Mar 31, 2015
Report on the Financial Statements
We have audited the accompanying financial statements of M/s. QUINTEGRA
SOLUTIONS LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31, 2015, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the 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 and presentation 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 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.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required 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, 2015;
b) in the case of the Profit and Loss Account, of the loss for the year
ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to Note 4(d) to the financial statements of the fact
that the waiver of term loan amounting to Rs.90.22 Crores by State Bank
of India under OTS is credited to Capital Reserve which is not in
accordance with the AS-5, Net profit or loss for the period, Prior
Period Item and Changes in accounting policies specified under Section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014 and not in line with the opinion of Expert Advisory Committee of
ICAI on accounting treatment of waiver of loan.
Had the said waiver of principal amount of loan been credited to the
statement of profit or loss account instead of capital reserve account
the profit for the period and carried forward balances in surplus under
the head "Reserves and Surplus" would have been higher by Rs.90.22
Crores.
We draw attention to Note 31 to the financial statements which
describes the position of the company in the fundamental accounting
assumption "Going concern" in spite of company's heavy accumulated
losses of Rs.184.81 Crores (PY Rs. 183.20 Crores) (excluding General,
Capital Reserves and Securities Premium) eroding its total net worth.
Other Matter
We did not audit the financial statements of the company's operation in
USA - Quintegra Solutions Limited (Integral foreign operation), who's
financial statements show Nil Revenue and Nil Fixed assets for the year
then ended. These financial statements have been audited by other
auditors whose reports have been furnished to us by the Management, and
our opinion is based solely on the reports of the other auditors. Our
opinion is not qualified in respect of this matter.
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 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) on the basis of the written representations received from the
directors as on 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
(f) 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 has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 23 to the
financial statements;
ii. the Company did not have any long-term contracts, including
derivative contracts, for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Auditor's report
The Annexure referred to in our report to the members of M/s QUINTEGRA
SOLUTIONS LIMITED ('the Company') for the year ended 31 March 2015. We
report that:
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
b. Physical verification of assets has been made by the company during
the year as per the scheduled program.
c. Fixed Assets disposed off or impaired during the year were
significant but not substantial to affect the going concern assumption
2. The company is a service company, primarily rendering Information
Technology services. Accordingly it does not hold any physical
inventories. Thus paragraph 3(ii) of the order is not applicable.
3. The Company has not granted any loans, secured or unsecured to
companies, firms, or other parties covered in the register maintained
under Section 189 of the Companies Act, 2013.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the Company and nature of its business
with regard to purchases of fixed assets and for the sale of solutions
and services. During the course of our audit no major weakness has been
noticed in the above controls and therefore reporting of the same does
not arise.
5. The Company has not accepted any deposits from the public.
6. The Central Government of India 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.
7. According to the information and explanations given to us and on
the basis of our examination of the records of the company, amount
deducted / accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, and
other material statutory dues have generally been regularly deposited
during the year by the Company with the appropriate authorities
wherever applicable except the following.
Statement of Arrears of Statutory Dues Outstanding for more than 6
Months as on 31st March 2015.
1. Tax on Dividend Rs.1,367,103 pertaining to the FY 2007-08 under
Income tax Act, 1961.
2. Property Tax of Rs.1,415,017 (Rs.451,744 for the year 2011-12 and
Rs.361,896 for the year 2012-13, Rs.601,377 for the year 2014-15).
3. Water Tax of Rs.242,937 (Rs.81,532 for the year 2012-13 and
Rs.161,405 for the year 2014-15).
The above taxes are not paid till date of our report.
b. The following Income Tax dues have not been deposited on account of
dispute as detailed under.
Rs. In lakhs
Assessed / Assessment Forum where
Statute Reassessed Year dispute
Demand is pending
U/s 269UC and 5.00# 2002-03 City Civil Court
269UL(2) Income
Tax Act, 1961
# Of the above demand Rs.2 lakhs have been paid.
c. According to the information and explanations given to us the
amounts which were required to be transferred to the investor education
and protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and Rules there under has been
transferred to such fund within time.
