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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 :

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.
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.
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.

4. The job of preparing Fixed Assets register was given to an outside party but on verification it was found that the register was not maintained for the Financial Year 2005-2006 and 2006-2007. Further no documents/ records relating to physical verification of fixed assets during the Financial Year 2006-2007 were produced for our verification. Therefore difference between the assets as per records and as per physical verification could not be ascertained.

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.

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.
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

	SCH		As at 31st March 2007		As at 31st March 2006
SOURCES OF FUNDS
Corpus Fund	1		12761419.00		12070663.00
Reserves & Surplus
General Reserve	2	0.00	0.00	0.00
Capital Reserve	3	147684776.00	147684776.00	143584776.00	143584776.00
TOTAL (Rs)			160446195.00