watson software ltd Auditors report

WATSON SOFTWARE LIMITED ANNUAL REPORT 2006-2007 AUDITORS REPORT To The Members of WATSON SOFTWARE LIMITED 1) We have audited the attached Balance Sheet Of WATSON SOFTWARE LIMITED as at 31st March, 2007 and also the annexed Profit and Loss Account of the Company for the year ended on that date. These financial statements are the responsibility of the companys management. Our responsibility is the express an opinion on these financial statement based On Our Audit, 2) 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 misstatements. An audit also includes examining, on the test basis, evidence supporting the amounts and disclosures in financial statements. All audit also includes assessing the accounting principles used and significant estimates made by managements, as well as evaluating the over all financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. 3) As required by the Companies (Auditors Report) Order, 2003 (CAR0, 2003), issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the annexure to a Statement on the matters specified in paragraph 4 & 5 of the said order; 4) Further to our comments an Annexure referred to in paragraph 3 above, we report that; 1. We have obtain all the information acid explanation, which to the best of our knowledge and belief were necessary for the purpose of our audit; 2. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of the Books of the Company. 3. The Balance Sheet, Profit and Loss Account dealt with by the report are in agreements with the Books of Account of the Company. 4. In our opinion, the Balance Sheet, the Profit & Loss Account dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956, to the extent applicable. 5. According to information and explanation given to us from the Directors as on 1st March, 2007, and taken on record by the Board of Directors, we are not in a position to verify that none of the Directors is disqualified as on 31st March, 2007 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. 6. In our opinion and to the best of our information and according to the explanation given to us, the said Accounts, subject to note no. 7 relating to dispute with Punjab National Bank (amount not ascertainable) and Note No. 1(d) relating to non provision of depreciation on fixed assets together with other notes thereon attached there to give in the prescribed manner 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 principal generally accepted in India: i. In the case of Balance Sheet, of the state of the affairs of the Company as at 31st March 2007, ii. In the case of Profit and Loss Account, of the loss for the year ended on that date, iii. In the case of Cash Flow statement of the cash Flow for the year ended on that date. FOR P.R. AGARWAL & AWASTHI CHARTERED ACCOUNTANTS (PAWAN AGARWAL) Partner M. No. 34147 Place: Mumbai Date : 11.07.2007 ANNEXURE TO THE AUDITORS REPORT: WATSON SOFTWARE LIMITED REFERRED TO IN PARAGRAPH 3 OF THE OUR REPORT OF EVEN DATE: 1. In Respect of its fixed Assets: As informed by the management, the properties and Fixed Assets have been attached by the Debt Recovery Tribunal - II, Mumbai and no physical verification could be done at the year end. The Fixed Assets are also in the custody of Recovery officer of Debt Recovery Tribunal - II, Mumbai. The company has not provided any depreciation oil fixed assets. 2. In Respects of inventories: The inventories have not been physically verified by the management during the year and at the close of the year, due to attachment by DRT - II, Mumbai. 3. a) The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the resister maintained under section 301 of the Companies Act, 1956. The Company had granted an unsecured loan to a company listed in the register maintained under section 301 of the Companies Act, 1956. b) In our opinion and according to the information and explanation given to us, the rate of interest, whichever applicable and other terms and condition 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 during the year. In respect of the other party, a wholly-owned subsidiary of the company, the loan is interest free and repayable on demand. In respect of loans taken by the Company, no interest has been paid and the principal amount is repayable on demand. d) The company has not taken any unsecured loan except an amount of Rs.26,19,798/- being sales tax deferred loan from Govt. of Maharashtra. In respect of loan given by the company, these are repayable on demand and, therefore; the question of overdue amount does not arise. 4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedure commensurate with the size of the company and the nature if its business with regard to the purchase of stores, raw materials including components, plant & machinery, equipments and similar assets & purchase of goods and for the sale of goods. 5. In respect of transaction covered under Section 301 of the Companies Act, 1956. (a) Based on the audit procedures applied by us and according to the information and explanation provided by managements, we are of the opinion that there was no transaction that needed to be entered into the register under section 301 the Companies Act, 1956. (b) According to the information and explanation given to us, there was no occurrence of transaction attracting provisions of section 301 of the Companies Act, 1956. 6) The Company has not accepted any deposits from the public; hence question of complying with the provision of section 58A and 58AA of the companies Act, 1956 and Rules made there under does not arise. 7) In our opinion the internal audit system of the company is commensurate with the size of the company and nature of its business. 8) The Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the Company. 9) In respect of statutory dues: a. According to the information made available to us all material statutory dues have been regularly deposited during the year with be appropriate authorities. b. According to the records of company, as far as Sales Tax, Income Tax, Wealth Tax, excise duty and Cess which have not been deposited on account of disputes, no information available because the Corporate Office and Registered office are attached by DRT - II Mumbai. 10. The Company has no accumulated losses. 11. There are no outstanding dues to any Institution or Bank except the claim of Punjab National Bank which is under dispute. 12. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debenture and other securities. 13. The Company is not a chit fund, Nidhi, mutual benefit fund or a society. 14. During the year, the company does not have any transaction is respect of dealing and trading in shares, securities, debentures and other investment. All shares, debentures and other securities held as investments by the company in its own name. 15. According to the information and explanation given to us, the company has not given any guarantee for loans taken by other from bank or financial institution. 16. In our opinion and according to the information and explanation given to us, no term loans were acquired during the year by the company. 17. According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on Short-term basis lave been used for long-term investments by the Company. 18. The Company has not made preferential allotments of shares during the year. 19. During the year covered by our audit report the Company has not issued any secured debentures. 20. The Company has not raised any money by public issues during the year covered by our report. 21. During the course of our examination of the books of accounts and record of the company carried out in accordance with Generally Accepted Auditing Practices, in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year nor have we been informed of any such case by the Management. FOR P.R. AGARWAL & AWASTHI CHARTERED ACCOUNTANTS (PAWAN AGARWAL) Partner M. No. 34147 Place: Mumbai Date : 11.07.2007