Auditors Report to the Members Of EdServ Softsystems Limited
1. We have audited the attached Balance Sheet of Edserv Softsystems Limited asat March 31, 2012 and the Profit and Loss Account and the Cash Flow Statement for the yearended on the date annexed thereto. These financial statements are the responsibility ofthe company's management. Our responsibility is to express an opinion on these financialstatements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and thedisclosures in the financial statements. An audit also includes assessing the accountingprincipals used and significant estimates made by management, as well as evaluating theoverall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued by the CentralGovernment of India in terms of sub-section (4A) of the Companies Act, 1956, we enclose inthe Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in Paragraph 3 above, we reportthat;
i. We have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purpose of our audit;
ii. In our opinion, proper books of account as required by law have been kept by thecompany so far as appears from our examination of those books;
iii. The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt withby this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet, Profit and Loss Account (read in conjunctionwith the Notes and Schedule attached thereto) dealt with by this report comply with theaccounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956 except the following;
i. Note No. 23.m to Financial Statements regarding Confirmations of Balance from SundryDebtors, Deposit accounts, Loans and Advances, Certain Creditors have not been obtained.Accounts of certain sundry debtors, loans and advances, deposits and creditors are underreview and reconciliation. Adjustments, if any will be made on completion ofreview/reconciliation / identification of doubtful debts/advances.
ii. The Company has initiated the process of review of impairment of assets in therespect of the tangible, intangible and other current assets their results in suchimpairment is awaited, The financial implication if any on the above will be provideappropriately at later stage.
iii. The Company has been subjected to survey by Income Tax Department during the year.The amounts of demand from the Income Tax Department for the preceding years are beforeappellate authority. Further notices were issued by the assessing officer for reassessmentof earlier years. The assessment proceedings are in various stages and are yet to becompleted. The company is confident the matter shall be decided later and financialimplications on above cannot be ascertained as on date, Hence no provision is made forsuch matters in the books.
In all the cases referred to above, effect on financial statements is notascertainable. We do not express independent opinion on these matters.
v. On the basis of written representations received from the directors, as on 31stMarch, 2012, and taken on record by the board of Directors, we report that none of thedirectors is disqualified as on 31st March, 2012 from being appointed as a director interms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
vi. Subject to our comments vide para 4.iv.i, 4.iv.ii, and 4.iv.iii above, inour opinion and to the best of our information and according to the explanations given tous, the said accounts give the information required by the Companies Act, 1956, in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
a. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31stMarch,2012;
b. in , the case of the Profit and Loss Account, of the Loss for the year ended on thatdate;
c. In the case of the Cash Flow Statement of the Cash Flows for the year ended on thatdate.
|For RAJ AND RAVI|
|(Membership No. 23211)|
|Date: 30.05.2012||Firm Registration No. 010935S|
Annexure referred to in paragraph 3 of the Auditors' Report to the members of on theaccounts for the year ended 31st March, 2012.
1. a) The company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.
b) As explained to us, all the fixed assets have been physically verified by themanagement at reasonable intervals during the year. According to the information andexplanations given to us and the records produced to us for our verification,discrepancies noticed on such physical verification were not, in our opinion, material andthe same have been properly dealt with in the Books of Account.
c) During the year the Company has not disposed off any substantial of major part ofthe Fixed Assets.
2. The company did not hold any stock of inventory. In view of the foregoing, theprovisions of clause 4(ii) of the Companies (Auditor's Report) Order, 2003 (as amended)are not applicable
3. As informed, the company has not granted any loans, secured or unsecured, to/fromcompanies, firms or other parties listed in the register maintained under Section 301 ofthe Companies Act, 1956.
4. As informed, the company has taken loans, from Subsidiary listed in the registermaintained under Section 301 of the Companies Act, 1956. The Loan is repayable on demandand there are no overdue amounts.
5. In our opinion and according to the information and explanation given to us, havingregard to the explanation that some items are of special nature for which alternatequotations cannot be obtained, there is an internal control system commensurate with thesize of the company and nature of its business for purchase of fixed assets and for thesale of software products and services. During the course of audit, no major weakness hasbeen noticed in the internal control system in respect of these areas. During the year,there are no transactions of purchase of inventory.
6. a) Based on the audit procedures performed by us and according to the informationand explanations provided by the management, we are of the opinion that the transactionsthat need to be entered in 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, thetransactions made in pursuance of contracts or arrangements entered in the registermaintained under sec 301 and exceeding the value of Five Lakh rupees in respect of anyparty during the year have been made at prices which are reasonable having regard toprevailing market prices at the relevant time.
7. In our opinion and according to the information and explanations given to us, as thecompany has not accepted deposits from the public within the meaning of the provisions ofSection 58A and 58AA of the Companies Act, 1956 paragraph 4(vii) of the Order is notapplicable.
8. In our opinion the company has an internal audit system commensurate with size andnature of its business.
9. To the best of our knowledge and as explained, the Central Government has notprescribed maintenance of cost records under Section 209 (1)(d) of the Companies Act,1956.
10. a) According to information and explanations given to us and as per recordsproduced before us for verification, the company is regular in depositing with appropriateauthorities undisputed statutory dues including P.F. E.S.I, Sales Tax, Income tax, Customduty and any other undisputed statutory dues.
b) As per information and explanations furnished to us and on verification of recordsproduced, no undisputed arrears of amounts payable in respect of sales tax / income tax /custom / wealth tax / excise / service tax were outstanding as at 31st March 2012, for aperiod of more than six months from the date they became payable.
c) According to the records of the Company, there are no disputed dues in respect ofsales tax / income tax / custom / wealth tax / excise / service tax as on 31st March 2012.
11. The Company has no accumulated losses as at 31st March, 2012 and has not incurredany cash losses during the financial year ended on that date or in the immediatelypreceding financial year.
12. In our opinion and on verification of records, the company has not defaulted inrepayment of dues to financial institution, bank or debenture holders.
13. The company has not granted any loans or advances on the basis of security by wayof pledge of shares, debentures and other securities and therefore paragraph 4(xii) of theOrder is not applicable.
14. The provisions of any special statute applicable to Chit Fund and Nidhi / mutualbenefit fund/society are not applicable to the company and therefore paragraph 4 (xiv) ofthe Order is not applicable.
15. The company is not dealing or trading in shares, securities, debentures and otherinvestments and therefore paragraph 4 (xiv) of the Order is not applicable.
16. According to the information and explanation given to us, the Company has not givenany guarantee for loans taken by others from banks or financial institutions and thereforeparagraph 4 (xvi) of the Order is not applicable.
17. The company has not availed term loans during the year.
18. According to the information and explanations given to us and on an overallexamination of the balance sheet of the company, in our opinion, no short term funds hasbeen used for fixed assets (long term investments) no long term funds were raised forshort term investments.
19. The company has not made any preferential allotment of shares to parties covered inthe Register maintained under Section 301 of the Companies Act, 1956.
20. The Company has not issued any Debentures during the year under report.
21. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us, we have neither come across anyinstance of fraud on or by the Company noticed or reported during the year, nor have webeen informed of such case by the management.
For RAJ AND RAVI
(Membership No. 23211)
Firm Registration no. 010935S