| We have audited the accompanying financial statements of Prism
Informatics Ltd., which comprise the Balance Sheet as at March 31,
2015, the Statement of Profit and Loss & 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 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 responsible 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
misstatements, whether due to fraud or error.
Auditors' 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 misstatements.
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 on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view, except in case of Receivable balances of Rs.
1,86,36,855 and Unsecured Loan of Rs. 1,50,00,000from All State Finance
& Leasing Ltd and Loan from Directors and entities in which director
have interest of Rs. 2,73,40,302 which are subject to confirmation and
reconciliation (if any), Unbilled revenue Rs. 17,44,061 which has been
as certified by the management, 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 Statement of Profit and Loss, of the profit of
the Company for the year ended on that date.
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
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 Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss
and Cash Flow Statement 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 March 31,2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31,2015
from being appointed as a director in terms of Section 164(2) of the
Act.
(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.
ii. The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There were no amount which were required to be transferred to the
Investor Education and Protection Fund by the Company.
(g) Without qualifying our report, we draw attention to Note no. 1.1 to
the financial statements indicating that the Company's subsidiaries
namely, Prism Software Consultancy DMCC (earlier known as Prism
Software Consultancy JLT), Prism Infoglobal, Prism INC and Prism PTE,
have been incurring losses from the operations resulting in substantial
erosion of capital as on the balance sheet date. In the opinion of the
management these conditions indicate the existence of material
uncertainty that may cast significant doubt about the subsidiary's
ability to continue as a going concern.
Prism Informatics Ltd.
Annexure to the Auditor's Report for the financial year ended 31st
March, 2015.
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has not carried out any physical verification of its
fixed assets.
ii. The Company is a service sector company, primarily rendering IT
consulting, software implementation and software development services.
Accordingly, it does not hold any physical inventories. Thus, paragraph
3(ii) of the Order is not applicable to the Company.
iii. The company has granted loans to two body corporate covered in the
register maintained under Section 189 of the Companies Act, 2013 ("the
Act").
(a) In case of the loans granted to the body corporate in the register
maintained under Section 189 of the Act, the terms of repayment the
arrangements have not been defined.
(b) Refer note no 27D for the provision for doubtful principal and
interest amount Rs 14,12,05,425 granted to Associate enterprise
Idhasoft Limited and Rs. 96,68,258 granted to subsidiary Prism Software
Consultancy DMCC (earlier known as Prism Software Consultancy JLT)
iv In our opinion and according to the information and explanations
given to us, the company has adequate Internal Control System
commensurate with the size of the company and nature of its business
with regard to purchase of fixed assets and sale of services. However,
the internal control in respect of service income &fixed assets needs
to be strengthened.
v. The Company has not accepted any deposits from the public.
vi. As per the information and explanations provided by management, the
Central Government has not prescribed the maintenance of cost records
under Section 148(1) of the Act, for any of the services rendered by
the company.
vii. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Income tax, TDS, Service Tax, Value Added Tax,
Profession tax, Provident fund and other material statutory dues have
been generally regularly deposited during the year by the company with
the appropriate authorities expect specified in following annexure
which are outstanding as at the last day of financial year for more
than six months from the date it become payable:
Name of Statute Nature of Dues Total
Outstanding
Liability
as on 31st
March 2015
Finance Act, 1994 Service Tax Payable 1,04,71,965
Income Tax Act, 1961 TDS Payable 7670781
MVAT Act, 2002 VAT / CST Payable 85065
PF Act, Provident Fund Payable 12,88,139
PT Professional Tax Payable 35,552
Local Body Tax LBT 1,46,803
Name of Statute Outstanding Others
for More than
6 Months from
the date they
become Payable
Finance Act, 1994 8485358 19,86,607
Income Tax Act, 1961 70,49,524 6,21,257
MVAT Act, 2002 - 85065
PF Act - 12,88,139
PT - 35,552
Local Body Tax 1,44,403 2,400
(b) According to the information and explanations given to us, there
are no material dues of Income Tax, Service Tax, Value Added Tax or any
other statutory due which have not been deposited with the appropriate
authorities on account of any dispute.
viii. The company does not have accumulated losses at the end of the
financial year however the Company has not incurred cash losses in the
current financial year and in the immediately preceding financial year.
ix. In the opinion and according to the information and explanation
give to us, the company has availed loan, the outstanding balance as on
31st March 2015 of which is Rs. 1.5 crore which was due for repayment.
However the company has requested for extension for the same.
x. In our opinion and according to the information and explanations
given to us, the company has not given any guarantee for loans taken by
the others from banks or financial institutions.
xi. According to the information and explanations given to us, no fraud
on or by the company has been noticed or reported during the course of
our audit.
For E. A. PATIL & ASSOCIATES
Chartered Accountants
(Firm Registration No. 117371W)
CA.E.A.Patil
Partner
Membership No. 031979
Mumbai,
August 13,2015
| 