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Auditor Report of Bartronics India Ltd.

Mar 31, 2016

To

The Members of BARTRONICS INDIA LIMITED

Report on the Standalone Financial Statements

We have audited the ac Companying Standalone Financial Statements of Bartronics India Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act, read with the rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order under Section 143(11) of the Act. We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements 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 India, of the state of affairs of the Company as at March 31, 2016, and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a. Reference is invited to Note 2.8 of the financial statements, the Company has not provided interest on unsecured loans as terms are not clearly available with the Company and consequently uncertainty arises in Financial Statements as to the exact amount.

b) Reference is invited to Note 2.13 (i)(a) forming part of the Financial Statement regarding Capital advances to the extent of Rs. 9,061.49 Lakhs “We are unable to ascertain whether such balances are fully recoverable”. Accordingly, we are unable to ascertain the impact, if any, that may arise in case any of these advances are subsequently determined to be doubtful of recovery. Had the Company provided for the same, the loss for the period would have been higher by the said amount.

c) Note 2.15 forming part of the Statement regarding Trade Receivables aggregating to Rs. 95,635.12 Lakhs are more than three years old and in respect of which the Company provided only Rs.7,035.92 lakhs. We are unable to form an opinion on the extent to which the debts may be recoverable.

d) Note 2.29 forming part of the financial statements regarding the non-repayment of FCCB amounting to Rs. 33,088.70 lakhs which has fallen due as of February 2013 and the Company has defaulted the payments even after the expiry of extended time sought by it from the RBI.

e) Without qualifying our opinion, we invite attention to Note no 2.44 forming part of the financial statements regarding the uncertainties relating to MCD Project — “Apke Dwar Project”, the matter is in arbitration.

f) The LIC of India, Andhra Bank, Bank of India, Indian Bank, Barclays Bank, IDBI Bank filed cases in DRT. A criminal case was also filed by a creditor at Delhi. There are certain cases against the Company pending at the Labour Court of India. Accordingly, we are unable to ascertain the impact, if any, that may arise in case any of these matters settle against the Company.

Our opinion is not modified on respect of these matters

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law relating to preparation of the standalone financial statements have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of these standalone financial statements.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, as applicable.

(e) On the basis of the written representations received from the Directors as on March 31, 2016, taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2016 from being appointed as a Director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in ‘Annexure A’. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

(g) With respect to the other matters to be included in the Independent Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has, in accordance with the generally accepted accounting practice, disclosed the impact of pending litigations on its financial position in its financial statements — Also Refer Note 2.27 to the financial statements.

ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses under the applicable law or accounting standards.

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government in terms of Section 143(11) of the Act, we give in ‘Annexure B’ a statement on the matters specified in paragraphs 3 and 4 of the Order.

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ Section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

We have audited the internal financial controls over financial reporting of Bartronics India Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ Section of our report of even date)

Report on Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government in terms of Section 143(11) of the Companies Act, 2013 (‘the Act’) of Bartronics India Limited (‘the Company’)

i. 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 phased programmed of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company, nature and value of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company

ii. The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.

iii. According to the information and explanations given to us, the Company has not granted unsecured loan to a Company covered in the register maintained under Section 189 of the Companies Act, 2013.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

v. According to information and explanations given to us, the Company has not accepted any deposit during the year. There are no unclaimed deposits to which the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 are applicable.

vi. The Company does not maintain the cost records pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 148 (1) of the Companies Act, 2013.

vii. (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-

tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities expect the following statutory dues were outstanding as at 31st March 2016 for a period of more than six months from the date becoming payable.

Sl. No

Particulars

Amount

1.

Central Sales Tax (2011-12)

855,144/-

2.

Central Sales Tax (2012-13)

529,916/-

3.

Dividend Distribution Tax (2010-11)

5,655,516/-

(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:

Natures of dues

Disputed Dues

Period to which the amount relates

Forum where the dispute is pending

Central Sales Tax

60,895,984/-

2008-09

CTO-Hyderabad (Pending for Re-Assessment)

Income tax-FBT

66,765,550/-

2008-09

Appellate authority — CIT Appeals

Income tax

85,086,235/-

2008-09

Appellate authority — Income Tax Appellate Tribunal

Income tax

23,857,430/-

2009-10

Appellate authority — Income Tax Appellate Tribunal

Income tax

64,855,030/-

2010-11

Appellate authority — DRP Bangalore

Income tax

169,815,780/-

2011-12

Appellate authority — Income Tax Appellate Tribunal

viii. Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to information and explanations given by the Management, we are of the opinion that the Company has defaulted in repayment of dues to financial institutions, banks or debenture holders details as follows :

Sl. No

Name of the Bank / Financial Institutions

Installment Type

Principal Overdue

Interest Overdue

Due Since (No. of installments)

1.

