Indus Networks Ltd Auditor Reports

INDUS NETWORKS LIMITED ANNUAL REPORT 2009-2010 AUDITORS REPORT To The Members of M/s.INDUS NETWORKS LIMITED HYDERABAD 1. We have audited the attached Balance Sheet of M/S Indus Networks Limited, Hyderabad as on 31st March 2010 and also the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. 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. 3. Our comments on the accounts are as under: i) Balances appearing under Fixed Assets, Current Assets, Loans and advances, Share Application Money Current Liabilities, Unsecured Loans are subject to confirmation and / or reconciliation, if any. ii) According to the information and explanation given to us, the company does not have any overdues to SSI units and hence no provision for interest is made in accounts. 4. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, We enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 5. Further to our comments in the Annexure related to in paragraph (3) & (4) above: 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 audit. b) In our opinion proper books of account as required by the law have been kept by the Company so far as it appears from our examination of such books. 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 comply with the requirements of the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. e) On the basis of the written representations received from the directors, and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March 2010, from being appointed as Directors in terms of 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 accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i) In so far as it relates to the Balance Sheet, of the state of affairs of the company as on 31st March 2010. ii) In so far as it relates to the Profit and Loss Account, of the profit of the company for the year ended on that date. iii) In case of the Cash flow statement, of the cash flows for the year ended on that date. For KUMAR & GIRI CHARTERED ACCOUNTANTS FRN 001584S PLACE: HYDERABAD J. BHADRA KUMAR DATE : 30.08.2010 PARTNER M.NO. 025480 1. ANNEXURE REFERRED TO IN PARAGRAPH (4) OF OUR REPORT OF EVEN DATE: i) FIXED ASSETS: a) The Company is updating records of fixed assets to reflect additions to fixed assets. No physical verification of fixed assets has been carried out by the company. b) According to the information and explanations given to us, the company has disposed off software whose book value is Rs. 3,50,36,786/- and the loss on sale of software is reflected in the books of account and the going concern status of the company is not affected. ii) INVENTORY: a) No physical verification of stock of software is carried out during the year. b) The procedures of physical verification of inventory followed by the management needs to be improved so as to be reasonable and adequate in relation to the size of the company and the nature of its business. c) The certificate given by the management in respect of inventory is relied upon. d) According to the information and explanation given to us, no material discrepancies were noticed on physical verification of inventory as compare to records. iii) LOANS TAKEN/GRANTED: The company has not taken or granted loans from / to the Companies, firms or other parties covered in the register maintained U/S 301 of the Companies Act, 1956. iv) INTERNAL CONTROL: In our opinion and according the information and explanations given to us, the internal control procedures with regard to purchase of inventory, fixed assets and the sale of software and services needs to be strengthened and streamlined so as to be commensurate with size of the company and the nature of its business. v) SECTION 301: 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 time. vi) PUBLIC DEPOSITS : The company has not accepted any deposited from the public excepting unsecured loan from body corporate. vii) INTERNAL AUDIT: The company has no internal audit system. viii) COST RECORDS: According to the explanations given to us, the Central Government has not prescribed the maintenance of cost records U/s 209 (1) (d) of the Companies Act, 1956. ix) STATUTORY DUES: a) According to the information and explanations given to us, the company is generally regular in depositing the PF, ESI and other statutory dues with the appropriate authorities excepting income tax. The Income-tax returns for A.Yr. 2001-02 to A.Yr. 2010-11 are yet to be filed. x) ACCUMULATED LOSSES: a) The accumulated losses at the end of the current financial year are not less than fifty percent of its net worth. b) The company has not incurred any cash loss in the current financial year and it has not incurred any cash loss in the immediately preceding financial year. xi) REPAYMENT OF DUES: The Company has repaid the secured loan taken during the year. xii) LOANS AND ADVANCES: The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) CHIT-FUND COMPANIES: The clause related to chit fund companies is not applicable to the Company. xiv) NIDHI/MUTUAL BENEFIT SOCIETIES: The clause related to Nidhi/Mutual benefit Funds/Societies is not applicable to the Company. xv) FINANCING COMPANIES: The Company is not a financing Company and hence, this clause is not applicable to the Company. xvi) GUARANTEE FOR LOANS: The Company has not given any guarantee for Loans taken by other from Banks/Financial Institutions. xvii) TERM LOANS: The clause regarding term loans utilization is not applicable to the Company. xviii) USAGE OF FUNDS: According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has utilized short-term funds for short-term purposes and long term funds for long term purposes. xix) PREFERENTIAL ALLOTMENT: The Company has not made any preferential allotment during the year. xx) CREATION OF SECURITIES: The Company has not issued any debentures and hence the question of creating securities in respect of said debentures does not arise. xxi) PUBLIC ISSUE: The Company has not raised any money by way of public issue during the year. xxii) FRAUDS: According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year. For KUMAR & GIRI CHARTERED ACCOUNTANTS FRN 001584S PLACE: HYDERABAD J. BHADRA KUMAR DATE : 30.08.2010 PARTNER M.NO. 025480