| 1) We have audited the attached Balance Sheet Of WATSON SOFTWARE
LIMITED as at
31st March, 2007 and also the annexed Profit and Loss Account of the
Company for the year ended on that date. These financial statements are
the responsibility of the companys management. Our responsibility is
the express an opinion on these financial statement 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 misstatements. An audit also
includes examining, on the test basis, evidence supporting the amounts
and disclosures in financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by managements, as well as evaluating the over all financial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3) As required by the Companies (Auditors Report) Order, 2003
(CARO,2003), issued by the Central Government of India in terms of
Section 227(4A) of the Companies Act, 1956, and on the basis of such
checks as we considered appropriate and according to the information
and explanations given to us, we enclose in the annexure to a Statement
on the matters specified in paragraph 4 & 5 of the said order;
4) Further to our comments an Annexure referred to in paragraph 3
above, we report that;
1. We have obtain all the information and explanation, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
2. In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of the
Books of the Company,
3. The Balance Sheet, Profit and Loss Account dealt with by the report
are in agreements with the Books of Account of the Company,
4. In our opinion, the Balance Sheet, the Profit & Loss Account dealt
with by this report comply with the Accounting Standards referred to in
Section 211(3C) of the Companies Act, 1956, to the extent applicable.
5. According to information and explanation given to us from the
Directors as on 3 P1 March, 2007, and taken on record by the Board of
Directors, we are not in a position to verify that none of the
Directors is disqualified as on 31st March, 2007 from being appointed
as a director in terms of clause (g) of sub-section (1) of section 274
of the Companies Act, 1956.
6. In our opinion and to the best of our information and according to
the explanation given to us, the said Accounts, subject to note no. 7
relating to dispute with Punjab National Bank (amount not
ascertainable) and Note No. 1(d) relating to non provision of
depreciation on fixed assets together with other notes thereon attached
there to give in the prescribed manner 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 principal generally accepted in
India:
i. In the case of Balance Sheet, of the stale of the affairs of the
Company as at 3 lst March 2007,
ii. In the case of Profit and Loss Account, of the loss for the year
ended on that date,
iii. In the case of Cash Flow statement of the cash Flow for the year
ended on that date.
ANNEXURE TO THE AUDITORS1 REPORT
WATSON SOFTWARE LIMITED
REFERRED TO IN PARAGRAPH 3 OF THE OUR REPORT OF EVEN DATE
1. In Respect of its fixed Assets:
As informed by the management, the properties and Fixed Assets have
been attached by the Debt Recovery Tribunal -II, Mumbai and no physical
verification could be done at the year end. The Fixed Assets are also
in the custody of Recovery officer of Debt Recovery Tribunal -II,
Mumbai. The company has not provided any depreciation on fixed assets.
2. In Respects of inventories:
The inventories have not been physically verified by the management
during the year and at the close of the year, due to attachment by DRT
-II, Mumbai.
3.a) 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. The Company had granted
an unsecured loan to a company listed in the register maintained under
section 301 of the Companies Act, 1956,
b) In our opinion and according to the information and explanation
given to us, the rate of interest, wherever applicable and other terms
and conditions are not prima facie prejudicial to the interest of the
Company.
c) In respect of loans granted by the company to one party, the amount
has been repaid during the year. In respect of the other party, a
wholly-owned subsidiary of the company, the loan is interest free and
repayable on demand. In respect of loans taken by the Company, no
interest has been paid and the principal amount is repayable on demand.
d) The company has not taken any unsecured loan except an amount of Rs.
26,19,798/-being sales tax deferred loan from Govt, of Maharashtra. In
respect of loan given by the company, these are repayable on demand
and, therefore, the question of overdue amount does not arise.
4. In our opinion and according to the information and explanation
given to us, there are adequate internal control procedure commensurate
with the size of the company and the nature if its business with regard
to the purchase of stores, raw materials including components, plant &
machinery, equipments and similar assets & purchase of goods and for
the sale of goods.
5. In respect of transaction covered under Section 301 of the
Companies Act, 1956.
(a) Based on the audit procedures applied by us and according to the
information and explanation provided by managements, we are of the
opinion that there was no transaction that needed to be entered into
the register under section 301 of the Companies Act, 1956.
(b) According to the information and explanation given to us, there was
no occurrence of transaction attracting provisions of section 301 of
the Companies Act, 1956.
6) The Company has not accepted any deposits from the public; hence
question of complying with the provision of section 58A and 58AA of the
companies Act, 1956 and Rules made there under does not arise.
7) In our opinion the internal audit system of the company is
commensurate with the size of the company and nature of its business.
8) The Central Government has not prescribed the maintenance of cost
records under clause (d) of sub-section (1) of section 209 of the
Companies Act, 1956 for the Company.
9) In respect of statutory dues:
a. According to the information made available to us all material
statutory dues have been regularly deposited during the year with be
appropriate authorities..
b. According to the records of company, as far as Sales Tax, Income
Tax, Wealth Tax, excise duty and Cess which have not been deposited on
account of disputes, no information available because the Corporate
Office and Registered office are attached by DRT-II Mumbai.
10. The company has no accumulated losses
11. There are no outstanding dues to any Institution or Bank except the
claim of Punjab National Bank which is under dispute.
12. Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and/or
advances on the basis of security by way of pledge of shares, debenture
and other securities.
13. The Company is not a chit fund, Nidhi, mutual benefit fund or a
society.
14. During the year, the company does not have any transaction is
respect of dealing and trading in shares, securities, debentures and
other investment. All shares, debentures and other securities held as
investments by the company in its own name.
15. According to the information and explanation given to us, the
company has not given any guarantee for loans taken by other from bank
or financial institution.
16. In our opinion and according to the information and explanation
given to us, no term loans were acquired during the year by the
company.
17. According to the information and explanation 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
investments by the Company.
18. The Company has not made preferential allotments of shares during
the year.
19. During the year covered by our audit report the Company has not
issued any secured debentures.
20. The Company has not raised any money by public issues during the
year covered by our report.
21. During the course of our examination of the books of accounts and
record of the company carried out in accordance with Generally Accepted
Auditing Practices, in India and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year nor
have we been informed of any such case by the Management.
FOR P. R. AGARWAL & AWASTHI
CHARTERED ACCOUNTANTS
(PAWAN AGARWAL)
Partner
M. No. 34147
Place : Mumbai
Date: 11.07.2007 | 