Andhra Bank

Monthly

3,657.15

3321.42

24

2.

Bank Of Baroda

Quarterly

2,036.09

1356.00

15

3.

Bank of India

Quarterly

2,791.08

2,244.98

8

4.

Indian bank

Quarterly

1,199.41

931.14

13

5.

LIC

Quarterly

3.000.00

2,006.85

21

Totals

12,683.72

9,860.40

ix. In our opinion and according to the information and explanation given to us, term loans have been applied by the Company during the year for the purpose for which they were raised. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year

x. To the best of our knowledge and belief, and according to the information and explanations given to us, and considering the size and nature of the Company’s operations, no fraud by the Company and no fraud of material significance on the Company by its officers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.

xii. In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

xiii. In our opinion and according to the information and explanations given to us the Company is in compliance with Sections 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

xiv. During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of Section 192 of the Companies Act, 2013 are not applicable.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934

For T. Raghavendra & Associates

Chartered Accountants

(Firm Regn No:003329S)

T. Raghavendra

Place: Hyderabad Proprietor

Date: 30-05-2016 (Membership No. 023806)


Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of BARTRONICS INDIA LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the period 01-10-2013 and ended on 31-03-2015, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Unaudited returns of the branches for the year ended on that date unaudited of the Company''s branches at USA and Hong Kong.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design,implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements 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 India, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a. Reference is invited to Note 10 of the financial statements, the company has not provided interest on unsecured loans as terms are not clearly available with the Company and consequently uncertainty arises in Financial Statements as to the exact amount.

b. Reference is invited to Note 15(i)(a) of the financial statements, the Company''s capital advances to the extent of Rs.9,062.09 Lakhs. We are unable to ascertain whether such balances are fully recoverable. Accordingly, we are unable to ascertain the impact, if any, that may arise in case any of these advances are subsequently determined to be doubtful of recovery. Had the Company provided for the same, the loss for the period would have been higher by the said amount

c. Note 17 forming part of the financial statements regarding the Trade Receivables to the extent of Rs.81,264.11 Lakhs are more than three years old and in respect of which the company provided only Rs.7,030.67 lakhs. We are unable to form an opinion on the extent to which the debts may be recoverable.

d. Note 32 forming part of the financial statement s regarding the non-repayment of FCCB amounting to Rs.31,302.20 Lakhs which has fallen due as of February 2013 and the company has defaulted the payments even after the expiry of extended time sought by it from the RBI.

e. Without qualifying our opinion, we invite attention to Note no 43 forming part of the financial statements regarding the uncertainties relating to MCD Project - "Apke Dwar Project", the matter is in arbitration.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far asit appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to the Auditors'' Report

The Annexure referred to in our report to the members of Bartronics India Limited for the period 01-10-2013 to 31-03- 2015. We report that:

S. Particulars Auditors Remark No.

(1) (a) whether the company is The Company is in the maintaining proper records process of re-constructing showing full particulars, its fixed assets register including quantitative details with a view towards and situation of fixed assets; reflecting full particulars including quantitative details and situation of the fixed assets.

(b) whether these fixed assets have Some of the fixed assets been physically verified by the were physically verified, management at reasonable in phases, by the Management intervals; whether any material during the year as per the discrepancies were noticed on regular program of such verification and if so, verification, which in our whether the same have been opinion is not reasonable properly dealt with in the books having regard to the size of of account; the company and the nature of its assets. In respect of the assets at third party locations, confirmations have been received. In view of the fact that the fixed assets register is in the process of re-construction, 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-construction of the register is completed

(2) (a) whether physical verification of inventory has been conducted Yes at reasonable intervals by the management;

(b) are the procedures of physical Yes verification of inventory followed by the management reasonable and adequate in relation to the size of the company and the nature of its business. If not, the in adequacies in such procedures should be reported;

(c) whether the company is maintaining proper records of Yes inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of account;

(3) (a) whether the company has granted any loans, secured or unsecured No to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. If so,

(b) whether receipt of the principal amount and interest are also Not Applicable regular; and

(c) if overdue amount is more than rupees one lakh, whether Not Applicable reasonable steps have been taken by the company for recovery of the principal and interest;

(4) is there an adequate internal Yes control system 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. Whether there is a continuing failure to correct major weaknesses in internal control system.

