| We have audited the attached Balance Sheet of IKF FINANCE LIMITED, (the
"Company") as at March 31, 2014, and the related Profit and Loss
Statement and the Cash Flow Statement for the year ended on that date
annexed thereto which we have signed under reference to this report.
These financial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material mis- statement. 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 Manage- ment as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2003, ("the
Order") issued by the Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956, and on the basis of such
checks as we considered appropriate and according to the information
and explanations given to us during the course of audit a statement on
matters specified in the said order has been given in the annexure
hereof.
Further to our comments in the Annexure referred to in paragraph 3
above, 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 it appears from our examination of those
books;
c) the Balance Sheet, Profit and Loss Statement and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) in our opinion and according to the information and explanations
given to us, the Balance Sheet, Profit and Loss Statement and Cash Flow
Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
e) on the basis of written representations received from the directors
and taken on record by the company, none of the directors are
disqualified as on March 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;
f) in our opinion and to the best of our information and according to
the explanations given to us, the said financial statements 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:
i) in the case of Balance Sheet, of the state of affairs of the company
as at March 31, 2014;
ii) in the case of Statement of Profit and Loss, of the profit of the
company for the year ended on that date; and
ii) in the case of Cash Flow Statement, of the cash flows of the
company for the year ended on that date.
ANNEXURE TO AUDITORS' REPORT (Referred to in paragraph 3 of our report
of even date)
Re: IKF FINANCE LIMITED ("the company")
Financial Year Ended March 31, 2014
I. (a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The Company has a phased programme of physical verification of
fixed assets, which in our opinion, is reasonable having regard to the
size of the Company and nature of fixed assets. In accordance with the
programme, the fixed assets have been physically verified by the
management during the year and no material discrepancies were noticed
on such physical verification.
(c) The Company has disposed off vehicles from fixed assets of which
are actually part of its business activity, as such the assets disposed
off during the year were not substantial and therefore do not affect
the going concern status of the Company.
II. In our opinion and as per the information and explanations given
to us the Company has not granted/taken any loans, secured or
unsecured, to/from companies, firms or other parties listed in the
register maintained under section 301 of the Companies Act, 1956 (the
Act).
III. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the above controls and therefore the reporting of the same
does not arise.
IV. In respect of transactions entered in the register maintained in
pursuance of section 301 of the Companies Act, 1956
(a) To the best of our knowledge and belief and according to the
information and explanations given to us, the particulars of contracts
or arrangements referred to in Section 301 of the Act have been entered
in the register required to be maintained under that section, and
(b) According to the information and explanations given to us, where
each of such transactions in respect of any party, the transactions
made in pursuance of such contracts or arrangements have been made at
prices which are reasonable having regard to the prevailing market
prices at the relevant time.
V. The Company has not accepted public deposits in accordance with the
provisions of Section 58A, 58AA or any other relevant provisions of the
Companies Act, 1956.
VI. The Company has an internal audit system, which in our opinion, is
commesurate with the size and the nature of its business.
VII. The Central Government has not prescribed the maintenance of cost
records under Section 209(1)(d) of the Act.
VIII. (a) According to the records of the Company and information and
explanations given to us, undisputed statutory dues including provident
fund, Investor education and protection fund, Employee's State
Insurance, Income tax, Wealth tax, service tax, as applicable were
regularly deposited during the year with the appropriate authorities
etc. and there exist no dues which is outstanding for a period
exceeding six months as at the last day of the financial year.
(b) According to the information and explanations given to us and the
books and records examined by us, there are no dues of Income Tax,
Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess
which have not been deposited on account of dispute which is
outstanding for a period exceeding six months as at the last day of the
financial year.
IX. The Company does not have any accumulated lossess at the end of
the financial year and has not incurred any cash losses during the
current and immediately preceeding financial year.
X. Based on our audit procedures and as per information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to banks, financial
institutions or debenture holders.
XI. According to the information and explanations given to us and
based on our examination of books and records, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares and other securities.
XII. In our opinion the company is not a chit fund or a nidhi/mutual
benefit fund/society.
XIII. Based on our examination of records and the information and
explanations given to us, the Company does not deal / trade in shares,
securities and debentures and other investments.
XIV. In our opinion and according to the information and explanations
given to us, the Company has given guarantees, in respect of loans,
sanctioned to the various finance creditors under the Channel Business
activity undertaken by the Company as detailed below. The terms and
conditions thereof are not prejudical to the interest of the Company.
(Rs. In Lacs)
Sl. Name of the Activity Outstanding Amount
No.
1 Channel Business 1670.17
XV. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
company were, prima facie, applied by the company during the year for
the purposes for which the loans were obtained other than temporary
deployment, pending application.
XVI. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the funds raised on short term basis have not been
used for long term investment.
XVII. According to the information and explanations given to us, the
company has allotted 30,00,000 Equity Shares of Rs.10/- each with a
Premium of Rs.3/- per Share on September 30, 2013, consequent to
conversion of Warrants allotted on September 30, 2013, to both the
Promoters and Promoter Group in terms of SEBI Preferential Issue
Guidelines and therefore we are of the opinion that the same are not
prejudicial to the interest of the Company.
XVIII.According to the information and explanations given to us, the
Company has created securities by way of floating charges in respect of
secured debentures issued.
XIX. The Company has not raised money by Public issue of Shares during
the year.
XX. To the best of our knowledge and belief and according to the
information and explanations given to us, no material fraud on or by
the Company was noticed or reported during the course of our audit.
XXI. In our opinion and according to the information and explanations
given to us, the nature of the Company's business / activities during
the year have been such that clause (ii) of paragraph 4 of the
Companies (Auditors') Report) Order, 2003 are not applicable to the
Company for the year.
For Hanumaiah & Co.
Chartered Accountants
Firm Registration No: 009021S
Sd/-
K Hanumaiah, FCA
Partner
Place: Vijayawada Membership No: 201719
Date: 27-05-2014 |