| 1. We have audited the attached Balance Sheet of TELECANOR GLOBAL
LIMITED, as at 30th September 2014, the Statement of Profit & Loss and
the Cash Flow Statement for the period ended on that date annexed
thereto. These financial statements are the responsibility of the
company's management. My responsibility is to express an opinion on
these financial statements based on our audit.
2. We have conducted the audit in accordance with the auditing
standards generally accepted in India. These 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
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. 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 (Auditors Report) Order, 2003(CARO)
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 paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from my examination of those
books;
iii) The balance sheet, the Statement of profit and loss and the cash
flow statement dealt with by this report are in agreement with the
books of account;
iv) In our opinion, the balance sheet, the Statement of profit and loss
and cash flow statement dealt with by this report comply with the
accounting standards referred to in subsection (3C) of Section 211 of
the Companies Act, 1956 ;
v) On the basis of written representations received from the directors,
as on 30th September 2014, and taken on record by the Board of
Directors, We report that none of the directors are disqualified as on
30th September 2014 from being appointed as director in terms of clause
(g) of Subsection 1 of section 274 of the Companies Act, 1956 ;
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with
accounting policies and other notes attached thereto give the
information required by the Companies Act, 1956 in the manner so
required and give a true and fair view in conformity 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 30th September 2014.
b) In the case of the Statement of Profit and Loss , of the Loss for
the period ended on that date and
c) In the case of the cash flow statement, of the cash flows of the
company or the period ended on that date.
RE. TELECANOR GLOBAL LIMITED Annexure to Audit Report
Referred to in paragraph 3 of our report of even date
(i) a. The company has maintained records showing full particulars
including quantitative details of situation of fixed assets.
b. The fixed assets were physically verified by the management during
the year, and discrepancies noticed on such verification have been
properly dealt with in the accounts.
c. Depreciation is provided on a straight line basis applying the
rates specified in Schedule XIV to the Companies Act, 1956 except the
following where the management has decided to put the following fixed
assets held for sale
(ii) a. The management of the company has conducted physical
verification of its inventories adequately during the year.
b. The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c. The company is maintaining records of inventory. The discrepancies
noticed on verification between the physical stocks and the book
records were not material.
(iii) The company, as per the information and explanations provided,
has not accepted or taken loans from the companies, firms or other
parties covered in the register maintained under Section 301 of the
Companies Act, 1956, and hence the matters regarding rate of interest,
terms & conditions of loans, repayments and overdue amounts more than
Rs. 1 Lakh are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, apart from certain procedures that need strengthening on
an ongoing basis, there are adequate internal control procedures
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. During the course of my audit, no major
weakness has been noticed in internal controls.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
a. The particulars of contracts or arrangements referred to section
301 that needed to be entered in the Register maintained under the said
section have been so entered.
b. Where each of such transaction is in excess of Rs. 5 lakhs in
respect of any party, the transactions have been at prices which are
prima facie reasonable having regard to prevailing market prices at the
relevant time. There are no such transactions.
(vi) The company has not accepted deposits from the public and hence
the provisions of Section 58 A of the Companies Act, 1956 and the rules
framed there under are not applicable to the company. In the company's
case, no order has been passed by the Company Law Board.
(vii) The company has not yet established a formal internal audit
system and the company functions with a detailed review of transactions
by its audit committee, which is commensurate with the size and nature
of its present business.
(viii) As per the information provided by the Management, that the
Company is not covered by the rules made by the Central Government for
the maintenance of cost records under Sec 209 (l)(d) of the Companies
Act, 1956.
(ix) According to the information and explanations given to us in
respect of statutory dues the details are as follows:
Details of undisputed dues to various statutory authorities are as
follows:
CST payable Rs. 2,27,324/-
FBT payable Rs. 75,000/-
IT Payable Rs. 1, 23,14,271/-
TDS Payable Rs. 30,24,762/-
Service Tax Payable Rs. 54,73,603/-
VAT Payable Rs. 16,74,815/-
We are informed that the company has no liability towards gratuity and
that the provisions of the Provident Fund & ESI Act are not applicable
to it.
In our opinion, the accumulated losses of the company are not more than
fifty percent of its net worth. The company has incurred cash loss
during the period ended 30th September 2014 (12 months).
(x) In our opinion and according to the information and explanations
given to us, the company has dues and has defaulted in repayment to
financial institution, bank or debenture holders with respect to
interest and installments. The Company has defaulted with respect to
repayment of Term Loan installments and interest on Overdraft availed
from Dhana Lakshmi bank and as per the communication received, the bank
has initiated legal proceedings for recovery of loan at Debt Recovery
Tribunal (DRT).
(xi) In our opinion, and according to the information and explanations
given to us that the company has been granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities against 7,00,000 shares pledged with Dhana Lakshmi bank ltd
(xii) In our opinion, the company is not a chit fund or a nidhi, mutual
benefit, fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (auditor's Report) Order, 2003 are not applicable to the
Company.
(xiii) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the company.
(xiv) The company has not given guarantees for loans taken by others
from banks or financial institutions.
(xv) In our opinion and according to the information provided and
explanations given that the company has taken term loans and were
applied by the company for the purpose for which they were obtained.
(xvi) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the company. We report
that the no funds raised on short term basis have been used for
long-term assets except permanent working capital.
(xviii)The receivables (debtors) amounting Rs. 6, 28, 19,027/- are
outstanding since 2 years. The management has informed us they are
making follow up efforts in this regard. However we observe that no
effective legal action has been initiated.
(xix) According to the information and explanations given to us, the
company has not issued any debentures during the year under audit or
any period prior to it.
(xx) According to the information given that the company has not made
any public issue during the year. Hence this clause is not applicable.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of my audit.
For MIS. COPAL & RAJAN
CHARTERED ACCOUNTANTS
Firm Registration No.000953S
K.GOUTHAM SUBBAIAH
PARTNER
Membership No.203237
Place: Hyderabad
Date: 24-12-2014
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