The Hindu Business Line : Auditors qualify B2B Soft accounts

THE auditors of B2B Software Technologies have qualified the company accounts for the financial year 2003-2004 with regard to its divestment in a wholly-owned US-based subsidiary, which is in fact subject to approval of the Reserve Bank of India (RBI).

In its latest report for fiscal 2004, the auditors of the Hyderabad-based company — PricewaterhouseCoopers, have stated that "in the event of non-approval by the RBI of the transaction relating to divestment, there would not be any impact on the loss for the year.

However, the reported figure of investments and current liabilities of Rs 1.71 crore and Rs 40.5 lakh respectively would have been higher for the fiscal by Rs 10.8 lakh ."

According to the company Managing Director, Mr P. Samantha Reddy, "during the year, the company reduced its investment in its wholly-owned subsidiary B2B Software Inc, by divesting its investments amounting to 23,000 shares. This buyback of shares has resulted in reduction of share capital from 150,000 shares to 127,000 shares."

In related observations, the auditors have stated that "we are unable to comment on the carrying value of investments in two of the subsidiaries, B2B Infotech Pte Ltd, Singapore and B2B Software Technologies Kassel GmbH, Germany amounting to Rs 54 lakh and Rs 56.9 lakh respectively in view of the substantial erosion of net worth in those companies."

With regard to loan, the auditors stated that the company granted an unsecured loan to another company covered in the accounts register amounting to Rs 5.6 crore . The company has secured loan from a director of the company, which aggregates to Rs 27.6 lakh .

The company promoters hold 85 per cent of the equity and the Indian public 13.49 per cent and the rest by private corporate bodies and others. For 2003-2004, the company recorded total income of Rs 1.5 crore and a net loss of Rs 94 lakh .