(5) in case the company has accepted The Company has not accepted deposits, whether the directives any deposits during the issued by the Reserve Bank of India reporting period. and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, where applicable, have been complied with? I not, the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?

(6) where maintenance of cost records The Company does not has been specified by the Central maintain the cost records Government under sub-section (1) pursuant to the Companies of section 148 of the Companies (Cost Accounting Records) Act, whether such accounts and Rules, 2011 prescribed by records have been made and the Central Government maintained; under Section 148 (1) of the Companies Act, 2013

(7) (a) is the company regular in No, the undisputed amounts depositing undisputed statutory payable in respect of the dues including provident fund, aforesaid dues were for a employees'' state insurance, outstanding as at 31st March income-tax, sales-tax, wealth 2015 period of more than six tax, service tax, duty of months from the date customs, duty of excise, value becoming payable are as added tax, cess and any other follows statutory dues with the appropriate authorities and if Central Sales tax (2010-11) not, the extent of the arrears Rs.314,256/- of outstanding statutory dues as at the last day of the Central Sales tax (2011-12) financial year concerned for a Rs.590,577/- period of more than six months from the date they became Central Sales tax (2012-13) payable, shall be indicated by Rs.476,090/- the auditor.

(b) in case dues of income tax or Yes, the disputed statutory sales tax or wealth tax dues that have not been or service tax or duty of deposited on account of customs or duty of excise or matters pending before value added tax or cess have deposited on appropriate not been account of any dispute, authorities are as follows: then the amounts involved and the forum where dispute is Nature of Financial pending shall be mentioned. Dues Year (A mere representation to the concerned Department shall not Income tax 2007-08 constitute a dispute). Fringe Benefit 2007-08 tax Income tax 2009-10 Rs. In Pending Lakhs Before

1268.89 ITAT 667.66 ITAT

35.14 CIT- Appeals (c) whether the amount required No amount required for to be transferred to in transferring to investor accordance with the relevant education and protection provisions of the Companies fund Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(8) whether in case of a company which The Company has accumulated has been registered for a period losses at the end of the not less than five years, its financial year, The accumulated losses at the end of accumulated losses are less the financial year are not less than fifty per sent of its than fifty per cent of its net net worth and has incurred worth and whether it has incurred cash losses in the current cash losses in such financial year financial year and also and in the immediately preceding incurred cash losses in the financial year; financial year immediately preceding such financial year.

(9) whether the company has defaulted the Company has not paid in repayment of dues to a financial principal, and interest of institution or bank or debenture 11,698.83 lakhs and 7,319.77 holders? If yes, the period and lakhs respectively to banks amount of default to be reported; and financial institutions as at the balance sheet date details as follows:

Sl. Name of the Bank / Installment Principal Interest No. Financial Institutions Type Overdue Overdue

1. Andhra Bank Monthly 3,657.15 2,274.21

2. Bank Of Boarda Quarterly 1,623.59 1,013.16

3. Bank of India Quarterly 2,791.08 1,704.97

4. Indian bank Quarterly 1,199.41 711.65

5. LIC Quarterly 2,427.60 1,615.78

Totals 11,698.83 7,319.77

Sl. Name of the Bank / Due Since No. Financial Institutions (No. of installments)

1. Andhra Bank 24

2. Bank Of Boarda 12

3. Bank of India 8

4. Indian bank 13

5. LIC 17

Totals

(10) whether the company has given any The Company has not given guarantee for loans taken by any guarantees to others others from bank or financial during the reporting institutions, the terms and period. conditions whereof are prejudicial to the interest of the company;

(11) whether term loans were applied The Company has not obtained for the purpose for which the loans any term loan during the were obtained; reporting period.

(12) whether any fraud on or by the company has been noticed or reported No during the year; If yes, the nature and the amount involved is to be indicated.

