Auditor's Report (Capricorn Systems Global Solutions)
Year End : Mar '12
We have audited the attached Balance Sheet of Capricorn Systems Global
Solutions Limited'' Hyderabad st as on 31 March ‘ 2012 and also the
Profit and Loss Account for the Year Ended on that date annexed thereto
and Cash Flow Statement for the period ended on that date. 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.
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 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 the management'' as well as evaluating the over all financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
1. As required by the Companies (Auditor’s Report) Order'' 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act'' 1956 and on the basis of such checks
of the books and records of the Company as we consider appropriate and
according to the information and explanations given to us'' We give in
the annexure a statement on the matters specified in paragraph 4 and 5
of the said Order.
2. Our comments on the accounts are as under:
a) Balances appearing under Sundry Debtors'' Loans and Advances are
subject to confirmation and / or reconciliation.
b) According to the information and the explanations given to us'' the
Company does not have any over – dues to SSI units and hence no
provision for interest is made in accounts.
3. Subject to our observations in the annexure referred to in
paragraph (1) and our comments in paragraph
(2) above'' 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
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 such
c) The Balance Sheet and Profit and Loss Account referred to in this
report are in agreement with the Books of Account.
d) In our opinion the Balance sheet and Profit and Loss Account are in
compliance with the Accounting Standards referred to in Sec. 211 (3C)
of the companies Act'' 1956'' excepting in relation to Accounting
Standard 22 on Accounting for Taxes on Income.
e) In our opinion'' and based on the information and explanations given
to us'' none of the
st Directors of the Company are disqualified as on 31 March ‘2012 from
being appointed as a Director under clause (g) of sub – section (1) of
Section 274 of the Companies Act'' 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us'' the said Balance Sheet and Profit and
Loss Account read together with the significant accounting polices and
notes thereon'' give the information required by the Companies Act''
1956'' in the manner so required and give a true and fair view:
i) In so far as it relates to the Balance sheet'' of the state of
affairs of the Company as on 31 of March 2012 and
ii) In so far as it related to the Profit and Loss Account'' of the
Profit of the Company for the Year ended on that date.
iii) In the case of Cash Flow Statement'' of the Cash Flows for the year
ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH (1) OF THE REPORT OF EVEN DATE:
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) As explained to us'' the fixed assets have been physically verified
by the management during the year which'' in our opinion'' is reasonable
having regard to the size of the Company and the nature of its assets.
No material discrepancies were notice on such verification.
(c) In our opinion'' the Company has not disposed off substantial part
of fixed assets during the year and the going concern status of the
Company is not affected
(ii) The Clauses relating to the physical verification of inventories''
maintenance of records of inventory is not applicable to the Company as
the company is engaged in the development of software and there are no
inventories in the operations of the Company.
(iii) In respect of loans'' secured or unsecured'' granted or taken by
the Company to/from companies'' firms or other parties covered in the
register maintained under Section 301 of the Companies Act'' 1956:
a) The Company has not taken any loans from parties mentioned in the
register maintained under section 301 of the Companies Act’1956.
b) There are no loans which are given during the year.
(iv) I n 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 services. During the course of our audit'' we have not
observed any major weaknesses in internal controls.
(v) (a) According to the information and explanations given to us'' we
are of the opinion that the transactions that need to be entered into
the register maintained under section 301 of the Companies Act'' 1956
have been so entered.
(b) In our opinion and according to the information and explanations
given to us'' the transaction made in pursuance of contract or
arrangements entered in the register maintained under section 301 of
the Companies Act'' 1956 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 prevailing market prices at the relevant
(vi) In our opinion and according to the information and explanations
given to us'' the Company has complied with the provision of sections
58A and 58AA of the Companies Act'' 1956 and the Companies (Acceptance
of Deposits) Rules'' 1975with regard to the deposits accepted form the
(vii) The Company has an internal audit system'' the scope of the same
need to be increase so as to be commensurate with the size and nature
of the business.
(viii) In our opinion and according to the information and explanations
given to us'' the Central Government has not specified maintenance of
cost records under section 209 (1) (d) of the Companies Act'' 1956 to
the company for the year under audit.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund'' investor education protection fund'' employees’ state insurance''
sales tax'' wealth tax'' custom duty'' excise duty'' cess and other
material statutory dues applicable to it.
(b) According to the information and explanations given to us no
undisputed amounts payable in st respect of wealth tax'' sales tax''
customs duty'' excise duty and cess were in arrears'' as at 31 March ‘
2012 for a period of more than six months from the date they became
(c) According to the information and explanation given to us'' there are
no dues of sale tax'' income tax'' customs duty'' wealth tax'' excise duty
and cess which have not been deposited on account of any dispute.
(x) The company does not have any accumulated losses. The company has
not suffered any cash losses during the financial year covered by the
audit and also in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us'' the Company is regular in payment of dues to the NBFCs
from which it has availed Hire Purchase Loan.
(xii) In our opinion and according to the information and explanation
given to us'' no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares'' debentures and other
(xiii) In our opinion'' the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore clause 4(xiii) of the Companies
(Auditor’s Report) Order’2003 is not applicable to the Company.
(xiv) In our opinion and according to the information and explanation
given to us the Company is not dealing in shares and securities.
(xv) In our opinion and according to the information and explanations
given to us the Company has not given guarantees for the loans taken by
others from Banks or Financial Institutions.
(xvi) The Company has not raised any new term loans during the year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company'' we report
that no funds raised on short term basis have been used for long term
investment'' No long term loan funds have been used to finance short
terms assets expect permanent working capital.
(xviii) The Company has not made any preferential allotment of shares
to parties and the Companies covered in the Register maintained under
Section 301 of the Companies Act’1956 during the year.
(xix) The Clause 4(xix) of the Companies (Audit Report) Order 2003
relating to the creation of security for the Debentures is not
applicable to the Company as no debentures are raised by the Company.
(xx) The Company has not raised any money by way of public issue during
(xxi) According to the information and explanations given to us'' no
fraud on or by the Company has been noticed or reported during the year
that caused the financial statements to be materially misstated.
for SATYANARAYANA & Co
FRN No. 003680S Sd/-
Place: Hyderabad. J. JAGANNADHA RAO
Date: 30 May 2012 Partner
Membership No. 006239