Report on the Financial Statements
1. We have audited the accompanying financial statements of Cinemax
India Limited (formerly known as Cinemax Exhibition India Limited),
(the 'Company') which comprise the Balance Sheet as at 31 March
2013, the Statement of Profit and Loss and the Cash Flow Statement for
the year then ended and a summary of significant accounting policies
and other explanatory information.
Management's Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial
statements, that 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 referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control 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. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 auditors' 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 control relevant to the
Company's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in
the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, 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.
Opinion
6. In our opinion and to the best of our information and according to
the explanations given to us, the 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:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2013;
ii) in the case of Statement of Profit and Loss, of the profit for the
year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditor's Report) Order, 2003
("the Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
8. As required by Section 227(3) of the Act, we report that:
a. 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;
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 financial statements dealt with by this report are in agreement
with the books of account;
d. in our opinion, the financial statements comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the Act;
and
e. on the basis of written representations received from the
directors, as on 31 March 2013 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2013
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Act;
Annexure to the Auditors' Report of even date to the members of
Cinemax India Limited (formerly known as Cinemax Exhibition India
Limited), on the financial statements for the year ended 31 March 2013.
Based upon the audit procedures performed for the purpose of reporting
the true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets have been physically verified by the management
during the year and no material discrepancies were noticed on such
verification. In our opinion, the frequency of verification of the
fixed assets is reasonable having regard to the size of the Company and
the nature of its assets.
(c) In our opinion, a substantial part of fixed assets has not been
disposed off during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory 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 proper records of inventory and no
material discrepancies between physical inventory and book records were
noticed on physical verification.
(iii) (a) The Company has granted unsecured loans to two parties
covered in the register maintained under Section 301 of the Act. The
maximum amount outstanding during the year is Rs. 538.67 lacs and the
year-end balance is Rs. Nil.
(b) The Company has granted an interest free loan to two parties
covered under Section 301 of the Act and the other terms and conditions
of such loans are not, prima facie, prejudicial to the interest of the
Company.
(c) In respect of interest free loans granted, receipt of the principal
amount is regular.
(d) There is no overdue amount in respect of loans granted to such
companies, firms or other parties.
(e) The Company has taken unsecured loans from four parties covered in
the register maintained under Section 301 of the Act. The maximum
amount outstanding during the period is Rs. 3,277.23 lacs and the
year-end balance is Rs. Nil.
(f) In respect of interest free loans taken, the other terms and
conditions of loans taken by the Company are not, prima facie,
prejudicial to the interest of the Company.
(g) In respect of interest free loans taken, payment of the principal
amount is regular.
(iv) In our opinion, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for the
sale of services. During the course of audit, no major weakness has
been noticed in the internal control system in respect of these areas.
(v) (a) In our opinion, the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Act have been so entered.
(b) Owing to the unique and specialized nature of the items involved
and in the absence of any comparable prices, we are unable to comment
as to whether the transactions made in pursuance of such contracts or
arrangements have been made at prevailing market prices at the relevant
time.
(vi) The Company has not accepted any deposits from the public within
the meaning of sections 58A and 58AA of the Act and the Companies
(Acceptance of Deposits) Rules, 1975. Accordingly, the provisions of
clause 4(vi) of the Order are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
(viii) To the best of our knowledge and belief, the Central Government
has not prescribed maintenance of cost records under clause (d) of
sub-section (1) of section 209 of the Act, in respect of Company's
products. Accordingly, the provisions of clause 4(viii) of the Order
are not applicable.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income
tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess
and other material statutory dues, as applicable, have not been
regularly deposited with the appropriate authorities and there have
been significant delays in a large number of cases. Undisputed amounts
payable in respect thereof, which were outstanding at the year end for
a period of more than six months from the date they became payable are
as follows
Name of the statute Nature of
the dues Amount Period to
(Rs. in lacs) which the amount
relates
Finance Act, 1994 Service Tax 76.58 Previous year
2012-13
ESIC Act, 1948 ESIC 0.66 Previous year
2012-13
Name of the Statute Due Date Date of Payment
Finance Act 1994 Several dates 26 April 2013
ESIC Act 1948 Several dates Several dates
(b) There are no dues in respect of income tax, sales tax, wealth tax,
service tax, customs duty, excise duty and cess that have not been
deposited with the appropriate authorities on account of any dispute.
(x) The Company has been registered for a period of less than five
years. Accordingly, the provisions of clause 4(x) of the Order are not
applicable.
(xi) In our opinion, the Company has not defaulted in repayment of dues
to any bank or financial institution during the year. The Company did
not have any outstanding debentures during the year.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities. Accordingly, the provisions of clause 4(xii) of the Order
are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Accordingly, the provisions of clause
4(xiii) of the Order are not applicable.
(xiv) 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 Order are not applicable.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantee for loans taken by others from banks or financial
institutions are not, prima facie, prejudicial to the interest of the
Company.
(xvi) In our opinion, the Company has applied the term loans for the
purpose for which the loans were obtained.
(xvii) In our opinion, no funds raised on short-term basis have been
used for long-term investments by the Company.
(xviii) During the year, the Company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under section 301 of the Act. Accordingly, the provisions of
clause 4(xviii) of the Order are not applicable.
(xix) The Company has neither issued nor had any outstanding debentures
during the year. Accordingly, the provisions of clause 4(xix) of the
Order are not applicable.
(xx) The Company has not raised any money by public issues during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable.
(xxi) No fraud on or by the Company has been noticed or reported during
the year covered by our audit.
For Walker, Chandiok & Co
Chartered Accountants
Firm Registration No: 001076N
per Khushroo B. Panthaky
Partner
Membership No.F-42423
Place: Gurgaon
Date: 28 May 2013
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