We have audited the accompanying financial statements of "ACROPETAL
TECHNOLOGIES LIMITED", which comprise the Balance Sheet as at 31st
March 2015, and the statements of Profitt and Loss and the Cash Flow
Statement for year then ended summary of significant accounting
policies and other explanatory information.
Management's Responsibility for the financial statements.
The Company's Board of Directors are responsible for the matters stated
in Section 134(5)of the Companies Act, 2013 with respect to the
preparation and presentation of these standalone 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 principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
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.
Auditors' responsibility
Our responsibility is to express an opinion on these standalone fi
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. 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 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
internal financial control relevant to the Company's preparation of
the financial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on whether the Company has
in place an adequate internal financial controls system over fi
financial reporting and the operating effectiveness of such controls. An
audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made
by the Company's Directors, 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 on the standalone
financial statements.
Basis for Qualified Opinion:
1. The company is undergoing a problem in facing the going concern
issue, here we mention events that may cast doubt about going concern
assumption as follows (as per para 10 of SA 570"Going Concern").
a. As referred in Note 7(a) to the Financial statements ,company is
facing difficulties in paying statutory dues such as Service tax and
TDS amount of Rs.3,34,42,351 and Rs.3,72,09,345 on 31.03.2015out of
which Rs.1,72,27,765 and Rs.3,30,82,033 outstanding for more than one
year.
b. Note 2(c) in the financial statements which indicates that the
Company has accumulated losses and its net worth has been substantially
eroded, the company incurred a net loss during the current year (
Rs.178.33 crores ) and previous year (Rs.74.12 crores ) and, the
Company's current liabilities (Rs.119.64 crores ) exceed its current
assets (Rs.10.25 crores) as at the balance sheet date. These
conditions, indicate the existence of a material uncertainty that may
cast significant doubt about the Company's ability to continue as a
going concern. However, the financial statements of the Company have
been prepared on a going concern basis.
2. Out of the Unsecured advances given to staff & ex- employees
referred in Note 10(d) of the financial statements, there is
uncertainty about recovery of Rs. 22,78,206/- as there is no recovery
during the year and these are outstanding for more than a year.
3. During the year the company has written off Rs. 139.87crores as
Bad debts referred in Note 11 of the financial statements of the
company which are outstanding for more than a year and the management
is not confident of realisation from its customers.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us,except for the effects of the matters
described in the Basis for Qualified Opinion paragraph above, the
aforesaid standalone 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, of the state of affairs of the Company as at 31st March 2015, and
its loss and its cash flows for the year ended on that date.
Other Matters:
We did not audit the financial statements/information of Acropetal USA
branch included in the standalone financial statements of the Company
whose financial statements / financial information reflect total
assets of Rs. 1,92,312 as at 31st March, 2015 and there is no revenue
for the year ended on that date, as considered in the standalone fi
financial statements. The financial statements / information of this
branch has been incorporated as Unaudited.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and 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 aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of
the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) The going concern matter described in sub- paragraph (a) under the
Emphasis of Matters paragraph above may have an adverse effect on the
functioning of the Company.
(f) We have neither been given written representation from the
directors nor secretarial audit report for the year that none of them
are disqualified as on 31.03.2015 from being appointed as directors in
terms of Sec 164(2).Form DD-B pursuant to sec 274(1)(g) has been filed
on 27.10.2013, due to failure in payment of dividend since 27.10.2012.
However the company is of opinion that Sec 164(2) does not had to
"ipsofacto" vacation and it envisages vacation only at the end of the
present tenure.
Annexure to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the
members of the Company on the standalone financial statements for the
year ended 31 March 2015, we report that:
i) (a) The Company has maintained proper records showing full
particulars of quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management
during the year and no material discrepancies noticed on such verifi
cation.
ii) The Company is a service company, primarily rendering software
services. During the year, it does not hold any inventories. Thus,
paragraph 3(ii) of the Order is not applicable.
iii) The Company has granted interest free loans to two body corporates
covered in the register maintained under section 189 of the Companies
Act, 2013 ('the Act'). The outstanding balances for the granted loans
are as follows:
Persons covered in the Register Amount outstanding as on
maintained under Sec 189 31.03.2015 (in Rs)
Binary spectrum softech Pvt Ltd 4,76,94,775
Ecologix knowledge solutions pvt ltd 4,50,000
a) According to the information and explanations given to us, the
company has not received any money in the year with respect to above
loans.
b) According to the information and explanations given to us the
company has taken reasonable steps to recover the principal amount. But
they are not able to recover any amount
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of fixed assets and sale of services. The activities of
the Company do not involve purchase of inventory and the sale of goods.
