| We have audited the accompanying financial statements of City Online
Services Limited ("the Company"), which comprise the Balance Sheet as at
March 31 , 2014, and the Statement of Profit and Loss and 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
The Company's 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 Standards referred to in Section 211(3C)
of the Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated September 13, 2013, issued by the Ministry of Corporate
Affairs, in respect of Section 133 of the Act. This responsibility
includes the design, implementation and maintenance of internal
controls relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatements, whether due to fraud or error.
Auditors' 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 the
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
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 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 the accounting policies used and the
reasonableness of the accounting estimates made by the 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 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 March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company 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"), as amended, issued by the Central Government in terms of
Section 227(4A) 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 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, the 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
referred to in Section 211(3C) of the Act read with the General
Circular 15/2013 dated September 13, 2013, issued by the Ministry of
Corporate Affairs, in respect of Section 133 of the Act.
(e) On the basis of the written representations received from the
directors as on March 31, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on March 13, 2014
from being appointed as a director in terms of Section 274(l)(g) of the
Act.
ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 1 of our
report of even date)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a programme of verification which, in our
opinion, provides for physical verification of all the fixed assets at
reasonable intervals.
(c) There was no disposal of the fixed assets of the Company during the
year. (ii)In respect of its inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(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 were 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 and no material discrepancies were noticed on physical
verification.
(iii) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system
(iv) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(v) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Income-tax, Sales Tax, Service Tax,
Custom Duty and other material statutory dues applicable to it, with
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Income-tax, Sales Tax, Service Tax, Custom Duty and other
material statutory dues in arrears as at March 31, 2014 for a period of
more than six months from the date they became payable, except as given
below:
Amount
Statute Nature of Dues Period to which involved
the amount relates
Income Tax Act, 1961 Income Tax 2013-14 2,67,217
Finance Act, 1994 Service Tax 2011-12 16,09,013
(c) There were no dues of Provident Fund, Income-tax, Sales Tax,
Service Tax and Custom Duty which have not been deposited as on March
31, 2014 on account of disputes.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks, financial institutions.
(vii) In our opinion, and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(viii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(ix) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
(x) Having regard to the nature of the Company's business / activities,
clauses 4(iii), (v), (vi), (viii), (x), (xii), (xiii), (xiv), (xv),
(xviii), (xix) and (xx) of CARO are not applicable.
For Seshachalam & Co
Chartered Accountants
Registration No. 003714S
T. Bharadwaj
Partner
Membership No. 201042
Hyderabad, May 30, 2014 |