Mar 31, 2015
We have audited the accompanying standalone financial statements of
California Software Company Limited ("the Company"), which comprise the
Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its profit/loss and its cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Notes to the
financial statements:
1. Note 26 and 27 in the stand alone financial statements which
indicate that the Standalone Company has accumulated losses and its net
worth has been fully eroded, the Standalone Company has incurred a net
loss during the current and previous year(s) and, the Stand alone
Company's current liabilities exceeded its current assets as at the
balance sheet date. These conditions, along with other matters set
forth in Note 26, indicate the existence of a material uncertainty that
may cast significant doubt about the Stand alone Company's ability to
continue as a going concern.
2. Note No. 29 to the standalone financial statements and Notes to
Fixed Asset schedule regarding Change in Depreciation Policy of Fixed
Assets and resultant loss amounting to Rs.58,64,486/- including prior
period Depreciation of Rs. 50,21,028.00
3. Note No. 30 to the stand alone financial statement regarding write
back of Account Payables to Aspire Communications P Ltd and Aspire
Peripherals P Ltd, two wholly owned subsidiaries of the Standalone
Company amounting to Rs. 253,45,879.00
4. Note no. 31 to the standalone financial statement regarding
unsecured loans from Associate companies amounting to Rs.
246,936,135.00
5. Company's Overseas subsidiary CSWL Inc and Indian subsidiary Aspire
Communications P Ltd and it subsidiary Aspire peripherals P Ltd have
stopped their operations fully. CSWL Inc has initiated Liquidation
proceedings.
Our opinion is not modified in respect of these matters.
Report On Other Legal and Regulatory Requirements
As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) Matter described under the Emphasis of Matters paragraph above, in
our opinion, may have an adverse effect on the functioning of the
Company.
(f) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(g) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in "Annexure A".
(h) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company does not have any pending litigations which would
impact its financial position.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There is delay in transferring the amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Holding Company incorporated in India, an amount of Rs. 51,163.00 was
due for payment payable on 29-08-2014 was effected only on 04-05-2015.
ANNEXURE TO AUDITORS' REPORT
(Referred to in paragraph 3 of our Report of even date to the members
of California Software Company Limited on the financial statements for
the year ended March 31, 2015)
i. (a). The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets;
(b). it has been represented to us, fixed assets have been physically
verified by the management at regular intervals; as informed to us no
material discrepancies were noticed on such verification; however
documentation of the same comparing the physical inventory and the book
inventory is not made available to us.
ii. The nature of business of the Company does not require it to have
any inventory. Hence, the requirement of clause (ii) of paragraph 3 of
the said Order is not applicable to the Company.
iii. The Company has not granted any loans to group or associate
companies during the year and there are no outstanding from previous
years and hence Clauses (a), (b) and (c) are not applicable.
iv. In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets and for the sale of services. Further, on the
basis of our examination of the books and records of the Company and
according to the information and explanations given to us, no major
weakness has not been noticed or reported.
v. The Company has not accepted any deposits from the public covered
under Section 73 to 76 of the Companies Act, 2013.
vi. As informed to us, the Central Government has not prescribed
maintenance of cost records under sub-section (1) of Section 148 of the
Act.
vii. (a) According to the information and explanations given to us and
based on the records of the company examined by us, the company is
regular in depositing the undisputed statutory dues, including
Income-tax, Sales-tax, Service Tax, Excise Duty and other material
statutory dues, as applicable, with the appropriate authorities in
India;
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and
Cess which have not been deposited on account of any dispute other than
those mentioned in Note 46; and
(c) An amount of Rs.51163/- was due for payment to Investor Education
and Protection Fund on 29/08/2014. There has been a delay in paying
this and the payment was effected on 04/05/2015.
viii. The Company has accumulated losses amounting to Rs.
109,06,00,637/- as at March 31, 2015 Accumulated loss is more than the
networth of the company. Company has incurred cash losses during the
year ended on that date and in the immediately preceding two financial
years.
ix. According to the records of the Company examined by us and the
information and explanation given to us, the Company has defaulted in
repayment of its dues to Canara Bank Term Loan and as at the balance
sheet date total dues amounted to Rs. 346,80,209/-.
x. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loan taken by
others from a bank or financial institution during the year
xi. In our opinion, and according to the information and explanations
given to us, the company has not raised any term loans during the year
xii. During the course of our examination of the books and records of
the company, carried in accordance with the auditing standards
generally accepted in India, we have neither come across any instance
of fraud on or by the Company noticed or reported during the course of
our audit nor have we been informed of any such instance by the
Management
For and on behalf of
Tomy & Francis
Chartered Accountants
FRN: 010922S
CA K J Tomy BSc FCA
Chennai Partner
29th May 2015 Membership No: 022768
Mar 31, 2014
We have audited the accompanying Consolidated financial statements of
California Software Company Limited and its subsidiaries ("the
Company"), which comprise the Balance Sheet as at March 31, 2014, and
the Statement of Profit and Loss for the year then ended, and a summary
of significant accounting policies and other explanatory information.
