Euro Multivision Limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of Euro Multivision Limited("the Company") which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.
Management's Responsibility for the financial statements
2. 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 preparation of thesefinancial statements to give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under section133 of the Act read with rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
3. Our responsibility is to express an opinion on these financial statements based onour audit.
4. We have taken into account the provisions of the Act and the Rules made there underincluding the Accounting Standards and matters which are required to be included in theaudit report.
5. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with the ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's 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 the internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over the financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of the accounting estimates made by the Company's Directorsas well as evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on financial statements.
8. In our opinion and to the best of our information and according to the explanationsgiven to us except for the matters illustrated and described in the Basis forQualified Opinion herein below the aforesaid 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 of the state ofaffairs of the Company as at 31st March 2017 and its loss and its cash flows for the yearended on that date.
Basis for Qualified Opinion
a) The attention is invited to the note no.3 of the financial statements towards thefact that the Company's financing facilities/arrangements including Term Loans WorkingCapital Facilities and Non Fund Based Credit Facilities have expired and the accounts withthe Banks have turned into Non Performing Assets since more than 5 years.
The Company is unable to renegotiate restructure or obtain replacement of financingarrangements and the banks have initiated legal proceedings for the recovery from theCompany u/s 19 of the Debt Recovery Tribunal (DRT) and u/s 13(2) of the Securitization& Reconstruction of Financial Assets & Enforcement of Security (Second) Interest(SARFAESI) Act 2002. In addition to this the Company has been continuously incurringsubstantial losses since past few years and as on March 31 2017 the Company's currentliabilities exceed its current assets by Rs.38575.71 lakhs. Further the networth of theCompany has fully eroded and the Company had filed for registration u/s. 15(1) of the SickIndustrial Companies (Special Provisions) Act 1985 before the Hon'ble Board forIndustrial & Financial Reconstruction.
All the above events indicate a material uncertainty that casts a significant doubt onthe Company's ability to continue as a going concern and therefore it may be unable torealize its assets and discharge its liabilities in the normal course of business. Thefinancial results do not disclose the fact that the fundamental accounting assumption ofgoing concern is not followed.
b) The Company has not provided for interest on financing facilities from securedlenders-banks amounting to Rs.5309.26 lakhs for the year ended 31st March 2017. Had thesame been accounted for; the net loss (after tax) would have been increased by Rs.5309.26lakhs for the year ended 31st March 2017.
c) Attention is also drawn to the fact that the Company has not provided for impairmentor diminishing value of its assets/investment as per Accounting Standard 28 -Accounting for Impairment of Assets' as notified under the Companies (AccountingStandards) Rules 2006 read with the General Circular 15/2013 dated 13th September 2013of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013.The effect of such Impairment or diminishing value has not been quantified by themanagement and hence the same is not ascertainable.
d) We draw attention to the fact that financial statements are subject to receipt ofconfirmation of balances from all of the debtors loans & advances investmentsbanks sundry creditors and other liabilities. Pending receipt of confirmation of thesebalances and consequential reconciliations/adjustments if any the resultant impact onthe financial statements is not ascertainable.
e) We draw attention to the facts that the non-ascertainment of complete particulars ofdues to Micro Small and Medium enterprises if any under MSMED Act 2006 and provisionstowards interest if any is not ascertained at this stage which is not in conformity withpara14 of Accounting Standard 29-Provision Contingent Liabilities and ContingentAssets.
Report on other legal and regulatory requirements
9. As required by 'the Companies (Auditor's Report) Order 2015' issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act (hereinafterreferred to as 'the Order') and on the basis of such checks of the books and records ofthe Company as we considered appropriate and according to the information and explanationsgiven to us we give in the Annexure a statement on the matters specified in paragraphs 3and 4 of the Order.
10. 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) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) The Balance Sheet Statement of Profit and Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with rule 7 of the Companies(Accounts) Rules 2014 except for as stated in basis for qualifications above.
e) On the basis of written representations received from the Directors as on March 312017 none of the Directors are disqualified as on March 31 2017 from being appointed asa Director in terms of sub-section (2) of section 164 of the Act.
f) 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 'A'.
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) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:
i) The Company has disclosed the impact if any of pending litigations as at March 312017 on its financial position in its financial statements;
ii) The Company has made provision as at March 31 2017 as required under theapplicable law or Accounting Standards for material foreseeable losses if any onlong-term contracts including derivative contracts except as stated in basis forqualifications above;
iii) There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company during the year ended March 31 2017.
iv) The Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016 and these are in accordance with the books of accountsmaintained by the Company. Refer to Note 12.1 to the financial statements.