8. The Company has accumulated losses at the end of the financial year
as on March 31 2015 and has incurred cash losses during the financial
year ended on that date and also incurred cash losses in the
immediately preceding financial year.
9. The Company has honoured OTS arrangement entered into with State
Bank of India, Overseas Branch, Chennai on its various fund facilities
availed and defaulted. The balance of OTS amount outstanding as on 31st
March 2015 is Rs.6.95 Crores which was settled in full and the charge
is satisfied before the date of our report.
10. The Company has not given any guarantee for loans taken by others
from bank or financial institutions.
11. No term loans were obtained during the year.
12. No fraud on or by the Company has been noticed or reported during
the year.
For GOPIKUMAR ASSOCIATES
Chartered Accountants
FRN : 000981S
S Gopinath
Place : Chennai Partner
Date :29.05.2015 M. No. 023854
Mar 31, 2014
We have audited the accompanying financial statements of M/s. QUINTEGRA
SOLUTIONS LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31, 2014, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
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 ("the Act") read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013. 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.
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 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
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 qualified audit opinion.
Basis for Qualified Opinion
The Company''s goodwill arisen on various amalgamations are carried in
the Balance Sheet at Rs. 71.63 Crores. Management has not amortised the
goodwill even though all the subsidiaries acquired on the amalgamations
have been liquidated or under liquidation, which constitutes a
departure from the para 19 of accounting standard 14 - Accounting for
Amalgamations referred to in sub-section (3C) of section 211 of the
Act. As a result opening accumulated losses have been understated to
the extent of Rs. 71.63 Crores and good will has been overstated to
that extent.
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 Profit and Loss Account, of the loss for the year
ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to Note 31 to the financial statements which
describes the position of the company in the fundamental accounting
assumption "Going concern" in spite of company''s heavy accumulated
losses of Rs.183.20 Crores (PY Rs.179.87 Crores) (excluding general
reserve and securities premium) eroding its total net worth and its
inability to repay the secured term loans and interest even after
rescheduling its repayment terms in December 2008. The secured term
loan outstanding as on 31st March 2014 is Rs.110.14 Crores (PY 119.13
Crores) and interest provided but unpaid amounting to Rs.65.71 Crores
(Rs.49.44 Crores).
We draw attention to Note 21 to the financial statements wherein the
fact of loan recovery by SBI from ECGC has been stated and the
existence of possibility of recovery by ECGC from the Company.
Other Matter
We did not audit the financial statements of the company''s US
subsidiary Quintegra Solutions Limited (Integral foreign operation),
whose financial statements reflect total assets of Rs. 7,54,206 as at
March 31, 2014, total revenues of Rs. 5,30,01,140 and net cash inflows
amounting to Rs. 4,14,482 for the year then ended. These financial
statements have been audited by other auditors whose reports have been
furnished to us by the Management, and our opinion is based solely on
the reports of the other auditors. Our opinion is not qualified in
respect of this matter.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor''s Report) Order, 2003 as
amended by the Companies (Auditor''s Report) Amendment Order 2004 issued
by the Central Government of India in terms of sub-section (4A) of the
Section 227 of the Companies Act, 1956 and on the basis of such checks
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 & 5 of the said order.
2) As required by Section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of Section 211 of the Companies Act, 1956 read with the
General Circular 15/ 2013 dated 13 September 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013;
e) on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of Clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
Annexure to the Auditor''s report
The Annexure referred to in our report to the members of M/s QUINTEGRA
SOLUTIONS LIMITED (''the Company'') for the year ended 31 March 2014. We
report that:
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
b. No physical verification of assets has been made by the company
during the year as per the scheduled program.
c. Fixed Assets disposed off or impaired during the year were
significant but not substantial to affect the going concern assumption.
