We have audited the attached balance sheet of Mindteck (India) Limited
(''the Company'') as at March 31, 2011, 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
Company''s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
1. As required by the Companies (Auditor''s Report) Order, 2003 (‘the
Order''), as amended, issued by the Ministry of Corporate Affairs in
terms of sub-section (4A) of Section 227 of the Companies Act, 1956
(‘the Act''), we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to above, we
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
(b) 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
(c) the balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
(d) in our opinion, the balance sheet, the profit and loss account and
the cash flow statement dealt with by this report are prepared in
compliance with the accounting standards referred to in sub-section
(3C) of Section 211 of the Act;
(e) on the basis of written representations received from the
directors, as at March 31, 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as at
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub- section (1) of Section 274 of the Act on the said date; and
(f) 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 Act, in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
(i) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2011;
(ii) in the case of the profit and loss account, of the profit of the
Company for the year ended on that date; and
(iii) in the case of the cash flow statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS'' REPORT
The Annexure referred to in paragraph 1 of our report to the members of
Mindteck (India) Limited (‘the Company'') for the year ended March 31,
2011. We report that:
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of three years. In our opinion, the periodicity of
physical verification is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) Fixed assets disposed of during the year were not substantial, and
therefore, do not affect the going concern assumption.
ii. The Company is a service company, primarily rendering software,
IT-enabled and related services. Accordingly it does not hold any
physical inventories. Thus, paragraph 4(ii) of the Order is not
iii. The Company has neither granted nor 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.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of fixed assets and with regard to the sale of services.
The activities of the Company do not involve purchase of inventory and
the sale of goods. We have not observed any major weakness in the
internal control system during the course of the audit.
v. (a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in Section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under that section.
(b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs 5
lakh with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
vi. The Company has not accepted any deposits from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. The Central Government of India has not prescribed the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 for any of the services rendered by the Company.
ix. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/ accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income-tax, Service tax and other material statutory dues have
generally been regularly deposited during the year by the Company with
the appropriate authorities, though there has been a delay in a few
cases. As explained to us, the Company did not have any dues on account
of Sales- tax, Wealth tax, Customs duty, Excise duty and Investor
Education and Protection Fund.
Further, there were no dues on account of Cess under Section 441A of
the Companies Act, 1956 since the aforesaid section has not yet been
made effective by the Central Government of India.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Income tax, Service tax and other material statutory
dues were in arrears as at March 31, 2011 for a period of more than six
months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Sales tax, Wealth tax, Service tax, Custom duty, Excise
duty and Cess which have not been deposited with the appropriate
authorities on account of any dispute. The Company, however, disputes
the following income tax dues:
Name Nature of Amount Period to Forum where
of the the dues (Rs) which the dispute is
statute amount pending
Income Tax Income tax/ 14,832,080 Assessment Income tax
Act, 1961 interest (5,000,000)* year appellate
Income Tax Income tax/ 16,031,837 Assessment Dispute
Act, 1961 interest year Resolution Panel
2007-08 (DRP), Bangalore
Income Tax Income tax/ 4,883,185 Assessment Commissioner
Act, 1961 interest year of Income
2003-04 Tax Appeals,
* Amount in parenthesis represent the payment made under protest.
x. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers. The Company did not have any outstanding dues to any financial
institutions or debentureholders during the year.
xii. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/nidhi/ mutual benefit
xiv. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
xv. In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given a
guarantee for a loan taken by others from a bank are not prejudicial to
the interests of the Company.
According to the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from financial
xvi. The Company did not have any term loans outstanding during the
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we are of
the opinion that funds raised on short- term basis have not been used
for long-term investment.
xviii. The Company has not made any preferential allotment of shares to
companies/firms/ parties covered in the register maintained under
Section 301 of the Companies Act, 1956.
xix. The Company did not have any outstanding debentures during the
xx. The Company has not raised any money by public issues.
xxi. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
for B S R & Company
Registration number : 128032W
Place: Bangalore Partner
Date: 13 May 2011 Membership No. 205385