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
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
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 31 st 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.
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.
a) No physical verification of stock of software is carried out during
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
d) According to the information and explanation given to us, no
material discrepancies were noticed on physical verification of
inventory as compare to records.
Hi) 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
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
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
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
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
xvii) TERM LOANS:
The clause regarding term loans utilization is not applicable to the
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
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