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½e have audited the attached balance sheet of ½ipro Limited (Dzthe Companydz)
as at March 31, 2010 and 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 Companyǯs management. Our responsibility is to express an
opinion on these financial statements based on our audit.
a) c ½e 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)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;
c) 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
d)c 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 Act;
e)c On the basis of written representations received from the directors as on March
31, 2010, and taken on record by the Board of Directors, we report that non e of
the directors is disqualified as at March 31, 2010 from being appointed as a
director in terms of clause (g) of sub-section (1) of Section 274 of the Act; and
f)c 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 India:
i) c In the case of the balance sheet, of the state of affairs of the Company as at
March 31, 2010;
ii) c In the case of the profit and loss account, of the profit of the Company for
the year ended on that date; and
iii) c In the case of cash flow statement, of the cash flows for the year ended on
that date.
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Partner
Bangalore
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d c à The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
ñ The Company has a regular programme of physical verification of its fixed assets
by which all fixed assets are verified in aphased manner over a period of three years.
In our opinion, this periodicity of physicalverification is reasonable havingregard 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.
c à The inventory, except goods-in-transit and stocks lying with third parties, has
been physically verified by the managementduring the year. In our opinion, the
frequency of such verification is reasonable. For stocks lying with third parties at
theyear-end, written confirmations have been obtained.
ñ The procedures for the physical verification of inventories followed by the
management are reasonable and adequate inrelation to the size of the Company and
the nature of its business.
The Company is maintaining proper records of inventory. The discrepancies
noticed on physical verification betweenthe physical stocks and the book records
were not material.
º
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Enthink Inc. 42 42
c In our opinion, the rate of interest, where applicable and other terms and
conditions on which loans have been grantedto companies, firms or other parties
listed in the register maintained under Section 301 of the Act are not, prima
facie,prejudicial to the interest of the Company.
' c The principal amounts and interest, wherever applicable, are being repaid
regularly in accordance with the agreedcontractual terms. Accordingly,
paragraphs 4(iii)(d) of the Order are not applicable to the Company.
& c The Company has not taken any loans, secured or unsecured, from companies,
firms or other parties covered in the registermaintained under Section 301 of the
Act. Accordingly, paragraphs 4(iii)(e) to (g) of the Order are not applicable to
theCompany.
c In our opinion and according to the information and explanations given to us, there
is an adequate internal control systemcommensurate with the size of the Company
and the nature of its business with regards to purchase of inventories and
fixedassets and with regard to sale of goods and services. ½e have not observed any
major weakness in the internal control systemduring the course of the audit.
Î c In our opinion and according to the information and explanations given to us, the
particulars of contracts or arrangementsreferred to in Section 301 of the Act have
been entered in the register required to be maintained under that Section.
In our opinion, and according to the information and explanations given to us, the
transactions made in pursuance ofcontracts and arrangements referred to in (a)
above and exceeding the value of Rs. 5 lakh with any party during theyear have been
made at prices which are reasonable having regard to the prevailing market prices
at therelevant timeexcept for purchases of certain services which are for the
Companyǯs specialized requirements and similarly for sale ofcertain goods and
services for the specialized requirements of the buyers and for which suitable
alternative sources are notavailable to obtain comparable quotations. However, on
the basis of information and explanations provided, the sameappear reasonable.
å c The Company has not accepted any deposits from the public.
c In our opinion, the Company has an internal audit system commensurate with the
size and nature of its business.
´ c ½e have broadly reviewed the books of accounts maintained by the Company
pursuant to the rules prescribed by the Central Government under Section
209(1)(d) of the Act for maintenance of cost records in respect of Vanaspati, Toilet
soaps, Lighting products and Mini computers/ Microprocessor based system and
Data communication system and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained. However, we have not made
a detailed examinationof the records.
· c 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,
Employeesǯ State Insurance, Income-tax, Sales-tax, ½ealth tax, Service tax, Customs
duty, Excise duty and other material statutory dues have been generally regularly
deposited during the year by the Company with the appropriate authorities. As
explained to us, the Company did not have any dues on account of Investor
education and Protection Fund.
