit procedures performed and the representations provided to us bythe management we report that the disclosures are in accordance with the books of accountmaintained by the company and as produced to us by the management.

2. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued bythe Central Government in terms of Section 143(11) of the Act we give in AnnexureB a statement on the matters specified in the paragraphs 3 and 4 of the Order.

For Babu peram and associates.
Chartered Accountants
Ca. Babu peram
Proprietor
Chennai (Firm Registration No. 012721S)
Date: 29th May 2017 Membership No.200803

Annexure "a"

To the Independent auditors' report

(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies

Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PentamediaGraphics Limited ("the Company") as of 31st March 2017 in conjunction with ouraudit of the 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe companiesact 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under

Section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors' judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial 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 that transactions are recorded as necessary to permitpreparation of financial accordance with generally accepted accounting principles andthat receipts and expenditures of the company are being made only in accordancewith authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that couldhave 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 financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialoperating effectively as at 31st March 2017 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

For Babu peram and associates
Chartered Accountants
Ca. Babu peram
Proprietor
Place: Chennai (Firm Registration No. 012721S)
Date: 29th May 2017 Membership No.200803

Annexure "B"

To the Independent auditors' report

(Referred to in paragraph 2 under 'Report on Other Legal and Regulator) Requirements'of our report of even date)

1. Fixed Assets: a) The company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

B) The fixed assets are physically verified during the year by the management atreasonable intervals. According to the information and explanation given to us nomaterial discrepancies were noticed on such verification.

C) As per our verification we opine that there are no immovable properties held in thename of the company. The company sold the land and building during the year.

2. The inventories were physically verified during the year by the management atreasonable intervals and according to the information and explanation given by themanagementnomaterialdiscrepancieswerenoticedonphysicalverification.

3. The company has not granted or taken any loans secured or unsecured to or fromcompanies firms Limited Liability Partnerships and other parties except from MayajaalEntertainment Ltd covered in the register maintained under Sec 189 of Companies Act 2013.

4. The company has not provided any loans investments guarantees or securities whichfall under the purview of Section 185 and Section 186 of the Companies Act 2013.

5. In our opinion and according to the information given to us the company has notaccepted any deposits from the public during the year. Therefore Clause 5 of thisorder is not applicable.

6. As per the information and explanations given to us maintenance of cost records hasnot been prescribed by the Central Government under Sub-section (1) of Section 148of the companies Act 2013.

7. According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Customs duty Excise Duty Service Tax Provident Fund andCess which have not been deposited on account of any dispute except the following cases:

INCOME lx

Claims against the company which has not been acknowledged as debt for the year ended31st March 2017 includes demands from the Income Tax Authorities for payment of Taxincluding interest for the issues mentioned hereinafter. Rs. 8.89 crores pertaining to theassessment years 1996-97 1997-98 and 1998-99. The demands for these years are due todisallowance of Training Income in STP/ EHTP. The matters are pending to these years inthe Supreme Court of India. So also demand and interest of Rs. 21.53 pertaining to theassessment year 2000-01 is due to the treatment of Goodwill which is now pending in theHigh Court of Madras. For the assessment year 2001-02 2002-03 and 2003-04 the demand andincluding interest is Rs. 109.09 crores due to the treatment of unrealized sales andopening of fresh cases u/s 263. These matters are pending in the Supreme Court of India.For the assessment years 2004-05 2005-06 and 2006-07 the demands inclusive interest areRs. 48.03 crores which arose due to opening of the files afresh u/s 147 due to nondeduction of TDS for some matters rate of depreciation etc. The company has appealedagainst the same in the High Court of Madras and has obtained a stay order. For theassessment years 2008-09 2009-10 2010-11 2012-13 2013-14 2014-15 there is a totaldemand of Rs. 10.15 crores including interest because of the dispute in the ratedepreciation deduction of TDS in some matters and these matters are now with theCommissioner of Income Tax (Appeals) There is also matter pending for PentasoftTechnologies (now merged with Pentamedia Graphics) where demand inclusive interest is Rs.6.30 crores for issues pertaining to unrealized sales.

Cases filed By the Company against income tax the department

1. The Company has filed a WP 2357/2010 and got a stay order dated 15.07.2010 and todispose of all the issues /appeals from 1996 to 2000 -07 within 8 weeks from the date ofthe order.

2. Revised returns has been filed by the company for the ays 2001-02 to 2004-05 on31.03.2008 writing off Rs. 690 Crores of impaired assets is still pending with thedepartment . The Madras High Court vide order/ direction dated 11.01.2010 has asked thedepartments to consider the revised returns.

3. The company has filed a WP 25120/2010 for Pentasoft Technologies and got a stayorder dated 18.12.2009 till such time all the issues /appeals from 1996 to 2000 -07 aredisposed off.

Cases filed By the income tax the department against the Company

1. Department has filed in the Supreme Court of India against Pentasoft Technologies(now merged with Pentamedia Graphics) for Assessment Years 2001-02 and 2002-03 challengingthe Depreciation on Non Compete Fees upheld by the Madras High Court.

8. The company has not obtained any loans or borrowings from financial institutionsbanks Government and debenture holders hence this Clause is not applicable.

9. In our opinion and according to the information given to us the company has notraised any money by way of initial public offer or further public offer and hencethis clause is not applicable.

10. As per our verification and explanation given to us by the company no fraud on orby the company has been noticed or reported during the year.

11. The managerial remuneration paid by the company is as per Section 197 read withschedule V to the Companies Act 2013.

12. The company is not a Nidhi company and hence this clause is not applicable.

13. As per our verification it is opined that all the transactions with the relatedparties are in compliance with Sections 177 and 188 of the Companies Act 2013 whereapplicable and the details have been disclosed in the financial statements.

14. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year hence this clause is notapplicable.

15. According to the information and explanations given to us the company has notentered into any non - cash transactions with the directors or persons connectedwith them. Hence provisions of Section 192 of the Companies Act 2013 are not applicableto the company.

16. The company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Babu peram and associates
Chartered accountants
Ca. Babu peram
Proprietor
Place : Chennai (Firm Registration No. 0127215)
Date : 29th May 2017 Membership No.200803