database finance ltd Auditors report

DATABASE FINANCE LIMITED ANNUAL REPORT 2003-2004 AUDITORS REPORT To, The Members of, Database Finance Ltd. We have audited the attached Balance Sheet of M/s. Database Finance Ltd. as at 31st July, 2004 and the Profit and Loss Account 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. 1. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 2. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of subsection (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. 3. 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 purpose of our audit. b) In our opinion, proper books of accounts, as required by law, have been kept by the Company, so far as, it appears from our examination of these 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 dealt with by this report comply with the mandatory Accounting Standard referred in sub section (3C) of section 211 of the Companies Act, 1956. e) We are unable to comment as we have not received written representation, from the Directors of the company, as on 31st July, 2004, regarding disqualification as a directors of the company in terms of clause (g) of sub-section (1) of section 274 of the Companies Act. 1956. In our opinion 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 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 31st July, 2004 and, (ii) In the case of the Profit & Loss Account of the "Profit" of the Company for the Year ended on that date. (iii) In the case of cash flow statement of the cash flows for the year ended on that date. FOR M. A. DARJI & CO. Chartered Accountants Place : Mumbai Date : 23rd September 2004 1. In respect of its fixed assets a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the bases of available information. b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, 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 physical verification. c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected. 2. In respect of its inventories : a. As explained to us, inventories have been physically verified by the management at regular intervals during the year. b. In our opinion and according to the information and explanation and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records. 3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. a. The Company has not granted loans and has not taken loans from the parties covered in the register maintained u/s. 301 of the Companies Act, 1956. b. In our opinion and according applicable and other terms and conditions are not prima facie prejudicial to the interest of the Company. c. In respect of loans granted by the Company to one party, the amount has been repaid of loans granted by the Company to one party, the amount has been repaid during the year. In respect of the other party, a wholly owned subsidiary of the Company, the loan is interest free and is repayable on demand. In respect of loans taken by the Company,, the interest payments are regular and the principal amount is repayable on demand. d. There is no overdue amount in respect of loans taken by the Company. In respect of loans given by the Company, these are repayable on demand and therefore the question of overdue amounts does not arise. 4. 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 the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls. 5. In respect of transactions covered under Section 301 of the Companies Act, 1956. a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in 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, there are no transactions in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act 1956 aggregating during the year to Rs. 500000/- or more in respect of any party. 6. The Company has not accepted any deposits from the public. 7. In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business. 8. The Central Government has prescribed maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made maintained. We have not, however, made a detailed examination of the same. 9. In respect of statutory dues a. According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st July 2004 for a period of more than six months from the date of becoming payable. b. There are no undisputed statutory dues except Income tax liability for A. Y. 2001-02, Rs. 13310 for which matter is pending with the C.I.T Appeals. 10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year. 11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders. 12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/society. Thereof, clause-4 (xiii) of the Companies (Auditors Report) Order 2003 is not applicable to the Company. 14. The Company has maintained proper records of transactions and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name. 15. The Company has given guarantees for loans taken by other from banks or financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima-facie prejudicial to the interests of the Company. 16. The Company has not raised any new term loans during the year. The term loans outstanding at the beginning of the year were applied for the purposes for which they were raised. 17. 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 not utilized any amount from short term sources towards repayment of long-term borrowings and acquisition of fixed assets. 18. During the year, 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. 19. The Company has not issued debentures and hence the question of securities does not arise. 20. The Company has not raised any money by way of public issue during the year. 21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstaked. FOR M. A. DARJI & CO. Chartered Accountants Place : Mumbai Date : 23rd September