2. The company is a service company, primarily rendering Information
Technology services. Accordingly it does not hold any physical
inventories. Thus paragraph 4(ii) of the order is not applicable.
3. a. The Company has not granted any loans, secured or unsecured to
companies, firms, or other parties covered in the register maintained
under Section 301 of the act.
b. 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 except an unsecured loan from Trusted
Aerospace Engineering Limited (TASE) and from the company''s director.
The loan from TASE is interest free and the balance outstanding as on
31st March 14 is Rs. 9.81 Crores and the maximum amount outstanding
during the year is Rs. 9.81 Crores. The loan from the company''s
director is interest free and the balance outstanding as on 31st March
14 is Rs.40 Lacs and the maximum amount outstanding during the year is
Rs.40 Lacs.
c. Recurring transactions during the course of business are classified
under advances. No interest is applicable to such types of inter
company advances. Repayment of principal and interest are not
applicable as they are not in the nature of loan.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the Company and nature of its business
with regard to purchases of fixed assets and for the sale of solutions
and services. During the course of our audit no major weakness has been
noticed in the above controls and therefore reporting of the same does
not arise.
5. a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of Companies Act, 1956 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, the
transactions made in pursuance of contracts and arrangements referred
to in (v)(a) above and exceeding the value of Rs.5 Lakh with any party
during the year have been made at a prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public under the
provisions of Section 58A and Section 58AA of the Act and rules framed
there under.
7. In our opinion, the Company has no internal audit system
commensurate with its size and nature of its business.
8. The Central Government of India has not prescribed the maintenance
of cost records under Section 209(1)(d) of the Companies Act, 1956 for
any of the services rendered by the Company. Accordingly, paragraph 4
(viii) of the order is not applicable.
9. a. According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amount
deducted /accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, and
other material statutory dues have generally been regularly deposited
during the year by the Company with the appropriate authorities
wherever applicable except the following.
b. Statement of Arrears of Statutory Dues Outstanding for more than 6
Months as on 31st March 2014
1. Tax on Dividend Rs.13,67,103 pertaining to the FY 2007-08 under
Income tax Act, 1961.
2. Property Tax of Rs.8,13,640 (Rs.4,51,744 for the year 2011-12 and
Rs.3,61,896 for the year 2012-13).
3. Water Ta x of Rs.81,532 for the first half of 2012-13. The above
taxes are not paid till date of our report.
4. The following Income Tax dues have not been deposited on account of
dispute as detailed under.
Rs. In lakhs
Assessed/ Assessment Forum where
Statute Reassessed Year dispute
Demand is pending
U/s 269UC and
269UL(2) Income 5.00# 2002-03 City Civil Court
Tax Act, 1961
# Of the above demand Rs.2 lakhs have been paid.
10. The Company has accumulated losses at the end of the financial year
as on March 31 2014 and has incurred cash losses during the financial
year ended on that date and also incurred cash losses in the
immediately preceding financial year. The provision for unpaid interest
on bank loan is treated as cash expense to arrive at cash loss.
11. The Company has defaulted in repayment of dues including interest
and principal to State Bank of India, Overseas Branch, Chennai on its
various fund facilities availed, outstanding at the year end amounting
to Rs.110.14 Crores (PY 119.13 Crores). The unpaid interest for the
current year provided for in the books of accounts on the said loan
amounts to Rs.16.26 Crores (PY 14.83 Crores).
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other investments.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/ nidhi/ mutual benefit
fund/ society. Accordingly, paragraph 4(xiii) of the order is not
applicable.
14. The Company is not dealing or trading in shares, securities,
debentures and other financial instruments.
15. The Company has not given any guarantee for loans taken by others
from bank or financial institutions.
16. No term loans were obtained during the year.
17. No funds raised on short-term basis during the year.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in register maintained under Section 301
of The Companies Act, 1956.
