1. We have audited the attached Balance Sheet of COMPUTECH
INTERNATIONAL LIMITED as at 31st March, 2011 and also the Profit and
Loss Account and the Cash Flow Statement 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 have 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 (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we annex hereto a statement
on the matter specified in paragraphs 4 and 5 of the said Order on the
basis of such check as we considered appropriate.
4. We further 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
b. In our opinion proper books of accounts as required by the
Companies Act, 1956 have been kept by the company so far as appears
from our examination of those books.
c. The Balance Sheet and Profit & 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, Profit & Loss Account and Cash
Flow Statement comply with the requirements of the Accounting Standards
referred to in Sub-section (3C) of Section 211 of the Companies Act,
1956 (as amended).
e. Based on representation letter received from directors and placed
before the Board of Directors, in our opinion none of the directors is
disqualified from being appointed as director as referred in section
274(l)(g) of the Companies Act, 1956 (as amended).
5. In our opinion and to the best of our information and according to
explanations given to us, the said accounts, subject to; .
a) Note No B (3 & 4) non production of confirmations from Sundry
Debtors, Sundry Creditors and other parties, and non production of Bank
Statements for our verification, if any differences can not be
b) Note No B (7) Total setoff of import payables with export debtors of
Rs.l218165740/-(equivalent to USD 37553 millions), for which necessary
application to RBI under exchange law is to be made by the company and
pending approval from Reserve Bank of India , and non provision of
exchange gain/loss for doubtful debts (amount unascertained).
Further read with other 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 31st March 2011;
I) In the case of the Profit and Loss Account, of the Loss of the
Company for the year ended on that date, and
iii) In the case of the Cash Flow Statement, of the rash flows of the
Company for the year ended on that date.
i) In respect of fixed assets:
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets;
b) The Fixed assets of the Company are physically verified by the
management according to a phased program designed to cover all the
items over a period of three years which, in our opinion, is reasonable
having regard to the size of the company and the nature of its
business. Pursuant to such program, a physical verification was carried
out during the year and no material discrepancies between the book
records and the physical inventory have been noticed.
c) The Company has not disposed off substantial part of its fixed
ii) In respect of inventories
a) As explained to us, inventories were physically verified during the
year by the Management at reasonable intervals.
b) In our opinion and according to the' information and explanations
given to us, the procedures of physical . verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us the company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
iii) a) According to the information & explanations given to us, the
company has not granted any loan to any company, firm or other parties
covered in the register maintained under section 301 of the Companies
Hence the provisions of the clauses 4(iii) (b), (c) and (d) of the
Order are not applicable to the company.
e) The company had taken unsecured loan of Rs. 5 lacs from a director
covered under section 301 of the Companies Act,. The maximum amount of
such loan outstanding during the year and closing balance as on 31st
March 2011 was Rs. 5 lacs & Rs. 5 lacs respectively.
f) In our opinion the rate of interest and other terms and conditions
of the loans taken by the Company are prima facie, not prejudicial to
the interest of the company.
g) The company is generally regular in paying interest and principal
amount of the above stated loans.
iv) In our opinion there is adequate internal control system
commensurate with the size of the Company and the nature of its
business for the purchase of software, hardware, fixed assets and for
sale of goods and services. To the best of our knowledge and belief
there is no major weakness(s) in internal control system.
v) a) To the best of our knowledge and belief, particulars of contracts
or arrangements referred to in section 301 of the Companies Act have
been entered in the register required to be maintained under that
b) In our opinion transactions made in pursuance of above-mentioned
contracts or arrangements have been made at reasonable prices.
vi) According to the information and explanations given to us, the
Company has not accepted deposits from the public as such provisions of
Section 58A and 58AA or any other relevant provisions of the Companies
Act, 1956 and hence the relevant clause is not applicable.
vii) As explained to us the Company has its own Internal audit system.
In our opinion, the internal audit system of the company is
commensurate with its size and nature of its business.
viii) According to the information and explanations given to us,
maintenance of cost records has not been prescribed by the Central
Government under clause (d) of sub sec.(i) of section 209 of the
Companies Act, 1956.
ix) According to the information and explanations given to us in
respect of statutory and other dues:
a) The Company has generally been regular in depositing undisputed
statutory dues including provident fund, Employees state insurance,
Investor Education And Protection Fund, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom duty, Excise duty, Cess and any other
statutory dues with appropriate authorities during the year and no
amount dues for more than six months from the date they become payable
as on 31.03.2011.
b) The following disputed statutory liabilities have not been deposited
in view of pending appeals.
Statue Nature Forum Amount Related
(Rs. In Lacs) Assessment Year
Tax Act, Income Tax Commissioner
of Income 8.88 2005-06
1961 Tax( Appeal)
Tax Act, Sales Tax Commercial Tax
Officer 13.05 2001-02
Tax Act, Income Tax Appletate
Tribunal of 85.29 2001-02
1961 Income Tax
Tax Act, Income Tax Appletate
Tribunal of 91.93 2004-05
1961 Income Tax
x) The Company have accumulated losses exceeding fifty percent of its
net worth as at the end of the financial year and the Company has
incurred cash losses in current financial year and in the immediately
preceding financial year.
xi) Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
company has not defaulted in the repayment of the dues to financial
institutions except from Life Insurance of Company and debenture
holders. The total defaulted amount to Banks as on 31st March, 2011 Rs.
3843.57 lacs (included interest).
xii) According to the information and explanations given to us, the
company has not granted loans or advances on the basis of securities by
way of pledge of shares, debentures or other securities.
xiii) The Company is not a Chit Fund/ Nidhi /Mutual Benefits
xiv) We have broadly reviewed the books of accounts and records
maintained by the company and state that prima- facie, proper records
have been maintained of the transactions and contracts relating to
purchase/sale of investments and timely entries have been made therein.
All the investments have been held by the company in its own name.
xv) 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
xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
company were, prima facie, applied by the company during the year for
the purposes for which the loans were obtained.
xvii) According to the information and explanations given to us, on an
overall basis funds raised on short term basis, prima facie, has not
been used during the year for long term investments and vice versa.
xviii) During the year company has not made any preferential allotment
of shares to parties and companies covered in the register maintained
under section 301 of the Companies Act, 1956.Hence the question whether
the price at which the shares have been issued is prejudicial to the
interest of the company does not arise.
xix) The company has not issued any debentures hence the relevant
clause is not applicable.
xx) The company has not raised monies by public issues during the year,
hence the question of disclosure and verification of the end use of
such monies does not arise.
xxi) To best of our knowledge and belief and according to the
information and explanations given to us no fraud on or by the company
was noticed or reported during the year.
For B. SINGHAL & CO.
46,B.B.Ganguly Street Firm Regn No 312197E
Dated : the 30th day of May, 2011
B. P. KHANDELWAL
Membership No.: 061382