To the Members of Acropetal Technologies Limited
Report on the Financial Statements.
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 Profit 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 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 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 mannerso 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 refl ect total assets of Rs. 1,92,312 as at 31st March, 2015 and
there is no revenue for the yearended on that date, as considered in the standalone
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.
For K Gopalakrishnan& Co
Chartered Accountants
Firm’s registration number: 009600S
K Gopalakrishnan
Proprietor
Membership number: 025421
Bangalore
29 May 2015
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 verification.
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
| Nature of the Dues |
Amount outstanding as on 31/03/2014 (Rs) |
Amount payable For the year |
Amount paid (including adjustments) during the year |
Amount outstanding on 31/03/2015 (Rs) |
| Provident |
|
|
|
|
|
2,26,51,497 |
1,94,35,719 |
3,03,69,954 |
1,17,17,262 |
| Fund |
|
|
|
|
| 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:
| Name of the statue |
Nature of the dues |
Amount in Rs. |
Period to which the amount relates |
Forum where the dispute is pending |
| Income tax Act, 1961 |
Regular assessment Tax |
10,44,80,750 |
April 2010- March 2011 |
CIT Appeals- I,Bangalore |
| Income tax Act, 1961 |
Regular assessment Tax |
17,31,71,810 |
April 2011- March 2012 |
CIT Appeals- 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 financial year.
ix) The company has defaulted in repayment of dues to financial institutions and banks
| Bank/financial institution |
Opening Bal. |
Amount outstanding on |
Period to which the amount relates |
|
|
31/03/2015 |
|
| Union bank of India |
17,56,58,842 |
19,96,32,045 |
April 2014 - |
|
|
|
March 2015 |
| South Indian bank |
13,26,93,893 |
15,08,03,416 |
April 2014 - |
|
|
|
March 2015 |
| Bank of India-TL |
3,46,40,034 |
3,72,69,007 |
April 2014 - |
|
|
|
March 2015 |
| Axis Bank-CC |
10,13,71,806 |
11,58,65,171 |
April 2014 - |
|
|
|
March 2015 |
| Central Bank of |
|
|
|
|
10,12,08,054 |
12,00,21,011 |
April 2014 - |
| India-TL |
|
|
March 2015 |
| SBT-Packing credit |
25,80,03,017 |
29,39,73,703 |
April 2014 - |
|
|
|
March 2015 |
| IOB-Cash credit |
65,64,744 |
74,60,675 |
April 2014 - |
|
|
|
March 2015 |
| SBI Global factors |
|
|
|
|
Nil |
9,92,18,413 |
April 2014 - |
| Ltd |
|
|
March 2015 |
| Indo factoring |
Nil |
2,13,08,525 |
April 2014 - |
|
|
|
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
+91-9892691696
