We have audited the accompanying financial statements of PALSOFT
INFOSYSTEMS LIMITED, (the company) which comprise the Balance Sheet
as at March 31, 2014, and the Statement of Profit and Loss and Cash
Flow Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information (attached as 1 &
Management Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of financial position,
financial performance and cash flow of the company in accordance with
the accounting standards referred to in sub -section (3C) of Section
211 of the Companies Act 1956 (the Act) read with the General
Circular 15/2013 dated 13 th September 2013 of the Ministry of
CorporateAffairs in respect of Section 133 of the Companies Act, 2013.
The responsibility includes the design, implementation and maintenance
of internal control relevant to the preparation and presentation of
financial statements that give a true and fair view and are free from
material misstatements, whether due to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the standards on auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
An audit involves performing procedure to obtain audit evidence about
the amounts and disclosure in the financial statements. The procedure
selected depends upon auditor''s judgement, including the assessment
of the risk of material misstatements of the financial statements,
whether due to fraud or error. In making those risk assessment, the
auditor considers internal control relevant to the Company''s prepara
-tion and fair presentation of the financial statements in order to
design audit procedure that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of
the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by management, as well as evaluating the
overall presentation of financial statements.
We believe that audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements 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
(a) in case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in case of Statement of Profit and Loss, of the profit for the year
ended on that date; and
(c) in case of the Cash Flow Statements, of the cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor '' s Report) Order, 2003 (the
order) issued by Central Government of India in terms of sub-section
(4A) of Section 227 of theAct, We give in theAnnexure
a statements on the matters specified in paragraphs
4 and 5 of the order.
2. As required by Section 227(3) of theAct, we report that:
a. We have obtained all 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 Law have been
kept by the Company so far as appears from our examinations of those
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statements dealt with by this Report are in agreement with the books of
d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section(3C) of Section 211 of the Companies Act, 1956 read with the
General Circular 15/2013 dated 13th September 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013;
e. On the basis of written representations received from the directors
as on March 31, 2014 and taken on record by the Board of Directors,
none of the director is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
Section 274 of the Companies Act,1956.
ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT
Statement referred to in paragraph 1 of Report on other Legal and
Regulatory Requirements of our report of even date to the members of
the PALSOFT INFOSYSTEMS LIMITED on the accounts for the year ended 31st
(i) (a) The Company has maintained proper records showing full partic
-ulars including quantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the management
during the year. No material discrepancies have been noticed on such
(c) No substantial part of fixed assets has been disposed off during
the year. (ii) (a), (b) and (c)
There was no inventory at the year-end. Therefore, the provisions of
clause 4 (ii) (a) to 4(ii) (c) of the Companies (Auditor''s Report)
Order, 2003 are not applicable to the company.
(iii) (a) The company has not granted any loans to
parties listed in the register maintained under Section 301 of the
Companies Act, 1956. Accordingly sub clause (b) to (d) are not
applicable (e), (f) and (g)
The company has not taken loan from parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Therefore,
the provision of clause 4(iii)(e) to 4(iii)(g) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and nature of its business
with regard to the purchase of fixed assets, other assets and with
regard to sale of goods. During the course of our audit, we have not
observed any continuing failure to correct major weakness in internal
(v) (a) According to information and explanations
given to us, all the transactions need to be entered into a register in
pursuance of Section 301 of the Act are entered in the register
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lacs 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, but few transactions could not be compared as the material
supplied/services rendered to such parties are either in short supply
or not supplied/services rendered by any other party. (Sale of
(vi) The company has not accepted deposits referred under section 58A
of Companies Act, 1956. Accordingly provisions of section 58A are not
(vii) The company has negative net worth at the commencement of the
financial year and the company does not have an average annual turnover
exceeding Rs. 5 crores for a period of three consecutive financial
years immediately preceding financial year 2013-14, therefore the
company is not required of an internal audit system.
(viii) According to information and explanation given to us, prime
facie the company has maintained the cost records in respect of the
products/activities of the company, as prescribed by the Central
Government under section 209(1) (d) of the Companies Act, 1956.
However, we have not carried examinations in detail.
(ix) (a) The company is generally regular in
depositing with appropriate authorities undisputed statutory dues.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Custom
Duty and Excise Duty were in arrears, as at 31.03.2014 for a period of
more than six months from the date they became payable except in case
of Sales Tax and Surcharge on Sales Tax amounting to Rs. 25,62,228/-
and Statutory dues as per Section 205C of the Companies Act 1956, for
transfer of unpaid application money to Investor Education and
Protection Fund amounting to Rs. 22,622/- are not paid to the
(b) According to the information and explanations given to us, there
are no dues of income tax, custom duty, wealth tax, excise duty and
cess, which have not been deposited on account of any dispute.
(x) The company has been registered for a period not less than five
years and its accumulated losses at the end of the financial year are
more than fifty percent of its net worth. Company has not incurred any
cash loss during the Financial Year 2013-14 as well as 2012-13.
(xi) The company has not taken any loan from financial
institutions or banks, therefore, the provisions of clause 4 (xi) of
the Companies (Auditors'' Report) Order, 2003 are not applicable to the
(xii) According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The company is not a chit fund or a nidhi/mutual benefit or a
society. Therefore, the provisions of clause 4 (xiii) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company.
(xiv) The company is not dealing in or trading in the 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) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
(xvi) The company has not taken any term loans.
Therefore, the provisions of clause 4 (xvi) of the Companies (Auditor''s
Report) Order, 2003 are not applicable to the company.
(xvii) According to the Cash Flow Statement and records examined by us
and information and explanations given to us and on overall examination
of Balance Sheet, we report that funds raised on short-term basis have
not been used for long-term investments.
(xviii) According to the information and explanations given to us, the
company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956 and hence the question of price at which shares
have been issued is prejudicial to the interest of the company does not
(xix) The company has not issued debentures during the year.
(xx) The company has not raised any money by way of public issue during
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
For KALANI & COMPANY
Place : Jaipur [Deepak Khandelwal]
Date : 30.05.2014 Partner
M. No. 409520