The subsidiaries included in the consolidation are:
I. CSWL, Inc. USA (100% equity held by Parent company) along with its
subsidiaries
a) International Innovations Inc, USA (100% equity held by CSWL Inc)
b) Waldron Limited, Hong Kong (100% of voting stock held by CSWL Inc)
and
c) AspireSoft Corporation (100% outstanding stock held by CSWL Inc)
II. Aspire Communications Pvt Limited, India (100 % equity held by
parent Company) along with its 100% subsidiary Aspire Peripherals Ltd
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance of the Company in accordance with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and fair presentation of the financial statements that
are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
We did not audit the Financial Statements of CSWL, Inc. USA
(consolidated basis with its subsidiaries) and it was individually
audited by other auditors These financial Statements have been audited
by other auditors whose reports have been furnished to us, and our
opinion, in so far as it relates to the amounts included in respect of
the parent company and subsidiaries, is based solely on the report of
the other auditors.
Further, we report that the consolidated financial statements have been
prepared by the Company in accordance with the requirements of
Accounting Standard AS-21 on Consolidated Financial Statements, issued
by the Institute of Chartered Accountants of India and on the basis of
the separate audited financial statements of California Software
Company Ltd. and its subsidiaries included in the Consolidated
Financial Statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the basis for qualified opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
b) in the case of the Statement of Profit and Loss, of the Loss for the
year ended on that date.
Emphasis of Matter
We draw attention to the following In the notes Accounts of the Parent
Company:
A) Note No.26 to the financial statement regarding Impairment of Fixed
Assets amounting to Rs. 44,539,816/-.
B) Note No. 6 to the financial statement and Notes to Fixed Asset
schedule regarding Change in Depreciation Policy of land & building and
resultant loss amounting to Rs. 137,38,189/-.
C) Note No. 27 to the financial statement regarding restatement of
receivables and payables write back of excess provision of Rs.
227,05,294/-.
D) Note No. 45 to the financial statement regarding Disinvestment of
wholly owned subsidiary Inatech Infosolutions P Ltd resulting in a
profit of Rs. 50,019,646/-.
E) Note no. 46 to the financial statement regarding unsecured loans
from Associate companies amounting to Rs. 110,286,406/-.
F) Account Receivable and payables are subject to confirmation. and
G) Company''s Overseas subsidiary CSWL Inc and Indian subsidiary Aspire
Communications P Ltd and it subsidiary Aspire peripherals P Ltd have
stopped their operations fully. CSWL Inc has initiated Liquidation
proceedings.
Report On Other Legal and Regulatory Requirements
1. For the Consolidated Financial Statements, the Companies (Auditor''s
Report) Order, 2003 ("the Order") issued by the Central Government of
India in terms of sub-section (4A) of Section 227 of the Act, is not
applicable.
2. As required by Section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
c) the Balance Sheet, Statement of Profit and Loss dealt with by this
Report are in agreement with the books of account.
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of Section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Act.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under Section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO AUDITORS'' REPORT
(Referred to in paragraph 3 of our Report of even date to the members
of California Software Company Limited on the financial statements for
the year ended March 31, 2014)
1 (a) The company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
(b) It has been represented to us that the fixed assets of the Company
are physically verified by the management during the year; however
documentation of the same comparing the physical inventory and the book
inventory is not made available to us.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year. However management has impaired
fixed assets by Rs. 44,539,816/-.
2 (a) The Company has not granted any loans to group or associate
companies during the year and there are no outstanding from previous
years and hence Clauses (a), (b) and (c) are not applicable.
(d) The Company has taken unsecured loans, from associate company''s
covered in the register maintained under Section 301 of the Act
amounting to Rs. 11,02,86,406/-. In our opinion the terms and
conditions are not prima facie prejudicial to the interest of the
company.
3. In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased/services rendered are of special nature for which suitable
alternative sources do not exists for obtaining comparative quotations,
there is generally an adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of fixed assets and for the sale of goods and services.
