Annexure-III 

S K BHARTIA & CO.                                                                                                                       103, Suraj Market

CHARTERED ACCOUNTANTS                                                                                                       H.B Road

                                                                                                                                                            FANCY BAZAR,

                                                                                                                                                            GUWAHATI-781001                                                     

AUDITORS REPORT

We have audited the attached Balance Sheet of Indian Institute of Entrepreneurship, Guwahati as on 31^st March 2007 and also the annexed Income and Expenditure Account for the year ended on that date. These financial statements are the responsibility of the Institute’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standard 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 from misstatement. An audit includes examining, on 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We report the following observations :

1. The interest on Corpus Fund Fixed Deposits amounting Rs.690756/- For the year 2006-07 with United Bank of India, Lalmati, Guwahati has been directly credited to the Corpus Fund. This has resulted in reducing income for the year by the corresponding amount. 
2. The NSIC had contributed Rs.5 lakhs to the corpus Fund of the institute vide FDR no. 853546 dated 10.03.2000(maturity date 10.03.2003). The FDR was in the name of NSIC . After maturity the NSIC did not furnish the details/ copy of the deposit receipt even after repeated reminders by the institute. Further no interest was paid by NSIC wef.10.06.2005 resulted in reduced income for the year by the amount of interest earned and lower amount of deposit by the amount of interest earned up to 31.03.2007.
3. The Training fees receivable Rs.12849855/- includes Rs.9760635/- outstanding for more than six months. Out of the amount outstanding for more than six month it appears that the maximum outstanding amount are not recoverable. Details of such outstanding are as under.

Serial No.            Name.                                                              Amount(Rs)           

                        1                        Assam Minorities Dev. Fin. Corpn.                      6000.00

                        11                      Development Commissioner, Handicraft               600.00

                        111                    DOI and Commerce, Agartalla                            191000.00

                         IV                      DOI and Commerce, Kamrup                            201200.00

                         V                       IDBI, Guwahati                                                   44400.00

                         VI                      NEC, Shillong                                                    1139498.00

                        VII                      SIDBI                                                                736500.00

                        VIII                    Guwahati University                                              1500.00

                        IX                        NBCFDC                                                           7667.00         

                   X                         DOI and Commerce, Naharlagun                        3000.00

                  XI                         PD, DRDA                                                        10000.00

                 XII                        CPWD, Guwahati                                               42716.00

                XIV                        NABARD, Dehradun                                         17500.00

                 XV                         Ministry of SSI,GOI                                         1636250.00    

                 XVI                        Small Farmers Agro Business Consor .              100000.00

               XVII                         Min of Food Processing, GOI                           750000.00

               XVIII                        NABARD                                                          97500.00

               XIX                           SPEED                                                             5000.00

               XX                            SPIU, DHTE, Govt. of Nagaland                     546400.00

               XXI                           GNRC, Guwahati                                            11000.00

               XXII                          Assam Ayurvedic Products                               10000.00

               XXIII                         DOI, Meghalaya                                              202000.00

               XXIV                         Planning Commission                                       10926.00

                XXV                         Director of VAH, Nagaland                             35000.00

                XXVII                       ASDC, OBC                                                 32500.00

                 XXX                        Bhubaneswari Mahila Samiti                             3647.00

                                                                                      TOTAL-----------    5841804.00

No provision for any doubtful recovery has been made. Therefore the current assets (Training fee recoverable) has been shown enhanced by the amount not recoverable.

In view of the above facts it is suggested that in future the institute should insist for advance payment of training fees before undertaking any training program.

5.  Provision for liability under the  “The payment of Gratuity ACT, 1972” was not done properly. During the year Rs.2803683/- has been debited towards provision for gratuity liability which includes Rs.1677511/- towards short provision made up to 31.03.2006. This has resulted in higher expenditure by Rs.1677511/- during the year.

      6.      No balance confirmation with debtors, creditors and for loans and advances were made available for our verification and their balances    are shown as appearing in the accounts.

7.      The tax deducted at source is not deposited timely. Further quarterly E-TDS returns are also not submitted timely. This may result in imposition of interest for delayed payment and penalty for not filing timely returns. Further no TDS was deducted out of consultancy and professional fee paid.

8.      The institute has not made any provision for liability under the provisions of the Income Tax Act,1961 towards income tax and fringe benefit liability. The institute could not produce any document showing that the said provisions were not applicable to the institute.