19. There is no debentures against which securities have to be created.
20. Disclosure on the end use of money raised by public issue is not
applicable.
21. No fraud on or by the Company has been noticed or reported during
the year.
For GOPIKUMAR ASSOCIATES
Chartered Accountants
FRN : 000981S
S Gopinath
Place : Chennai Partner
Date:30th May 2014 M. No. 023854
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of M/s. QUINTEGRA
SOLUTIONS LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31, 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
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 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
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 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
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.
Basis for Qualified Opinion
The Company''s goodwill arisen on various amalgamations are carried in
the Balance Sheet at Rs.71.63 Crores. Management has not amortised the
goodwill even though all the subsidiaries acquired on the amalgamations
have been liquidated or under liquidation, which constitutes a
departure from the para 19 of Accounting Standard 14 - Accounting for
Amalgamations referred to in sub-section (3C) of Section 211 of the
Act. As a result opening accumulated losses have been understated to
the extent of Rs.71.63 Crores and good will have been overstated to the
extent.
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, 2013;
b) in the case of the Profit and Loss Account, of the loss for the year
ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to Note 33 to the financial statements which
describes the position of the company in the fundamental accounting
assumption "Going concern" in spite of company''s heavy accumulated
losses of Rs.179.67 Crores (PY Rs.164.44 Crores) (excluding general
reserve and securities premium) eroding its total net worth and its
inability to repay the secured term loans and interest even after
rescheduling its repayment terms in December 2008. The secured term
loan outstanding as on 31st March 2013 is Rs.119.13 Crores (PY 119.13
Crores) and interest provided but unpaid amounting to Rs.49.44 Crores
(PY 34.60 Crores).
Other Matter
We did not audit the financial statements of Quintegra Solutions
Limited USA, (Integral foreign operation), whose financial statements
reflect total assets of Rs. 1,38,62,778 as at March 31, 2013, total
revenues of Rs. 8,55,91,705 and net cash outflows amounting to Rs.
12,35,875 for the year then ended. These financial statements have been
audited by other auditors whose reports have been furnished to us by
the Management, and our opinion is based solely on the reports of the
other auditors. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1) As required by 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, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2) As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of Section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors
as on March 31, 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 the Auditor''s report
The Annexure referred to in our report to the members of M/s QUINTEGRA
SOLUTIONS LIMITED (''the Company'') for the year ended 31 March 2013. We
report that:
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
b. No physical verification of assets has been made by the Company
during the year as per the scheduled program.
c. Fixed Assets disposed off during the year were not substantial and
therefore does not affect the going concern assumption.
2. The Company is a service company, primarily rendering Information
Technology services. Accordingly, it does not hold any physical
inventories. Thus paragraph 4(ii) of the order is not applicable.
3. a. The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 301 of the act.
b. 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 except an unsecured loan from Trusted
Aerospace Engineering Limited. The said loan is interest free and the
balance outstanding as on 31st March 2013 is Rs. 9.81 Crores and the
maximum amount outstanding during the year was Rs. 9.81 Crores
c. Recurring transactions during the course of business are classified
under advances. No interest is applicable to such types of inter
company advances. Repayment of principal and interest are not
applicable as they are not in the nature of loan.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the Company and nature of its business
with regard to purchases of fixed assets and for the sale of solutions
and services. During the course of our audit no major weakness has been
noticed in the above controls and therefore reporting of the same does
not arise.
5. a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of Companies Act, 1956 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, the
transactions made in pursuance of contracts and arrangements referred
to in (v)(a) above and exceeding the value of Rs.5 Lakh with any party
during the year have been made at a prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public under the
provisions of Section 58A and Section 58AA of the Act and rules framed
there under.
7. In our opinion, the Company has no internal audit system
commensurate with its size and nature of its business.
8. The Central Government of India has not prescribed the maintenance
of cost records under Section 209(1)(d) of the Companies Act, 1956 for
any of the services rendered by the Company. Accordingly, paragraph 4
(viii) of the order is not applicable.
