1. We have audited the attached Balance Sheet of Intense Technologies
Limited (the Company) as at March 31, 2007 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 Companys 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 the 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, 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 account
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 the written representations received from the
Directors, as on March 31, 2007, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
March 31, 2007 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 March 31, 2007
b) in the case of the profit and loss account, of the loss 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 to the Auditors Report
(Referred to in paragraph 3 of our Report of even date on the accounts
of Intense Technologies Limited as at 31st March, 2007)
1. The Company has maintained proper records to show fu[l particulars,
including quantitative details and situation of fixed assets. The
Company has a policy of verifying fixed assets at reasonable intervals.
In terms of the policy, the Company has carried out a physical
verification of fixed assets during the year and. the discrepancies
noted were not material when compared to the books.
2. The fixed assets of the Company have not been revalued during the
3. The Company did not hold any stock of finished goods, stores and
spare parts and raw materials during the year. In view of the
foregoing, the provisions of 4(A)(iii).(iv),(v) and (vi) of the said
order are not applicable.
4. The Company has not taken any loans, secured or unsecured from
companies, firms or other parties listed in the register maintained
under Section 301 of the Companies Act, 1956.As informed to us, there
are no companies under the same management as defined under the then
applicable Section 370( 1B) of the Companies Act, 1956.
5. According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to companies,
firms or other parties listed in the register maintained under section
301 of the Companies Act, 1956. As informed to us, there are no
companies under the same management as defined under the then
applicable Section 370(1 6) of the Companies Act, T956.
6. The Company has given loans or advances in the nature of loans to
its employees, the principal amounts of which together with interest
thereon, where applicable, are repaid as stipulated.
7. In our opinion and according to the information and explanations
given to us, having regard to the explanations that some items are of a
special nature for which alternative quotations cannot be obtained,
there are adequate internal control procedures generally commensurate
with the size of the Company and the nature of its business with regard
to purchases of stores and spare parts, plant and machinery, equipment
and other assets, and with regard to sale of software and other
services and products.
8. In our opinion and according to information and explanations given
to us, the transactions of purchase and sale of goods, materials and
services made in pursuance of contracts or arrangements entered in the
register maintained under Section 301 of the Companies Act. 1956 and
aggregating to Rs.50.000/- (Rupees Fifty Thousand only) or more during
the year in respect of each party have been made at prices which are
reasonable having regard to the prevailing market prices for such
goods, materials or services on the prices at which transactions for
similar goods and services have been made with other parties.
9. As informed to us the Company has no unserviceable or damaged
10. The Company has not accepted any deposits during the year and
hence provisions of Section 58A of the Companies Act, 1956 and the
rules framed there under are not applicable.
11. We are informed that in the operation of the Company no realizable
by-products and or scrap are generated.
12. The Company has no outside internal audit function commensurate
with the size and nature of its business.
13. We have been informed that the Central Government has not
prescribed the maintenance of Cost records under Section 209 (1) (d)
under the Companies Act, 1956 for the Company and any of its products.
14. The Company has been generally regular in depositing Provident
Fund & Employees State Insurance dues with the appropriate
15. According to the information and explanations given to us. there
are no undisputed amounts payable in respect of wealth tax, sales-tax,
customs duty and excise duty outstanding as at 31st March, 2007 for a
period exceeding six months from the date they became payable The
Income Tax Department has issued a demand of Rs.61,39.220/- for the
Assessment Year 2003- 04, which is disputed by the company by
contesting at IT Authorities.
16. The Company has a policy of authorizing expenditure based on
reasonable checks and balances. The policy is intended to ensure that
expenses are authorized on the basis of contractual obligations or
accepted business practices, having regard to the Companys business
needs and exigencies. In terms of these observations, we have not come
across any expenses charged to revenue account.
17. the Company is not a sick industrial company within the meaning of
clause (o) of sub- section (1) of Section 3 of Sick Industrial
Companies (Special Provisions) Act, 1985.
18. In respect of services/consultancy rendered by the Company:
There is a reasonable system of recording receipts, issues and
consumption of material and stores, where applicable and allocating
materials consumed to each project. There is a reasonable system of
allocating man- hours utilized to the relevant consultancy and/or
project contracts. There is a reasonable system of authorization at
proper levels and an adequate system of internal control on the issue
and allocation of stores and labour to jobs.
19. In respect of trading activity, in our opinion the company has a
reasonable system of determining the damaged goods.
20. The Company has no accumulated losses at the end of the financial
year and has incurred Rs. 380.23 lakhs cash losses in the financial
year and there was no cash loss in the financial year immediately
preceding such financial year.
21. The Company has working capital loan from a nationalized bank and
did not issue any debentures. Accordingly, clause 4 (xi) of the order
is not applicable.
22. The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, clause 4 (xii) of the order is not applicable.
23. The Company is not chit fund, nidhi, mutual benefit fund or a
society. Accordingly, clause 4 (xiii) of the order is not applicable.
24. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly, clause 4 (xiv) of the order is not
25. 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. Accordingly, clause 4 (xv) of the
order is not applicable.
26. The Company has not obtained any term loans. Accordingly, clause
4 (xvi) of the order is not applicable.
27. According to the information and explanations given to us, the
Company has not raised any funds on short-term basis. All assets have
been funded by shareholders funds.
28. The Company has made preferential allotment of shares to parties
and companies covered in the register maintained under section 301 of
29. The Company has not issued any debentures. Accordingly, clause 4
(xix) of the order is not applicable.
30. The Company has not raised any money by public issues during the
year. Accordingly, clause 4 (xx) of the order is not applicable.
31. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
32. All the investments are held by the Company in its own name.
For Srinivas P. & Associates
Place : Hyderabad P.Srinivas
Date : 29th June, 2007. Proprietor