MPHASIS Auditors Report

We have audited the accompanying financial statements of MphasiS
Limited ("the Company"), which comprise the Balance Sheet as at 31
October 2013, 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
accounting principles generally accepted in India, including the
Accounting Standards referred to in the Companies Act, 1956 ("the
Act") (read with the General Circular 15/2013 dated 13/9/2013 issued
by the Ministry of Corporate Affairs). 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.

Auditor''s 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.

An 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, the auditor
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. An 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.

Opinion

In our opinion and to the best of our information and according to the
explanations given to us, 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:

(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 October 2013;

(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.

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) 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, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards prescribed
under the Companies Act, 1956 (read with the General Circular 15/2013
dated 13/9/2013 issued by the Ministry of Corporate Affairs);

(e) On the basis of written representations received from the directors
as on 31 October 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 October 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.

Annexure referred to in paragraph 1 under the heading "Report on
other legal and regulatory requirements" of our report of even date

Re: MphasiS Limited ("the Company")

(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.

(b) The Company has a regular programme of physical verification of
fixed assets which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. In accordance with
this programme, certain fixed assets were physically verified by the
management during the year and we are informed that no material
discrepancies were noticed on such verification.

(c) There was no disposal of a substantial part of fixed assets during
the year.

(ii) The Company''s business does not involve inventories and,
accordingly, the requirements under paragraph 4(ii) of the Order are
not applicable to the Company.

(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. Accordingly, the
provisions of clause 4(iii)(a) to (d) of the Order are not applicable
to the Company and hence not commented upon.

(b) According to information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Accordingly, the provisions of clause
4(iii)(e) to (g) of the Order are not applicable to the Company and
hence not commented upon.

(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services except that the internal control system in respect of purchase
and sale of services with regard to infrastructure services business in
India needs to be strengthened. Except for the foregoing, during the
course of our audit, we have not observed any major weakness or
continuing failure to correct any major weakness in the internal
control system of the Company in respect of these areas.

(v) In our opinion, there are no contracts or arrangements that need to
be entered in the register maintained under section 301 of the
Companies Act, 1956. Accordingly, the provisions of clause 4(v)(b) of
the Order is not applicable to the Company and hence not commented
upon.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and nature of its business.

(viii) To the best of our knowledge and as explained, the Central
Government has not prescribed the maintenance of cost records under
clause (d) of sub-section (1) of section 209 of the Companies Act,
1956, for the products of the Company.

(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income- tax,
sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and
other material statutory dues have generally been regularly deposited
with the appropriate authorities. With regard to service tax dues, we
also draw reference to Note 12 to the financial statements.

(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.

(c) According to the records of the Company, there are no dues of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess which have not been deposited on account of any dispute
except the following:

Disputed Amount Bank
amount paid under guarantee
Name of the Nature of
statute dues protest providetd
under protest
(Rs. in
million) (Rs. in
million) (Rs. in million)

Income Tax
Act, 1961 Adjustment 2,049.91 - -
for transfer 1,015.90 327.02 -
pricing and
other 841.69 346.93 -
disallowances 245.93 - -

338.72 123.76 -

120.90 - -

Income Tax
Act, 1961 Non-deduc
tion of TDS 5,363.73 306.96 4,910.28

Name of the Period to
which the
Status Forum where dispute is
amount pending
relates
(financial
year)

Income tax
Act, 1961 2008-09 Dispute Resolution Panel (DRP)

2007-08 CIT (Appeals)

2006-07 ITAT

2005-06 ITAT

2004-05 ITAT

2003-04 ITAT

Income tax Act
1961 2005-06 to CIT(Appeals)
2011-12



Disputed Amount Bank
amount paid under guarantee
Name of the Nature of protest provided
statute dues under protest
(Rs. in
million) (Rs. in
million) (Rs. in
million)

Income Tax
Act, 1961 Disallowances 1.56 - -
under section 15.49 _ -
10A

58.61 41.98 -

13.37 6.50 -

103.22 10.00 -

Finance Act,
1994 Service tax 21.92 7.30 -


Name of the Period to
which the
Status Forum where dispute is
amount
relates pending
(financial
year)

Income tax Act, 2008-09 CIT (Appeals)
1961

2007-08 ITAT

2003-04 CIT (Appeals)

2005-06 Supreme Court

2001-02 Supreme Court

Finance Act, 1994 2005-07 CESTAT, Karnataka

(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.

(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders. As at year end, the Company did
not have any outstanding dues to any financial institution or debenture
holders.

(xii) According to the information and explanations given to us and
based on the documents and records produced before us, the Company has
not granted loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.

(xvi) The Company did not have any term loans outstanding during the
year.

(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.

(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the
year.

(xx) The Company has not raised any money through a public issue during
the year.

(xxi) (a) We have been informed by the management that there were two
theft cases of automated teller machines which were installed and
maintained by the Company, resulting in loss of '' 3.5 million, of which
the Company has recovered '' 2.3 million from the insurers and is
confident that the balance would be recovered from vendors.

b) We have been informed that a vendor in collusion with an employee of
the Company has supplied leased assets to the Company in deviation of
the approved purchase order. The Company has initiated investigation
and pending conclusion of the matter under investigation, the amount of
loss is presently not ascertainable.

c) We have been informed that a vendor has made false representation to
the income tax department regarding amounts owed by the Company
amounting to '' 565 million though such amounts have been paid by/
set-off against receivables of the Company in the normal course of its
business. Further, as informed, the vendor has also made false
allegation as regards certain other receipts from the Company, The
Company based on legal advice, is of the view that the allegations by
the vendor are not tenable and has initiated legal proceedings for the
alleged fraudulent conduct of the vendor.

d) We have been informed that based on certain observations in case of
a purchase order pertaining to infrastructure services business in
India, the management has initiated investigation into contracts
pertaining to such business, which is under progress and as such the
impact, if any is presently not ascertainable.

For S.R.BATLIBOI & ASSOCIATES LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W

per Adarsh Ranka

Partner

Membership Number: 209567

Place : Bengaluru

Date : 05 December 2013

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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