9. a. According to the information and explanations given to us and
on the basis of our examination of the records of the company, amount
deducted /accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, and
other material statutory dues have generally been regularly deposited
during the year by the Company with the appropriate authorities
wherever applicable except the following,
Statement of Arrears of Statutory Dues Outstanding for more than 6
Months as on 31st March 2013
1. TDS on Salaries amounting to Rs.18,98,427 pertaining to the FY
2008-09 under Income tax Act, 1961.
2. Tax on Dividend Rs.13,67,103 pertaining to the FY 2007-08 under
Income tax Act, 1961.
3. Professional Tax of Rs.4,02,847 (Rs.1,80,055 for the year 2008 -09
& Rs.1,15,193 for the year 2009-10 & Rs.65,784 for the year 2010-11
Rs.41,815 for the year 2011-12 Rs.25,180 for the first half of
2012-13).
4. Property Tax of Rs.6,32,692 (Rs.4,51,744 for the year 2011-12 and
Rs.1,80,948 for the first half of 2012-13).
5. Water Tax of Rs.81,532 for the first half of 2012-13. The above
taxes are not paid till date of our report.
10. The Company has accumulated losses at the end of the financial year
as on March 31 2013 and has not incurred cash losses during the
financial year ended on that date but incurred cash losses in the
immediately preceding financial year.
11. The Company has defaulted in repayment of dues including interest
and principal to State Bank of India, Overseas Branch, Chennai on its
various fund facilities availed, outstanding at the year end amounting
to Rs.119.13 Crores. The unpaid interest provided for in the books of
accounts on the said loan amounts to Rs.14.83 Crores.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other investments.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/ nidhi/ mutual benefit
fund/ society. Accordingly, paragraph 4(xiii) of the order is not
applicable.
14. The Company is not dealing or trading in shares, securities,
debentures and other financial instruments.
15. The Company has not given any guarantee for loans taken by others
from bank or financial institutions.
16. No term loans were obtained during the year.
17. No funds raised on short-term basis during the year.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in register maintained under Section 301
of The Companies Act, 1956.
19. There is no debentures against which securities have to be created.
20. Disclosure on the end use of money raised by public issue is not
applicable.
21. No fraud on or by the Company has been noticed or reported during
the year.
For GOPIKUMAR ASSOCIATES
Chartered Accountants
FRN : 000981S
S Gopinath
Place : Chennai Partner
Date :30th May 2013 M. No. 023854
Mar 31, 2012
We have audited the attached Balance Sheet of M/s. QUINTEGRA SOLUTIONS
LIMITED ("the Company") as at 31st March 2012, the Profit & Loss
account and the cash flow statement for the 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 the financial statements based on our audit.
We have 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 supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis of our opinion.
As required by the Companies (Auditor's Report) Order, 2003 as amended
by the Companies (Auditor's Report) Amendment Order 2004 ("the order")
issued by the Central Government of India in terms of sub-section (4A)
of the Section 227 of the Companies Act, 1956 (the Act), we give in the
annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
We draw your attention to the following points:
1 The company incurred heavy accumulated losses of Rs.164.44
Crores(excluding general reserve and securities premium) eroding its
total net worth. Also the company unable to serve its secured term
loans even after rescheduling its repayment terms in December 2008
which is outstanding as on 31st March 2012 is Rs.119.13 Crores and
interest provided but unpaid amounting to Rs.34.60 Crores. In spite of
the above conditions, the accounts of the company have been prepared on
a 'going concern basis'.
2 The Company has not amortized the good will on various acquisitions
over the years in accordance with the requirements of accounting
standard 14 titled 'Accounting for Amalgamations'. As a result opening
accumulated losses have been understated to the extent of Rs. 71.63
Crores and good will have been overstated to the extent.
