| 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 |