| 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 |