TeleCanor Global Ltd.
|BSE: 530595||Sector: IT|
|NSE: N.A.||ISIN Code: INE381G01013|
|BSE 00:00 | 17 Sep||TeleCanor Global Ltd|
|NSE 05:30 | 01 Jan||TeleCanor Global Ltd|
TeleCanor Global Ltd. (TELECANORGLOBAL) - Auditors Report
Company auditors report
The Members of Telecanor Global Limited Report on the StandaloneFinancial Statements
Ve have audited the accompanying standalone financial statements ofTelecanor Global Limited (the Company') which comprise the balance sheet as at 31March 2017 the statement of profit and loss and the cash flow statement for the year thenended and a summary of 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 statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation and presentation of these standalone financial statements that give a true andfair view of the financial position financial performance and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalonefinancial statements based on our audit. We have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the financial statements. The procedures selecteddepend on the auditor's judgme ul including the assessment of the risks of materialmisstatement of the financial statements whetl ier duo to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the financial statements that give a true and fair view 'in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31 March 2017 and its profit and its cash flows for the yearended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016("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 a statement on the mattersspecified in the paragraph 3 and 4 of the order.
2. As required by Section 143 (3) of the Act we report that:
(a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) in our opinion proper books of account as required by law have beenkept 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 cashflow statement dealt with by this Report are in agreement with the books of account;
(d) in our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014;
(e) on the basis of the written representations received from thedirectors as on 31 March 2017 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2017 from being appointed as a director in termsof Section 164 (2) of the Act;
(f) with respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure B"; and
(g) with respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i. the Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements;
ii. the Company has made provision as required under the applicablelaw or accounting standai ds for material foreseeable losses if any
iii. The company has not transferred any amount to the InvestorEducation and Protection Fu ml as the company has incurring cash losses continuously .
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
iv. the Company has provided requisite disclosures in its standalonefinancial statements as to holdings as well as dealings in Specified Bank Notes during theperiod from 8 Novem her 2016 to 30 December 2016 and these are in accordance with thebooks of accounts maintained by the Company
For M/s. Gopal & Raj an CHARTERED ACCOUNTANTS Firm RegistrationNo.00C953S
K.GOUTHAM SUBBAIAH PARTNER Membership No.203237
PLACE: HYDERABAD DATE: 30-05-2017.
Annexure - A to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to the membersof the Company on l lie standalone financial statements for the year ended 31 March 2017we report that:
(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets .
(b) The Company has a regular programme of physical verification of itsfixed assets by which iixed assets are verified in a phased manner over a period of threeyears. In accordance with this programme certain fixed assets were verified during theyear and no material discrepancies were noticed on such verification. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets.
(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
(ii) The Company is a service company primarily rendering softwareservices. Accordingly it does not hold any physical inventories. Thus paragraph 3(ii) ofthe Order is not applicable to the Company.
(iii) The Company has not granted loans to bodies corporate covered inthe register maintained Tinder section 189 of the Companies Act 2013 (the Act').
(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct with respect to the loans and investments made.
(v) The Company has not accepted any deposits from the public.
(vi) The Central Government has not prescribed the maintenance of costrecords 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 andon the basis of our examination of the records of the Company various undisputedstatutory dues are outstanding which are within 6 months and beyond 6 months. the list isas mentioned below:
(viii) Based cm our audli procedures and according to the informationand explanations given to us. vve arc of the opinion that the Company has defaulted inrepayment of dues to financial institutions banks. and debenture holders. The Company hastaken loans or borrowings from Dhanalakshmi Bank and is in default in payment ofinstallments and interest on Term Loan and OD. The default is since beginning of 2012financial year. The amount of Term loan sanctioned was Rs.32900000/- and OD/workingcapital sanctioned was Rs. 10000000 The as per the communication received the bank hasinitiated legal proceedings for recovery of loan at Debt Recovery Tribunal (DRT).Dhanalakshmi bank has granted loans / advances on the basis of security by way of pledgeof company shares( 700000 shares) and other securities such as book debts . DhanlaxmiBank Limited has assigned all debts due and payable by the company and accrued interestthereon other charges along with underlying security in favour of Phoenix ARC PrivateLimited as per Assiyimiunl Agreement dated 28/03/2014.
The company has taken vehicle loan from Kotak Mahindra bank anddefaulted the same Ihe vehicle was confiscated and sold by the bank. As per our books anamount of Rs.337000/- is outstanding financial institution banks government ordebenture holders during the ye nr.
(ix) The Company did not raise any money by way of initial public offeror further publ ic offer (including debt instruments) and term loans during the year.Accordingly paragraph 3 of the Order is not applicable.
(x) According to the information and explanations given to us nomaterial fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the course of our audit.
(xi) According to the information and explanations give to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.
(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company no transactions with the relatedparties .
(xiv) According to the information and explanations give to us andbased on our examination of the records of the Company the Company has made preferentialallotment on 2nd Aug 2016 vide BSE in principle permission numberDCS/PREF/KS/PRE/1175/2016-2017 or has not done any private placement of shares or fully orpartly convertible debentures during the year.
(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
(xiv) The receivables (debtors) amounting Rs. 63528539/-(net) out ofwhich Majority of receivables are outstanding since 2 years . The management has informedus they are making followup efforts in this regard. However we observe that no effectivelegal action has been initiated and the same need to be initiated immediately.
For M/s. Gopal &jLg.afi CHARTERED ACCOUNgpIgl Firm Registration3S
PLACE: HYDERABAD DATE: 30-05-2017.
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Telecanor Global Limited ("the Company") as of 31 March 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal fiaaneial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reportiirg is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded a:s necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2017 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
For M/s. Gopal & Rajan CHARTERED ACCOUNTANTS Firm Registration NoPSssv
PLACE: HYDERABAD DATE: 30-05-2017.