We have audited the attached Balance Sheet of iCATE Global Solutions
Limited as at March 31, 2008, the Profit and Loss Account and Cash Flow
Statement of the Company for the year ended on that date annexed
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.
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 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
As required by the Companies (Auditors Report) Order, 2003, issued by
the Central Government of India in terms of Section 227 (4A) of the
Companies Act, 1956, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
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
those books and proper returns adequate for the purpose of our audit
have been received from the branches not visited by us.
iii. The accounts of two overseas branches of the Company have been
audited by other firms of auditors. The reports of such auditors on the
accounts of the said branches have been forwarded to us and dealt with
in the manner considered necessary in preparing our report.
iv. The Balance Sheet and Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account and the audited returns from the overseas branches.
v. 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, 1 956.
vi. On the basis of written representations received from the 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.
vii. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with the notes
thereon, give the information required by the Companies Act, 1 956, 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 Balance Sheet, of the state of affairs of the
Company as at March 31, 2008;
b. in the case of 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 to Auditors Report
Annexure referred in our report of even date
1. a. The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
b. We are informed that the fixed assets, except those held by the
employees under hard furnishing scheme have been physically verified by
the management at reasonable intervals and no material discrepancies
have been noticed in respect of assets so verified during the year. In
our opinion the frequency of verification is reasonable having regard
to the size of the Company and the nature of its assets.
c. During the year the Company has not disposed off any substantial
part of its fixed assets.
2. The nature of operations of the Company does not require it to hold
inventories. Clause 4 (ii) of the Order is, therefore, not applicable
to the Company for the year under report.
3. a. The Company has granted unsecured loans to two subsidiaries of
the Company. The maximum balance outstanding at any point of time
during the year from the subsidiaries was Rs. 1 45,384 thousands. The
loan of Rs. 107,321 thousands given to one subsidiary is considered
doubtful and is fully provided. Subject to the above, in our opinion,
the terms and conditions of the loans are not prima-facie prejudicial
to the interests of the Company and there are no overdue amounts. The
Company has not granted any loans, secured or unsecured, to any other
Companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
b. In our opinion, the rate of interest and other terms and conditions
in respect of unsecured loan from its Ultimate Holding Company, iCate
Corporation, USA amounting to Rs.40,1 20 thousands as at March 31, 2008
is not prima facie prejudicial to the interest of the Company. The
Company is regular in payment of interest whereas the principal
repayment has not fallen due as per the terms of the agreement.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and sale of services.
During the course of our audit, no major weakness has been noticed in
the internal controls.
5. a. In our opinion and according to the information and
explanations given to us the particulars of contracts/ arrangements
that need to be entered into the register maintained under section 301
have been so entered.
b. The transactions pursuant to such contracts / arrangements have been
made at prices which are reasonable having regard to the prevailing
market price at the relevant time.
6. The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of section 58A and 58AA of
the Companies Act, 1 956, March 31, 2008 and rules made there under.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records under
Section 209 (1 )(d) of the Companies Act, 1 956.
9. a. According to the information and explanations given to us and
the records of the Company examined by us, the statutory dues
applicable to the Company are Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income Tax, Karnataka
Entry Tax, Wealth Tax, Custom Duty, Profession Tax, Cess and VAT. The
Company is generally regular in depositing the statutory dues with the
b. According to the information and explanations given to us and the
records of the Company examined by us, there are no statutory dues that
have not been deposited on account of any dispute except as stated
Sr. Name of the Statute Nature of
1. Income Tax Act, 1961 Income Tax
2. Income Tax Act, 1961 Income Tax
Amount Rs. Period to which Forum where
(in thousands) this matter dispute is
96 Assessment Year CIT Appeals
18,229 Assessment Year CIT Appeals
c. According to the information and explanations given to us, no
undisputed dues payable in respect of Income Tax, Sales Tax, Wealth
Tax, Customs Duty and Cess were outstanding as at March 31, 2008 for a
period of more than six months from the date they became payable.
10. The Financial statements of the Company as on March 31, 2008 do
not show accumulated losses. The Company has not incurred any cash
losses during the financial year covered by our audit and in the
immediately preceding financial year.
11. The Company has not taken any loans from any financial
institutions or banks and has not issued any debentures.
12. The Company has not granted any loans or advances against security
by way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund, nidhi, mutual benefit fund or a
society. Clause 4 (xiii) of the Order is, therefore, not applicable to
14. In our opinion, the Company is not an investment company dealing
or trading in shares, securities, debentures and other investments.
Clause 4(xiv) of the Order is, in our opinion, not applicable to the
Company for the year under report. Investments as on March 31, 2008 are
held by the Company in its own name.
15. 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.
16. According to the information and explanations given to us and the
records of the Company examined by us, the Company has not taken any
term loans during the year.
17. On the basis of the records of the Company examined by us and
according to the information and explanations given to us, in our
opinion, the Company has not raised short term funds for long term
18. The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by way of public issues
during the year.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
For and on behalf of
Chandabhoy & Jassoobhoy
April 30, 2008 Membership No. 102580