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Auditor Report of Acropetal Technologies Ltd.

Mar 31, 2015

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


Mar 31, 2014

We have audited the accompanying financial statements of "ACROPETAL TECHNOLOGIES LIMITED", which comprise the Balance Sheet as at 31st March 2014, 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.

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 to in sub-section (3C) of section 211 of "The Companies Act, 1956". 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 auditor''s judgment, including the assessment of the risk 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 company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. 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.

In our opinion and to the best of our information and according to the explanation given to us, the 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 principle generally accepted in India subject to

(i) We are unable to express an opinion on the Sundry Debtors of Rs.75.59 crores outstanding over a period of one year.

(ii) The branch accounts of Acropetal USA are not audited and the financials are incorporated as unaudited.

a. In the case of debtors outstanding over one year, though the management is confident that they are fully recoverable, we are unable to express our opinion on this, as there is no receipts from them during the year.

b. In case of USA Brach ony the unaudited final accounts are provided and hence we are unable to express our opinion on the financials of the branch.

c. In the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2014:

d. In the case of the Statement of profit and Loss, of the loss for the year ended on that date: and

e. In the case o 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 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 branch accounts of Acropetal USA are not audited and the financials are incorporated as unaudited.

d. The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with this Report are in agreement with the books of account;

e. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956;

f. On the basis of written representations received from the directors as on March 31st, 2013, 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.

g. 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.

(1) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets [4(i)(a)].

(2) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to information and explanation given to us no material discrepancies were noticed on such verification [4(i)(b)].

(3) According to the information and explanation given to us the fixed assets of the Company disposed off during the year, in our opinion, do not constitute substantial part of fixed assets of the Company and such disposal has in our opinion not effected the going concern of the Company[4(i)(c)].

(4) As there were no inventories there was no physically verification of inventories. [4(ii)(a)].

(5) As there were no inventories paragraph [4(ii)(b)] of the order is not applicable.

(6) As there were no inventories paragraph [4(ii)(c)] of the order is not applicable.

(7) (a) According to the information and explanations

given to us, the company has not granted any fresh loans to wholly owned subsidiary company, firms or other parties covered in the register maintained u/s 301 of the Companies Act 1956 during the year. However the company has outstanding balance receivables from the following parties for loans / advance granted during the earlier years as follows [4(iii)(a)].

in Rs Person covered in the Register under Sec 301 Amountoutstanding as on 31.03.2014

Binary Spectrum Softech Pvt Ltd 4,75,44,775

Vision Info Inc 11,23,62,341

(b) According to the information and explanations given to us, the Company has granted interest free loans [4(iii)(b)].

(c) According to the information and explanations given to us the company has not received any money in the form of repayment of principle during the year with respect to both the above loans / advances [4(iii)(c)].

(d) according to the information and explanations given to us the company has taken reasonable steps to recover the principal. But they were not able to recover any amount. [4(iii)(d)].

(e) according to the information and explanations given to us, the company has taken interest free loan from persons covered under the register maintained under section 301 as below [4(iii)(e)].

in Rs.

Person covered in the Register under Sec 301 Amountoutstanding as on 31.03.20174

Mr. Ravi Kumar D 98,47,818.48

Mindriver Information Technologies Private Limited 1,04,22,93r.48

Kinfotech Private Limited 21,46,520

Acropetal Inc 3,63,576.54

(f) According to the information and explanations given to us the loan taken by the Company are interest free loans [4(iii)(f)].

(g) According to the information and explanations given to us the Company is regular in repayment of principal to parties from whom they have taken loan [4(iii)(g)].

(8) In our opinion and according to the information and explanations given to us, having regard to the explanations, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weakness in such internal controls system [4(iv)].

(9) In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies act, 1956, to the best of our knowledge and belief and according to the information and explanation given to us is as follows [4(v)]:

(a) The particulars of contracts or arrangements referred to section 301 that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered up to November 2013. As the records were seized by regulatory authorities on 31.12.2013, we could not verify the subsequent entries. [4(v)(a)].

(b) Where each of such transaction is in excess of Rs 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time [4(v)(b)].

(10) The company has not accepted any deposits from public during the year [4(vi)].

(11) In our opinion, the company has an internal audit system commensurate with the size and nature of its business [4(vii)].

(12) As explained to us, the Central Government has not prescribed maintenance of Cost records to the Company [4(viii)].