Further, on the basis of our examination of the books and records of
the Company, and according to the information and explanations given to
us, we have neither come across nor have been informed of any
continuing failure to correct major weaknesses in the aforesaid
internal control system.
4 (a) In our opinion and according to the information and explanation
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Act have been entered in the register required to
be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, having regards to our comments in paragraph 3 above, the
transactions made in pursuance of such contracts or arrangements
entered into the register maintained in pursuance of Section 301 of the
Act and exceeding the value of Rupees five lakhs in respect of any
party during the year, have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
5. In our opinion and according to the information and explanations
given to us, the has not accepted any deposit from Public hence the
provisions of Sections 58A and 58AA of the Act and the rules framed
there under, do not apply to the company.
6. In our opinion, the Company has internal audit system commensurate
with its size and nature of its business.
7. The Government of India has not prescribed maintenance of cost
records by the Company under Section 209(1)(d) of the Act for any of
the products of the Company.
8 (a) According to the information and explanations given to us and the
records of the Company examined by us, in our opinion, the Company has
generally been regular in depositing the undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-Tax, Sales tax, Value Added Tax,
Wealth tax, Service tax, Customs duty, Excise duty, Cess and other
material statutory dues as applicable with the appropriate authorities
in India.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and
Cess which have not been deposited on account of any dispute other than
those mentioned in Note 41.
9. The Company has accumulated losses amounting to Rs. 96,93,96,503/-
as at March 31, 2014 Accumulated loss is more than the net worth of the
company. Company has incurred cash losses during the year ended on that
date and in the immediately preceding two financial years.
10. According to the records of the Company examined by us and the
information and explanation given to us, the Company has defaulted in
repayment of its dues to Canara Bank Term Loan and as at the balance
sheet date total dues amounted to Rs. 229,02,228/-.
11. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
12. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company during the year for loans taken by others from banks or
financial institutions, are not prejudicial to the interest of the
Company.
13. In our opinion and according to the information and explanations
given to us, on an over all basis, the term loans have been applied for
the purposes for which they were obtained.
14. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
15. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
16. During the course of our examination of the books of account,
carried out in accordance with the generally accepted auditing
practices in India, we have neither come across any instance of fraud
on or by the Company, noticed or reported during the year nor have we
been informed of such case by the management.
17. Clauses, (ii), (xiii), (xiv), (xix) and xx of paragraph 4 of the
Companies (Auditor''s Report) Order 2003 as amended by the Companies
(Auditor''s Report) (Amendment) order, 2004, are not applicable in the
case of the Company for the current year, since in our opinion there is
no matter which arises to be reported in the aforesaid order.
CA K J Tomy BSc FCA
Partner
Membership No: 022768
For and on behalf of
Tomy & Francis
Chennai Chartered Accountants
September 23, 2014 FRN: 010922S
Mar 31, 2012
1. We have audited the attached Balance Sheet of California Software
Company Limitedas at March 31,2012 and the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date, which
we have signed under reference to this report. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by The Companies (Auditor's Report) (Amendment) Order, 2004
issued by the Government of India in terms of section 227(4A) of 'The
Companies Act, 1956' of India (the 'Act') and on the basis of such
checks of the books and records of the Company as we considered
appropriate and according to the information and explanations given to
us, we give in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) subject to our remarks in paragraph 4 above, we have obtained all
the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit;
(b) proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
(c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report have been prepared in all
material respects in compliance with the applicable accounting
standards referred to in section 211(3C) of the Act.
(e) on the basis of written representations received from the Directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 2012 from being appointed as a director in
terms of Section 274(1)(g) of the Act.
(f) in our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto, give in the prescribed
manner the information required by the Act give a true and fair view in
conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012 ;
(ii) in the case of the Statement of Profit and Loss , of the Loss for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
1 (a) The Company is in the process of maintaining proper records to
show full particulars including quantitative details and situation of
fixed assets.
(b) It has been represented to us that the fixed assets of the Company
are physically verified by the management during the year; however
documentation of the same comparing the physical inventory and the book
inventory is not made available to us.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year. However the management considered
impairment in substantial portion of the Fixed Assets during the year
and charged it to the Statement of Profit and Loss year. According to
the information given by the Management this will not affect the going
concern status of the company.
2 (a) The Company has granted an interest free unsecured loans to its
100% subsidiary Inatech Infosolutions Private Limited (Rs. 413.31 lakhs)
covered under register maintained under Section 301 of the Act. The
maximum amount involved during the year Rs. 427.31 lakhs.
