| 1. We have audited the accompanying financial statements of M/s
GradientInfotainments Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2015 and the Statement of Profit and Loss
and Cash Flow Statement for the year ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
2. The management and Board of Directors of the Company are 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 that give a true and fair view of the financial position,
financial performance 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
Companies (Accounts) Rules, 2014. This responsibility includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding 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; design, implementation
and maintenance of adequate internal financial controls, that are
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.
Auditor's Responsibility
3 Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement
4 An audit involves performing procedures to obtain audit evidence
about the amounts and 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 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 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 management and Board of
Directors, as well as evaluating the overall presentation of the
financial statements
5 We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion
Basis of Qualified opinion
6.The balance of trade payables of Rs.8216.04 lakhs , Trade receivables
of Rs.9643.16 lakhs and loans and advances Rs.1372.63 lakhs are subject
to confirmation. We have not received any confirmations though
management has circulated the balance confirmation letters.
Qualified Opinion
7. In our opinion and to the best of our information and according to
the explanations given to us, expect for the effects of the matters
described in the qualifies opinion paragraph ,the financial statements
give the information required by the Act in the manner so accepted in
India of the state of affairs of the Company as at 31st March 2015, its
Profit for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7 As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section143 of the Act, we give in the Annexure a
statement on the matters Specified in paragraphs 3 and 4 of the Order.
8 As required by section 143(3) of the Act, we further 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
purpose of our audit;
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. The Balance Sheet, Statement of Profit and Loss dealt with by this
Report are in agreement with the books of account;
d. In our opinion, the aforesaid financial statements comply with the
applicable Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules 2014;
e. On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of Section 164(2) of the Act ;
f. In our opinion and to the best of our information and according to
the explanations given to us,
We report as under with respect to other matters to be included in the
Auditor's Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014:
(i) The Company does not have any pending litigations which would
impact its financial position
(ii) The Company did not have any long-term contracts including
derivative contracts; as such the question of commenting on any
material foreseeable losses thereon does not arise
(iii)There has not been an occasion in case of the Company during the
year under report to transfer any sums to the Investor Education and
Protection Fund. The question of delay in transferring such sums does
not arise.
Annexure referred to in paragraph 7 of Our Report of even date
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us during the course of
our audit, we report that:
(i).(a) The Company has not maintained proper records showing full
particulars including quantitative details and situation of fixed
assets on the basis of available information.
(b) Substantial portion of fixed assets have been physically verified
by the management during the year at reasonable intervals and following
material discrepancy between book records and physical inventory was
noticed and properly dealt with in books of accounts.
Capital work in progress amounting to Rs.203.98 lakhs stands duly
adjusted as described in Pt no.6 forming part of notes to accounts
(ii)The physical verification of inventory is not applicable to the
company due to its nature of business. As at the date of reporting the
company does not have any physical inventory.
(iii) 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.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets and for the sale of 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, no major
weakness has been noticed or reported.
(v) The Company has not accepted any deposits from the public covered
under Section 73 to 76 of the Companies Act, 2013.
(vi) According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
sub-section (1) of Section 148 of the Act.
(vii) (a) According to the information and explanations given to us and
based on the records of the company examined by us, the company is not
regular in depositing the service tax The outstanding liability of
service tax due for more than 6 months as on the need of financial year
is Rs. 37,53,382/-.Further, the Company did not comply to the statutory
requirement of prompt deduction and remittance of Tax at source on
applicable instances. The provisions of Customs, Provident fund,
Employees State Insurance Act are not presently applicable to the
Company.
(b) According to the information and explanations given to us and based
on the records of the company examined by us there are statutory dues
of earlier years payable in respect of Tax deducted at source being
Rs.2,04,04,578/-, in respect of service tax being Rs.8,57,57,579/-, in
respect of FBT being Rs.2,61,180/- and in respect of income tax payable
being Rs.5,53,36,908/-.
(c) According to the information and explanations given to us there is
no instance of requirement to transfer any sums to the Investor
Education and Protection Fund.
(viii) The Company has accumulated losses of Rs.27,88,65,432/- as at
31.03.2015, being more than 50% of its net worth. The Company has
incurred cash profit for the current financial year under audit and
cash loss for the preceding financial year.
(ix) According to the records of the company examined by us and as per
the information and explanations given to us, the company has defaulted
in repayment of dues to banks to the extent of Rs.40,40,870/- as per
books of accounts, comprising of Rs.36,14,500/- dues to Andhra Bank and
Rs.4,26,370/- dues to Indian Bank, as described in Pt no.2 forming part
of notes to accounts.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for loan taken by others from a
bank or financial institution during the year
(xi) According to the information and explanations given to us, the
company has not raised any term loans during the year
(xii) In our opinion and according to the information and explanation
given to us, considering the size and nature of the Company's
operations, no fraud of material significance on or by the Company has
been noticed or reported during the year.
For CRK & Co,
Chartered Accountants
FRN: 010388S
Place: Hyderabad Sd/-
Date : 14.11.2015 C.R.Kumar
Proprietor |