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Auditor Report of California Software Company Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of California Software Company Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 of 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.

Auditor's 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. 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 profit/loss and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the financial statements:

1. Note 26 and 27 in the stand alone financial statements which indicate that the Standalone Company has accumulated losses and its net worth has been fully eroded, the Standalone Company has incurred a net loss during the current and previous year(s) and, the Stand alone Company's current liabilities exceeded its current assets as at the balance sheet date. These conditions, along with other matters set forth in Note 26, indicate the existence of a material uncertainty that may cast significant doubt about the Stand alone Company's ability to continue as a going concern.

2. Note No. 29 to the standalone financial statements and Notes to Fixed Asset schedule regarding Change in Depreciation Policy of Fixed Assets and resultant loss amounting to Rs.58,64,486/- including prior period Depreciation of Rs. 50,21,028.00

3. Note No. 30 to the stand alone financial statement regarding write back of Account Payables to Aspire Communications P Ltd and Aspire Peripherals P Ltd, two wholly owned subsidiaries of the Standalone Company amounting to Rs. 253,45,879.00

4. Note no. 31 to the standalone financial statement regarding unsecured loans from Associate companies amounting to Rs. 246,936,135.00

5. Company's Overseas subsidiary CSWL Inc and Indian subsidiary Aspire Communications P Ltd and it subsidiary Aspire peripherals P Ltd have stopped their operations fully. CSWL Inc has initiated Liquidation proceedings.

Our opinion is not modified in respect of these matters.

Report On Other Legal and Regulatory Requirements

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) Matter described under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".

(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There is delay in transferring the amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company incorporated in India, an amount of Rs. 51,163.00 was due for payment payable on 29-08-2014 was effected only on 04-05-2015.

ANNEXURE TO AUDITORS' REPORT

(Referred to in paragraph 3 of our Report of even date to the members of California Software Company Limited on the financial statements for the year ended March 31, 2015)

i. (a). The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(b). it has been represented to us, fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification; however documentation of the same comparing the physical inventory and the book inventory is not made available to us.

ii. The nature of business of the Company does not require it to have any inventory. Hence, the requirement of clause (ii) of paragraph 3 of the said Order is not applicable to the Company.

iii. The Company has not granted any loans to group or associate companies during the year and there are no outstanding from previous years and hence Clauses (a), (b) and (c) are not applicable.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness has not been noticed or reported.

v. The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

vi. As informed to us, the Central Government has not prescribed maintenance of cost records under sub-section (1) of Section 148 of the Act.

vii. (a) According to the information and explanations given to us and based on the records of the company examined by us, the company is regular in depositing the undisputed statutory dues, including Income-tax, Sales-tax, Service Tax, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities in India;

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute other than those mentioned in Note 46; and

(c) An amount of Rs.51163/- was due for payment to Investor Education and Protection Fund on 29/08/2014. There has been a delay in paying this and the payment was effected on 04/05/2015.

viii. The Company has accumulated losses amounting to Rs. 109,06,00,637/- as at March 31, 2015 Accumulated loss is more than the networth of the company. Company has incurred cash losses during the year ended on that date and in the immediately preceding two financial years.

ix. According to the records of the Company examined by us and the information and explanation given to us, the Company has defaulted in repayment of its dues to Canara Bank Term Loan and as at the balance sheet date total dues amounted to Rs. 346,80,209/-.

x. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from a bank or financial institution during the year

xi. In our opinion, and according to the information and explanations given to us, the company has not raised any term loans during the 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 we been informed of any such instance by the Management

For and on behalf of Tomy & Francis Chartered Accountants FRN: 010922S

CA K J Tomy BSc FCA Chennai Partner 29th May 2015 Membership No: 022768


Mar 31, 2014

We have audited the accompanying Consolidated financial statements of California Software Company Limited and its subsidiaries ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss for the year then ended, and a summary of significant accounting policies and other explanatory information.