According to the information and explanations given to us, no undisputed
amounts payable in respect of ProvidentFund, Employeesǯ State Insurance, Income-
tax, Sales-tax, ½ealth tax, Service tax, Customs duty, Excise duty and othermaterial
statutory dues were outstanding as at March 31, 2010 for a period of more than six
months from the date theybecame payable.
There were no dues on account of cess under Section 441A of the Act since the
date from which the aforesaid Section comes into force has not yet been notified by
the Central Government.
According to the information and explanations given to us, the following dues of
Income tax, Excise duty, Customs duty,Sales tax and Service tax have not been
deposited by the Company on account of disputes:
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d c The Company does not have any accumulated losses at the end of the financial
year and has not incurred cash losses during the financial year and in the
immediately preceding financial year.
dd c In our opinion and according to the information and explanations given to us, the
Company has not defaulted in repayment of any dues to any financial institution or
bank. The Company did not have any outstanding debentures during the year.
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d c The Company has not granted loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
dº c In our opinion and according to the explanations given to us, the Company is not
a chit fund/nidhi/mutual benefit fund/ society.
d c According to the information and explanations given to us, the Company is not
dealing or trading in shares, securities, debentures and other investments.
dÎ c In our opinion and according to the information and explanations given to us, the
terms and conditions on which the Company has given guarantees for loans taken by
others from banks or financial institutions are not prejudicial to the interest of
theCompany.
då c In our opinion and according to the information and explanations given to us, the
term loans taken by the Company have been applied for the purpose for which they
were raised.
d c 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 the
funds raised on short term basis have not been used for long term investment.
d´ c The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintainedunder Section 301 of
the Act.
d· c The Company did not have any outstanding debentures during the year.
c The Company has not raised any money by public issues during the year.
d c ½e have been informed that a junior level employee of the Compan y had
embezzled funds amounting to Rs 228 million over a period of three years from
November 2006 to December 2009. The Companiesǯ internal investigation under the
directsupervision of the Companyǯs Audit Committee related to this embezzlement
has been completed.
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Chartered Accountants
Firm registration number: 101248½
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Partner
Membership No. : 046768
Bangalore
April 23, 2010
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Financial Performance
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9,163 6,460 7,908 5,741
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46,310 38,999 48,980 29,738
ccc 8,809 5,860 8,809 5,860
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c cc 1,283 996 1,283 996
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cc! c 36,218 32,143 38,888 22,882
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* Profit for the year in Standalone Result is after Rs 4,534 million (March 2009:
Rs (7,454) million) of gains/(losses) relating to translation of foreigncurrency
borrowings and mark to market losses of related cross currency swaps. In the
Consolidated Accounts, these are considered as hedges of netinvestment in
overseasoperations and are recognized directly in shareholders' funds.
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Thecombined market for Indian IT-ITeS in fiscal 2010 wasnearly $ 63 billion. Key
factors supporting this projectionare the growing impact of technology led
innovation,the increasing demand for global sourcing and graduallyevolvin g socio-
political attitudes.
·
½e, therefore, applied to the Ministry ofCorporate Affairs, Government of India
and sought anexemption from the requirement to present detailedfinancial statements
of each subsidiary.
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Our Sales for the current year grew by 7% to Rs. 276,505million and our Profit
for the year was Rs. 46,310 million,increase of 19% over the previous year. Over the last
10years, our Sales have grown at a compounded annualgrowth rate (CAGR) of 28% and
Profit after Tax at 31%.
- &&c
Your Board of Directors has approved issue of Bonus Sharesin the ratio of two
equity shares for every three existingequity shares outstanding as on the record date
and twoAmerican Depositary Shares for every three existingAmerican Depository
Shares outstanding as on the recorddate. Issue of Bonus Shares has also been approved
by theshareholders of the Company through Postal Ballot onJune 4, 2010. Subsequent to
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this approval, the record dateto determine the eligible shareholders who are entitled
toreceive the Bonus Shares fixed as June 16, 2010.
