To the Members of
INDUS FINANCE CORPORATION LIMITED.
Report on the Financial Statements
We have audited the accompanying financial statements of Indus Finance
Corporation Limited ("the Company"), which comprise the Balance Sheet as at
March 31,2013, 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
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 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.
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. 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.
Basis for Qualified Opinion:
1. Deviation from Accounting Policy: (Refer Note 2.1)In case of Sale of Fixed
Asset, the company has disclosed the Sale Consideration as Income and the Written Down
Value is adjusted against the Reserves in the Balance Sheet. Consequent of which profit of
the year is overstated by Rs.43,36,665/-; and
2. Non - Provisioning for NPA as per prudential norms stipulated by RBI: (Refer
Note 2.18) The Company has not provided for Sub - Standard and Doubtful Asset as
stipulated by Reserve Bank of India. Consequent of which Profit and Assets for the year
are overstated by Rs.500,000/- (Sub Standard Asset Rs.5,000,000/- )
In our opinion and to the best of our information and according to the explanations
given to us, except for the effects of the matter described in the paragraph
"Basis for Qualified Opinion", 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 a sat March
b) in the case of the Profit and Loss Account, of the profit for the year ended on that
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that
Emphasis of Matter
We draw your attention to Note No.21.1 which describes the demand raised by Income Tax
Department. The Department has attached some of the investments of the company which is
not yet lifted.
Our opinion has not been qualified in respect of above stated matters as it does not
affect the financial statements materially.
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 Cash Flow Statement dealt with
by this Report are in agreement with the books of account;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement comply with the Accounting Standards referred to in subsection(3C) of section
211 of the Companies Act, 1956
e) on the basis of written representations received from the Directors as on March 31,
2013, and taken on record by the Board of Directors, none of the Directors is disqualified
as on March 31, 2013, from being appointed as a Director in terms of clause (g) of
sub-section 1 of section 274 of the Companies Act, 1956;
f) Since the Central Government has not issued any notification as to the rate at which
the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any
Rules under the said section, prescribing the manner in which such cess is to be paid, no
cess is due and payable by the Company.
||For V. Ramaratnam & Co
||Membership No. : 012339
The Annexure referred to in paragraph 1 of the Our Report of even date to the members
of Indus Finance Corporation Limited on the accounts of the company for the year ended 31st
On the basis of such checks as we considered appropriate and according to the
information and explanation given to us during the course of our audit, we report that:
1. (a) The company has maintained proper records showing full particulars including
quantitative details and situation of its fixed assets.
(b) As explained to us, fixed assets have been physically verified by the management at
reasonable intervals; no material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations given to us, no
substantial fixed asset has been disposed during the year and therefore does not affect
the going concern assumption.
2. (a) As explained to us, inventories have been 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 are
reasonable and adequate in relation to the size of the company and the nature of its
(c) In our opinion and on the basis of our examination of the records, the Company is
generally maintaining proper records of its inventories. No material discrepancy was
noticed on physical verification of stocks by the management as compared to book records.
3. (a) According to the information and explanations given to us and on the basis of
our examination of the books of account, the Company has granted to/ taken loans from
companies, listed in the register maintained under Section 301 of the Companies Act, 1956.
(b) The Company has granted loan and advances to 2 parties that are covered in the
register maintained under Section 301 of the Act. The amount involved during the year and
the year-end balance of such loans aggregates to Rs.3,00,00,000/- & Rs.3,20,00,000/-
respectively. The Company has taken loan from 2 parties that are covered in the register
maintained under Section 301 of the Act. The amount involved during the year and the
year-end balance of such loans aggregates to Rs.3,25,51,652/- & Rs.32,95,19,114 /-
(c) In our opinion the rate of interest and other terms and conditions on which loans
have been granted / taken to / from companies, firms or other parties listed in the
registers maintained under Section 301 are not, prima facie, prejudicial to the interest
of the company.
(d) The parties have repaid the principal amounts as stipulated and have been regular
in the payment of interest.
(e) There is no overdue amount of loans granted to / taken from companies listed in the
registers maintained under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations given to us, there
is generally an adequate internal control procedure commensurate with the size of the
company and the nature of its business, for the purchase of inventories & fixed assets
and payment for expenses & for sale of goods. During the course of our audit, no major
instance of continuing failure to correct any weaknesses in the internal controls
has been noticed.
5. a) Based on the audit procedures applied by us and according to the information and
explanations provided by the management, 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.
b) As per information & explanations given to us and in our opinion, the
transaction entered into by the company with parties covered u/s 301 of the Act exceeds
five lacs rupees in a financial year are made under any contracts or arrangements at the
price at which it is made are reasonable to prevailing market price.
6. The Company has not accepted any deposits from the public covered under section 58A
and 58AA of the Companies Act, 1956.
7. As per information & explanations given by the management, the Company has an
internal audit system commensurate with its size and the nature of its business.
8. As per information & explanation given by the management and in our opinion, the
company is predominantly a "Non- Banking Finance Company" and hence not required
to maintain cost records as prescribed by the Central Government under clause (d) of
sub-section (1) of section 209 of the Act.
9. (a) According to the records of the company, undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees` State Insurance,
Sales-tax, Income Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the
extent applicable and any other statutory dues have generally been regularly deposited
with the appropriate authorities. According to the information and explanations given to
us there were no outstanding statutory dues as on 31st of March, 2013 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there is no amounts
payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and
excise duty which have not been deposited on account of any disputes.
10. The Company does not have any accumulated loss and has not incurred cash loss
during the financial year covered by our audit and in the immediately preceding financial
11. Based on our audit procedures and on the information and explanations given by the
management, we are of the opinion that, the Company has not defaulted in repayment of dues
to a financial institution, bank or debenture holders.
12. According to the information and explanations given to us, the Company has not
granted loans and advances on the basis of security by way of pledge of shares, debentures
and other securities.
13. The Company is not a chit fund or a nidhi /mutual benefit fund/society.
Therefore, the provision of this clause of the Companies (Auditor`s Report) Order, 2003
(as amended) is not applicable to the Company.
14. According to information and explanations given to us, the Company is trading in
Shares, Mutual funds & other Investments. Proper records & timely entries have
been maintained in this regard & further investments specified are held in their own
15. According to the information and explanations given to us, the Company has not
given any guarantees for loan taken by others from a bank or financial institution.
16. Based on our audit procedures and on the information given by the management, we
report that the company has not raised any term loans during the year.
17. Based on the information and explanations given to us and on an overall examination
of the Balance Sheet of the Company as at 31st March, 2013, we report that no
funds raised on short-term basis have been used for long-term investment by the Company.
18. Based on the audit procedures performed and the information and explanations given
to us by the management, we report that the Company has not made any preferential
allotment of shares during the year.
19. The Company has no outstanding debentures during the period under audit.
20. The Company has not raised any money by public issue during the year.
21. Based on the audit procedures performed and the information and explanations given
to us, we report that no fraud on or by the Company has been noticed or reported during
the year, nor have we been informed of such case by the management.
||For V. Ramaratnam & Co
||Membership No. : 012339