For T.Raghavendra & Associates Chartered Accountants (FRN -003329S)

T. Raghavendra Proprietor (Membership No.023806) Place: Hyderabad Date: 20-05-2015


Sep 30, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Bartronics India Limited ("the Company"), which comprise the Balance sheet as at September 30, 2013, and the Statement of Profit and Loss, and Cash Flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

The audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. The audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

1. Without qualifying our opinion, we invite attention to Note no 47 forming part of the financial statements regarding the uncertainties relating to MCD Project - "Apke Dwar Project"

2. We invite attention to: Note 17 forming part of the financial statements regarding the Trade Receivables balance aggregating to Rs.97,646.74 Lakhs (including Rs.94721.98 Lakhs relating to the period prior to September 30th, 2012) and in respect of which no provision has been made .In the absence of the required information, we are unable to form an opinion on the extent to which the debts may be irrecoverable.

3. Note 14 forming part of the financial statements regarding the non repayment of FCCB amounting to Rs.31,426 Lakhs which has fallen due as of February 2013 and the company has defaulted the payments even after the expiry of extended time sought by it from the RBI.

4. Attention is invited to Note 48 of the accompanying financial statements, which explain the payment of managerial remuneration amounting to 82.18 lakhs was paid in excess of the permissible remuneration under Schedule XIII of the Companies Act, 1956, during the year ended September 30, 2013

Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to the above comments and annexure referred to in para 1 below and notes on accounts, the financial statements 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 India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at September 30, 2013;

ii) In the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

iii) In the case of the cash Flow Statement, for the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) The un-audited accounts of the overseas branch has been forwarded to us as certified by the management and have been dealt with by us in preparing this report.

c) 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;

d) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

e) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

f) On the basis of written representations received from the directors as on September 30, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on September 30, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies act, 1956.

g) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

i. a. The Company is in the process of re-constructing its fixed assets register with a view towards reflecting full particulars including quantitative details and situation of the fixed assets.

b. Some of the fixed assets were physically verified, in phases, by the Management during the year as per the regular program of verification, which in our opinion is not reasonable having regard to the size of the company and the nature of its assets. In respect of the assets at third party locations, confirmations have been received. In view of the fact that the fixed assets register is in the process of re-construction, 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-construction of the register is completed.

c. The assets disposed off during the period in our opinion are not substantial and therefore do not affect the going concern status of the company.

ii. a. As explained to us, the stock of raw materials, stores and finished goods other than in transit have been physically verified during the year by the Management. In our opinion 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 inventory 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 the company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been property dealt with in the books of account.

iii. According to the information and explanations given to us, the company has neither granted nor taken any loans from the 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, the internal control procedures are inadequate, commensurate with the size of the company and the nature of its business, with regard to purchase of inventory and fixed assets and for the sale of goods and needs to be strengthened so as to be commensurate with the current size of the Company and the nature of its business and services. Except for the above we have not observed any other continuing failure to correct major weakness in the internal control system.

v. a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangements that need to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 have been properly entered in the said register.

b. In our opinion and according to the information and explanations given to us, the transactions entered in the register maintained under Section 301 and exceeding during the period by Rupees five lakhs in respect of each party have been made at prices which are reasonable and in respect of which no comparable quotations were available and hence unable to comment.

vi. The company does not have any internal audit system, which in our opinion, is commensurate with its size and nature of its business.

vii. The Company has not maintained the cost records pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1)(d) of the Companies Act, 1956

viii. a) According to the information and explanations given to us and the records of the company examined by us, the company is generally irregular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, customs Duty, Excise Duty, and other material statutory dues as applicable with the appropriate authorities with frequent delays in deposit of dues.

b) According to the information and explanations given to us, the undisputed amounts payable in respect of the aforesaid dues were outstanding as at 30th September, 2013 for a period of more than six months from the date becoming payable are as follows:

Nature of the Dues Financial Year Rs. In Lakhs Remarks Pending Before Income Tax 2008-09 128.85 Asst to be completed

Income Tax 2010-11 1.95 Self Asst Tax Asst to be completed

Provident Fund 2012-13 48.02 Paid In October 2013

c) According to the information and explanations given to us and the records of the company examined by us, the disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as follows:

Nature of Financial Rs.in the Dues year Lakhs Remarks Pending Before

Income Tax 2007-08 1297.67 Regular Tax demand u/s 143 (3) ITAT

Fringe Benefit Tax 2007-08 667.66 CIT (Appeals)

