| We have examined the attached Consolidated Balance Sheet of Maars
Software International Limited and its subsidiaries Maars Infratech
Pvt. Ltd (India),and Maars Software International Ltd FZLLC (Dubai) as
at March 31, 2011, the Consolidated Profit and Loss Account for the
year then ended and Consolidated Cash Flow Statement thereon.
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 conducted our audit in accordance with generally accepted auditing
standards in India. These Standards require that we plan and perform
the audit to obtain reasonable assurance whether the financial
statements are prepared, in all material respects, in accordance with
an identified financial reporting framework and are free of material
misstatements. As audit includes, examining on test basis, evidence
supporting 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 statements. We believe that our audit provides a
reasonable basis for our opinion.
We did not audit the financial statement of the subsidiary. This has
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 subsidiary, is based solely on the other auditors
report.
We report that the Consolidated Financial Statements have been prepared
by the Company's Management in accordance with requirements of
Accounting Standards (A.S) 21, Consolidated Financial Statements issued
by the Institute of Chartered Accountants of India.
In our opinion and to the best of our information and according to the
explanations given to us, the Consolidated Financial Statements give a
true and fair in conformity with the accounting principles generally
accepted in India.
a) In the case of the Consolidated Balance Sheet, of the state of
affairs of the Company and its subsidiary as at 31.03.2011.
b) In the case of the Consolidated Profit and Loss Account of the Loss
of the Company and its Subsidiary as at 31.03.2011.
c) In the case of the Cash Flow Statement of the Cash Flows of the
Company and its Subsidiaries.
ANNEXURE TO THE AUDITOR'S REPORT
Annexure referred to in paragraph 3 of the Auditors Report of even date
on the accounts of MAARS Software International Limited for the year
ended on 31st March, 2011 ]
1. (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) As informed to us, the management in accordance with a phased
program of verification adopted by the company has physically verified
a major portion of these assets. In our opinion the frequency of
verification is reasonable.
(c) As per information and explanations provided by the management
during the year, the company has not disposed off a substantial portion
of fixed assets.
2. The company is in the business of software development and training
and does not carry any inventories.
3. According to the information and explanations given to us during
the year company has not taken loans from and has not granted loans to
the parties covered U/s. 301 of the Companies Act, 1956. Accordingly,
paragraph 4(iii) of the said order not applicable to the company.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of fixed assets and with regard to
the sale of goods. During the course of our audit, no major weakness
has been noticed in the internal controls.
5. According to the information and explanations provided by the
management, there have been transactions that need to be entered in the
register required to be maintained U/s. 301 of the Companies Act, 1956.
6. The company has not taken/ accepted any deposits from the public to
which the directives issued by the RBI and the provision of section
58A, 58AA and any other relevant provisions of the companies act
1956and the rule framed there under are applicable accordingly, the
provision of paragraph 4(vi) of the said order not applicable to the
company..
7. In our opinion, the company has an internal control system
commensurate with the size and nature of its business.
8. As informed to us, that maintenance of cost records has not been
prescribed by the Central Govt. U/s. 209(l)(d) of the Companies act,
1956, is not applicable to the company.
(a) According to the records of the company, generally the company is
regular in depositing with appropriate authorities undisputed statutory
dues including provident fund, investor education protection fund,
Employees state insurance, income-tax, sales-tax, wealth-tax, custom
duty, excise- duty, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income-tax, wealth-tax, sales
tax, customs duty and excise duty were outstanding, as at 31.03.2011,
for a period of more than six months from the dated they became
payable.
(c) According to the records of the company, there are no dues of sales
tax, income tax, custom tax/wealth tax, excise duty/cess, which has not
been deposited on account of any dispute except the income tax for the
assessment year 2001-2002 amounting to Rs.84,83,898/- for which an
appeal was preferred before the honorable Income Tax Tribunal .Apart
from the above, for the assessment year 2005-2006 amounting to
Rs.32,93,993/- is disputed to be paid on account of appeal preferred
before the honorable CIT (Appeals), Chennai respectively against the
assessment order passed by the A.O.
10. The accumulated losses of the company are not more than fifty
percent of its net worth. The company has not incurred any cash losses
during the financial year covered by our audit and the immediate
preceding financial year.
11. Based on our Audit procedure and on the information and explanation
given by the management, the company has not provided for payment of
interest on the dues payable to banks and financial institutions. As
informed to us the company is in process of one time settlement with
the said banks and financial institutions.
12. The company has not granted any loans or advances on basis of the
security by way of pledge of shares, securities, debentures and other
securities.
13. In our opinion company is not a chit fund or a nidhi/ mutual
benefit fund/society. Accordingly the provision of paragraph of
4(xiii)of the said order are not applicable to the company.
14. The company is not dealing in or trading in shares, security,
debenture, and other investments. Accordingly, the provision of the
paragraph of 4 (xiv) of the said order are not applicable to the
company.
15. The company has given guarantee to Bank of India for loan taken by
the erstwhile UK Subsidiary. The said guarantee was materialized. As
explained to us, amount due thereon has been included as a part of one
time settlement proposal submitted by the company. The amount involved
in that guarantee is 1 million pounds (Approx.).
16. The company has not taken any term loan during the year under
review.
17. According to the information and explanation given to us and on an
overall examination of the balance sheet of the company, we report that
the no funds raised on short-terms basis have been used for long-term
investment. No long-term funds have been used to finance short-term
assets except core (permanent) working capital.
18. Based on our examination of records and the information provided
to us by the management, we report that the company has made a
preferential allotment of 77,20,000 Equity shares of Rs 10/ Each
against 8% Cumulative convertible Preference shares allotted to Bank
of India as a part of one settlement for conversion of outstanding loan
are still not accepted by Bank of India. Except the above the company
has not made any preferential allotment of shares to parties and
companies covered under section 301 of the Act.
19. During the period covered by our audit report, the company has not
issued any debentures.
20. The company has not raised funds from public issue during the
year.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
audit.
For Daiya, Tiwari & Soni
Chartered Accountants
FRN:-004268C
(CA Pawan Sharma)
Partner
Date: 8th September, 2011
Place: Chennai M.No.- 075861 |