(13) (a) The Company is not regular in deposting the undisputed statutory dues as mentioned below[4(ix)(a)]:

inRs

Amount Amount payable for Total outstandingas Statutory payables outstanding the year on31.03.2014 as on 31.03.2013 2013-14

PF 1,95,05,368 31,45,584 2,26,51,497

Service Tax 2,50,03,252 1,22,06,093 3,72,09,345

TDS 2,60,75,712 1,01,76,208.48 3,62,51,920.48

(b) The company does not have any disputed statutory liability as on the date of Balance Sheet [4(ix)(b)].

(c) . According to the information and explanation given to us, there are no income tax, service tax, and cess which have not been deposited on account of any dispute[4(ix)(c)].

(14) The company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year [4(x)].

(15) The company has taken term loans from banks & the company is not regular in repayment of such loans within the stipulated time [4(xi)].

inRs'' Loan amount Amount, Period to which the Bank outstanding as on (''31.03.2014 (Rs) amount relates

United Bank of 14,64,84,492 17,56,58,842 April 2013 - March India 2014

South Indian 10,44,16,589 13,26,93,893 April 2013 - March Bank 2014

(16) The company has not granted any loan against security by way of pledge of shares, debentures or other securities [4(xii)].

(17) The company is not a chit fund or a nidhi mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(18) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(19) The company has not given any corporate guarantee during the year [4(xv)].

(20) In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised [4(xvi)].

(21) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds are raised on short - term basis have been used for long - term investment

(22) According to the information and explanations given to us, the company has not made preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act, and the price at which the shares are not prejudicial to the interest of the company [4(xviii)].

(23) According to the information and explanations given to us, during the period the company has not issued any debenture during the period and hence the question of creation of charge or and use are not applicable to the Company [4(xix)].

(24) The Company has not raised money by Public Issue during the year and hence we do not have any comments under this clause [4(xx)].

(25) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit [4(xxi)].

For K. Gopalakrishnan & Co., Chartered Accountants FRN:009600S

K. Gopalakrishnan Proprietor M. No.:025421.

Place: Bangalore Date: 24.04.2014


Mar 31, 2013

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 2013, and the statement 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

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''. 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 auditor’s judgment, including the assessment of the risk 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 company’s 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.

Opinion

In our opinion and to the best of our information and according to the explanation given to us, the 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 principle generally accepted in India:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2013;

b. In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c. In the case of 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 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 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 31st, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, 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.

ANNEXURE TO OUR REPORT OF EVEN DATE

(1) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets [4(i)(a)].

(2) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to information and explanation given to us no material discrepancies were noticed on such verification [4(i)(b)].

(3) During the year the company has not disposed off any fixed asset. Hence, in our opinion the going concern status is not affected[4(i)(c)].

(4) As explained to us, the inventory has been physically verified during the year by the management at reasonable intervals [4(ii)(a)].

(5) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business [4(ii)(b)].

(6) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material [4(ii)(c)].

(7) (a) According to the information and explanations given to us, the company has not granted any loans to companies other than wholly owned subsidiary company during the year, firms or other parties covered in the register maintained u/s 301 of the Companies Act 1956 [4(iii)(a)].

Accordingly Paragraph 4 iii (b), (c) and (d) of the order are not applicable.

(8) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weakness in such internal controls system [4(iv)].

(9) In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies act,1956, to the best of our knowledge and belief and according to the information and explanation given to us [4(v)(a)]:

(a) The particulars of contracts or arrangements referred to section 301 that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) Where each of such transaction is in excess of Rs 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(10) The company has not accepted any deposits from public during the year [4(vi)].

(11) In our opinion, the company has an internal audit system commensurate with the size and nature of its business [4(vii)].

(12) As explained to us, the Central Government has not prescribed maintenance of Cost records to the Company [4(viii)].

(13) (a) The Company is not regular in depositing the undisputed statutory dues including PF of `1,25,65796/-, Service Tax of ` 2,50,40,421/-, Income Tax of ` 6,16,17,056/-, TDS of `3,80,36,036/-. [4(ix)(a)]:

(b). The company does not have any disputed statutory liability as on the date of Balance Sheet.

(c). According to the information and explanation given to us, there are no income tax, service tax, and cess which have not been deposited on account of any dispute.

(14) The company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year [4(x)].

(15) The company has taken term loans from banks & the company is not regular in repayment of such loans within the stipulated time [4(xi)]

(16) The company has not granted any loan against security by way of pledge of shares, debentures or other securities [4(xii)].

(17) The company is not a chit fund or a nidhi mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

(18) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(19) The company has given the corporate guarantee to the extent of 3 crores for the financial assistance availed by Mindriver Information Technologies Private Ltd., during the year [4(xv)].