9. Rs.495390/- were paid to M/s Synergic Softak Sulution towards annual Maintenance charges for support services of application software. No competitive quotations were obtained due to secret password with the service provider. The expenditure appears to be excessive considering the nature of services rendered.
10. The Institute has recovered Rs.3385500/- towards internal faculty services by debiting respective projects and crediting the receipts against internal faculty service. In fact the receipt should have been credited to salary and allowances account and other heads of the applicable expenses. This has resulted in higher Income and Expenditure by Rs.3385500/-

11. The outstanding payment to CPWD as on 31.03.2007 are as under.

      A. CPWD (Civil)

                          a.      Construction of fencing works                       154016.00

                          b.      Construction of second Hostel Building        24576500.00

                          c.      Construction of Boundary wall                        892080.00

                                                                     TOTAL                     25622596.00

B. CPWD (Electr)

                           a. Instalation of 63 KVA DG Set                           522382.00

                           b. Sound proofing of DG Set                                 194250.00

                                                                             TOTAL              716632.00

                           GRAND TOTAL                26339228.00

The above amount has been shown as advance to CPWD since last year.    

On verification it was found that the construction of building and installation of DG set had been competed long back. In fact the institute is charging depreciation on the furniture installed in the said hostel building. By not capitalizing the outstanding amount the value fixed assets has been shown short/less by Rs.26339228/- and the loans and advance has been inflated by the same amount.  As a result of which institute has shown lower depreciation as under:-

I.             Depreciation @ 10% on civil work Rs. 25622596.00                   2562260.00

II.            Depreciation on DG set @ 15% on Rs. 716632.00                      107495.00

               Total Depreciation                                                                        2669755.00

This resulted in lower depreciation and expenditure by Rs.2669755.00

12.  The institute has made provision for leave encashment Rs.2351129/- which  includes Rs.1743480/- short provision in earlier years resulted in higher expenditure during year by the said short provision in earlier years.

13.   Bill payable Rs.100583/- to M/s N.E.A.C. is outstanding since last several years towards balance payment of officers qtrs at Geneshguri, Guwahati. The holding numbers are yet to be transferred in the Name of the institute.

14.   Advances from Sponsors- Following advances received from sponsors long back are still outstanding.

i.        Directorate of Industries, Mizoram.                   25000.00 Op. balance

ii.       NEC Shillong                                                  400749.00 Op. balance

iii.       Dept. of science & Technology                       452800.00 Op. balance

iv.      Directorate of industries, Nagaland                  110000.00 Op. balance

v.      Assam Prathamic Siksha                                   8744.00 Op. Balance

vi.       DC, SSI New Delhi                                       532500.00 Op. balance

vii.       Coir Board                                                   817000.00 Op. balance

viii.       DC, Handloom                                             808570.00 Op. balance

Details of programs against above advances could not be furnished to us. Further bills were not raised and /or expenses incurred against above programs were not adjusted. The amount of advance and income will be affected on the basis of actual assessment.

15.  Advance payment Rs.50000/- was made to the Indian Institute of Packaging on 09.05.2006. The program was fixed to be held in 2005–06 but now extension sought up to 2007-08.

16.            Advance to employees for expenses includes Rs.56000/- misappropriated by Mr. L.C.Gogoi is outstanding since last year. It was stated that services of Mr.Gogoi has been terminated. The expenditure account and advance to employees for expenses will be affected on the basis of recovery to be made from Mr. Gogoi.

17.  Loans and Advance made during the year are not adjusted/ recovered timely. Maximum number of adjustment vouchers were passed on 30.03.2007 and 31.03.2007. The impact of delayed adjustment if any could not be ascertained.

18.    LTC advance Rs.26200/- outstanding as on 31.03.2007 includes old outstanding as under:-

                                                                     Date of payment                        Amount

i.             Mr.S.B.Baruah            Op.Bal.                                    13500/-

ii.            Mr.W.R.Singh            28.09.2006                                4600/-

iii.            Mr. B.Das                   Op.Bal.                                      8100/-

         The amount of expenditure will be increased by the amount of bills against above advances and the amount of the advances will be reduced accordingly.

19.            Advance to project member includes old outstanding due as under :-

            Name                         Date of Outstanding                         Amount

            Mr.J.Bhattacharjee       Op. Balance                                     417/-

            (not in service)

            Mr. Tapan Sarma                  “                                             6730/-

            (not in service)           

            Mr. A.J.Kalita                        “                                             500/-

            (not in service)                        “                                  

            Miss Pallavi Borah                  “                                            1000/-

               (not in service)                     “

            Mr. Sanjib Barman                  “                                           15000/-

            Mr.Ramen Kalita                     “                                             640/-

            Mr. Anurag Sarma                   “                                             620/-

            Mr. M.K.Bayan                       “                                            1997/-

            M/s Society for Ent. Dev.         “                                            20000/-

            Mr. Pankaj Barman                  “                                            500/-

            Mr. Babul Dutta                       “                                            6714/-

            Mr.Pankaj Kr. Das            18.04.2006                                 2500/-

            (not in service)

            Mr. P.C. Philip                   Op.Balance                                   500/-

            Mr. J.P.Sinha                             “                                          15000/-

            Mr.Recta Raj Baishya                 “                                         10218/-

            Mr. Satyajit Sarma                      “                                         6596/-                         

            Mr. Poragdhar  Borah                 “                                          9461/-       

                                                                                        Total          98393/-

The amount of expenditure will be higher by the amount of bill against above advances and amount determined to be not recoverable and the amount of advances will be reduced accordingly.

