1. We have audited the attached balance sheet of Nucleus Netsoft And
GIS (India) Limited, (the company), as at March 31, 2008, the profit
and loss account and also the Cash Flow Statement for the year ended on
that date annexed thereto. 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.
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
3. As required by the Companies (Auditors Report) Order, 2003 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
4. Further to our comments in the Annexure referred to above, we
(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
(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
(iii) The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
(iv) In our opinion, the balance sheet, 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;
(v) On the basis of written representations received from directors as
on March 31, 2008 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2008
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 read with the
significant accounting policies and 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:
(a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2008;
(b) in the case of the profit and loss account, of the profit for the
year ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date
Annexure referred to in paragraph 3 of the Auditors Report on the
Nucleus Netsoft And GIS (India) Limited
In our opinion and according to the information and explanations given
to us, the nature of the companys business / activities during the
year is such that clauses viii, xiii, xviii and xix are not applicable
to the company.
1. 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 Company has a regular programme of physical verification of its
fixed assets under which all fixed assets are verified in a phased
manner over a period of 3 years. In our opinion, this periodicity of
physical verification is reasonable having regard to the size of the
Company and the nature of its assets. Discrepancies noticed on such
verification have been properly dealt with in the books of accounts.
c. Fixed assets disposed of during the year were not substantial, and
therefore, do not affect the going concern assumption.
2. In respect of its 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
3. The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, firms or other parties covered 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 adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services and we have not observed any continuing failure to correct
major weaknesses in such internal controls.
5. In respect of contracts or arrangements entered in the register
maintained in pursuance of section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanation given to us:
a. The particulars of contracts or arrangements referred to section
301 that needed to be entered into the register, maintained under the
said section have been so entered.
b. According to the information and explanations given to us, where
each of such transactions, is in excess of Rs 5 lakhs in respect of any
party, the transactions have been made at prices which are prima facie,
reasonable having regard to the prevailing market prices at the
relevant time, except that in respect of sale of services, no
comparison of prices could be made available to us as the Company
informed us that there are no prevailing market prices/ alternate
sources of supply.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from public
within the meaning of Section 58A and 58AA or any other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of
Deposit) Rules, 1975 with regard to deposits accepted from the public.
7. In our opinion, the internal audit function carried out during the
year by a firm of Chartered Accountants appointed by the management
have been commensurate with the size of the Company and the nature of
8. In respect of statutory dues:
a. According to the information and explanations given to us, the
Company has been regular in depositing undisputed statutory dues,
including Provident Fund, Employee State Insurance, Income Tax, Service
Tax and any other material statutory dues with the appropriate
authorities during the year. There were no dues payable in respect of
Investors Education and protection Fund, Sales Tax, wealth Tax, Customs
Duty, Excise Duty and Cess. Further, since the Central Government has
till date not prescribed the amount of cess payable under section 441A
of the Companies Act, 1956, we are not in a position to comment upon
the regularity or otherwise of the company in depositing the same.
b. According to the information and explanations given to us, there
are no disputed dues payable in respect of Income Tax, sales Tax,
Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess. Details
of disputed dues in respect of Foreign Exchange Regulation Act and
Service Tax which have not been deposited as on March 31, 2008 on
account of any dispute are given below:
Name of the Nature of Dues Amount (Rs.) Statute
Foreign Exchange Contravention of 10,000,000
Regulation Act, 1973 FERA regulations
Service Tax Service tax on 6,798,386
Period to which Forum where the
the amount relates dispute is pending
1994-95 Appellate Tribunal
1996-2000 Commissioner of
9. The Company does not have any accumulated losses at the end of the
year. The Company has not incurred cash losses during the financial
year covered by the audit and the immediately preceding financial year.
10. In our opinion and according to the information and explanations
given to us, the company has not defaulted in the repayment of dues to
banks. The company has not borrowed funds from financial institutions
or by way of debentures.
11. In our opinion the Company has not granted any loans and advances
on the basis of security by way of pledge of shares, debentures and
12. Based on our examination of the records and evaluation of the
related internal controls, the Company has maintained proper records of
transactions and contracts in respect of its dealing in shares,
securities, debentures and other investments and timely entries have
been made therein. The aforesaid shares, securities, debentures and
other investments have been held by the Company in its own name, except
to the extent of the exemption granted under Section 49 of the
Companies Act, 1956.
13. In our opinion and 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.
14. To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, term loans
availed by the company were, prima facie, applied by the Company during
the year for the purpose for which the loans were obtained, other than
temporary deployment pending allocation.
15. According to the information and explanations given to us and on
an overall examination of the balance sheet of the company, funds
raised on short-term basis, prima facie, not been used during the year
for long-term investment.
16. The Company has not raised any money by way of public issues
during the year.
17. 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
was noticed or reported during the year.
For Deloitte Haskins & Sells
Mumbai, June 20, 2008 Membership No. 038568