We have audited the attached Balance Sheet of CAUVERY SOFTWARE
ENGINEERING SYSTEMS LIMITED as at 31st August, 2006 and also the
Profit and Loss Account for the year ended on that date annexed thereto
and the Cash Flow Statement for the year ended on that date. 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.
We conducted our audit in accordance with the 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 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.
We report as follows:
1. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph 1
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of the
c) The Balance Sheet and Profit and Loss Account dealt with by this
report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit and Loss Account & Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
e) On the basis of written representation received from the Directors
as on 31st August, 2006, and taken on record by the Board of Directors,
we report that none of the directors are disqualified as on 31s1
August, 2006 from being appointed as Directors in terms of Clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956.
f) In our opinion and to the beast of our information and according to
the explanations given to us, the said accounts read together with the
Companys Accounting policies and notes thereto, 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
as on 31 August, 2006 (ii) In the case of the Profit and Loss Account,
of the profit of the Company
for the year ended on that date.
Annexure to Auditors Report (Referred to in paragraph 1 of our report
of even date)
1 (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets on the basis of information available.
(b) According to the information and explanation given 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 the assets. No
material discrepancies were noticed on such verification.
(c) The Company has not disposed off any substantial/ major part of fixed
2 None of the Fixed Assets have revalued during the year.
3 As explained to us, the stock of shares, spare parts, raw materials
and finished goods have been physically verified by the management at
regular intervals during the year. In pur opinion the frequency of such
verification is reasonable having regard to the size of the company and
nature of its business.
4 In our opinion and according to the information and explanations
given to us, the procedures of .physical verification of stocks
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
5 As explained to us there were no material discrepancies noticed on
physical of the stocks of raw materials, stores and spare parts and
finished goods, having regard to the size of the operations of the
6 The valuation of stocks is fair and proper and is in accordance with
the normally accepted accounting principles and is on the same basis as
in the preceding year.
7 The Company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties as listed in the
register maintained under Section 301 of the Companies Act, 1956.
8 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 with regard to purchase of fixed assets and for the sale of
9 In our opinion and according to the information and explanations
given to us, there are no transactions during the year exceeding in
value Rs. 5 lakhs in respect of any party ,which need to be entered in
the register maintained under section 301 of the companies act,1956.
10 I n our opinion and according to the information and explanations
given to us, the company has not accepted deposits from the public and
therefore, the provision of Section 58A of the Companies Act, 1956 and
rules there under are not applicable to the company.
11 In our opinion the company has an internal audit system commensurate
with it size and the nature of its business.
12 Maintenance of cost records under Section 209(1) (d) of the
Companies Act, 1956 are applicable to the company.
13 Provisions relating to Provident Fund and Employees State Insurance
are not applicable to the company.
14 No loans have been taken from Banks / Financial Institutions during
the year under audit.
15 The provisions of any Special Statute applicable to a chit fund,
nidhi or Mutual fund benefit/societies are not applicable to the
16 According to the information and explanations given to us, the
company has not granted any loans and advance on the basis of security
by way of pledge of shares, debentures and other securities.
17 According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
Banks and Financial Institutions.
18 On the basis of an overall examination of the financial statements
of the company, there are no funds raised on a short term basis which
have been used for long term investment and vice versa.
19 The company has not made any preferential allotment of shares during
the year to any party.
20 The company has not raised any money by public Issues during the
21 To the best of our knowledge and belief and according to the
information and explanation given to us, no fraud on or by the company
has been noticed or reported during the year.
For M/s S S Trimbakkar & Co.
S S Trimbakkar