Further to our comments in the annexure referred to above, 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 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 appears from our examination of the
those books.
c. The Balance Sheet, Profit & 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 comply with the accounting
standards referred to in Section 211(3C) of the Companies Act, 1956 to
the extent applicable.
e. 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 is disqualified as on 31st March,
2012 from being appointed as a Director in terms of Section 274(1)(g)
of the Companies Act, 1956; and
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with the notes
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 31st March, 2012.
b. In the case of Profit & Loss account, of the Loss of the Company
for the year ended on that date; and
c. In the case of the Cash flow statement, of the cash flows for the
year ended on that date.
The Annexure referred to in our report to the members of
M/s QUINTEGRA SOLUTIONS LIMITED ('the Company') for the
year ended 31 March 2012. We report that:
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
b. No physical verification of assets has been made by the company
during the year as per the scheduled program.
c. Fixed Assets disposed off during the year were not substantial and
therefore does not affect the going concern assumption.
2. The company is a service company, primarily rendering Information
Technology services. Accordingly it does not hold any physical
inventories. Thus paragraph 4(ii) of the order is not applicable.
3. a. The Company has not granted any loans, secured or
unsecured to companies, firms, or other parties covered in the register
maintained under Section 301 of the act.
b. 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 except an unsecured loan from Trusted
Aerospace Engineering Limited. The said loan is interest free and the
balance outstanding as on 31st March 2012 is Rs. 9.81 Crores and the
maximum amount outstanding during the year was Rs. 9.81 Crores.
c. Recurring transactions during the course of business are classified
under advances. No interest is applicable to such types of inter
company advances. Repayment of principal and interest are not
applicable as they are not in the nature of loan.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the Company and nature of its business
with regard to purchases of fixed assets and for the sale of solutions
and services. During the course of our audit no major weakness has been
noticed in the above controls and therefore reporting of the same does
not arise.
5. a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of Companies Act, 1956 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, the transactions made in pursuance of contracts and
arrangements referred to in 5(a) above and exceeding the value of Rs.5
Lakh with any party during the year have been made at a prices which
are reasonable having regard to the prevailing market prices at the
relevant time.
6. The Company has not accepted any deposits from the public under the
provisions of Section 58A and Section 58AA of the Act and rules framed
there under.
7. In our opinion, the Company has no internal audit system
commensurate with its size and nature of its business.
8. The Central Government of India has not prescribed the maintenance
of cost records under Section 209(1)(d) of the Companies Act, 1956 for
any of the services rendered by the Company. Accordingly, paragraph 4
(viii) of the order is not applicable.
9. a. According to the information and explanations given to us
and on the basis of our examination of the records of the company,
amount deducted /accrued in the books of account in respect of
undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax,
and other material statutory dues have generally been regularly
deposited during the year by the Company with the appropriate
authorities wherever applicable except the following.
Statement of Arrears of Statutory Dues Outstanding for more than 6
Months as on 31st March 2012
1. TDS on Salaries amounting to Rs.1,37,99,500 pertaining to the FY
2008-09 under Income tax Act, 1961.
2. Tax on Dividend Rs.13, 67,103 pertaining to the FY 2007-08 under
Income tax Act, 1961.
3. Professional Tax of Rs.4,02,847 (Rs.1,80,055 for the year 2008 -09
& Rs.1,15,193 for the year 2009-10 & Rs.65,784 for the year 2010-11 and
Rs.41,815 for the year
2011-12) The above taxes are not paid till date of our report.
There were no dues on account of Cess under Section 441A of the
Companies Act, 1956 since the aforesaid section has not yet been made
effective by the Central Government of India.
b. The following Income Tax dues have not been deposited on account of
dispute as detailed under.
