Compucom Software

1.  We have audited the attached Balance Sheet of COMPUCOM SOFTWARE
 LIMITED as at March 31, 2009, 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, Profit and 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, the Profit and Loss Account and
 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, 2009 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, 2009, 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, 2009;
 
 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 AUDITOR’S REPORT OF EVEN
 DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009 OF
 COMPUCOM SOFTWARE LIMITED
 
 As required by the Companies (Auditor’s Report) Order, 2003 and the
 Companies (Auditor’s 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,
 during the year, the Company has granted an unsecured loan of Rs.
 60,76,440/- (outstanding balance as on 31st March, 2009 - Rs.
 1,42,50,416/-) to companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956.
 
 b) According to the information and explanations given to us, during
 the year, the Company has taken an unsecured loan of Rs. 12,95,17,719/-
 (outstanding balance as on 31st March, 2009 - Rs. 9,13,21,956/-) from
 companies, firms or other parties listed in the register maintained
 under section 301 of the Companies Act, 1956.
 
 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.  On the basis of audit procedures performed by us, and according to
 the information, explanations and representations given to us, all the
 transactions in which directors were interested, as contemplated under
 Section 297 and Section 299 of the Companies Act, 1956, and which were
 required to be entered in the register maintained under section 301 of
 the said Act have been entered accordingly.
 
 6.  Transactions that need to be entered in the register maintained
 under section 301 of the Companies Act, 1956:
 
 a) Based upon the audit procedures applied by us and according to the
 information and explanations given to us, we are of the opinion that
 the particulars of contracts or arrangements referred to in section 301
 of the Companies Act, 1956, have been entered in the register
 maintained under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of Rs. 500,000 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.
 
 7.  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 National Company Law Tribunal, or Reserve
 Bank of India, or any Court, or any other Tribunal has passed no order.
 
 8.  In our opinion, the Company has an internal audit system
 commensurate with the size of the Company and nature of its business.
 
 9.  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.
 
 10.  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) We have been informed that there are no disputed dues which have
 remained outstanding as at the end of the financial year, for a period
 of more than six months from the date they became payable.
 
 11.  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.
 
 12.  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.
 
 13.  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.
 
 14.  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.
 
 15.  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.
 
 16.  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.
 
 17.  In our opinion and according to information and explanations given
 to us, the Company has taken a term loan of Rs.  30,89,60,890.80
 (outstanding balance as on 31st March, 2009 - Rs. 28,92,86,862/-) from
 any bank or financial institutions during the year under review.
 
 18.  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.
 
 19.  The Company has not made any preferential allotment of shares to
 any parties or companies covered in the register maintained under
 section 301 of the Companies Act, 1956.
 
 20.  The Company did not issue any debentures during the year.
 
 21.  The Company has not raised any money by a public issue, during the
 year.
 
 22.  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.
 
 Looking to the nature of activities being carried on, at present, by
 the Company and also considering the nature of the matters referred to
 in the various clauses of the Companies (Auditors’ Report) Order, 2003,
 and the Companies (Auditors’ Report) (Amendment) Order, 2004, Clauses
 (iii)(b), (iii)(c), (iii)(d), (iii)(f), (iii)(g), (v)(b) and (xiii) of
 paragraph 4 of the aforesaid Order, are, in our opinion, not applicable
 to the Company.
 
 
 For and on behalf of
 S. MISRA & ASSOCIATES
 Chartered Accountants
 
 SACHINDRA MISRA
 Partner
 Membership No. 73776
 
 Jaipur, 30th July, 2009