1. We have audited the attached Balance Sheet of COMPUCOM SOFTWARE
LIMITED as at March 31, 2011, the Profit and Loss Account and the Cash
Flow Statement of the Company for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Company''s Management. Our responsibility is to express an opinion on
these financial statements 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 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 and the
Companies (Auditors Report Amendment) Order, 2004 issued by the Central
Government of India in terms of Section 227(4A) of the Companies Act,
1956, we annexed hereto a statement on the matters specified in
paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to 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 account as required by law, have
been kept by the Company so far as appears from our examination of such
books.
c) The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
d) In our opinion, the Balance Sheet, the Profit and Loss Account and
the 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 the written representations received from the
Directors as on March 31, 2011 and taken on record by the Board of
Directors and the information and explanations given to us, none of the
Directors is prima-facie disqualified as at March 31, 2011 from being
appointed as a Director in terms of Clause (g) of Sub-Section (1) of
Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the 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 March 31, 2011;
ii) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date;
iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE REFFERED TO IN PARAGRAPH 2 OF OUR AUDITORS'' REPORT OF EVEN
DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2011 OF
COMPUCOM SOFTWARE LIMITED
As required by the Companies (Auditors'' Report) Order, 2003 and the
Companies (Auditors'' Report) (Amendment) Order, 2004, issued by the
Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we further report that:
1. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) The management on a sample basis during the year has physically
verified the major assets and in our opinion, the frequency of
verification is reasonable. No material discrepancies were noticed on
such verification.
c) There has been no substantial disposal of fixed assets during the
year, so as to affect the going concern status of the Company.
2. The Company does not have any inventories.
3. a) According to the information and explanations given to us, the
Company has granted an unsecured loan to one party covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount outstanding at any time during the year was Rs.
2,31,34,720/- (outstanding balance as on March 31, 2011 is Nil). The
Company has not charged interest on such loan. The terms and conditions
of the unsecured loans so granted are not prima facie prejudicial to
the interest of the Company. There is no irregularity in the repayment
of principal which is as per mutual stipulations.
b) According to the information and explanations given to us the
Company has taken an unsecured loan from three companies listed in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount outstanding at any time during the year was of Rs.
22,11,02,790/- (outstanding balance as on March 31, 2011- Rs.
16,77,37,589/-). The rate of interest and other terms & conditions of
the unsecured loan so taken are prima facie not prejudicial to the
interest of the company. There is no irregularity in interest and
principal repayments as per mutual stipulations.
4. In our opinion and according to the information and explanations
given to us there are generally adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchases of computers and other equipment and for
the sale of software and services. During the course of our audit, we
have not observed any continuing failure to correct major weaknesses in
the internal control.
5. In respect of the contracts or arrangements referred to in 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 need to be entered 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, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in
respect of any party during the year, have been made at prices which
are reasonable, having regard to prevailing market prices at the
relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
within the meaning of Section 58A, 58AA, or any other relevant
provisions of the Companies Act, 1956 and the rules framed there under.
The Company Law Board, or Reserve Bank of India, or any Court, or any
other Tribunal has passed no order.
7. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.
However, in our opinion, the system should be strengthened further so
as to match up with the growth of the Company.
8. According to the information and explanations given to us, the
maintenance of cost records has not been prescribed by the Central
Government under Section 209(1)(d) of the Companies Act, 1956, for any
of the activities of the Company.
9. a) According to records of the Company, it has generally been
regular in depositing undisputed statutory dues, including dues
pertaining to Investor Education and Protection Fund, Employees'' State
Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise
Duty, Cess and any other statutory dues with the appropriate
authorities.
b) Details of dues of Income Tax and Entry Tax which have not been
deposited as at March 31, 2011 on account of disputes are given below :
Particulars Period to which
the Forum where the Dispute
is pending Amount (Rs.)
amount relates
Income Tax A.Y. 2005-06 Commissioner of Income
Tax (Appeals) 13,75,878/-
Income Tax A.Y. 2005-06 Commissioner of Income
Tax (Appeals) 8,50,287/-
Income Tax A.Y. 2008-09 Commissioner of Income
Tax (Appeals) 26,73,470/-
Entry Tax A.Y. 2007-08,
2008-09 Deputy Commissioner
(Appeals) Entry Tax-
34,28,931/
and 2009-10 Penalty-
1,02,87,793/-
Interest-
8,22,950/-
10. The Company has neither accumulated losses at the end of the
Financial Year nor has it incurred cash losses, both, in the Financial
Year under report and the immediately preceding Financial Year.
11. According to the information and explanations given to us and
based on the documents and records produced before us, there has been
no default in repayment of dues to banks. There are no dues to
financial institutions or debenture holders.
12. As explained to us, the Company has not granted any loans or
advances on the basis of security by way of pledge of shares,
debentures or other securities.
13. In our opinion and according to the information and explanations
given to us, the nature of activities of the Company does not attract
any special statute applicable to Chit Fund and Nidhi / Mutual Benefit
Fund / Societies.
14. In respect of the shares, securities, debentures and other
investments dealt or traded by the Company, proper records have been
maintained in respect of the transactions and contracts and timely
entries have been made therein. All the investments are held by the
Company in its own name.
15. 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.
16. The Company has raised new term loans during the year. In our
opinion and according to the information and explanations given to us,
the term loans outstanding at the beginning of the year and those
raised during the year have been 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, the Cash Flow Statement
and other records of the Company, we are of the opinion that, prima
facie short-term funds have not been used for long-term purposes.
18. The Company has made preferential allotment of shares to a Company
covered in the register maintained under Section 301 of the Companies
Act, 1956 and the same is not prejudicial to the interest of the
Company.
19. The Company did not issue any debentures during the year.
20. The Company has not raised any money by a public issue during the
year.
21. According to the information and explanations given to us and to
the best of our knowledge and belief, no fraud on or by the Company,
has been noticed or reported by the Company during the year.
For and on behalf of
5. MISRA & ASSOCIATES
Chartered Accountants
FRN-004972C
CA SACHINDRA MISRA
Partner
Membership No. - 073776
Jaipur, May 27, 2011
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