Rs. In Lakhs
Statute *Assessed/
Reassessed Assessment Forum where
Demand Year dispute
is pending
U/s 269UC
and 269UL(2)
Income 5.00# 2002-03 City Civil Court
Tax Act,
1961
# Of the above demand Rs.2 Lacs have been paid.
10. The Company has accumulated losses at the end of the financial
year as on March 31 2012 and has incurred cash losses during the
financial year ended on that date and also in the immediately preceding
financial year.
11. The Company has defaulted in repayment of dues including interest
and principal to State Bank of India, Overseas Branch, Chennai on its
various fund facilities availed, outstanding at the year end amounting
to Rs.119.13 Crores. The unpaid interest provided for in the books of
accounts on the said loan amounts to Rs.13.56 Crores.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other investments.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/ nidhi/ mutual benefit
fund/ society. Accordingly, paragraph 4(xiii) of the order is not
applicable.
14. The Company is not dealing or trading in shares, securities,
debentures and other financial instruments.
15. The Company has not given any guarantee for loans taken by others
from bank or financial institutions.
16. No term loans were obtained during the year.
17. No funds raised on short-term basis during the year.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in register maintained under Section 301
of The Companies Act, 1956.
19. There is no debentures against which securities have to be
created.
20. Disclosure on the end use of money raised by public issue is not
applicable.
21. No fraud on or by the Company has been noticed or reported during
the year.
For GOPIKUMAR ASSOCIATES
Chartered Accountants
FRN : 000981S
S Gopinath
Place: Chennai Partner
Date : 31.08.2012 M. No. 023854
Mar 31, 2010
We have audited the attached Balance Sheet of M/s. QUINTEGRA SOLUTIONS
LIMITED ("the Company") as at 31st March 2010, the Profit & Loss
account and the cash flow statement for the year ended on that date,
annexed thereto. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion
on the financial statements based on our audit.
We have 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 supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis of our opinion.
As required by the Companies (Auditors Report) Order, 2003 as amended
by the Companies (Auditors Report) Amendment Order 2004 ("the order")
issued by the Central Government of India in terms of sub-section (4A)
of the Section 227 of the Companies Act, 1956 (the Act), we give in the
annexure a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
Further to our comments in the annexure referred to above, 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 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 appears from our examination of the
those books.
c. The Balance Sheet, Profit & 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 comply with the accounting
standards referred to in Section 211(3C) of the Companies Act, 1956 to
the extent applicable.
e. On the basis of written representations received from the directors
as on 31st March, 2010 and taken on record by the Board of Directors we
report that none of the Directors is disqualified as on 31 st March,
2010 from being appointed as a Director in terms of Section 274(1 )(g)
of the Companies Act, 1956; and
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts together with the notes
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 31 st March, 2010.
b. In the case of Profit & Loss account, of the Loss of the Company
for the year ended on that date; and
c. In the case of the Cash flow statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors report referred to in paragraph 3 of our
report of even date
The Annexure referred to in our report to the members of M/s QUINTEGRA
SOLUTIONS LIMITED (the Company) for the year ended 31 st March 2010.
We report that:
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
b. The company has a regular program of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over
a period of three years. In accordance with this program, certain fixed
assets were verified during the year and no material discrepancies were
noticed on such verification. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the
company and nature of its assets.
c. Fixed Assets disposed off during the year were not substantial and
therefore does not affect the going concern assumption.
2. The company is a service company primarily rendering Information
Technology services. Accordingly it does not hold any physical
inventories. Thus paragraph 4(ii) of the order is not applicable.
3.a. The Company has not granted any loans, secured or unsecured to
companies, firms, or other parties covered in the register maintained
under Section 301 of the act.
b. 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 except an unsecured loan from Trusted
Aerospace Engineering Limited. The said loan is interest free and the
balance outstanding as on 31 st March 2010 is Rs. 10.64 crores
(Previous Year 12.38 crores)
c. Recurring transactions during the course of business are classified
under advances. No interest is applicable to such types of inter
company advances. Repayment of principal and interest are not
applicable as they are not in the nature of loan.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the Company and nature of its business
with regard to purchases of fixed assets and for the sale of solutions
and services. During the course of our audit no major weakness has been
noticed in the above controls and therefore reporting of the same does
not arise.
