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Virtualsoft Systems Ltd.

BSE: 531126 Sector: IT
NSE: N.A. ISIN Code: INE237C01016
BSE 00:00 | 06 Jun Virtualsoft Systems Ltd
NSE 05:30 | 01 Jan Virtualsoft Systems Ltd
OPEN 2.53
PREVIOUS CLOSE 2.53
VOLUME 270
52-Week high 2.53
52-Week low 1.20
P/E
Mkt Cap.(Rs cr) 3
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2.53
CLOSE 2.53
VOLUME 270
52-Week high 2.53
52-Week low 1.20
P/E
Mkt Cap.(Rs cr) 3
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Virtualsoft Systems Ltd. (VIRTUALSOFTSYS) - Auditors Report

Company auditors report

To the Members of VirtualSoft Systems Limited Report on the Financial Statements

We have audited the accompanying standalone financial statements of VirtualSoftSystems Limited (‘the Company') which comprise the balance sheet as at 31st March2017 the statement of profit and loss and the cash flow statement for the year ended 31stMarch 2017 and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.

Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the statement of affairs of theCompany as at 31stMarch 2017 and its profit and Loss and its cash flows for the yearended on that date.

Emphasis of Matter

Attention is invited to Note no. 25 under Explanatory Notes to Financial Statementsregarding compliance with ‘AS 15- Accounting for Employee Benefits' the managementis providing for provisions of gratuity and leave encashment as per management's policywhereas as per AS-15 every listed company is required to get the valuation done by anActuary.

Attention is invited to Note no. 32 under Explanatory Notes to Financial Statementsregarding the financial statements being prepared on a going concern basisnotwithstanding the fact that the company's net worth is eroded (Net Worth as on 31stMarch 2017 minus Rs. 57756565/-). These events cast significant doubt on the abilityof the Company to continue as a going concern.

Attention is invited to Note no. 35 under Explanatory Notes to Financial Statementsregarding amortization of intangible assets. The company has not provided for amortizationof CRM Software and Website under development.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act we report that:

a. we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c. the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d. except for the matter described in the Emphasis of Matter paragraph in our opinionthe aforesaid standalone financial statements comply with the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014;

e. on the basis of written representations received from the directors as on 31st March2017 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31stMarch 2017 from being appointed as a director in terms of Section 164(2) of theAct;

f. with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

g. with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

a. The Company does not have any pending litigations which would impact its financialposition.

b. The Company does not have any long term contracts including derivate contracts forwhich provision would be required to be made under the applicable law or accountingstandards for material foreseeable losses.

c. Following are the instances of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company :

Year Amount(Rs)
1997-1998 43850
1996-1997 27390

For Nath Ahuja & Co.

Chartered Accountants

Firm's registration number: 001083N

Narinder Nath Ahuja

Proprietor

Membership No. 80178

New Delhi

30th May 2017

Annexure - A to the Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31st March 2017 we report that:

i) In respect of its fixed assets:

(a) The Company has maintained its Fixed Assets Register. verification

(b) As explained to us the physical of fixed assets was conducted by the management atreasonable intervals but we were not provided with any records for the same so we areunable to comment on the frequency of physical verification having regard to the size ofthe Company and the nature of assets.

(c) According to the information and explanations given to us point (c) is notapplicable as the Company does not have any immovable properties.

ii) In respect of its inventories:

(a) As informed and represented to us there were no inventories lying with the companywhich were required to be physically verified during the year by the management atreasonable intervals.

(b) As the company does not have inventory point (b) is not applicable.

iii) In respect of loans granted by the company:

(a) The Company has not grantedany loans secured or Unsecured to Companies firms orother parties covered under register maintained under section 189 of the Companies Act2013.

(b) Accordingly para 3(iii)(b) and 3(iii)(c) of the Order is not applicable to theCompany in respect of repayment of the principal amount and interest.

iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from the public during the year. Therefore theprovisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013and the rules framed there under are not applicable to the Company.

vi) We have been informed by the management that no cost records have been prescribedunder section 148

(1) The Companies of Act for any of the products sold or services rendered by thecompany.

vii) According to the information and explanations given to us and on the basis of ourexamination of the books of accounts the company is not regular in depositing undisputedstatutory dues including Service Tax Income Tax and other material statutory dues asapplicable with appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Income Tax Sales Tax Service Tax Duty of CustomsValue Added Tax or any other material statutory dues were outstanding as at 31st March2017 for a period of more than six months from the date they became payable.

According to the information and explanations given to us there are no dues of ServiceTax Income Tax Sales Tax and Excise Duty which have not been deposited on account of anydispute as at March 31 2017.

viii) According to the information and explanations given to us the company has nottaken any loans from financial institutions or banks so there is no default in repaymentof dues to financial institutions or banks or bond holders.

ix) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers has been noticed or reported during the courseof our audit.

x) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid/provided formanagerial remuneration in the financial year under consideration.

xi) During the course of our examination of the books of account carried out inaccordance with generally accepted auditing practices in India and according to theinformation and explanations given to us we have neither come across any instances offraud on or by the company noticed or reported during the year nor have we been informedof such cases by the management.

xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any private placementof shares or fully or partly convertible debentures or preference shares.

xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Nath Ahuja & Co.

Chartered Accountants

Firm's registration number: 001083N

Narinder Nath Ahuja

Proprietor

Membership No. 80178

New Delhi

30th May 2017

Annexure- B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of VirtualSoftSystems Limited ("the Company") as of 31stMarch 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Nath Ahuja & Co.

Chartered Accountants

Firm's registration number: 001083N

Narinder Nath Ahuja

Proprietor

Membership No. 80178

New Delhi

30th May 2017