Patni Computer Systems Ltd

To the Members of

Patni Computer Systems Limited

We have audited the attached Balance Sheet of Patni Computer Systems Limited(‘the Company’) as at 31 December 2010, the Profit and Loss Account and the CashFlow Statement for the year ended on that date, annexed thereto. These financialstatements are the responsibility of the Company’s management. Our responsibility isto express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted inIndia. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

As required by the Companies (Auditor’s Report) Order, 2003 (‘theOrder’) issued by the Central Government of India in terms of sub-section (4A) ofSection 227 of the Companies Act, 1956 ("the Act"), we enclose in the Annexure,a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

a) we have obtained all the information and explanations which, to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;

c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealtwith by this report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash FlowStatement dealt with by this report comply with the Accounting Standards referred to insubsection (3C) of Section 211 of the Act;

e) on the basis of written representations received from the directors of the Company,as at 31 December 2010 and taken on record by the Board of Directors, we report that noneof the directors are disqualified as at 31 December 2010 from being appointed as adirector in terms of clause (g) of sub-section (1) of Section 274 of the Act; and

f) in our opinion, and to the best of our information and according to the explanationsgiven to us, the said accounts give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India :

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31December 2010;

ii) in the case of the Profit and Loss Account, of the profit for the year ended onthat date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended onthat date.

Annexure to the Auditors’ Report

(Referred to in our report of even date)

1 a) The Company has maintained proper records showing full particulars, includingquantitative details and situation, of fixed assets.

b) The Company has a regular programme of physical verification of its fixed assets, bywhich all fixed assets are verified in a phased manner over a period of three years.During the current year, as part of a cyclical plan, the Company has carried out physicalverification of certain fixed assets and no material discrepancies were noticed upon suchverification. In our opinion, this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets.

c) Fixed assets disposed off during the year were not substantial and, therefore, donot affect the going concern assumption.

2 The Company is a service company, primarily rendering IT consulting and softwaredevelopment services. Accordingly it does not hold any physical inventories. Thus,paragraph 4(ii) of the Order is not applicable.

3 The Company has neither granted nor taken any loans, secured or unsecured, to/fromcompanies, firms or other parties covered in the register maintained under Section 301 ofthe Act.

4 In our opinion and according to the information and explanations given to us, thereis an adequate internal control system commensurate with the size of the Company andnature of its business with regard to purchase of fixed assets and with regard to sale ofservices. The activities of the Company do not involve purchase of inventory and the saleof goods. We have not observed any major weakness in the internal control system duringthe course of the audit.

5 a) In our opinion and according to the information and explanations given to us, theparticulars of contracts or arrangements referred to in Section 301 of the Act, have beenentered in the register required to be maintained under that section.

b) In our opinion, and according to the information and explanations given to us, thetransactions made in pursuance of contracts and arrangements referred to in (a) above andexceeding the value of `5 lakh with any party during the year have been made at priceswhich are reasonable having regard to the prevailing market prices at the relevant time.

6 The Company has not accepted any deposits from the public.

7 In our opinion, the Company has an internal audit system commensurate with the sizeand nature of its business.

8 The Central Government has not prescribed the maintenance of cost records underSection 209(1) (d) of the Act, for any of the services rendered by the Company.

9 a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company, amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund, Employees’State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, and othermaterial statutory dues have been generally regularly deposited during the year by theCompany with the appropriate authorities. As explained to us, the Company did not have anydues on account of Excise duty and Investor Education and Protection Fund.

According to the information and explanations given to us, no undisputed amountspayable in respect of Provident Fund, Employees’ State Insurance, Income tax, Salestax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dueswere in arrears as at 31 December 2010 for a period of more than six months from the datethey became payable, other than dues of value added taxes amounting to `5,905 thousandsfor 2009-2010 for foreign branches. There were no dues on account of Cess under section441A of the Act, since the date from which the aforesaid section comes into force has notyet been notified by the Central Government.

b) According to the information and explanations given to us, there are no undisputedamounts payable in respect of Wealth tax, Service tax, Customs duty, Sales tax and othermaterial statutory dues as at 31 December 2010 for a period of more than six months fromthe date they became payable. According to the information and explanations given to us,the following dues of Income-tax have not been deposited by the Company on account ofdisputes:

10 The Company does not have any accumulated losses at the end of the financial yearand has not incurred cash losses in the current financial year and in the immediatelypreceding financial year.

11 The Company did not have any outstanding dues to any financial institution, banks ordebentureholders during the year.

12 The Company has not granted loans and advances on the basis of security by way ofpledge of shares, debentures and other securities.

13 In our opinion and according to the information and explanations given to us, theCompany is not a chit fund/ nidhi/ mutual benefit fund/ society.

14 According to the information and explanations given to us, the Company is notdealing or trading in shares, securities, debentures and other investments.

15 According to the information and explanations given to us, the Company has not givenany guarantee for loans taken by others from banks or financial institutions.

16 The Company did not have any term loans outstanding during the year.

17 According to the information and explanations given to us, and on an overallexamination of the balance sheet of the Company, we report that funds raised on short-termbasis have not been used for long term investment.

18 The Company has not made any preferential allotment of shares to companies/ firms/parties covered in the register maintained under Section 301 of the Act.

19 The Company did not have any outstanding debentures during the year.

20 We have verified the end-use of money raised by public issue as disclosed in note 29to the financial statements. The Company has not raised any money by public issues duringthe year.

21 According to the information and explanations given to us, no fraud on or by theCompany has been noticed or reported during the course of our audit.