Value Added tax 2007-08 7.96 Deputy Commissioner

Value Added tax 2008-09 31.82 Deputy Commissioner

Value Added tax 2009-10 53.74 Deputy Commissioner

Value Added tax 2010-11 17.39 Deputy Commissioner

Center Sales Tax 2007-08 16.83 Deputy Commissioner

ix. According to the records of the Company examined by us and the information and explanation given to us, the Company has not paid principal, and interest of 11,088.32 lakhs and 4,112.79 lakhs respectively to banks and financial institutions as at the balance sheet date Details as follows :

Rupees in lakhs

Sl. Name of the Bank / Installment Principal Interest Due Since No Financial Institutions Type Overdue Overdue (No. of install ments)

1. Andhra Bank Monthly 3,657.15 982.68 24

2. Bank Of Boarda Quarterly 798.59 514.39 6

3. Bank of India Quarterly 2,791.08 897.89 8

4. Indian bank Quarterly 832.82 387.12 9

5. HSBC Monthly 404.42 89.87 4

6. LIC Quarterly 1,570.80 1,031.32 11

7. HP Financial Services Quarterly 1,033.46 209.52 9

Totals 11,088.32 4,112.79

x. In our opinion and according to the information and explanation given to us the term loans have been applied for the purpose for which they were obtained, other than temporary deployment pending application.

xi. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year but incurred cash losses in the financial year immediately proceeding such financial year.

xii. According to the information and explanations given to us and an overall examination of the balance sheet of the company, we report that no funds raised on a short-term basis which have been used for long- term investment, and vice versa.

xiii. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

xiv. Having regard to the nature of the Company''s business and activities clauses 4 (vi), (xii), (xiii), (xiv), (xv), (xviii), (xix) and (xx) of CARO are not applicable.

For T.Raghavendra & Associates

Chartered Accountants

FRN 003329S

Place: Hyderabad T.Raghavendra

Date : 29-11-2013 Mem 023806


Mar 31, 2011

1) We have audited the attached Balance Sheet of Bartronics India Limited ("the Company") as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto in which are incorporated the Returns from an overseas branch audited by other auditors. These fnancial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these fnancial 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 fnancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fnancial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall fnancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) Without qualifying our opinion, we invite attention to Note 25 of Schedule 20 forming part of the fnancial statements regarding the uncertainties relating to MCD - Aapke Dwar Project.

4) We invite attention to:

a) Note 9 of Schedule 20 forming part of the fnancial statements regarding Sundry Debtors balance aggregating to Rs.36,577.76 Lakhs and in respect of which no provision has been made for reasons stated therein. We are unable to form an opinion on the extent to which the debts may prove irrecoverable.

b) Note 11 of Schedule 20 regarding slow moving software inventory aggregating to Rs.314.13 Lakhs. We are unable to form an opinion on the appropriateness of the carrying cost of such items of inventory

5) As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the said Order.

6) Further to our comments in paragraph 3 and the Annexure referred to in paragraph 5 above, we report as follows:

a. Subject to paragraph 4 above, we have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the purposes of our audit;

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 those books and proper returns adequate for the purposes of our audit have been received from the overseas branch audited by other auditors.

c. the report on the accounts of the overseas branch audited by other auditors has been forwarded to us and have been dealt with by us in preparing this report;

d. the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account and the audited Branch Return;

e. 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;

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 Companies Act, 1956, in the manner so required, and subject to the effect of adjustments that may be required in respect of matters referred to in paragraph 4 above, the effect of which we have not been able to determine, 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, 2011;

(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 fows of the Company for the year ended on that date.

7) On the basis of written representations received from the Directors as on 31st March, 2011 taken on record by the Board of Directors, we report that none of the Directors is disqualifed as on 31st March, 2011 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 5 of our report of even date)

i) Having regard to the nature of the Company's business/activities clauses 4 (v), (viii), (x), (xii), (xiii), (xiv), (xv), (xviii), (xix) and (xx) of CARO are not applicable.

ii) In respect of its fixed assets:

(a) The Company is in the process of re-constructing its fixed assets register with a view towards refecting full particulars including quantitative details and situation of fixed assets.

(b) Some of the fixed assets were physically verifed during the year by the management in accordance with a program of verifcation, which in our opinion, provides for physical verifcation of all fixed assets at reasonable intervals. In respect of assets at third parties locations, confirmations have been received. 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 verifed and the book records would be dealt with in the period in which such re-construction 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.

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verifed during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation 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 and no material discrepancies were noticed on physical verifcation.

