1. We have audited the accompanying financial statements of Euro
Multivision Limited ("the Company"), which comprise the Balance Sheet
as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary 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 section 134(5) of the Companies Act, 2013 ('the Act) with
respect to the preparation of these financial statements to give a true
and fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules
made there under including the Accounting Standards and matters which
are required to be included in the audit report.
5. We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements require that
we comply with the ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers the internal financial control
relevant to the Company's preparation of the financial statements that
give a true and fair view, in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over the financial reporting and the
operating effectiveness of such controls. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the Company's
Directors, as well as evaluating the overall presentation of the
financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Qualified Opinion
8. In our opinion and to the best of our information and according to
the explanations given to us, except for the matters illustrated and
described in the Basis for Qualified Opinion herein below, the
aforesaid financial statements give the information required by the Act
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India, of the
state of affairs of the Company as at 31st March 2015, and its loss and
its cash flows for the year ended on that date.
Basis for Qualified Opinion
1. The attention is invited to the note no. 24(6), the Company's
financing arrangements have expired and the amount outstanding is
overdue for repayment since January,2011 in the case of Term Loans from
Cosmos Bank and since April, 2011 in case of Term Loans from State Bank
of India. The Company has been unable to either renegotiate,restructure
or obtain replacement financing and the banks have initiated legal
proceeding for recovery from the Company with the Debt Recovery
Tribunal. In addition to this, the Company has continuously been
incurring substantial losses since past few years and as of 31st March,
2015, the Company's current liabilities exceeds its current assets by
Rs. 33,735.82 lakhs. Further, the net worth of the Company has been
fully eroded and the Company has filed for registration u/s 15 (1) of
Sick Industrial Companies (Special Provisions) Act, 1985, before the
Hon'ble Board for Industrial & Financial Reconstruction.
All the above events indicate a material uncertainty that casts a
significant doubt on the Company's ability to continue as a going
concern and therefore it may be unable to realize its assets and
discharge its liabilities in the normal course of business. The
financial results do not disclose the fact that the fundamental
accounting assumption of going concern is not followed.
2. The Company has not provided interest on unsecured loan amounting
to Rs. 233.07 lakhs (Previous year Rs. 154.33 lakhs) for the year ended
31" March, 2015. Had the same been provided the loss for the year
ending 31" March, 2015 will increase by Rs. 233.07 lakhs (Previous year
Rs. 154.33 lakhs) and the corresponding liability will also increase by
Rs. 233.07 lakhs as at 31" March, 2015 (Previous Year Rs. 154.33
lakhs).
3. The Company has not provided for impairment or diminishing value of
its assets/investment as per 'Accounting Standard 28 - Accounting for
Impairment of Assets' as notified under the Companies (Accounting
Standards) Rules, 2006 read with the General Circular 15/2013 dated
13th September, 2013 of 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 the management and
hence the same is not ascertainable.
Report on other legal and regulatory requirements
4. As required by 'the Companies (Auditor's Report) Order, 2015',
issued by the Central Government of India in terms of sub section (11)
of section 143 of the Act (hereinafter referred to as 'the Order'), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.
5. 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 best of 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 the Company 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 dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards 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 31,2015, none of the directors are disqualified as on March
31,2015 from being appointed as a director in terms of sub-section (2)
of section 164 of the Act.
f) With respect to the other matters to be included in the Auditor's
Report in accordance with rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our knowledge and belief
and according to the information and explanations given to us:
i) The Company has disclosed the impact, if any, of pending litigations
as at March 31, 2015, on its financial position in its financial
statements;
ii) The Company has made provision as at March 31,2015 as required
under the applicable law or Accounting Standards for material
foreseeable losses, if any, on long-term contracts including derivative
contracts except as stated in basis for qualifications above;
iii) There were no amounts required to be transferred to the Investor
Education and Protection Fund by the Company during the year ended
March 31,2015.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(1) In respect of Fixed Assets:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
b) As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner, which in our
opinion is reasonable, having regards to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
physical verification.
(2) In respect of its Inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of such verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, 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) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
(3) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 189 of the Act. Therefore, the provisions of clause
3(iii), (iii)(a) and (iii)(b) of the said Order are not applicable to
the Company.
(4) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with
regards to purchases of inventory, fixed assets and with regards to the
sale of goods and services. Further, on the basis of our examination of
the books and records of the Company, and according to the information
and explanations given to us, we have neither come across, nor have
been informed of, any continuing failure to correct major weakness in
the aforesaid internal control system.
(5) In our opinion and according to the information and explanations
given to us, the Company during the year has not accepted any deposits
from the public within the meaning of 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 this
Act, within the meaning of section 74 & 75 of the Act and the Rules
framed there under to the extent notified, the principal amount of such
deposits and interest due thereon remained unpaid even after expiry of
one year from such commencement and the Company has not filed a
statement within a period of three months from such commencement or
from the date on which such payments, are due, with the Registrar
details as prescribed u/s.74(1)(a).
(6) The Central Government of India has not specified the maintenance
of cost records under sub-section (1) of section 148 of the Act for any
of the products of the Company.
(7) In respect of Statutory Dues:
a) According to the information and explanation given to us and the
records of the Company examined by us, in our opinion the Company has
been facing liquidity stress since past few years due to which there
were delays in depositing various undisputed statutory dues with
appropriate authorities including provident fund, employee's state
insurance, income tax, sales tax, wealth tax, service tax, duty of
customs, duty of excise, value added tax, cess and other material
statutory dues, as applicable to it and there are no arrears of
outstanding statutory dues as at the year end for a period of more than
six months from the date they became payable.
b) According to the information and explanation given to us and the
records of the Company examined by us, there are no dues of sales tax,
wealth tax, service tax, duty of customs, duty of excise, value added
tax, as at March 31,2015, which have not been deposited on account of
any dispute. However there are dues of income tax which have not been
deposited on account of a dispute which are as under:
Name of the Nature of Dues Amount Rs.
Statute
Income Tax Demand arisen pursuant 43.08 lakhs
to assessment
Name of the Period to which the Forum where the
Statute amount relates dispute is pending
Income Tax Financial Year Commissioner of
2011-12 Income Tax (Appeals)
c) There were no amounts required to be transferred to the Investor
Education and Protection Fund by the Company during the year ended
March 31,2015.
(8) The Company has accumulated losses at the end of financial year and
also had the same at the end of the immediately preceding financial
year. Further the Company has incurred cash losses during the financial
year covered by our audit and also during the immediately preceding
financial year. The accumulated losses of the Company have exceeded its
net worth.
(9) In our opinion and according to the information and explanations
given to us the Company has defaulted in repayment of loans and
interests dues to the banks and financial institution. The principal
outstanding of Term Loans and Cash Credit facilities amounts to Rs.
20,307.5* lakhs and overdue interest amounts to Rs. 14,850.47 lakhs as
at March 31, 2015, subject to reconciliation with the banks. The period
of default ranges around 51 months.
(10) In our opinion and according to the information and explanations
given to us, the Company has not given the guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of the clause 3(x) of the Order are not
applicable to the Company.
(11) The Company has not raised any term loan during the year.
Accordingly, the provisions of clause 3(xi) of the Order are not
applicable.
(12) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For Deepak Maru & Co.
Chartered Accountants
ICAI Firm Registration No:115678W
Jaymin P. Shah
Partner
Mem.No.118113
Place : Mumbai
Date : May 30, 2015
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