computech international ltd Auditors report

COMPUTECH INTERNATIONAL LIMITED ANNUAL REPORT 2009-2010 AUDITORS REPORT To The Shareholders, 1. We have audited the attached Balance Sheet of COMPUTECH INTERNATIONAL LIMITED as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. 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 have 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 our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we annex hereto a statement on the matter specified in paragraphs 4 and 5 of the said Order on the basis of such check as we considered appropriate. 4. We further report that: 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 audit. b. In our opinion proper books of accounts as required by the Companies Act, 1956 have been kept by the company so far as appears from our examination of those books. c. The Balance Sheet and Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account. d. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement comply with the requirements of the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956 (as amended). e. Based on representation letter received from directors and placed before the Board of Directors, in our opinion none of the directors is disqualified from being appointed as director as referred in section 274(l)(g) of the Companies Act, 1956 (as amended). 5. In our opinion and to the best of our information and according to explanations given to us, the said accounts, subject to; a) Note No B (3 & 4) non production of confirmations from Sundry Debtors, Sundry Creditors and other parties, and non production of Bank Statements for our verification, if any differences can not be commented. b) Note No B (7) Total setoff of import payables with export debtors ofRs.1218165740/-(equivalent to USD 37553 millions) , for which necessary application to RBI under exchange law is to be made by the company and pending approval from Reserve Bank of India , and non provision of exchange gain of Rs. 102771210/- for doubtful debts. c) Note No. B(ll) of schedule 21 regarding recoverability of overdue debtors amounting to Rs. 10.36 lacs, (previous year Rs. 2576.71 lacs) which is considered good by the management for which we are not in a position to express an opinion on its ultimate realization. Further read with other notes thereon 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 the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010; ii) In the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date, and iii) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. For B. SINGHAL & CO. Chartered Accountants Firm Regn No 312197E B.P. KHANDELWAL Partner Membership No. 061382 46, B.B. Ganguly Street Kolkata - 700 012 Dated: The 31st day of May, 2010 ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date) i) In respect of fixed assets: a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets; b) The Fixed assets of the Company are physically verified by the management according to a phased program designed to cover all the items 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 business. Pursuant to such program, a physical verification was carried out during the year and no material discrepancies between the book records and the physical inventory have been noticed. c) The Company has not disposed off substantial part Of its fixed assets. ii) In respect of inventories a) As explained to us, inventories were physically verified during the year by the Management at reasonable interval. b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business. c) In our opinion and according to the information and explanations given to us the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification. iii) a) According to the information & explanations given to us, the company has not granted any loan to any compeny, firm or other parties covered in the register maintained under section 301 of the Companies Act. Hence the provisions of the clauses 4(iii) (b), (c) and (d) of the Order are not applicable TO THE COMPANY. e) The company has taken unsecured loan of Rs. 5 lacs from a director covered under section 301 of the Companies Act,. The maximum amount of such loan outstanding during the year and closing balance as on 31st March 2010 was Rs. 5 lacs & Rs. 5 lacs respectively. f) In our opinion the rate of interest and other terms and conditions of the loans taken by the Company are prima facie, not prejudicial to the interest of the company. g) The company is generally regular in paying interest and principal amount of the above stated loans. iv) In our opinion there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of software, hardware, fixed assets and for sale of goods and services. To the best of our knowledge and belief there is no major weakness(s) in internal control system. v) a) To the best of our knowledge and belief, particulars of contracts or arrangements referred to in section 301 of the Companies Act have been entered in the register required to be maintained under that section. b) In our opinion transactions made in pursuance of above-mentioned contracts or arrangements have been made at reasonable prices. vi) According to the information and explanations given to us, the Company has not accepted deposits from the public as such provisions of Section 58A and S8AA or any other relevant provisions of the Companies Act, 1956 and hence the relevant clause is not applicable. vii) As explained to us the Company has its own Internal audit system. In our opinion, the internal audit system of the company is commensurate with its size and nature of its business. viii) According to the information and explanations given to us, maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub sec.(i) of section 209 of the Companies Act, 1956. ix) According to the information and explanations given to us in respect of statutory and other dues: a) The Company has generally been regular in depositing undisputed statutory dues including provident fund, Employees state insurance, Investor Education And Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess and any other statutory dues with appropriate authorities during the year and no amount dues for more than six months from the date they become payable as on 31.03.2010. b) The following disputed statutory liabilities have not been deposited in view of pending appeals. Statue Nature Forum Amount Related (Rs. in Assessment Lacs) Year Income Tax Act, Income Tax Commissioner of 8.88 2005-06 1961 Income Tax (Appeal) Sales Tax Act, Sales Tax Commercial Tax 13.05 2001-02 Silvassa Officer Income Tax Act, Income Tax Appletate 85.29 2001-02 1961 Tribunal of Income Tax Income Tax Act, Income Tax Appletate 91.93 2004-05 1961 Tribunal of Income Tax x) The Company have accumulated losses exceeding fifty percent of its net worth as at the end of the financial year and the Company has incurred cash losses in current financial year and in the immediately preceding financial year. xi) Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repayment of the dues to financial institutions except from Life Insurance of Company and debenture holders. The total defaulted amount to Banks as on 31st March, 2010 Rs.3625.31 lacs (included interest). xii) According to the information and explanations given to us, the company has not granted loans or advances on the basis of securities by way of pledge of shares, debentures or other securities. xiii) The Company is not a Chit Fund/Nidhi/Mutual Benefits Fund/ Society. xiv) We have broadly reviewed the books of accounts and records maintained by the company and state that prima-facie, proper records have been maintained of the transactions and contracts relating to purchase/sale of investments and timely entries have been made therein. All the investments have been held by the company in its own name. 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) To the best of our knowledge and belief and according to the - information and explanations given to us, term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtaisied. xvii) According to the information and explanations given to us, on an overall basis funds raised on short term basis, prima facie, has not been used during the year for long term investments and vice versa. xviii)During the year 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.Hence the question whether the price at which the shares have been issued is prejudicial to the interest of the company does not arise. xix) The company has not issued any debentures hence the relevant clause is not applicable. xx) The company has not raised monies by public issues during the year, hence the question of disclosure and verification of the end use of such monies does not arise. xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year. For B. SINGHAL & CO. Chartered Accountants Firm Regn No 312197E B.P. KHANDELWAL Partner Membership No. : 061382 46, B.B. Ganguly Street Koikata - 700 012 Dated: the 31st day of May, 2010