(iv) The Company has neither granted nor taken any loans, secured or unsecured to / from companies, frms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, internal control procedures with regard to purchase of inventory and fixed assets and for the sale of goods need to be strengthened so as to be commensurate with the current size of the Company and the nature of its business. Except for the above, we have not observed any other continuing failure to correct major weaknesses in internal controls.

(vi) 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 Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain purchases for which comparable quotations are not available and in respect of which we are unable to comment.

(vii) In our opinion the internal audit functions carried out during the year by a frm of Chartered Accountants appointed by the management have been generally commensurate with the size of the Company and the nature of its business.

(viii) According to the information and explanations given to us in respect of statutory dues:

(a) Except for delays in deposit of dues relating to provident fund, employees state insurance, income- tax, wealth tax, value added tax, fringe benefit tax and service tax, the Company has generally been regular in deposit of excise duty, custom duty cess and other material statutory dues applicable to it with the appropriate authorities.

(b) The statutory dues in arrears as at 31st March 2011 for a period of more than six months from the date they became payable are as follows:

Name of Nature of the Rs. in Period to which Date of Due Date the Statute Dues Lakhs. the amount relates Payment

3.25 2000-01 Various Dates

111.69 2007-08 March 31, 2008

Income- Income Tax 334.59 2008-09 March 31, 2009 Tax Act,

848.41 2009-10 March 31, 2010 1961 515.33 2010-11 September 15, 2010 Not paid

Fringe benefit Tax 768.76 2007-08 March 31, 2008 3.42 2003-04 Various Dates

The Finance Service Tax 5.50 2004-05 Various Dates Act, 1994 0.84 2005-06 Various Dates

(c) Details of dues of Income-tax which have not been deposited as on 31 March, 2011 on account of disputes are given below:

Name of the Nature of Financial Years to which Rs. in Forum where statute the Dues the matter pertains Lakhs dispute is pending

Income-Tax Income Tax 2005-2006 89.67 Commissioner of Act, 1961 2006-2007 199.52 Income Tax- Appeals

(ix) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to fnancial institution and banks as follows :

Maximum amount of Maximum period Subsequent Lender default ( Rs in lakhs) of default ( days) Payment

Andhra Bank

Principal 152.78 78 Paid

Interest 60.09 58

Bank of India

Principal 330.00 109 Paid

Interest 55.69 69

Bank of Baroda

Principal 137.50 87 Paid

Interest 32.65 60

HSBC

Principal — — Paid

Interest 12.42 69

Indian Bank

Principal 91.67 94 Paid

Interest 20.03 70

Punjab National Bank

Principal 5000.00 138 Paid

Interest 60.74 79

LIC

Principal 142.86 78 Not Paid

Interest 33.12 164 Paid

(x) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained, other than temporary deployment pending application.

(xi) 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.

(xii) 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.

Notes:

1) The Cash Flow Statement is prepared in accordance with the Indirect Method as set out in Accounting Standard - 3 on Cash Flow Statements notifed in Section 211(3C) of the Companies Act, 1956.

2) Cash and Cash Equivalents include Rs 223.25 lakhs (31.03.2010: Rs. 466.24 lakhs ) Deposits lodged with Banks against guarantees/ letter of credit issued.

3) Previous year's figures have been regrouped/ rearranged/reclassified wherever necessary to conform with those of the current year.

4) Figures in bracket represents cash outfow.

5) Schedules 19 and 20 form an integral part of the Cash Flow statement.

For Deloitte Haskins & Sells

Chartered Accountants

(Registration No. 008072S)

C R Rajagopal

Partner Membership No:23418

Hyderabad, 25 August, 2011


Mar 31, 2010

1) We have audited the attached Balance Sheet of BARTRONICS INDIA LIMITED ("the Company") as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto in which are incorporated the return from a overseas branch audited by other auditor. 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 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.

4) a) The trading sales and purchases includes software transmitted through electronic form without adequate documentary evidence with respect to transfer of significant risks and rewards incidental to the ownership aggregating to Rs.8,837.59 Lakhs and Its 8,461.87 Lakhs respectively and are outstanding as on 31 March 2010, on which we are unable to express our opinion. Had the adjustment been made in the financial statements, the sales and the debtors would be lower by Rs.8,837.59 Lakhs, the purchases and the creditors would be lower by Rs.8,461.87 Lakhs,

b) The Company based on the expert opinion obtained, has recognized the deferred tax expense using current applicable effective tax rate, being Minimum Alternate Tax (MAT) rate, instead of regular tax rates as specified by paragraph 21 of Accounting Standard 22 - "Accounting for Taxes on Income". Had the Company recognised the deferred tax expense using regular tax rates, the deferred tax expense for die year would be higher by Rs.2,615.89 Lakhs.