For Deepak Maru & Co.
ICAI Firm Regn. No.:115678W
Jaymin P. Shah
Place : Mumbai
Date : May 30 2017.
Annexure - A' to the Independent Auditors' Report
Referred to in paragraph 10(f) of the Independent Auditor's Report of even date to theMembers of Euro Multivision Ltd on standalone financial statement for the year ended March31 2017.
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 EuroMultivision Ltd. ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
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.
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.
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 thattransactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
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.
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 financialreporting were operating effectively as at March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For Deepak Maru & Co.
ICAI Firm Regn. No.:115678W
Jaymin P. Shah
Place : Mumbai
Date : May 30 2017.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 9 of the Independent Auditors' Report of even date to themembers of Euro Multivision Limited on the financial statements as of and for the yearended March 31 2017)
(1) In respect of Fixed Assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregards to the size of the Company and nature of its assets. No material discrepancieswere noticed on such physical verification.
(c) According to the information and explanations given to us and the records examinedby us we report that the title deeds comprising all the immovable properties of landand buildings are held in the name of the Company as at the balance sheet date.
(2) In respect of its Inventories:
The inventories have been physically verified during the year by the management atreasonable intervals and no material discrepancies were noticed on physical verificationin relation to the size of the Company and the nature of its business.
(3) The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act. Thereforethe provisions of clause 3(iii) (iii)(a) and (iii)(b) of the said order are notapplicable to the Company.
(4) In our opinion and according to the information and explanation given to us theCompany has neither granted any loans nor provided any guarantees nor any securities inrespect of any loans to any party covered under section 185 or section 186 of the Act.
(5) In our opinion and according to the information and explanations given to us theCompany during the year has not accepted any deposits from the public within the meaningof section 73 & 76 of the Act and the Rules framed there under to the extent notified.
However in respect of deposits accepted by the company before the commencement of thisAct within the meaning of section 74 & 75 of the Act and the Rules framed there underto the extent notified the principal amount of such deposits and interest due thereonremained unpaid even after expiry of one year from such commencement and the Company hasnot filed a statement within a period of three months from such commencement or from thedate on which such payments are due with the Registrar details as prescribedu/s.74(1)(a). Further no application has been made for extension of time with the NationalCompany Law Tribunal u/s.74 (2) of the Companies Act 2013 in this regards.
(6) The Central Government of India has not specified the maintenance of cost recordsunder sub-section (1) of section 148 of the Companies Act 2013 for any of the products ofthe Company.
(7) In respect of Statutory Dues:
(a) According to the information and explanation given to us and the records of theCompany examined by us in our opinion the Company has been facing liquidity stress sincepast few years due to which there were delays in depositing various undisputed statutorydues with appropriate authorities including provident fund employee's state insuranceincome tax sales tax wealth tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues as applicable to it and there are noarrears of outstanding statutory dues as at the year end for a period of more than sixmonths from the date they became payable.
(b) According to the information and explanation given to us and the records of theCompany examined by us there are no dues of income tax sales tax wealth tax servicetax duty of customs duty of excise value added tax as at March 31 2017 which havenot been deposited on account of any dispute.
(c) There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company during the year ended March 31 2017.
(8) In our opinion and according to the information and explanations given to us theCompany has defaulted in repayment of loans and interest's dues to the banks and financialinstitution as under:
|Name of the Bank ||Principal Outstanding (Rs. in Lakhs) ||Interest Outstanding (Rs. in Lakhs) ||Default since |
|State Bank of India ||12391.62 ||15467.34 ||April 2011 |
|The Cosmos Co-Op Bank Ltd ||7915.88 ||9410.80 ||January 2011 |
|Total ||20307.50 ||24878.14 || |
(9) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments). The term loans were applied for the purposesfor which those are raised.
(10) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
(11) The Company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.
(12) As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3 (xii) of the Order are not applicable to the Company.
(13) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the standalone financial statements as required by the applicableaccounting standards.
(14) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3(xiv) of the Order is not applicable to the Company.
(15) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its Directors and hence provisions of Section 192 of theAct are not applicable.
(16) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For Deepak Maru & Co.
ICAI Firm Regn. No.:115678W
Jaymin P. Shah
Place : Mumbai
Date : May 30 2017.