(b) In our opinion, the rate of interest and other terms and conditions
of such loan are not prima facie prejudicial to the interest of the
Company considering that it is given to a 100% subsidiary.
(c) In respect of the aforesaid loan, reasonable steps have been taken
by the Company for the recovery of the principal amount and interest,
where applicable.
(d) The Company has not taken any loans, secured or unsecuredfrom
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
3 In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased/ services rendered are of special nature for which suitable
alternative sources do not exists for obtaining comparative quotations,
there is generally an adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of fixed assets and for the sale of goods and services.
Further, on the basis of our examination of the books and records of
the Company, and according to the information and explanations given to
us, we have neither come across nor have been informed of any
continuing failure to correct major weaknesses in the aforesaidinternal
control system.
4 (a) In our opinion and according to the information and explanation
given to us, the particulars of contracts or arrangements referred toin
Section 301 of the Act have been entered in the register required to be
maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, having regards to our comments in paragraph 3 above, the
transactions made in pursuance of such contracts or arrangements
entered into the register maintained in pursuance of Section 301 of the
Act and exceeding the value of Rupees five lakhs in respect of any
party during the year, have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
5 In our opinion and according to the information and explanations
given to us, the Company has in general, complied with the provisions
of Sections 58A and 58AA of the Act and the rules framed there under,
with regard to the deposits accepted from public. According to the
information and explanations given by the Company, no order under
aforesaid sections has been passed by the Company Law Board on the
Company in respect of the aforesaid deposits
6 In our opinion, the company has internal audit system commensurate
with its size and nature of its business.
7 The Government of India has not prescribed maintenance of cost
records by the Company under Section 209(1)(d) of the Act for any of
the products of the Company.
8 (a) According to the information and explanations given to us and the
records of the Company examined by us, in our opinion, the Company has
generally been regular in depositing the undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-Tax, Sales tax, Value Added Tax,
Wealth tax, Service tax, Customs duty, Excise duty, Cess and other
material statutory dues as applicable with the appropriate authorities
in India.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and
Cess which have not been deposited on account of any dispute other than
those mentioned in Note 43.
9 The Company has accumulated losses amounting to Rs. 543,232,736/- as at
March 31, 2012 after writing off impairment of assets amounting to Rs.
532,042,399/-. Accumulated loss is more than 50% of the networth of the
company. Company has incurred cash losses during the year ended on that
date or in the immediately preceding financial year.
10 According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of its due to any financial institution or bank as at the
balance sheet date,
11 The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
12 In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company during the year for loans taken by others from banks or
financial institutions, are not prejudicial to the interest of the
Company.
13 In our opinion and according to the information and explanations
given to us, on an over all basis, the term loans have been applied for
the purposes for which they were obtained.
14 On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
15 The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
16 During the course of our examination of the books of account,
carried out in accordance with the generally accepted auditing
practices in India, we have neither come across any instance of fraud
on or by the Company, noticed or reported during the year nor have we
been informed of such case by the management.
17 Clauses, (ii), (xiii), (xiv), (xix) and xx of paragraph 4 of the
Companies (Auditor's Report) Order 2003 as amended by the Companies
(Auditor's Report) (Amendment) order, 2004, are not applicable in the
case of the Company for the current year, since in our opinion there is
no matter which arises to be reported in the aforesaid order.
CA KJ Tomy, BSc, FCA
Chennai Partner
14/07/2012 Membership No: 0 22768
For and on behalf of
Tomy & Francis
Chartered Accountants
FRN:010922S
Mar 31, 2011
1.We have audited the attached Balance Sheet of California Software
Company Limited as at March 31,2011 and the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date, which
we have signed under reference to this report. These financial
statements are the responsibility of the CompanyÃs management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2.We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 as
amended by The Companies (AuditorÃs Report) (Amendment) Order, 2004
issued by the Government of India in terms of section 227(4A) of ÃThe
Companies Act, 1956Ã of India (the ÃActÃ) and on the basis of such
checks of the books and records of the Company as we considered
appropriate and according to the information and explanations given to
us, we give in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) Subject to our remarks in paragraph 4 above, we have obtained all
the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit;
(b) Proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report have been prepared in all
material respects in compliance with the applicable accounting
standards referred to in section 211(3C) of the Act.
(e) On the basis of written representations received from the Directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 2011 from being appointed as a director in
terms of Section 274(1)(g) of the Act.