(20) In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised [4(xvi)].

(21) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds are raised on short – term basis have been used for long – term investment

(22) According to the information and explanations given to us, the company has not made preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act, and the price at which the shares are not prejudicial to the interest of the company [4(xviii)].

(23) According to the information and explanations given to us, during the period the company has not issued any debenture during the period and hence the question of creation of charge or and use are not applicable to the Company [4(xix)].

(24) The Company has not raised money by Public Issue during the year and hence we do not have any comments under this clause [4(xx)].

(25) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit [4(xxi)].

For K. Gopalakrishnan & Co.,

Chartered Accountants FRN:009600S

K. Gopalakrishnan

Proprietor

M. No.:025421.

Place: Bangalore

Date: 29.05.2013


Mar 31, 2012

1. We have audited the attached balance sheet of ACROPETAL TECHNOLOGIES LIMITED as at 31st March 2012 the profit and loss account and the cash flow statement for year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards 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 of material misstatement. An audit includes examining, on a test basis, evidence supporti ng 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.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub - section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) 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;

(ii) In our opinion, the company has kept proper books of account as required by law so far as appears from our examination of those Books of Accounts.

(iii) The balance sheet, profit and loss account dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the balance sheet, profit and loss account dealt with by this report comply with the accounting standards referred to in sub - section (3C) of section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub - section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principle generally accepted in India:

A. In the case of the balance sheet, of the state of affairs of the company as at 31st March 2012.

B. In the case of the profit and loss account, of the profit for the year ended on that date;

C. In the case of Cash Flow Statement, of the cash flows of the company for the year ended on that date.

Annexure to our report of even date:

(1) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(2) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to information and explanation given to us no material discrepancies were noticed on such verification.

(3) During the year the company has not disposed off any fixed asset. Hence, in our opinion the going concern status is not affected.

(4) As explained to us, the inventory has been physically verified during the year by the management at reasonable intervals.

(5) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(6) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(7)

(a) Accordingtothe information and explanations given to us, thecompany has not granted any loans to companies other than wholly owned subsidiary company during the year, firms or other parties covered in the register maintained u/s 301 of the Companies Act 1956. Accordingly Paragraph iii (b), (c) and(d) of the order are not applicable.

The company has extended an interest free loan for its wholly owned subsidiary for a period of two years.

(8) In ouropinion and accordingtothe information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weakness in such internal controls system.

(9) In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies act, 1956, to the best of our knowledge and belief and according to the information and explanation given to us:

(a) The particulars of contracts or arrangements referred to section 301 that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(10) The company has not taken any public deposits during the year.

(11) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(12) As explained to us, the Central Government has not prescribed maintenance of Cost records to the Company.

(13)

(a) The Company is generally regular in depositing the undisputed statutory dues ESI,PF, Service Tax, Income Tax, etc. excepting some delay in such remittances of the dues to the appropriate authorities. The Extent of arrears of the statutory dues outstanding as at March 31,2012 for the period of more than six months from the date of become payable towards Income Tax was Rs. 3.10 Crores and service Tax was Rs. 0.14 Crores of which Rs. 1.47 Crores of Income Tax and Rs. 0.14 Crores of service Tax were paid subsequently.

(b) The company does not have any disputed statutory liability as on the date of Balance Sheet.

(c) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute.

(14) The company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(15) The company has taken term loans from banks & the company is generally regular in repayment of such loans within the stipulated time.

(16) The company has not granted any loan against security by way of pledge of shares, debentures or other securities.

(17) The company is not a chit fund or a nidhi mutual benefit fund /society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(18) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the companies (Auditor's Report) Order, 2003 are not applicable to the company.

(19) The company has given a corporate guarantee in favor of UPS Capital Inc for the loan availed by wholly owned subsidiary Vision Info Inc, UAE as under:

Term Loan 1: Rs. 6,27,93,4777- Term Loan 2: Rs. 11,63,63,0757- Term Loan 3: Rs. 22,02,20,318/-

(20) In our opinion and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised.

(21) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds are raised on short - term basis have been used for long - term investment.

(22) According to the information and explanations given to us, the company has not made preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act, and the price at which the shares are not prejudicial to the interest of the company.

(23) According to the information and explanations given to us, during the period the company has not issued any debenture during the period and hence the question of creation of charge or and use are not applicable to the Company.

(24) The Company has not raised money by Public Issue during the year and hence we do not have any comments under this clause.

(25) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

K. Gopalakrishnan

Proprietor. M. No.: 025421.

 
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