| We have audited the accompanying financial statements of Advanta
Limited ("the Company"), which comprise the Balance Sheet as at
December 31, 2014, and the Statement of Profit and Loss and 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
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
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 ("the Act")
read with General Circular 8/2014 dated 4 April 2014 issued by the
Ministry of Corporate Affairs. 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.
Auditor's Responsibility
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.
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 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 but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. 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. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
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 Companies Act, 1956 ("the Act") 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 December 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) 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
1. 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.
2. 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 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 and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956, read with General Circular
8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs;
(e) On the basis of written representations received from the directors
as on December 31, 2014 under section 164(2) of the Companies Act, 2013
and taken on record by the Board of Directors, none of the directors is
disqualified as on December 31 2014, from being appointed as a director
in terms of cLause (g) of sub- section (1) of section 274 of the
Companies Act, 1956, provisions of which are consistent with those
under section 164(2) of the Companies Act, 2013.
Annexure referred to in paragraph 1 of our report of even date
Re: Advanta Limited (Formerly Advanta India Limited)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) There was no disposal of substantial part of fixed assets during
the year.
(ii) (a) The management has conducted physical verification of inven
-tory 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 were noticed on physical verification.
(iii) (a) According to the information and explanations
given to us, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties (determined in the
manner stated in clause (v) below) covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, the
provisions of clause 4(iii)(a) to (d) of the Order are not applicable
to the Company and hence not commented upon.
(b) The Company had taken loan from one company covered in the register
maintained under section 301 of the Companies Act, 1956 (determined in
the manner stated in clause (v) below). The maximum amount involved
during the year was H4,000 lacs and the year-end balance of loans taken
from such parties was H1,588 lacs.
(c) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans are not prima facie prejudicial to the interest of the
Company.
(d) In respect of loans taken, repayment of the principal amount is as
stipulated and payment of interest has been regular.
(iv) In our opinion and according to the information and explanations
given to us and having regard to the explanation that certain sales
transactions are of proprietary nature for which alternative sources
are not available to obtain comparable quotations, 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 goods and services. During the course of our
audit, we have not observed any major weakness or continuing failure to
correct any major weakness in the internal control system of the
Company in respect of these areas.
(v) (a) According to the information and explanations
provided by the management, we are of the opinion that the particulars
of contracts or arrangements referred to in section 301 of the
Companies Act, 1956 that need to be entered into the register
maintained under section 301 have been so entered. In evaluating the
parties to be covered under section 301, only contracts or arrangements
upto March 31, 2014 (being the last day up to which this section was
applicable to the Company) have been considered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees five lacs have been
entered into during the financial year at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, for the period upto March 31, 2014 (the Companies Act, 1956
and relevant section has been replaced by the Companies Act, 2013
effective April 1, 2014), and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained. We have
not, however, made a detailed examination of the same.
(ix) (a) Undisputed statutory dues including investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, customs duty and other material statutory dues have
generally been regularly deposited with the appropriate authorities
except for service tax and provident fund where there has been a slight
delay in a few cases. The provisions of sales-tax, excise duty and cess
are not applicable to the Company.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth tax, service tax, customs duty and other material statutory dues
were outstanding, at the year end, for a period of more than six months
from the date they became payable.
(c) According to the information and explanations given to us, there
are no dues of sales-tax and customs duty which have not been deposited
on account of any dispute except for income tax and service tax as
follows:
(x) The Company's accumulated losses at the end of the financial year
are less than fifty percent of its net worth and it has not incurred
cash losses in the current and immediately preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to bank or debenture
holders. The company has no outstanding dues in respect of a financial
institution.
(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
(xiii) 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 Order are not applicable to the Company.
(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 to the
Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks and
financial institutions, the terms and conditions whereof, in our
opinion, are not prima- facie prejudicial to the interest of the
Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short- term basis have been used for long-term
investment.
Name of the Nature of dues Amount of Period to which Forum where
Statute demand the amount dispute is
(In lacs) relates pending
Income Tax Income Tax# 103.94 A.Y. 1995-96 High Court
Act,1961 12.02 A.Y. 1996-97 High Court
17.35 A.Y. 1997-98 High Court
253.12 A.Y. 2008-09 Income Tax
Appellate
Tribunal
82.49 A.Y. 2010-11 The Commissione
r of Income
Tax (Appeals)
The Finance Act, Service tax 490.13 F.Y. 2006-07 The Customs, Excise
and 1994 including penalty Service Tax Appellate Tribunal Excluding
interest and penalty.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956 for the period upto March 31,
2014 (the Companies Act, 1956 and the relevant sections has been
replaced by the Companies Act, 2013 effective April 1, 2014).
(xix) The Company has unsecured debentures outstanding during the year,
on which no security or charge is required to be created.
(xx) The Company has not raised any money through a public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S.R. BATLIBOI & ASSOCIATES LLP
ICAI Firm Registration Number: 101049W
Chartered Accountants
per Shankar Srinivasan
Partner
Membership Number: 213271
Place: Mumbai
Date: February 02, 2015
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