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Auditor Report of Quintegra Solutions Ltd.

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



 
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