We have not observed any major weakness in the internal control system
during the course of the audit.
v) The company has not accepted deposits from the public. However There
are balances outstanding in Advance from customers for a period more
than 365 days from the date of acceptance, which will be classified as
deposits as per sec 2(31) read with Rule 2(c)(xii) of the Companies
act, 2013.There are advances from MD for Rs. 2,70,35,837/- for which
we were not provided certificate from him that it is not advanced out
of borrowed money and hence we are unable to report that whether it is
deposit u/s 2(31) or otherwise.
vi) The Central government has not prescribed the maintenance of cost
records under section 148(1) of the companies Act,2013 for any of the
services rendered by the company.
vii) (a) Undisputed statutory dues including provident fund,
employees 'state insurance, income- tax, sales tax, wealth tax, service
tax, duty of custom, duty of excise,value added tax,cess and any other
statutory dues have not been regularly deposited with the appropriate
authorities and there have been serious delays in large no of cases.
Statement of Arrears of Statutory dues Outstanding for more than six
months
Amount Amount
Amount paid
outstanding Amount outstanding
Nature of the (including
as on payable For on
adjustments
31/03/2014 the year 31/03/2015
during the
year
(Rs) (Rs)
Provident
Fund 2,26,51,497 1,94,35,719 3,03,69,954 1,17,17,262
CST 4,12,500 - - 4,12,500
DDT 1,56,34,793 - - 1,56,34,793
Service Tax 3,72,09,345 2,19,21,074 2,56,88,068 3,34,42,351
Employees
state 8,10,532 12,06,591 7,14,128 13,02,995
Insurance
TDS 3,62,55,921 76,24,308 67,52,534 3,71,27,694
(b) According to the information and explanations given to us, there
are no dues of sales tax, wealth tax, duty of customs or duty of excise
and cess which have not been deposited with the appropriate authorities
on account of any dispute. However according to information and
explanations given to us, the following dues of income tax have not
been deposited by the company on account of dispute:
Period to Forum
Name of the Nature of which the where the
Amount in Rs.
statue the dues amount dispute is
relates pending
Regular CIT
Income tax April 2010-
Act, 1961 assessment 10,44,80,750 March Appeals-
Tax I,Bangalore
Regular CIT
Income tax April 2011-
assessment 17,31,71,810 Appeals-
Act, 1961 March 2012
Tax I,Bangalore
(c) The company do not have any amount that is required to be
transferred to investor education and protection fund in accordance
with the relevant provisions of Companies act,1956(1 of 1956) and rules
made thereunder.
viii) The company has accumulated losses at the end of the financial
year 2014-15.The accumulated losses are more than Fifty percent of its
net worth as at the balance sheet date. The company has also incurred
cash losses in the financial year and the immediately preceding fi
financial year.
ix) The company has defaulted in repayment of dues to financial
institutions and banks
Amount Period to which
Bank/financial outstanding
institution Opening Bal. on the amount
relates
31/03/2015
April 2014 -
Union bank of India 17,56,58,842 19,96,32,045 March 2015
April 2014 -
South Indian bank 13,26,93,893 15,08,03,416 March 2015
April 2014 -
Bank of India-TL 3,46,40,034 3,72,69,007 March 2015
April 2014 -
Axis Bank-CC 10,13,71,806 11,58,65,171 March 2015
Central Bank of April 2014 -
India-TL 10,12,08,054 12,00,21,011 March 2015
April 2014 -
SBT-Packmg credit 25,80,03,017 29,39,73,703 March 2015
April 2014 -
lOB-Cash credit 65,64,744 74,60,675 March 2015
SBI Global factors Nil 9,92,18,413 April 2014 -
Ltd March 2015
April 2014 -
Indo factoring Nil 2,13,08,525 March 2015
x) In our opinion and according to the information and explanations
given to us,the company has given guarantee for Term loans taken by its
subsidiary Vision Info Inc and Mindriver information technologies pvt
ltd and the terms &conditions are not prejudicial to the interests of
the Share holders.
xi) The company has not taken any term loans during the financial
year.
xii) During the course of our examination of the books and records of
the company, carried in accordance with the auditing standards generally
accepted in India, we have neither come across any instance of fraud on
or by the company noticed or reported during the course of our audit
nor have been informed of any such instance by the management.
For K Gopalakrishnan& Co
Chartered Accountants
Firm's registration number: 009600S
K Gopalakrishnan
Proprietor
Membership number: 025421
Bangalore
29 May 2015
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