5. a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of Companies Act, 1956 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,
the transactions made in pursuance of contracts and arrangements
referred to in (v)(a) above and exceeding the value of Rs.5 Lakh with
any party during the year have been made at a price which are
reasonable having regard to the prevailing market prices at the
relevant time.
6. The Company has not accepted any deposits from the public under the
provisions of Section 58A and Section 58AA of the Act and rules framed
there under.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. The Central Government of India has not prescribed the maintenance
of cost records under Section 209(1 )(d) of the Companies Act, 1956 for
any of the services rendered by the Company. Accordingly, paragraph 4
(viii) of the order is not applicable.
9. a. According to the information and explanations given to us and
on the basis of our examination of the records of the company, amount
deducted /accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, and
other material statutory dues have generally been regularly deposited
during the year by the Company with the appropriate authorities
wherever applicable except the following,
Statement of Arrears of Statutory Dues Outstanding for more than 6
Months as on 31st March 2010
1. TDS on Salaries amounting to Rs. 155,07,872 pertaining to the FY
2008-09 under Income Tax Act, 1961.
2. Tax on dividend Rs. 13,67,103 pertaining to the FY 2007-08 under
Income Tax Act, 1961.
3. Professional Tax of Rs. 2,62,128 (Rs. 180,055 pertains to 2008-09
and Rs. 82,073 for pertains to 1st half year of 2009-10) and Property
and Watertax of Rs. 82,964 pertaining to 1 st half year of FY 2009-10.
The above taxes are not paid till date of our report.
There were no dues on account of Cess under Section 441A of the
Companies Act, 1956 since the aforesaid section has not yet been made
effective by the Central Government of India.
b. The following Income Tax dues have not been deposited on account of
dispute as detailed under.
Rs. In Lacs
Statute Assessed/Reassessed Assessment Forum where
Demand Year dispute is
pending
Income Tax 16,24 2002-03 TAT
Act, 1961 653 2004-05 Not Appealed
49.31 2007-08 CIT (Appeals)
U/s269UCand 5.00* 2002-03 City Civil
Court
269UL(2) Income
Tax Act.
1961
* The above figures are net of taxes paid on self assessment. As
against the above assessed / Reassessed demands, Rs. 1,51,65,000 has
been recovered from the company towards various assessment years, by
the Income Tax Department.
* Of the above demand Rs. 2 lacs have been paid.
10. The Company has no accumulated losses at the end of the financial
year as on March 31, 2010 and has incurred cash losses during the
financial year ended on that date and also in the immediately preceding
financial year.
11. The Company has defaulted in repayment of dues including interest
and principal to State Bank of India, Overseas Branch, Chennai on its
various fund facilities availed, outstanding at the year end amounting
to Rs.119.12 Crores. The unpaid interest provided for in the books of
accounts on the said loan amounts to Rs. 12.39 Crores.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other investments.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/ nidhi/ mutual benefit
fund/ society. Accordingly, paragraph 4(xiii) of the order is not
applicable.
14. The Company is not dealing or trading in shares, securities,
debentures and other financial instruments.
15. The Company has not given any guarantee for loans taken by others
from bank or financial institutions.
16. Term Loans were applied for the purpose for which the loans were
obtained.
17. Funds raised on short-term basis have not been used for long term
investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in register maintained under Section 301
of The Companies Act, 1956.
19. There is no debentures against which securities have to be
created.
20. Disclosure on the end use of money raised by public issue is not
applicable.
21. No fraud on or by the Company has been noticed or reported during
the year.
For GOPIKUMAR ASSOCIATES
Chartered Accountants
FRN :000981S
S Gopinath
Partner
M. No. 023854
Place : Chennai
Date : 02.09.2010