The subsidiaries included in the consolidation are:

I. CSWL, Inc. USA (100% equity held by Parent company) along with its subsidiaries

a) International Innovations Inc, USA (100% equity held by CSWL Inc)

b) Waldron Limited, Hong Kong (100% of voting stock held by CSWL Inc) and

c) AspireSoft Corporation (100% outstanding stock held by CSWL Inc)

II. Aspire Communications Pvt Limited, India (100 % equity held by parent Company) along with its 100% subsidiary Aspire Peripherals Ltd

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 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 fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s 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 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 qualified audit opinion.

We did not audit the Financial Statements of CSWL, Inc. USA (consolidated basis with its subsidiaries) and it was individually audited by other auditors These financial Statements have been audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relates to the amounts included in respect of the parent company and subsidiaries, is based solely on the report of the other auditors.

Further, we report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard AS-21 on Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India and on the basis of the separate audited financial statements of California Software Company Ltd. and its subsidiaries included in the Consolidated Financial Statements.

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 matter described in the basis for qualified opinion paragraph, 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 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.

Emphasis of Matter

We draw attention to the following In the notes Accounts of the Parent Company:

A) Note No.26 to the financial statement regarding Impairment of Fixed Assets amounting to Rs. 44,539,816/-.

B) Note No. 6 to the financial statement and Notes to Fixed Asset schedule regarding Change in Depreciation Policy of land & building and resultant loss amounting to Rs. 137,38,189/-.

C) Note No. 27 to the financial statement regarding restatement of receivables and payables write back of excess provision of Rs. 227,05,294/-.

D) Note No. 45 to the financial statement regarding Disinvestment of wholly owned subsidiary Inatech Infosolutions P Ltd resulting in a profit of Rs. 50,019,646/-.

E) Note no. 46 to the financial statement regarding unsecured loans from Associate companies amounting to Rs. 110,286,406/-.

F) Account Receivable and payables are subject to confirmation. and

G) Company''s Overseas subsidiary CSWL Inc and Indian subsidiary Aspire Communications P Ltd and it subsidiary Aspire peripherals P Ltd have stopped their operations fully. CSWL Inc has initiated Liquidation proceedings.

Report On Other Legal and Regulatory Requirements

1. For the Consolidated Financial Statements, the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, is not applicable.

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 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 Act.

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 AUDITORS'' REPORT

(Referred to in paragraph 3 of our Report of even date to the members of California Software Company Limited on the financial statements for the year ended March 31, 2014)

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

(b) It has been represented to us that the fixed assets of the Company are physically verified by the management during the year; however documentation of the same comparing the physical inventory and the book inventory is not made available to us.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year. However management has impaired fixed assets by Rs. 44,539,816/-.

2 (a) The Company has not granted any loans to group or associate companies during the year and there are no outstanding from previous years and hence Clauses (a), (b) and (c) are not applicable.

(d) The Company has taken unsecured loans, from associate company''s covered in the register maintained under Section 301 of the Act amounting to Rs. 11,02,86,406/-. In our opinion the terms and conditions are not prima facie prejudicial to the interest of the company.

3. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased/services rendered are of special nature for which suitable alternative sources do not exists for obtaining comparative quotations, there is generally an adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

4 (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, having regards to our comments in paragraph 3 above, the transactions made in pursuance of such contracts or arrangements entered into the register maintained in pursuance of Section 301 of the Act and exceeding the value of Rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

5. In our opinion and according to the information and explanations given to us, the has not accepted any deposit from Public hence the provisions of Sections 58A and 58AA of the Act and the rules framed there under, do not apply to the company.

6. In our opinion, the Company has internal audit system commensurate with its size and nature of its business.

7. The Government of India has not prescribed maintenance of cost records by the Company under Section 209(1)(d) of the Act for any of the products of the Company.

8 (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales tax, Value Added Tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues as applicable with the appropriate authorities in India.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute other than those mentioned in Note 41.

9. The Company has accumulated losses amounting to Rs. 96,93,96,503/- as at March 31, 2014 Accumulated loss is more than the net worth of the company. Company has incurred cash losses during the year ended on that date and in the immediately preceding two financial years.

10. According to the records of the Company examined by us and the information and explanation given to us, the Company has defaulted in repayment of its dues to Canara Bank Term Loan and as at the balance sheet date total dues amounted to Rs. 229,02,228/-.

11. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company during the year for loans taken by others from banks or financial institutions, are not prejudicial to the interest of the Company.

13. In our opinion and according to the information and explanations given to us, on an over all basis, the term loans have been applied for the purposes for which they were obtained.

14. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

15. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

16. During the course of our examination of the books of account, carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the management.

17. Clauses, (ii), (xiii), (xiv), (xix) and xx of paragraph 4 of the Companies (Auditor''s Report) Order 2003 as amended by the Companies (Auditor''s Report) (Amendment) order, 2004, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which arises to be reported in the aforesaid order.

CA K J Tomy BSc FCA Partner Membership No: 022768 For and on behalf of

Tomy & Francis Chennai Chartered Accountants September 23, 2014 FRN: 010922S


Mar 31, 2012

1. We have audited the attached Balance Sheet of California Software Company Limitedas at March 31,2012 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. 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 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 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.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by The Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Government of India in terms of section 227(4A) of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give 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 in paragraph 3 above, we report that:

(a) subject to our remarks in paragraph 4 above, we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in all material respects in compliance with the applicable accounting standards referred to in section 211(3C) of the Act.

(e) on the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of Section 274(1)(g) of the Act.

(f) in our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto, give in the prescribed manner the information required by the Act give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012 ;

(ii) in the case of the Statement of Profit and Loss , of the Loss for the year ended on that date; and

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

1 (a) The Company is in the process of maintaining proper records to show full particulars including quantitative details and situation of fixed assets.

(b) It has been represented to us that the fixed assets of the Company are physically verified by the management during the year; however documentation of the same comparing the physical inventory and the book inventory is not made available to us.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year. However the management considered impairment in substantial portion of the Fixed Assets during the year and charged it to the Statement of Profit and Loss year. According to the information given by the Management this will not affect the going concern status of the company.

2 (a) The Company has granted an interest free unsecured loans to its 100% subsidiary Inatech Infosolutions Private Limited (Rs. 413.31 lakhs) covered under register maintained under Section 301 of the Act. The maximum amount involved during the year Rs. 427.31 lakhs.

(b) In our opinion, the rate of interest and other terms and conditions of such loan are not prima facie prejudicial to the interest of the Company considering that it is given to a 100% subsidiary.

(c) In respect of the aforesaid loan, reasonable steps have been taken by the Company for the recovery of the principal amount and interest, where applicable.

(d) The Company has not taken any loans, secured or unsecuredfrom companies, firms or other parties covered in the register maintained under Section 301 of the Act.

3 In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased/ services rendered are of special nature for which suitable alternative sources do not exists for obtaining comparative quotations, there is generally an adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaidinternal control system.

4 (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred toin Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, having regards to our comments in paragraph 3 above, the transactions made in pursuance of such contracts or arrangements entered into the register maintained in pursuance of Section 301 of the Act and exceeding the value of Rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

5 In our opinion and according to the information and explanations given to us, the Company has in general, complied with the provisions of Sections 58A and 58AA of the Act and the rules framed there under, with regard to the deposits accepted from public. According to the information and explanations given by the Company, no order under aforesaid sections has been passed by the Company Law Board on the Company in respect of the aforesaid deposits

6 In our opinion, the company has internal audit system commensurate with its size and nature of its business.

7 The Government of India has not prescribed maintenance of cost records by the Company under Section 209(1)(d) of the Act for any of the products of the Company.

8 (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales tax, Value Added Tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues as applicable with the appropriate authorities in India.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute other than those mentioned in Note 43.

9 The Company has accumulated losses amounting to Rs. 543,232,736/- as at March 31, 2012 after writing off impairment of assets amounting to Rs. 532,042,399/-. Accumulated loss is more than 50% of the networth of the company. Company has incurred cash losses during the year ended on that date or in the immediately preceding financial year.

10 According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of its due to any financial institution or bank as at the balance sheet date,

11 The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12 In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company during the year for loans taken by others from banks or financial institutions, are not prejudicial to the interest of the Company.

13 In our opinion and according to the information and explanations given to us, on an over all basis, the term loans have been applied for the purposes for which they were obtained.

