Datapro Information Technology Ltd Auditors Report.

DATAPRO INFORMATION TECHNOLOGY LIMITED ANNUAL REPORT 2000-2001 AUDITORS REPORT To, The Members Datapro Information Technology Limited Pune, We have audited the attached Balance Sheet of Datapro Information Technology Limited as at 31st March, 2001 and the Profit & Loss Account of the Company for the year ended on that date, annexed thereto and report that: 1. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of section 227(4A) of the Companies Act, 1956, we enclose in an annexure to this report a statement on the matters specified in paragraphs 4 & 5 of the said order. 2. Further to our comments in the annexure referred to in paragraph (1) above, we report that: i) We have obtained all the information & explanation which to best of our knowledge & belief were necessary for the purpose of our audit; ii) In our opinion, proper books of account, as required by law, has been kept by the company so far, as appears from our examinations of the books. iii) The Balance Sheet & the Profit & Loss Account dealt with by this report are in agreement with the books of accounts. iv) In our opinion, the Profit & Loss Account and the Balance Sheet comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (including any Amendment thereto) except: a) AS-15 on Accounting for Retirement Benefits. b) AS-11 on Accounting for the effect of changes in Foreign Exchange Rates [refer notes 2 (f)] v) As per the written submission given by the directors and taken on records by the board, none of the directors of the Company are disqualified from being appointed as director of the Company as on 31st March 2001 pursuant to the provisions of Section 274(1)(g). vi) The following are the comments /observations which have adverse effect on the functioning of the company: a) The Gratuity and Leave encashment has been provided for on cash basis (refer Note 2e). b) Balances of Debtors & Creditors are in the process of reconciliation and Confirmation. c)Term loan balance of Rs. 37,43,889/-, from Sangli Bank, is subject to reconciliation & confirmation [refer note 3 (xv)]. 3. In our onion 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 notes appearing to Schedule 13, give the information required by the Companies Act 1956, in the manner so required and give a true & fair view: i) In the case of Balance Sheet of the State of affairs of the Company as at 31st March, 2001. ii) In the case of Profit & Loss Accounts, of the profit of the Company for the year ended on that date. for RAJESH KUKREJA & ASSOCIATES Chartered Accountants Place: Mumbai Sanjeev Mahajan Date: 11.08.2001 (Partner) ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph (1) of our report of even date on the accounts of Datapro Information Technology Ltd.) 1) The Company is in the process of updating proper records of Fixed Assets including capital work in progress showing full particulars including quantitative details & situations of Fixed Assets. Further we are informed that the management during the current year did not carry out the physical verification of these fixed assets. We have also not physically verified the fixed assets. 2) None of the Fixed Assets have been revalud during the currant period. 3) Physical verification of stocks has been carried out by the management at a reasonable intervals. 4) The procedure followed for physical verification, by the management is reasonable and adequate in relation to the size of the company and the nature of its business. 5) The discrepancies noticed on physical verification of stocks as compared to book records were not material and the same has been properly dealt with in the books of accounts. 6) In our opinion and on the basis of our examination of the stock records, the valuation of stocks is fair end proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year except that no provision has been made for diminution in the value of the stock that may occur due to market factors and obsolescence. 7) The Company has taken unsecured loans from Companies, firms or other parties listed in the register required to be maintained under section 301 arid from the companies under the same management as defined under section 370(1 B) of the Companies Act, 1956, the terms and conditions of which are not prima facie prejudicial to the interests of the Company. 8) The Company has not granted any loans, secured or unsecured to Companies, and other concern listed in register required to be maintained under section 301 of the Companies Act, 1956,and /or to Companies under the same management as defined under section 370(1 B) of the Companies Act. 9) The Company has given interest free loans to employees. The employees are regular in repayment of the principal amounts. The Company has not given any, other loans or advances except deposits with govt. bodies and premises deposits. 10) In our opinion and according to the information and explanation given to us, there is an adequate internal control procedures commensurate with the size of the company and the nature of its business, for the purchase of software, hardware, including components and other assets and for the sale of goods. But the internal control procedure needs to be further strengthened in relation with the size of the company and nature of the business, However in our opinion the internal control on the purchase of Fixed Assets needs to be further strengthened. 11) In our opinion and according to the information and explanation given to us, the transactions if any of purchase of goods A material and the sale of goods materials and services, made in pursuance of contracts or arrangements entered in the register required to be maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rs. 50,000 or more in respect of each party, have been made at prices which are reasonable having regard to the prevailing market prices as per the certification of management. 12) According to information & explanations given to us the company has not determined any obsolete stock. 13) The company has not accepted, deposits from the public during year. 14) The Company have an internal audit system which is required due to the fact that the Paid up Capital of the Company exceeds Rs. 25 Lac. However the same needed to be strengthened further considering the nature and size of the business of the Company. 15) We are informed that the Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, for the Company. 16) As explained to us the Company does not generate any re-saleable by- product or scrap, owing to the nature of its business. 17) According to the records available to us, the Company has defaulted in payment of, some, of the statutory dues such as Provident Fund Contribution, Employees State Insurance contribution, Profession Tax etc aggregating to Rs.3,43,098/- for the year under review. 18) According to the information & explanation given to us, there were no undisputed amounts payable in respect of Income tax, Wealth tax, Custom duty, Excise duty and Sales tax, outstanding as at the last day of the financial year for the period of more than six months from the date they became payable. 19) During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices and according to the explanations given to us, we have not come across any personal expenses other than expenses under contractual obligations with the Company employees and / or generally accepted business practices, which have been charged to the revenue account as per certification given by the management. 20) The Company is not a sick industrial company within the meaning of clause (o) of sub-section (1) of section 3 of the sick industrial companies (Special Provision) Act 1985 (1 of 1986) so a reference is not required to be made to the Board of industrial and Financial Reconstruction under section 15 of that Act {Paragraph 4 (A) (xx)}. 21. In respect of operations relating to services rendered by the Company. i) The nature of the services rendered is such that it does not involve consumption of materials ii) The Company is in the process of implementing a system of allocating man-hours utilised to the relative jobs of software consultancy commensurate with the size and nature of its business. For RAJESH KUKREJA & ASSOCIATES Chartered Accountants Sd/- Place: Mumbai Sanjeev Mahajan Date : 11.08.2001 (Partner)