1. We have audited the attached Balance Sheet of Four Soft Limited
(''the Company'') as at 31 March 2012 and also the Statement of Profit
and Loss and the Cash Flow Statement for the year ended on that date
annexed thereto (collectively referred as the ''financial statements'').
These financial statements are the responsibility of the Company''s
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 a 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditor''s Report) Order, 2003 (''the
Order'') (as amended) issued by the Central Government of India in terms
of sub-section (4A) of Section 227 of the Companies Act, 1956 (''the
Act''), we enclose in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to above, we
(a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
(c) The financial statements dealt with by this report are in agreement
with the books of account;
(d) On the basis of written representations received from the
directors, as on 31 March 2012 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2012
from being appointed as a director in terms of clause (g) of
sub-section (I) of Section 274 of the Act;
(e) In our opinion and to the best of our information and according to
the explanations given to us,the financial statements dealt with by
this report comply with the accounting standards referred to in
sub-section (3C) of Section 211 of the Act and 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, in the case of:
(i) the Balance Sheet, of the state of affairs of the Company as at 31
(ii) the Statement of Profit and Loss, of the loss for the year ended
on that date; and
(iii) the Cash Flow Statement, of the cash flows for the year ended on
Annexure to the auditors'' report of even date to the members of Four
Soft Limited, on the financial statements as at and for the year ended
31 March 2012.
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and
taking into consideration the information and explanations given to us
and the books of account and other records examined by us in the normal
course of audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of
(b) The Company has a regular program of physical verification of its
fixed assets under 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 the nature 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 during the year.
(ii) (a) The Company does not have any tangible inventory. Accordingly,
the provisions of clause 4(ii) of the Order are not applicable.
(iii) (a) The Company has granted unsecured loans to two bodies
corporate covered in the register maintained under Section 301 of the
Act. The maximum amount outstanding during the year is Rs. 156,357,274
and the year-end balance is Rs.39,706,017.
(b) In our opinion, the rate of interest and other terms and conditions
of such loans are not, prima facie, prejudicial to the interest of the
(c) In respect of loans granted, receipt of the principal amount is as
stipulated and payment of interest has been regular.
(d) There is no overdue amount in respect of loans granted to such
companies, firms or other parties.
(e) The Company has not taken any loans, secured or unsecured from
companies, firms or other 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 not applicable.
(iv) (a) Owing to the nature of its business, the Company does not
maintain any physical inventories or sells any goods.
Accordingly, clause 4(iv) of the Order with respect to purchase of
inventories and sale of goods is not applicable. In our opinion, there
is an adequate internal control system commensurate with the size of
the Company and the nature of its business for the purchase of fixed
assets and for the sale of services. During the course of our audit, no
major weakness has been noticed in the internal control system in
respect of these areas.
(v) (a) In our opinion, the particulars of all contracts or
arrangements that need to be 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 absence of any comparable prices, we are unable to comment
as to whether the transactions, other than loans, made in pursuance of
such contracts or arrangements have been made at prevailing market
prices at the relevant time.
(vi) The Company has not accepted any deposits from the public within
the meaning of Sections 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 its size and the nature of its business.
(viii) To the best of our knowledge and belief, the Central Government
has not prescribed maintenance of cost records under clause (d) of
sub-section (I) of Section 209 of the Act, in respect of Company''s
products/ services. Accordingly, the provisions of clause 4(viii) of
the Order are not applicable.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales-tax, wealth-tax, service-tax, custom duty, excise duty, cess and
other material statutory dues, as applicable, have generally been
regularly deposited with the appropriate authorities, though there has
been a slight delay in case of depositing employee state insurance. No
undisputed amounts payable in respect thereof were outstanding at the
year-end for a period of more than six months from the date they became
(b) The dues outstanding in respect of service tax and income-tax on
account of any dispute, are as follows:
Name of the
statute Nature of dues Amount (Rs.) Financial year Forum where
Act, 1994 Service tax 3,563,314 2006-07 Appellate
Act, 1961 Income tax 52,541,539 2006-07 Income Tax
(x) In our opinion, the Company has no accumulated losses at the end of
the financial year, but it has incurred cash losses in the current and
the immediately preceding financial year.
(xi) The Company has no dues payable to a financial institution or a
bank or debenture-holders during the year. Accordingly, the provisions
of clause 4(xi) of the Order are not applicable.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities. Accordingly, the provisions of clause 4(xii) of the Order
are not applicable.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Accordingly, the 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 the Order are not applicable.
(xv) According to the information and explanations given to us, the
Company has given guarantees for loans taken by its wholly owned
subsidiary from a bank, the terms and conditions whereof, in our
opinion are not, prima facie, prejudicial to the interest of the
(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
(xvii) In our opinion, no funds raised on short-term basis have been
used for long-term investment.
(xviii)During the year, the Company has not made any preferential
allotment of shares to parties or companies covered 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 the year. 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
(xxi) No fraud on or by the Company has been noticed or reported during
the period covered by our audit.
For Walker, Chandiok & Co
Firm Registration No: 00I076N
per Sanjay Kumar
Membership No: 207660
Place : Hyderabad
Date : 26 May 20I2