14 On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

15 The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

16 During the course of our examination of the books of account, carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the management.

17 Clauses, (ii), (xiii), (xiv), (xix) and xx of paragraph 4 of the Companies (Auditor's Report) Order 2003 as amended by the Companies (Auditor's Report) (Amendment) order, 2004, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which arises to be reported in the aforesaid order.

CA KJ Tomy, BSc, FCA

Chennai Partner

14/07/2012 Membership No: 0 22768

For and on behalf of

Tomy & Francis

Chartered Accountants

FRN:010922S


Mar 31, 2010

1. We have audited the attached Balance Sheet of California Software Company Limited as at March 31,2010 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 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.

3. As required by the Companies (Auditors Report) Order, 2003 as amended by The Companies (Auditors Report) (Amendment) Order, 2004 issued by the Government of India in terms of section 227(4A) of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give 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 in paragraph 3 above, we report that:

(a) Subject to our remarks in paragraph 4 above, we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in all material respects in compliance with the applicable accounting standards referred to in section 211(3C) of the Act.

(e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Act.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto, give in the prescribed manner the information required by the Act give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010 ;

ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

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

Annexure to the Auditors Report

(Referred to inparagraph 3 of our Report of even date to the members of for the year ended March 31,2010)

(I) (a) The Company is in the process of maintaining proper records to show full particulars including quantitative details and situation of fixed assets.

(b) It has been represented to us that the fixed assets of the Company are physically verified by the management during the year; however documentation of the same comparing the physical inventory and the book inventory is not made available to us.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

(ii) (a) The Company has granted an unsecured loan to a company covered under register maintained under Section 301 of the Act. The maximum amount involved during the year Rs.7,000,000/- and the year end balance of the loan was Rs.1,000,000/-.

(b) In our opinion, the rate of interest and other terms and conditions of such loan are not prima facie prejudicial to the interest of the Company

(c) In respect of the aforesaid loan, reasonable steps have been taken by the Company for the recovery of the principal amount and interest, where applicable.

(d) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(iii) In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased/ services rendered are of special nature for which suitable alternative sources do not exists for obtaining comparative quotations, there is generally an adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(iv) (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, having regards to our comments in paragraph 3 above, the transactions made in pursuance of such contracts or arrangements entered into the register maintained in pursuance of Section 301 of the Act and exceeding the value of Rupees five lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(v) In our opinion and according to the information and explanations given to us, the Company has in general, complied with the provisions of

Sections 58A and 58AA of the Act and the rules framed there under, with regard to the deposits accepted from public. According to the information and explanations given by the Company, no order under aforesaid sections has been passed by the Company Law Board on the Company in respect of the aforesaid deposits

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

(vii) The Government of India has not prescribed maintenance of cost records by the Company under Section 209(1)(d) of the Act for any of the products of the Company.

(Viii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company has generally been regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales tax, Value Added Tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues as applicable with the appropriate authorities in India.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of Sales Tax, Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute. The particulars of dues of Income Tax which has not been deposited on account of a dispute are indicated in Note 27 of Schedule 22.

(ix) The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses during the year ended on that date or in the immediately preceding financial year.

(X) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of its due to any financial institution or bank as at the balance sheet date,

(xi) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company during the year for loans taken by others from banks or financial institutions, are not prejudicial to the interest of the Company.

(xiii) In our opinion and according to the information and explanations given to us, on an over all basis, the term loans have been applied for the purposes for which they were obtained.

(xiv) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment.

(xv) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

(xvi) During the course of our examination of the books of account, carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year nor have we been informed of such case by the management.

(xvii) Clauses, (ii), (xiii), (xiv), (xix) and xx of paragraph 4 of the Companies (Auditors Report) Order 2003 as amended by the Companies (Auditors Report) (Amendment) order, 2004, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which arises to be reported in the aforesaid order.

CAKJTOMY BSc FCA

Partner

(Membership No: 0 22768)

Chennai For and on behalf of

June 23, 2010 Tomy & Francis

Chartered Accountants

FRN: 010922 S

 
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