Cranes Software International

1.  We have audited the attached Balance Sheet M/s. Cranes Software
 International Limited, as at 31st March 2009, 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 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 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 of India in terms of
 sub-section (4A) of section 227 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.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 i) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 ii) 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
 those books;
 
 iii) 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;
 
 iv) 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;
 
 v) On the basis of written representations received from the Directors,
 as on 31st March 2009 and taken on record by the Board of Directors, we
 report that none of the Directors is disqualified as on 31st March 2009
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of section 274 of the Companies Act, 1956;
 
 vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts 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:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March 2009;
 
 (b) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 ANNEXURE
 
 (Referred to in paragraph 3 of our report of even date)
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) All the Assets have not been physically verified by the management
 during the year but there is a regular programme of verification which,
 in our opinion, is reasonable having regard to the size of the company
 and the nature of its assets. No material discrepancies were noticed on
 such verification.
 
 (c) The Company has not disposed off substantial part of fixed assets
 during the year and therefore do not affect the going concern
 assumption.
 
 (ii) (a) The inventory has been physically verified during the year by
 the management. In our opinion, the frequency of verification is
 reasonable.
 
 (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 are reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) The company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records were not material.
 
 (iii) The Company has not granted/taken any loans, secured or
 unsecured, to/from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956. In
 view of the above, clause 4 (iii) (b), (c), (d), (f) and (g) of the
 said order are not applicable.
 
 (iv) 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 purchases of inventory, fixed assets and with
 regard to the sale of goods and services. During the course of our
 audit, we have not observed any continuing failure to correct major
 weaknesses in the internal control system.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that the particulars of all contracts and
 arrangements referred to in section 301 of the Companies Act 1956 have
 been entered in the register required to be maintained under that
 section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the contracts and arrangements entered in the register
 maintained under section 301 of the Companies Act, 1956 have been made
 at prices which are reasonable having regard to the prevailing market
 prices at the relevant time.
 
 (vi) The company has not accepted any deposit from the public and as
 such the provisions of clause 4(vi) of the said Order are not
 applicable.
 
 (vii) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) The Central Government has not prescribed the maintenance of
 cost records as required under clause (d) of sub-section (1) of section
 209 of the Companies Act, 1956.
 
 (ix) (a) According to the information and explanations given to us,
 undisputed statutory dues including, Provident Fund, Investor Education
 and Protection Fund, Employees’ state Insurance, Income Tax, Sales Tax,
 Service Tax, Wealth Tax, Customs duty and Cess have generally been
 regularly deposited by the company with the appropriate authorities.
 
 (b) According to the information and explanations given to us, details
 of dues of Sales tax, Service tax, Income tax, Customs duty, Wealth
 tax, and Cess, which have not been deposited on account of any dispute
 are given below
 
                                                        (Rs. in Million)
 
 Particulars           Period to which      Forum where       Amount
                       amount relates    dispute is pending
 
 Income Tax        2004-05 to 2007-08  Commmissioner of 
                                         Income Tax,         114.20
                                         Appeals - IV
 Income Tax        2005-06 to 2006-07  Commmissioner of 
                                         Income Tax,         366.20
                                         Appeals - I
 
 Sales Tax         2005-06 to 2007-08  Commissioner of 
                                         Commercial
                                         Taxes, Appeals       10.42
 
 (x) The Company does not have accumulated losses, as at March 31,
 2009.The Company has not incurred cash losses in the financial year
 covered by our audit and in the immediately preceding financial year.
 
 (xi) The Company has not defaulted in repayment of dues to any
 financial institution and banks wherever applicable. There are no
 debenture holders as at the balance sheet date.
 
 (xii) According to information and explanations given to us, the
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion and according to the information and explanation
 given to us, the Company is not a chit fund or a Nidhi /mutual benefit
 fund/ society.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the Company is not dealing in or trading in shares,
 securities, debentures and other investments.
 
 (xv) In our opinion and according to information and explanations given
 to us, and as per our examination of relevant records, the terms and
 conditions on which guarantees are given are not prejudicial to the
 interest of the Company.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purpose for which
 they were raised.
 
 (xvii) According to the information and explanations 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 have been used for long-term
 investment.
 
 (xviii) During the year the 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.
 
 (xix) During the year, the Company has not raised any funds by issue of
 debentures.
 
 (xx) During the year covered by our audit report, the company has not
 raised any money by way of public issue.
 
 (xxi) During the course of our examination of the books of account
 carried out in accordance with the generally accepted auditing
 practices in India and according to the information and explanations
 given to us, no fraud on or by the Company, has been noticed or
 reported during the year.
 
 
                                         For S.JANARDHAN & ASSOCIATES 
                                                Chartered Accountants
 
                                                  Balakrishna S. Bhat
 Bangalore                                                    Partner
 June 30, 2009                                   Membership No.202976