20.    Bill receivable Rs.255647.91 includes all outstanding due as under.

      Name                                       Amount                 Remarks

      AAU                                       1845.00                  Opening Balance

      KVIC, Guwahati                     1250.00                  Opening Balance         

      MM Enterprises, Shillong         31500.00                Opening Balance         

      DIC, Nagaon                           4350.00                  Opening Balance      

      RGVN                                      892.00                  Opening Balance        

       NECCI                                    6480.00                 Opening Balance        

      Director DDK,Ghy.                   2600.00                Opening Balance

      UGC                                        12008.00               Opening Balance  

      NEC Tele Medicine Programme   161169.00         Opening Balance

      K.R.Kalita                                     2206.00           Opening Balance                             

                                       Total……   224300.91

      The old outstanding if found not recoverable should be written off. The expenditure will be increased by the amount found not recoverable and the advances will be reduced by the corresponding amount.

21. Advance to DAVP Rs. 2 lacs . The amount is outstanding since a long time. As explained no bill has been received against the amount paid. As a result the amount of loans and advances has been shown higher by the amount of bill.

22.            Recovery of Administrative Expenses from projects as per details given bellow was made and deducted from the Administrative expenses.

             BFDC                               37194/-

            Handloom Cluster              174639/-

            Housing Project                  62078/-

            Cane & Bambo Cluster      150998/-

            Diagnostic Study                 69579/-

                                Total……      494488/-

As a result administrative expenses were shown reduced by Rs.494488/- and expenditure in the respective projects are shown higher by the amount shown above project wise.

23. On verification of the bank reconciliation statements, it was found that the following cheques were deposited with UBI, Lalmati Branch, but cleared by the bank.

            Date                                   Cheque No            Amount

            20.07.2005                        025747                    7150/-

            04.10.2005                        555985                     213/-

            25.11.2005                        334719                     300/-

            09.06.2006                        373366                     500/-

Steps need to be taken to recover the amount. Income and expenditure will be affected on the basis of recovery to be made. Further following cheque were issued but not yet debited by the bank:

            Date                              Cheque No                   Amount

            12.05.2004                        009629                     1000/-

            21.05.2004                        009654                     1000/-

            29.10.2004                        252540                     2450/-

            10.03.2005                        353602                      750/-

            28.03.2005                        353653                      7100/-

            11.05.2005                        353765                      3000/-

             05.10.2005                        354171                      5395/-

The validity period of cheques issued expired long back, the same are required to be reversed. The amount of income and expenditure will be affected accordingly.

Subject to the above:-

1) We have obtained all information and explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit;

2)   The Balance Sheet and the Income & Expenditure Account dealt with the report are in agreement with the books of accounts;

3)   In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Income & Expenditure Account read together with the Schedules and Notes on Account thereon give a true and fair view in conformity with the accounting principles generally accepted in India;

a) In case of Balance Sheet of the state of affairs of the Institute as at 31^st March 2007, and

b) In so far as Income & Expenditure Account, the excess of Expenditure over Income of the Institute for the year ended on that date.

                                                          For and on behalf of

Guwahati,                                                                                                                                                                         S K Bhartia & Co.

28-09-2007                                                                                       

                                            S K Bhatia

                                                                                             Prop.

INDIAN INSTITUTE OF ENTREPRENEURSHIP

BASISTHA CHARIALI, GUWAHATI-781029 

BALANCE SHEET AS AT 31ST MARCH 2007

(B.Sharma)                                                    (K Ahmed)                                              For S.K. BHARTIA & CO.

Administrative Officer                                       Director                                                                                                                                         Guwahati                                                                                                                       (S K Bhartia)

Guwa         

INDIAN INSTITUTE OF ENTREPRENEURSHIP

BASISTHA CHARIALI, GUWAHATI – 781029

INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2007

(B.Sharma)                                                                (K Ahmed)                                               For S K BHARTIA & CO.    

Administrative Officer                                               Director                 

Guwahati,                                                                                                                              Chartered Accountant

Dated 26 th September, 2007                                                                                  

INDIAN INSTITUTE OF ENTREPRENEURSHIP

BASISTHA CHARIALI, GUWAHATI – 781029

SCHEDULE ATTACHED TO & FORMING PART OF THE BALANCE SHEET AS AT 31^ST MARCH,2007