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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the 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.
1. As required by the Companies (Auditors Report) Order, 2003 (CARO),
issued by the Central Government in terms of Section 227(4A) 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.
2. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(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 it appears from our examination of
(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
explanations given to us, 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:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
(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.
3. On the basis of the written representations received from the
directors as on March 31, 2010 taken on record by the Board of
Directors, none of the Directors is disqualified as on March 31, 2010
from being appointed as a director in terms of Section 274 (1) (g) of
the Companies Act, 1956.
Annexure to the auditors report (Referred to in paragraph 3 of our
report of even date)
(i) Having regard to the nature of the Companys business, Clauses
(ii), (viii), (x),(xiii), (xiv) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a 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.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties listed 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 for the
purchase of fixed assets and for the sale of services. The activities
of the Company do not involve purchase of inventory and sale of goods.
During the course of our audit, we have not observed any major weakness
in such internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under the said
section have been so entered.
(b) Since the value of the said transaction does not exceed Rupees five
lakhs, the information required under Clause (v)(b) of Paragraph 4 of
the Companies (Auditors Report) Order, 2003 is not applicable to the
(vi) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Employees State Insurance, Income Tax,
Investor Education and Protection Fund, Sales-tax, Service Tax, Wealth
Tax, Customs Duty, Cess and any other material statutory dues
applicable to it with the appropriate authorities during the year.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Service Tax,
Cess and other material statutory dues in arrears as at March 31, 2010
for a period of more than six months from the date they became payable.
(c) Details of dues of income tax which have not been deposited as on
March 31, 2010 on account of any dispute are given below:
Name of the Statute Nature of Amount involved
dues (Rs. lakhs)
The Income Tax Act, 1961 Income Tax 34.41
Indian Customs Act, 1962 Customs Duty 8.05
Name of the Period to which the Forum where the dispute
Statue amount relates
The Income Tax Act,1961 A. Y. 2007-08 Commissioner of Income
Tax (Appeals)-I, Bangalore
Indian customs Act,1962 Various Commissioner of Customs
Further, the Company has received a show cause notice from Directorate
General of Central Excise Intelligence, Bangalore during the year
2006-07, for non-payment of service tax on account of payments made to
its subsidiaries based outside India for rendering services outside
India. The revenue authorities have classified these services as that
of a Commission Agent falling under the category of Business
Auxiliary Services and quantified the liability at Rs. 499 lakhs which
is being contested by the Company. During the year 2008-09 the Company
has filed an appeal with the Customs, Excise and Service Tax Appellate
Tribunal South Zonal Bench (CESTAT), Bangalore. On January 30, 2009,
CESTAT has passed the stay order granting the Company waiver from
depositing further amounts till the disposal of the above appeal
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions.
(x) In our opinion and according to the information and explanations
given to us, the Company has not granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
(xi) 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.
(xii) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained other than amounts temporarily invested
pending utilization of the funds for the intended use.
(xiii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long-term investment.
(xiv) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956.
(xv) According to the information and explanations given to us, during
the period covered by our audit report, the Company had not issued any
(xvi) According to the information and explanations given to us, the
Company has not raised any money by public issue.
(xvii)To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no fraud on the
Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
(Registration No. 117 366W)
Hemant M. Joshi
(Membership No. 38019)
Date: May 7, 2010