I have audited the accompanying standalone financial statements of Izmo
Limited (formerly Logix Microsystems Limited) (''the Company''), which
comprise the balance sheet as at 31 March 2015, the statement of profit
and loss and the cash flow statement for the year then ended, and a
summary of significant accounting policies and other explanatory
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 and presentation 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 oftheAct, 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.
My responsibility is to express an opinion on these standalone
financial statements based on my audit. I 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.
I conducted my audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require that
I 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.
I believe that the audit evidence I have obtained is sufficient and
appropriate to provide a basis for my audit opinion on the standalone
In my opinion and to the best of my information and according to the
explanations given to me, 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 31 March 2015 and its profit and its cash flows for the year ended
on that date.
a) The Consolidation of Financial Statements and Consolidation of Cash
Flow Statements of his subsidiaries has not been complied as per
Companies Act 2013.1 am therefore unable to comment on the impact, if
any, on the Profit & Loss account as at the Balance Sheet date. my
opinion is not modified 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, I 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) ofthe Act, I report that:
a) I have sought and obtained all the information and explanations
which to the best of my knowledge and belief were necessary for the
purposes of my audit.
b) in my opinion proper books of account as required by law have been
kept by the Company so far as it appears from my examination of those
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 my 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) 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) ofthe
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 my opinion and to the best of my information and
according to the explanations given to me.
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 24.24 to
the financial statements;
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts - Refer Note
24.25 to the financial statements;
iii. there were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure to the Independent Auditors'' Report
The Annexure referred to in my Independent Auditors'' Report to the
members of the Company on the standalone financial statements for the
year ended 31 March 2015,1 report that:
i) a)The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
b)The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner over
a period of three years. In accordance with this programme, certain
fixed assets were verified during the year and no material
discrepancies were noticed on such verification. In my opinion, this
periodicity of physical verification is reasonable having regard to the
size of the Company and the nature of its assets.
ii) The Company is a service company, primarily rendering software
services. Accordingly, it does not hold any physical inventories.Thus,
paragraph 3(ii) ofthe Order is not applicable.
iii) a)The Company has granted loans to one bodies corporate covered in
the register maintained under section 189 of the Companies Act, 2013
b) In the case of the loans granted to the bodies corporate listed in
the register maintained under section 189 of the Act, the terms of
arrangements do not stipulate any repayment schedule and the loans are
repayable on demand. Accordingly, paragraph 3(iii)(b) of the Order is
not applicable to the Company in respect of repayment of the principal
c) In respect of loans granted, the terms of repayment of the principal
amount and the payment of the interest have not been stipulated and
hence I am unable to comment as to whether receipt of the principal
amount and the interest is regular.
d) Where overdue amount in respect of a loan granted is more than
rupees one lakh, reasonable steps have not been taken by the Company
for recovery of the principal amount.
iv) In my opinion and according to the information and explanations
given to me, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of fixed assets and sale of services. The activities of the
Company do not involve purchase of inventory and the sale of goods. I
have not observed any major weakness in the internal control system
during the course of the audit.
Annexure to the Independent Auditors'' Report
v) The Company has not accepted any deposits from the public.
vi) 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 me and
on the basis of my examination of the records of the Company, amounts
deducted/ accrued in the books of account in respect of undisputed
statutory dues including provident fund, income tax, sales tax, wealth
tax, service tax, duty of customs, value added tax, cess and other
material statutory dues have been regularly deposited during the year
by the Company with the appropriate authorities. As explained to me,
the Company did not have any dues on account of employees'' state
insurance and duty of excise.
According to the information and explanations given to me, undisputed
amounts payable in respect of provident fund, income tax, sales tax,
wealth tax, service tax, duty of customs, value added tax, cess and
other material statutory dues were in arrears as at 31 March 2015 for a
period of more than six months from the date they became payable.
Name of the Nature of Amount Period to Date of
statute the dues (Rs) which the Payment
Income Tax TDSon 11,30,408 March Amount not
Act,1961 foreign 2015 paid till date
b) According to the information and explanations given to me, there are
no material dues of wealth tax, duty of customs and cess which have not
been deposited with the appropriate authorities on account of any
dispute. However, according to information and explanations given to me,
the following dues of income tax have not been deposited by the Company
on account of disputes:
Name of the Nature of Amount Amount Paid
statute the dues (Rs) Under Protest
IncomeTax Transfer 5,51,67,570 NIL
Act, 1961 Pricing 2008-09
IncomeTax Transfer 3,90,81,185 NIL
Act, 1961 Pricing 2009-10
Name of the Period to Forum where dispute
statute which the is pending
IncomeTax F.Y Appellate
Act, 1961 Tribunal
IncomeTax F.Y Appellate
Act, 1961 Tribunal
c) As regards provision for current year taxation the company is in the
process of making payment towards TDS on NonResident dues of Rs.
11,30,408/- under the provisions of IncomeTax Act,1961. Management is
of the opinion that Dues with respect to withholding taxes shall be
paid in full before the due date of filing of Income tax returns and
accordingly no disallowance under the provisions oflncome Tax Act,1961
shall be attracted in respect of the same.
viii) The Company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses in the financial
year and in the immediately preceding financial year.
ix) According to the information and explanations given to me and on
the basis of examination of books of accounts, I observe that the
Company has defaulted in repayment of term loans installments amounting
to Rs.260.02 Lakh (Principal amount of Rs.194.62 Lakh and Interest
ofRs.65.40 Lakh) payable from September 2012 to March 2015 and Rs.
11.19 Crore towards other credit facilities payable from September
x) In my opinion and according to the information and the explanations
given to me, the Company has not given any guarantee for loans taken by
others from banks or financial institutions.
xi) The Company did not have any term loans outstanding during the
xii) According to the information and explanations given to me, no
material fraud on or by the Company has been noticed or reported during
the course of my audit.
M. No: 202118
Place: New York,U.S.A
Date : 30th May, 2015