In October 2009, your Company signed an agreementto form a joint venture with
Delhi International AirportPrivate Limited. This Joint Venture Company is namedas
½ipro Airport IT Services Limited. ½ipro holds 74%in the Joint Venture and Delhi
International AirportPrivate Limited holds 26% stake. This partnership
assumessignificance as IGI airportǯs new integrated terminal(T3) will be the gateway
for the Commonwealth Gamesscheduled to be held in New Delhi.
dd
All the subsidiaries of the Company are unlisted and noneof them are material
unlisted subsidiaries as per Clause 49of the Listing Agreement.
During the year under review, your Company has madeacquisitions and
investments of an aggregate of US$ 171Million as equity in its direct subsidiaries ½ipro
CyprusPrivate Limited, ½ipro Inc and ½ipro Yardley ConsumerCare Private Limited.
Your Company has also invested Rs. 37 Million as equityin ½ipro Airport IT
Services Limited, a newly formedjoint venture company with Delhi International
Airport(P) Limited. Apart from this, the Company has fundedits subsidiaries, from time
to time, as per the fundingrequirements, through loans, guarantees and other means.
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During the year, your Company has earned foreign exchange of Rs.168,469
million and the outgoings in foreign exchange were Rs.71,739 million, including
outgoings on materialsimported and dividend.
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The Company has taken several steps to conserve energythrough its DzEco Eye
and Sustainabilitydz initiativesseparately as part of this Annual Report. Theinformation
on Conservation of Energy required underSection 217(1)(e) of the Companies Act,
1956, read withRule 2 of the Companies (Disclosure of Particulars in theReport of Board
of Directors) Rules, 1988, is provided inAnnexure A in page 44 of this Annual Report.
dº
Articles of Association of the Company provide that at leasttwo-thirds of our
Directors shall be subject to retirementby rotation. One third of these retiring Directors
mustretire from office at each Annual General Meeting of theshareholders. A retiring
Director is eligible for re-election.
The requisite notices together with necessary deposit havebeen received from a
member pursuant to Section 257of the Companies Act, 1956 proposing the election
ofMr.Shyam Saran.
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The names of the Promoters and entities comprisingDzgroupdz as defined under the
Monopolies and RestrictiveTrade Practices (DzMRTPdz) Act, 1969, for the purposes
ofSection 3(1)(e)(i) of the SEBI (Substantial Acquisition ofShares and Takeover)
Regulations, 1997, include:
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The auditors, M/s. BSR & Co., Chartered Accountants,retire at the ensuing Annual
General Meeting and haveconfirmed their eligibility and willingness to accept office,if
re-appointed. The proposal for their re-appointment isincluded in the notice for Annual
General Meeting sentherewith.
Pursuant to the direction from the Ministry of CorporateAffairs for appointment of Cost
Auditors, your Board ofDirectors has re-appointed P.D. Dani& Co., as the CostAuditor for
the year ended March 31, 2011. c
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Your Company has not accepted any fixed deposits. Hence,there is no outstanding
amount as on the Balance Sheet date.
On behalf of the Directors I confirm that as required underSection 217 (2AA) of the
Companies Act, 1956.
b) ½e have selected such accounting policies andapplied them consistently and made
judgementsand estimates that are reasonable and prudent so asto give true and fair
view of the state of affairs of theCompany at the end of the financial year and of
theprofits of the Company for the period;
c) ½e have taken proper and sufficient care for themaintenance of adequate accounting
records inaccordance with the provisions of the CompaniesAct, 1956, for safeguarding
the assets of the Companyand for preventing and detecting fraud and
otherirregularities; and
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då
Your Directors take this opportunity to thank thecustomers, shareholders,
suppliers, bankers, businesspartners/associates, financial institutions and Centraland
State Governments for their consistent support andencouragement to the Company.
I am sure you will joinour Directors in conveying our sincere appreciation toall
employees of the Company for their hard work andcommitment. Their dedication and
competence hasensured that the Company continues to be a significantand leading
player in the IT Services industry.
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