To the Members of Four Soft Limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of Four Soft Limited,("the Company"), which comprise the Balance Sheet as at 31 March 2013, andthe Statement of Profit and Loss and Cash Flow Statementfor the year then ended, and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial statements, thatgive a true and fair view of the financial position, financial performance and cash flowsof the Company in accordance with the accounting principles generally accepted in India,including the Accounting Standards referred to in sub-section (3C) of Section 211 of theCompanies Act, 1956 ("the Act"). This responsibility includes the design,implementation and maintenance of internal control relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
3. Our responsibility is to express an opinion on these financial statements based onour audit. We conducted our audit in accordance with the Standards on Auditing issued bythe Institute of Chartered Accountants of India. Those Standards require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditors' judgment, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the Company's preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
6. In our opinion and to the best of our information and according to the explanationsgiven to us, the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India: i) in the case of the Balance Sheet, of the stateof affairs of the Company as at 31 March 2013; ii) in the case of the Statement of Profitand Loss, of the lossfor the year ended on that date; and iii) in the case of the CashFlow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditor's Report) Order, 2003 ("the Order")issued by the Central Government of India in terms of sub-section (4A) of Section 227 ofthe Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and5 of the Order.
8. As required by sub-section(3) of section 227 of the Act, we report that: a. we haveobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit; b. in our opinion, proper books ofaccount as required by law have been kept by the Company so far as appears from ourexamination of those books; c. the financial statements dealt with by this report are inagreement with the books of account; d. in our opinion, the financial statements complywith the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;and e. on the basis of written representations received from the directors, as on 31 March2013 and taken on record by the Board of Directors, none of the directors is disqualifiedas on 31 March 2013 from being appointed as a director in terms of clause (g) ofsub-section (1) of Section 274 of the Act.
For Walker, Chandiok & Co
Firm Registration No: 001076N
per Sanjay Kumar Jain
Membership No: 207660
Date: 30 May 2013
Annexure to the Independent Auditors' Report of even date to the members of Four SoftLimited, on the financial statements as at and for the year ended 31 March 2013.
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit, we report that:
(i) (a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner over a period of three years,which, in our opinion, is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.
(c) In our opinion, a substantial part of fixed assets has not been disposed-off duringthe year.
(ii) The Company does not have any tangible inventory. Accordingly, the provisions ofclause 4(ii) of the Order are not applicable.
(iii) (a) The Company has granted unsecured loans to two parties covered in theregister maintained under Section 301 of the Act. The maximum amount outstanding duringthe year is Rs.41,241,861and the year-end balance is Rs.31,798,726.
(b) In our opinion, the rate of interest and other terms and conditions of such loansare not, prima facie, prejudicial to the interest of the Company.
(c) In respect of loans granted, receipt of the principal amount and the interest isregular.
(d) There is no overdue amount in respect of loans granted to such parties.
(e) The Company has not taken any loans, secured or unsecured from companies, firms orother parties covered in the register maintained under Section 301 of the Act.Accordingly, the provisions of clauses 4(iii)(f) and 4(iii)(g) of the Order are notapplicable.
(iv) Owing to the nature of its business, the Company does not maintain any physicalinventories or sell any goods. Accordingly, clause 4(iv) of the Order with respect topurchase of inventories and sale of goods is not applicable. In our opinion, there is anadequate internal control system commensurate with the size of the Company and the natureof its business for the purchase of fixed assets and for the sale of services. During thecourse of our audit, no major weakness has been noticed in the internal control system inrespect of these areas.
(v) (a) In our opinion, the particulars of all contracts or arrangements that need tobe entered into the register maintained under Section 301 of the Act have been so entered.
(b) Owing to the unique and specialized nature of the items involved and in the absenceof any comparable prices, we are unable to comment as to whether the transactions made inpursuance of such contracts or arrangements have been made at the prevailing market pricesat the relevant time.
(vi) The Company has not accepted any deposits from the public within the meaning ofSections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975.Accordingly, the provisions of clause 4(vi) of the Order are not applicable.
(vii) In our opinion, the Company has an internal audit system commensurate with itssize and the nature of its business.
(viii) To the best of our knowledge and belief, the Central Government has notprescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209of the Act, in respect of Company's products/services. Accordingly, the provisions ofclause 4(viii) of the Order are not applicable.
(ix) (a) Undisputed statutory dues including provident fund, investor education andprotection fund, employees' state insurance, income-tax, sales-tax, wealth tax, servicetax, custom duty, excise duty, cess and other material statutory dues, as applicable, havegenerally been regularly deposited with the appropriate authorities, though there has beena slight delay in a few cases. Further, no undisputed amounts payable in respect thereofwere outstanding at the year-end for a period of more than six months from the date theybecame payable.
(b) The dues outstanding in respect of service tax and income-tax on account of anydispute, are as follows:
|Name of the statute ||Nature of dues ||Amount (Rs.) ||Financial year ||Forum where dispute is pending |
|The Income Tax Act, 1961 ||Income tax ||52,541,539 ||2006-07 ||Income Tax Appellate Tribunal |
|The Income Tax Act, 1961 ||Income tax ||60,939,060 ||2007-08 ||Income Tax Appellate Tribunal |
(x) In our opinion, the Company has no accumulated losses at the end of the financialyear but it has incurred cash losses in the current and the immediately precedingfinancial year.
(xi) The Company has no dues payable to a financial institution or a bank ordebenture-holders during the year. Accordingly, the provisions of clause 4(xi) of theOrder are not applicable.
(xii) The Company has not granted any loans and advances on the basis of security byway of pledge of shares, debentures and other securities. Accordingly, the provisions ofclause 4(xii) of the Order are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefitfund/society. Accordingly, provisions of clause 4(xiii) of the Order are not applicable.
(xiv) In our opinion, the Company is not dealing or trading in shares, securities,debentures and other investments. Accordingly, the provisions of clause 4(xiv) of theOrder are not applicable.
(xv) In our opinion, the terms and conditions on which the Company has given guaranteefor loans taken by its wholly owned subsidiary from a bank are not, prima facie,prejudicial to the interest of the Company.
(xvi) The Company did not have any term loans outstanding during the year. Accordingly,the provisions of clause 4(xvi) of the Order are not applicable.
(xvii) In our opinion, no funds raised on short-term basis have been used for long-terminvestment by the Company.
(xviii)During the year, the Company has not made any preferential allotment of sharesto parties and companiescovered in the register maintained under Section 301 of the Act.Accordingly, the provisions of clause 4(xviii) of the Order are not applicable.
(xix) The Company has neither issued nor had any outstanding debentures during theyear.Accordingly, the provisions of clause 4(xix) of the Order are not applicable.
(xx) The Company has not raised any money by public issues during the year.Accordingly, the provisions of clause 4(xx) of the Order are not applicable.
(xxi) No fraud on or by the Company has been noticed or reported during the periodcovered by our audit.
For Walker, Chandiok & Co
Firm Registration No.: 001076N
per Sanjay Kumar Jain
Membership No.: 207660
Date: 30 May 2013