Bartronics India

1.  We have audited the attached Balance Sheet of BARTRONICS INDIA
 LIMITED as at 31st March, 2009, the Profit and Loss Account for the
 year ended on that date and the Cash Flow Statement for the year ended
 on that date, both 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 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 [CARO]
 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 to the extent applicable.
 
 4.  Deferred tax liability to the extent of Rs. 1663.40 Lacs has not
 been provided in the financial statements.  Consequently Profit for the
 year After Tax and the Reserves and Surplus are overstated by Rs.
 1,663.40 Lacs and the Deferred Tax Liability (net) is understated by
 Rs. 1,663.40 Lacs. Accordingly, Earnings Per Share (EPS) both basic and
 diluted has been overstated by Rs. 5.88 and Rs. 5.38 respectively.
 
 5.  Further to our comments in the annexure referred to in paragraph 3
 above, we report that:
 
 (i) we have obtained all the information except for quantitative
 information for production of goods for reason stated in Note 3 of Note
 16 (a) of Schedule 20 to the Financial Statements 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 it appears from our examination of
 those books;
 
 (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) in our opinion and to the best of our information and according to
 the explanations given to us, subject to the effect on the financial
 statements of the matter referred in paragraph 4 above and except for
 disclosure of quantitative information for production of goods for
 reason stated in Note 3 of Note 16 (a) of Schedule 20 to the financial
 statements, 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.
 
 6.  On the basis of written representations received from the directors
 as on 31st March, 2009 and taken on record by the Board of Directors,
 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.
 
 Annexure to the Auditors Report
 
 (Referred to in paragraph 3 of our report of even date)
 
 The nature of the Companys business/activities during the year was
 such that paragraphs 4 (viii), 4(xii), 4(xiii), 4(xiv), 4 (xv) and
 4(xix) of CARO are not applicable.
 
 (i) In respect of its fixed assets:
 
 (a) The Company is in the process of re-compiling its fixed assets
 register with a view towards reflecting full particulars including
 quantitative details and situation of fixed assets.
 
 (b) Some of the fixed assets were physically verified during the year
 by the management in accordance with a program of verification, which
 in our opinion, provides for physical verification of all fixed assets
 at reasonable intervals. Having regard to the size of the Company and
 the nature of its assets, the program of verification is reasonable. In
 view of the fact that the fixed assets register is in the process of
 reconstruction, management has informed that discrepancies, if any,
 arising between the assets verified and the book records would be dealt
 with in the period in which such re- compilation of the register is
 completed.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute substantial part of the fixed assets of the Company and
 such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (ii) In respect of its inventories:
 
 (a) As explained to us, the inventories were physically verified during
 the year by the management. In our opinion, having regard to the nature
 of business and location of stocks, 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) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories. The discrepancies noticed on verification between the
 physical stocks and the book records were not material.
 
 (iii) The Company has not granted or 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 Cthe
 Act1). As the Company has neither granted nor taken any loans, secured
 or unsecured, to or from parties listed in the register maintained
 under Section 301 of the Act, paragraphs 4 (iii)(b), (c), (d), (f) and
 (g) of CARO are not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, the internal control systems are generally commensurate
 with the size of the Company and the nature of its business for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. While we have not observed any continuing failure to correct
 major weaknesses in such internal control systems, the Company needs to
 strengthen systems and procedures relating to documentation.
 
 (iv) According to the information and explanations given to us, we are
 of the opinion that there are no contracts or arrangements which need
 to be entered in the register maintained under section 301 of the Act.
 Accordingly, paragraphs 4 v(a) and v(b) of CARO are not applicable.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has not accepted deposits from the public to
 which the directives issued by the Reserve Bank of India and the
 provisions of Section 58A and 58AA or any other relevant provisions of
 the Act and the Companies (Acceptance of Deposits) Rules, 1975 apply.
 Accordingly, paragraph 4(vi) of CARO is not applicable.
 
 (vii) In our opinion the internal audit functions 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
 its business.
 
 (viii) In respect of statutory dues:
 
 (a) According to the information and explanations given to us and
 according to the records of the Company, undisputed statutory dues in
 respect of provident fund, employees state insurance, professional tax,
 income-tax, value added tax, fringe benefit tax and service tax have
 not been regularly deposited with the appropriate authorities and few
 delays in deposit of such dues have been noticed. In respect of other
 material undisputed statutory dues including investor education and
 protection fund, wealth tax, sales tax, custom duty and excise duty,
 the Company has been regular in depositing with the appropriate
 authorities.
 
 (b) According to the information and explanations given to us,
 following are the undisputed statutory dues as at 31st March, 2009
 outstanding for a period of more than six months from the date they
 became payable:
 
 Name of the     Nature of     Rs.     Period to   Due Date   Date of
 Statute         the Dues    in Lacs,  which the              Payment
                                       amount
                                       relates
 
 Income- Tax 
 Act,          Income Taxes   3.25     2000-01   Various Dates
 1961                       768.76     2007-08   March 31,2008 Not paid
 
 The Finance 
 Act,                         3.42     2003-04   Various Dates
 1994           Service Tax   5.50     2004-05   Various Dates
                              0.84     2005-06   Various Dates
 
 (c) According to the information and explanations given to us, there
 were no dues of sales tax, wealth tax, service tax, custom duty, excise
 duty and cess which have not been deposited as on 31st March, 2009 on
 account of any dispute. The details of the disputed dues of income tax
 which have not been deposited as on March 31, 2009 are given below:
 
 Name of the statute  Nature of Financial Years to  Rs. in  Forum where
                      the Dues  which the matter    Lacs    dispute is
                                   pertains                 pending
 
                                    1999-2000       2.29
                                    2000-2001       1.89
                                                            Commissioner
 Income-Tax Act, 1961 Income Tax    2001-2002       1.45    of Income
 
                                    2002-2003       0.98    Tax- Appealsa
                                    2003-2004       1.10
                                    2004-2005       0.80
 
 (ix) The Company does not have accumulated losses and has not incurred
 cash losses during the financial year covered by our audit and the
 immediately preceding financial year.
 
 (x) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 financial institution and banks.
 
 (xi) 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 for the purpose for
 which the loans were obtained.
 
 (xii) 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.
 
 (xiii) According to the information and explanations given to us during
 the year, the Company has not made preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Companies Act, 1956.
 
 (xiv) During the year covered by our audit report, the Company has not
 raised any money by public issue.
 
 (xv) According to the information and explanations given by the
 management, we report that no fraud on or by the Company has been
 noticed or reported during the year.
 
                                     For Deloitte Haskins & Sells
 
                                            Chartered Accountants
 
                                              GANESH BALAKRISHNAN
 
                                                          Partner
 
                                            Membership No: 201193
 
 Place : Hyderabad
 Date  :   2nd September, 2009