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto, give in the prescribed
manner the information required by the Act give a true and fair view in
conformity with the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011 ;
(ii) In the case of the Profit and Loss Account, of the Loss for the
year ended on that date; and
(iii) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors' Report
(Referred to in paragraph 3 of our Report of even date to the members
of California Software Company Limited on the financial statements for
the year ended March 31,2011)
1.(a) The Company is in the process of maintaining proper records to
show full particulars including quantitative details and situation of
fixed
assets.
(b) It has been represented to us that the fixed assets of the Company
are physically verified by the management during the year; however
documentation of the same comparing the physical inventory and the book
inventory is not made available to us.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2.(a) The Company has granted an unsecured loans to its 100%
subsidiaries Aspire Commuications P Ltd (Rs.25.56 lakhs)
Infosolutions Private Limited (Rs. 397.31 lakhs)covered under register
maintained under Section 301 of the Act. The maximum amount involved
during the year Rs.422.87lakhs
(b) In our opinion, the rate of interest and other terms and conditions
of such loan are not prima facie prejudicial to the interest of the
Company
(c) In respect of the aforesaid loan, reasonable steps have been taken
by the Company for the recovery of the principal amount and interest,
where applicable.
(d) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
3.In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased/ services rendered are of special nature for which suitable
alternative sources do not exists for obtaining comparative quotations,
there is generally an adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of fixed assets and for the sale of goods and services.
Further, on the basis of our examination of the books and records of
the Company, and according to the information and explanations given to
us, we have neither come across nor have been informed of any
continuing failure to correct major weaknesses in the aforesaid
internal control system.
4. (a) In our opinion and according to the information and explanation
given to us, the particulars of contracts or arrangements referred to
in Section
301 of the Act have been entered in the register required to be
maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, having regards to our comments in paragraph 3 above, the
transactions made in pursuance of such contracts or arrangements
entered into the register maintained in pursuance of Section 301 of the
Act and exceeding the value of Rupees five lakhs in respect of any
party during the year, have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
5.In our opinion and according to the information and explanations
given to us, the Company has in general, complied with the provisions
of Sections 58A and 58AA of the Act and the rules framed there under,
with regard to the deposits accepted from public. According to the
information and explanations given by the Company, no order under
aforesaid sections has been passed by the Company Law Board on the
Company in respect of the aforesaid deposits
6.In our opinion, the company has internal audit system commensurate
with its size and nature of its business.
7.The Government of India has not prescribed maintenance of cost
records by the Company under Section 209(1)(d) of the Act for any of
the products of the Company.
8.(a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the
Company has generally been regular in depositing the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employeesà State Insurance, Income-Tax, Sales tax,
Value Added Tax, Wealth tax, Service tax, Customs duty, Excise duty,
Cess and other material statutory dues as applicable with the
appropriate authorities in India.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and
Cess which have not been deposited on account of any dispute. The
particulars of dues of Income Tax, Service tax and Sales tax which has
not been deposited on account of a dispute are indicated in Note 24 of
Schedule 21.
9 The Company has no accumulated losses as at March 31, 2011 and it has
not incurred any cash losses dur ing the year en ded on that date or in
the immediately preceding financial year.
10 According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of its due to any financial institution or bank as at the
balance sheet date,
11 The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
12 In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company during the year for loans taken by others from banks or
financial institutions, are not prejudicial to the interest of the
Company.
13 In our opinion and according to the information and explanations
given to us, on an over all basis, the term loans have been applied for
the purposes for which they were obtained.
14 On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
15 The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
16 During the course of our examination of the books of account,
carried out in accordance with the generally accepted auditing
practices in India, we have neither come across any instance of fraud
on or by the Company, noticed or reported during the year nor have we
been informed of such case by the management.
17 Clauses, (ii), (xiii), (xiv), (xix) and xx of paragraph 4 of the
Companies (AuditorÃs Report) Order 2003 as amended by the Companies
(AuditorÃs Report) (Amendment) order, 2004, are not applicable in the
case of the Company for the current year, since in our opinion there is
no matter which arises to be reported in the aforesaid order.
CAKJ TOMY BSc FCA
Partner
(Membership No: 0 22768)
For and on behalf of
Tomy & Francis
Chartered Accountants
FRN: 010922 S
Chennai
June 27, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of California Software
Company Limited as at March 31,2010 and the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date, which
we have signed under reference to this report. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 as
amended by The Companies (Auditors Report) (Amendment) Order, 2004
issued by the Government of India in terms of section 227(4A) of The
Companies Act, 1956 of India (the Act) and on the basis of such
checks of the books and records of the Company as we considered
appropriate and according to the information and explanations given to
us, we give in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) Subject to our remarks in paragraph 4 above, we have obtained all
the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit;
(b) Proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report have been prepared in all
material respects in compliance with the applicable accounting
standards referred to in section 211(3C) of the Act.
