We have audited the attached Balance Sheet of M/s V M F Soft Tech
Limited (and reduced) Hyderabad as at 30th June 2012 and also the
profit and loss account and cash flow statements of the company for
year ended on that date, in which are incorporated the financials for
nine months, of the amalgamating company, which were audited by other
1. 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 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 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure
hereto a statement on the matters specified in paragraphs 4 and 5 of
the said Order.
4. Further to our comments in the Annexure referred to in paragraph 2
above, we report that:
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 Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account;
d. In our opinion, the Balance Sheet and Profit and Loss Account and
cash flow statement dealt with by this report comply with the mandatory
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
e. In our opinion, and based on information and explanations given to
us, none of directors are disqualified as on 30th June, 2012 from being
appointed as directors in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956;
f. Subject to
a. Notes No: - 28, of notes to financials - Regarding non -
confirmation of balances from various parties.
b. Notes No: 29 of notes to financials - Regarding non-provision for
proportionate liability on account of employees'' retirement benefits,
which have not been quantified.
c. Note No 30 – of notes to financials - Regarding non provision of
loss, if any, on account of unquoted investments market value not
d. Note No 31- of notes to financials - Regarding scheme of
arrangement and amalgamation.
g. Based on our audit and on consideration of separate audit report for
nine months of, amalgamating company and to the best of our information
and according to the explanations given to us, the said accounts read
together with the Significant Accounting Policies and other notes to
financials thereon give the information required by the Companies Act,
1956, in the manner so required, and present a true and fair view, in
conformity with the accounting principles generally accepted in India:
I. In the case of the Balance Sheet, of the state of affairs of the
Company as at 30th June, 2012; ii. In the case of the profit and loss
account of the Profit for the year ended on that date. And iii. In
the case of cash flow statement, of the cash flows for the year ended
on that date
Annexure ''A'' to Auditors'' Report
Referred to in paragraph 2 of our report of even date
I. a. The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
b. The management during the year has verified all the fixed assets.
There is a regular program of verification which in our opinion, is
reasonable having regard to the size of the company and nature of its
assets. No material discrepancies were noticed on such verification.
c. During the year, the company has not disposed any fixed assets
during the year under review.
ii. The company does not have any inventory hence this clause is not
iii. The Company neither granted nor taken any loans, secured or
unsecured to / from companies, firms or other parties covered in the
register in the register maintained under section 301 of the Companies
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the company and the nature of its
business for the purchases of plant and machinery, equipment and other
assets and for the sale of goods.
v. In our opinion according to the information and explanation given to
us, the transactions of related companies have been entered in
pursuance of section 301 of Companies Act, 1956 and the same are not
prejudicial to the interest of the company
vi. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public to
which the provisions of Section 58A and 58AA of the Act and rules
framed there under.
vii. In our opinion, the internal audit functions carried out during
have been commensurate with the size of the company and nature of its
viii. Maintenance of cost records by the company has not been
prescribed by the Central Government under Section 209 (1) (d) of the
Companies Act, 1956.
ix. a. As per the records maintained by the company, the company is
regular in depositing undisputed statutory dues the authorities. The
company is not having investor education protection fund. According to
the explanation and information given to us, we understand that the
company is not liable for under, sales tax and Employees State
b. As per the records and as per the information and explanation given
to us, no undisputed amounts payable in respect of Wealth Tax, Sales
Tax, Customs Duty and Excise duty and Cess as at 30th June 2012 for a
period of more than six months from the date they became payable.
x. There are no accumulated losses at the end of the financial year.
The company has not incurred cash losses during the year under review.
xi. During the year under review the company has not taken any loans
from the financial institutions.
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.
Annexure ''A'' to Auditors'' Report
xiii. In our opinion, the company is not a chit fund or a nidhi/ mutual
benefit fund/ society. Therefore the provisions of clause 4(xiii) of
the Companies (Auditor'' s Report) order, 2003 are not applicable to the
xiv. In our opinion, the company is not dealing in or trading in shares
securities debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor'' s Report)
order, 2003 are not applicable to the company.
xv. The company has not given any guarantees for loans taken by others
from banks or financial institutions.
xvi. The company has taken any term loan during the year under review
and is regular in payment of installments.
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
investment. No long-term funds have been used to finance short-term
xviii. The company has not made any preferential allotment of shares
during the year to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
xix. The company has not issued any debentures during the year under
xx. The company has not raised any money by public issue during the
year under review.
xxi. According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For Mahesh, Virender & Sriram
Reg No. 0019395
(B R Mahesh)
Date: 09.11.2012 Partner
Place: Hyderabad M.No. 18628