Omnitech Infosolutions Ltd Auditor Reports

(STANDALONE FINANCIAL STATEMENTS)

To the Members of

OMNITECH INFOSOLUTIONS LIMITED

Omnitech House, A/13, Cross Road, No 5,

Kondivita Road, Marol, M.I.D.C., Andheri (East),

Mumbai-400093.

Report on Financial Statements

We have audited the accompanying financial statements of Omnitech Infosolutions Ltd, which comprise the Balance Sheet as at March 31, 2014, 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 information.

Managements 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.

Auditors Responsibility

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 auditors 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 Companys 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 of Opinion

1. As stated in the note to financial statement for Retirement Benefits, The Companys liability for gratuity is to be determined by actuarial valuation made at the end of each financial year using the projected unit credit method. The actuarial valuation report from the LIC is not available hence the adhoc provision of 50% of the liability of the previous financial year is made which is not as per accounting standard ( AS-15) issued by the Institute of chartered Accountant of India

2. Due to financial irregularity defaults in repayments, winding up petitions are filed against the company by three unsecured Loan Party (ICD) and which are pending for admission & for further hearing. Further there are 2 arbitration petitions filed by two NBFCs against the company which are pending for hearing. The Company is in active discussions with these parties for restructuring of these loans/ICD. The Management is of the view that since matters relating to several of the financial irregularities are sub judice and various proceedings are ongoing, any further adjustments / disclosures to the financial statements, if required, would be made in the financial statements of the Company as and when the outcome of the above uncertainties is known and the consequential adjustments / disclosures are identified

In view of the above, we are unable to comment on the adjustments / disclosures which may become necessary as a result of further findings of the ongoing legal proceedings and the consequential impact, if any, on these financial statements.

Emphasis of Matters:

Without qualifying our opinion we draw our attention to the following matters:

a. Balances of Debtors, Creditors, Loans and advances given are subject to confirmation.

b. The company has made the provision for doubtful debts of Rs. 3306.05 against the trade receivable which are outstanding more than 365 days.

c. The inventories carried by the company include software which are in the form of CDs. We have not verified the technical details of such CDs.

d. Company also have intangible assets having gross block value of Rs.19739.41 lacs out of which assets worth Rs. 1736. 57 Lacs have been acquired during the year from its subsidiary Europe Omnitech Technology services BV, Netherland. This assets has been acquired under tri party agreement between the company, its subsidiary and the Vendor. M/S Europe Omnitech Technology services BV has made payment of 19.00 lacs Euro to the vendor company in the year 2012. Now Europe Omnitech Technology services BV has transferred the said intangible assets to the company at the value which it has paid to the vendor plus interest of 1.99 lacs Euro. We have not verified the technical aspects of the intangible assets.

e. The company have not been able to recover Rs 318.45 Lacs from the staff who have left the company. The same have been written off in the books during the year.

f. As stated in Note 3 "Long Term Borrowings" and Note 6 "Short Term Borrowings" of the Financial Statements, wherein the Companys loan liabilities has been reinstated in the Financial Statements based on the bank statements pursuant to the Corporate Debt Restructuring Scheme ("CDR"). However, as per the information and explanation provided to us, the Company is yet to Comply with the terms and conditions of the scheme of CDR The company has been sanctioned Term Loans from GE Capital Services and the outstanding balance as on 31^st March 2014 is Rs.3146.47 lacs. The company has not been able to repay the stipulated instalments and hence the GE Capital Services who has gone for arbitration and has called back the credit facility hence the same has been classified under Short term borrowings.

g. The Company has not been able to perform few contracts with some parties for which it has to pay damages of Rs.13.48 Lacs. Apart from this one customer has invoked Bank Guarantee of Rs. 77.20 lacs for non performance of Contract. The management informed us that they are perusing with the customers and are hopeful to get the money back from the customer.

h. As informed by the management the company has invested Rs. 14.06 lacs in its subsidiary in USA which is functioning at lower level of operation and its investment value has been eroded and Similarly company had invested Rs.45.41 lacs in one of its subsidiaries in Singapore and as informed by the management the operation is not started and hence the company has provided for the diminution in the value of investment in accordance with the accounting standard 13 issued by the ICAI

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required subject to the our comments in paragraph 1 & 2 in basis of opinion and in paragraph a to h in Emphasis of Matters above, 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 as at March 31,2014;

b) in the case of the statement of Profit and Loss, of the loss for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditors 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, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, 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 POLADIA & CO.
	Chartered Accountants
	FRN No.: 128274W
	Navin Gala
Place: Mumbai	(Partner)
Date: 28th May, 2014	Membership No.: 040640