(e) On the basis of written representations received from the Directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 2010 from being appointed as a director in
terms of Section 274(1)(g) of the Act.
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto, give in the prescribed
manner the information required by the Act give a true and fair view in
conformity with the accounting principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010 ;
ii) In the case of the Profit and Loss Account, of the Profit for the
year ended on that date; and
iii) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors Report
(Referred to inparagraph 3 of our
Report of even date to the members of for the year ended March
31,2010)
(I) (a) The Company is in the process of maintaining proper records to
show full particulars including quantitative details and situation of
fixed assets.
(b) It has been represented to us that the fixed assets of the Company
are physically verified by the management during the year; however
documentation of the same comparing the physical inventory and the book
inventory is not made available to us.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
(ii) (a) The Company has granted an unsecured loan to a company covered
under register maintained under Section 301 of the Act. The maximum
amount involved during the year Rs.7,000,000/- and the year end balance
of the loan was Rs.1,000,000/-.
(b) In our opinion, the rate of interest and other terms and conditions
of such loan are not prima facie prejudicial to the interest of the
Company
(c) In respect of the aforesaid loan, reasonable steps have been taken
by the Company for the recovery of the principal amount and interest,
where applicable.
(d) The Company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
(iii) In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items
purchased/ services rendered are of special nature for which suitable
alternative sources do not exists for obtaining comparative quotations,
there is generally an adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of fixed assets and for the sale of goods and services.
Further, on the basis of our examination of the books and records of
the Company, and according to the information and explanations given to
us, we have neither come across nor have been informed of any
continuing failure to correct major weaknesses in the aforesaid
internal control system.
(iv) (a) In our opinion and according to the information and
explanation given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, having regards to our comments in paragraph 3 above, the
transactions made in pursuance of such contracts or arrangements
entered into the register maintained in pursuance of Section 301 of the
Act and exceeding the value of Rupees five lakhs in respect of any
party during the year, have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(v) In our opinion and according to the information and explanations
given to us, the Company has in general, complied with the provisions
of
Sections 58A and 58AA of the Act and the rules framed there under, with
regard to the deposits accepted from public. According to the
information and explanations given by the Company, no order under
aforesaid sections has been passed by the Company Law Board on the
Company in respect of the aforesaid deposits
(vi) In our opinion, the company has internal audit system commensurate
with its size and nature of its business.
(vii) The Government of India has not prescribed maintenance of cost
records by the Company under Section 209(1)(d) of the Act for any of
the products of the Company.
(Viii) (a) According to the information and explanations given to us
and the records of the Company examined by us, in our opinion, the
Company has generally been regular in depositing the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income-Tax, Sales tax,
Value Added Tax, Wealth tax, Service tax, Customs duty, Excise duty,
Cess and other material statutory dues as applicable with the
appropriate authorities in India.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and
Cess which have not been deposited on account of any dispute. The
particulars of dues of Income Tax which has not been deposited on
account of a dispute are indicated in Note 27 of Schedule 22.
(ix) The Company has no accumulated losses as at March 31, 2010 and it
has not incurred any cash losses during the year ended on that date or
in the immediately preceding financial year.
(X) According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of its due to any financial institution or bank as at the
balance sheet date,
(xi) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xii) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company during the year for loans taken by others from banks or
financial institutions, are not prejudicial to the interest of the
Company.
(xiii) In our opinion and according to the information and explanations
given to us, on an over all basis, the term loans have been applied for
the purposes for which they were obtained.
(xiv) On the basis of an overall examination of the balance sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
(xv) The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
(xvi) During the course of our examination of the books of account,
carried out in accordance with the generally accepted auditing
practices in India, we have neither come across any instance of fraud
on or by the Company, noticed or reported during the year nor have we
been informed of such case by the management.
(xvii) Clauses, (ii), (xiii), (xiv), (xix) and xx of paragraph 4 of the
Companies (Auditors Report) Order 2003 as amended by the Companies
(Auditors Report) (Amendment) order, 2004, are not applicable in the
case of the Company for the current year, since in our opinion there is
no matter which arises to be reported in the aforesaid order.
CAKJTOMY BSc FCA
Partner
(Membership No: 0 22768)
Chennai For and on behalf of
June 23, 2010 Tomy & Francis
Chartered Accountants
FRN: 010922 S