Had the adjustments referred in (a) and (b) above, been made in the financial statements, the profit after tax and Reserves and Surplus would be lower by Rs 2,927.76 Lakhs. The basic and diluted earnings per share would be lower by Rs. 9.55 and Rs 6.79 respectively.

5) Without qualifying our opinion, attention is invited to the following regarding inventories and debtors for the reasons stated therein:

a. note 9 of Schedule 21 regarding debtors balance aggregating to Rs. 4,761.49 lakhs outstanding for more than six months, considered good for recovery by the management and no provision has been made.

b. note 11 of Schedule 21 regarding non-provision for slow moving software inventories aggregating to Rs. 986.34 lakhs lying for more than nine months, considered saleable by the Company and no provision has been made.

6. 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 except for the matter stated in para 4(a) above, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

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 those books; and proper return adequate for the purpose of our audit has been received from the foreign branch audited by other auditor. The branch audit report has been forwarded to us and appropriately dealt with;

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 and the audited branch return;

d. in our opinion subject to our comments in paragraphs 4 above in respect of trading sales and deferred tax liability, which is not in accordance with Accounting Standard 9 - "Revenue Recognition" and Accounting Standard 22 - "Accounting for Taxes on Income", 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;

e. 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 Companies Act, 1956, in the manner so required, and subject to the impact of die financial statements of die matters referred to in paragraph 4(a) and 4(b) above, 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, 2010;

(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.

7) On the basis of written representations received from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that, none of the Directors is disqualified as on 31st March, 2010 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)

(i) Having regard to the nature of the Companys business/activities clauses 4 (v), (vi), (viii), (x), (xii), (xiii), (xiv), (xv), (xix) and (xx) of CARO are not applicable.

(ii) 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. For the fixed assets lying at the third parties locations, confirmations have been obtained from them in respect of physical existence of the fixed assets. 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.

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during die year by the management at reasonable intervals.

(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 and no material discrepancies were noticed on physical verification.

(iv) 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.

(v) In our opinion and according to the information and explanations given to us, there is inadequate internal control system 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, which needs further improvement and needs to strengthen systems and procedures relating to documentation.

(vi) In our opinion the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the management which is not commensurate with the si^e of the Company and the nature of its business.

(vii) 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, wealth tax, value added tax, fringe benefit tax and service tax have not been regular and substantial delays in deposit of such dues have been noticed, with the appropriate authorities. In respect of other material undisputed statutory dues including investor education and protection fund, custom duty and excise duty, the Company has been generally 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 31 March, 2010 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 which the Payment Lakhs amount relates

Income-Tax Act, 1961 Income Tax 3.25 2000-01 Various Dates

768.76 2007-08 March 31,2008

750.52 2008-09 March 31,2009

836.67 2009-10 September 15, 2010 Not paid

The Finance Act, 1994 Service Tax 3.42 2003-04 Various Dates

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 31 March, 2010 on account of any dispute. The details of the disputed dues of income tax which have not been deposited as on 31 March, 2010 are given below:

Name of the statute Nature of Financial Years to Rs. in Forum where the Dues which the matter Lakhs dispute is pertains pending

Income-Tax Act, 1961 Income Tax 2006-2007 89.67 Commissioner 2007-2008 111.31 of Income Tax- Appeals

(viii) In our opinion and according to the information and explanations given to us, the Company has on few instances defaulted in repayment of dues to financial institution and banks which is as follows:

Amount of default (Rs in lakhs) Delays in No of days

2,335.42 1-60

1,721.76 60-120

183.34 120-180

(ix) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained, other than temporary deployment pending application.

(x) 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.

(xi) According to the information and explanations given to us the Company has made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 at a price which is prima facie not prejudicial to the interests of the company

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants

(Registration No.008072S)

C R Rajagopal

Partner Hyderabad, 06 December, 2010


Mar 31, 2003

1. We have audited the attached Balance Sheet of M/s BARTRONICS INDIA LIMITED as at March 31, 2003 and the relative Profit & Loss Account for the year ended on that date, both of which we have signed under the reference to this report. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standard 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 our opinion.

3. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Central Government of India in terms of Section 227(4A) of The Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to paragraph 3 above, we report that :

(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 audit;

(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 those books;

(c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report have been prepared in compliance with the applicable accounting standards referred to in sub section (3C) of Section 211 of the Companies Act; 1956.

(e) On the basis of written representations received from the directors, as on March 31, 2003, and taken on record by the Board of Directors of the Company, we report that none of the directors is disqualified as on March 31, 2003 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

(f) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and Profit and Loss account together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act, and also give respectively, 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 31,2003; and in the case of the Profit and Loss Account, of the profit for the year ended on that date.

(ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT TO THE MEMBERS OF BARTRONICS INDIA LIMITED

Annexure referred to in Paragraph 3 of our Report of even date:

1. The company is maintaining its fixed asset register to reflect the quantitative details and situation/location of fixed assets. We are informed that the management conducted physical verification of fixed assets and that no material discrepancies were noticed.

2. None of the fixed assets have been revalued during the year, so far, as appears from the information and explanations given to us.

3. The stock of finished goods, stores, spare parts and raw materials, were verified by the management at the time of annual closing.

4. The procedure for physical verification of stock followed by the management is, in our opinion reasonable and adequate in relation to the size of the company and the nature of its business at present.

5. The discrepancies arising out of physical verification of stocks have been suitably dealt with in the books of accounts.

6. On the basis of our examination of the records made available to us, in our opinion, the valuation of stocks, is fair and proper and in accordance with the stated accounting policies of the company.

7. The company has not taken any loans from companies/firms listed in the register to be maintained under section 301 and 370(1B) of the Companies Act, 1956.

8. The company has not granted any loans to companies/firms or other parties to the incorporated /listed in the register to be maintained under section 301 and 370 (1C) of the Companies Act, 1956. In respect of other loans and advances, the terms and conditions of the said loans are prima-facie prejudicial to the interest of the company.

9. In our opinion and according to the information and explanations given to us, the existing internal control procedures relating to purchase of store, consumables, raw materials, Plant & Machinery, equipment and other assets and for the sale of goods are adequate and addressed in an on going manner.

10. According to the information and explanations given to us, purchase of goods and materials and sale of goods, materials and services, in pursuance of contracts or agreements to be entered in the register to be maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rs.50,000 or more in value in respect of each party have been made, in so far as appears from the information and explanations given to us, at prices which are prima facie reasonable.

11. As explained to us, the company did not have any unserviceable and damaged goods during the year, which were significant in value.

12. The company has not invited or accepted any deposits from the public attracting the provisions of section 58A of the Companies Act, 1956 and the rules framed hereunder.

13. The companys operations do not generate any scrap/by-products.

14. The company has an adequate internal audit system commensurate with the nature and size of its business.

15. The Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products of the company.

16. The company has generally regularly deposited during the year Provident Fund and Employees State Insurance dues with the appropriate authorities.

17. According to the information and explanations given to us there are no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Customs Duty and Excise Duty as at the Balance Sheet date for a period of more than 6 months from the date they became payable.

18. To the best of our knowledge and on the basis of our examination of the books of accounts, prevailing internal controls and information and explanations given to us, there are no personal expenses charged to revenue account other than expenses under service contract obligations with employees, or in accordance with generally accepted business practices.

19. To the best of our knowledge and on the basis of our examination of the books of accounts, there are no dues outstanding more than Rs.1 lakh for more than 30 days to Small-Scale Industrial undertakings. The total outstanding due to Small-Scale Industrial undertakings is nil. Total outstanding due to creditors other than Small-Scale Industrial undertakings is Rs.97,86,958/-.

20. The company is not a sick industrial company within the meaning of clause (o) of sub section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

21. The company is implementing a system of recording receipts of materials and stores and a system of identifying issued and consumption of material to relative jobs.

22. The company has a reasonable system of authorization at proper levels and also an adequate internal control system commensurate with its size and nature of activity.

23. In respect of the trading activities of the company, as per the information and explanations given to us, the company does not have any damaged goods. In view of the technical nature of the companys activities and the products it trades in, we are not in a position to examine the veracity thereof, and have therefore relied upon the same.

for Yaji Associates Chartered Accountants

Sd/- A.P.P. Kasipati Partner M.No.19442

Place : Hyderabad Date : 30.08.2003

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