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Auditor Report of Cybermate Infotek Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of CYBERMATE INFOTEK LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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 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 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 Companies (Accounts) Rules, 2014. This responsibility 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; design, implementation and maintenance of adequate internal financial controls, that are 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 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 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls.

An audit also includes evaluating the appropriateness of 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, 2015, and its loss and its 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, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we further 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 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014.e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to 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 has disclosed the impact, if any, of pending litigations as at March 31, 2015, on its financial position in its standalone financial statements (Refer Note No. 25)

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 referred to in paragraph 1 under "Report on other Legal & Regulatory Requirements" in Independent Auditors' of even date to the members of CYBERMATE INFOTEK LIMITED on the standalone financial statements accounts as of and for the year ended March 31, 2015

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

(b) As explained to us, fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification.

i. The company has no inventory. Hence, this clause is not applicable.

ii. The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act.

iii. In our opinion and according to the information and explanations given to us, there is adequate internal control

Nature of Due Amount Payable

VAT Payable 1,34,948/-

Professional Tax 37,700/-

TDS Payable 1,93,107/-

system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness has been noticed or reported.

iv. The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

v. To the best of our knowledge and as explained, the company is not in the business of manufacturing and sale of any goods. Therefore, in our opinion, the provision of the order made by the Central Government for maintenance of cost records under sub-section (1) of Section 148 of the Act, 2013 is not applicable.

vi. (a) The Company is not regular in depositing statutory dues with the appropriate authorities following are the undisputed amounts payable which were outstanding, at the year end, for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us and based on the records of the company examined by us, (Income Tax) amount outstanding on account of dispute are;

Name of the Statute Nature of dues Amount

Income Tax Act, 1961 Income Tax 12,42,619/-

Income Tax Act, 1961 Income Tax 6,43,94,600/-

Income Tax Act, 1961 Income Tax 1,70,34,842/-

Income Tax Act, 1961 Income Tax 2,76,63,700/-

Name of the Statute Period to Forum where dispute is pending which the amount relates

Income Tax Act, 1961 2004-05 Commissioner of Income Tax - Appeals

Income Tax Act, 1961 2009-10 Income Tax Appellate Tribunal

Income Tax Act, 1961 2011-12 Commissioner of Income Tax - Appeals

Income Tax Act, 1961 2012-13 Commissioner of Income Tax - Appeals

(c) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise.

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

ix) In our opinion, and according to the information and explanations given to us, the company has not taken any loans from banks or financial institutions nor has issued any debentures. Hence, this clause is not applicable.

x) In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from bank or financial institutions.

xi) The Company has not raised any term loan during the year. Hence, this clause is not applicable.

xii) According to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For P. Murali & CO., Chartered Accountants Firm Registration No.: 007257S

P. Murali Mohana Rao Place: Hyderabad partner Date: 28th May 2015 Membership No.: 023412




Mar 31, 2014

We have audited the accompanying financial statements of CYBERMATE INFOTEK LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, 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:

The Company''s 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'')read with the General circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013. 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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. 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 March 31, 2014;

(b) In the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and © 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 referred to in Sub-Section(3C)of Section 211 of the Companies Act,1956(''the Act'')read with the General circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013.

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, 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

I. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies between the book records and the physical inventory have been noticed on such verification.

(c) The Company has not disposed off substantial part of the Fixed Assets during the year,

II. The Company is a service company, rendering software related services. The Company''s products, prima-facie, include developed software product. The inventory of software work-in-progress, being intangible, could not be physically verified; hence this clause is not applicable.

III. (a) The Company has granted advances to Parties covered in the register maintained U/s. 301 of the Companies Act, 1956, and the year end balance of advances to such parties was Rs. 63,41,862/- (b) In our opinion terms and conditions on which advances have been granted to parties listed in the register maintained under section 301 is not prejudicial to the interest of company.

(c) According to the information and explanation given to us, no repayment schedule has been specified and accordingly the question of regularity in repayment of principal amount does not arise.

(d) There is no overdue amount in excess of Rs. 1 Lakh in respect of advances granted to parties covered under section 301 of the Companies Act, 1956 since repayment schedule is not stipulated.

(e) The Company has taken advances/loans from the parties covered in the register maintained U/s.301 of the Companies Act, 1956 and the balance amount outstanding as on the last day of the financial year is Rs.3,37,88,158/-.

(f) According to the information and explanation given to us, the interest & other terms and conditions on which advances have been taken from parties listed in the register maintained under section 301 were not prima facie prejudicial to the interest of company.

IV. In our opinion and according to the information and explanations given to us, there are generally adequate internal control systems commensurate with the size of the company and the nature of its business with regard to software development services and fixed assets. There is no continuing failure by the company to correct any major weaknesses in internal control.

V.a) In our opinion and according to the information and explanation given to us , since no contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been made by the company in respect of any party in the financial year, the entry in the register U/s.301 of the Companies Act, 1956 does not arise. b) According to the information and explanations given to us, as no such contracts or arrangements made by the Company, the applicability of the clause of charging the reasonable price having regard to the prevailing market prices at the relevant time does not arise.

VI. The Company has not accepted any deposits from the public and hence the applicability of the clause of directives issued by the Reserve Bank of India and provisions of section 58A, 58AA or any other relevant provisions of the Act and the rules framed there under does not arise. As per information and explanations given to us no order from the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal 7has been received by the Company.

VII. In our opinion, the company is having internal audit system, commensurate with its size and nature of its business.

VIII. In respect of the Company, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section(I) of section 209 of the Companies Act, ,1956.

IX. a) The Company is not regular in depositing statutory dues with the appropriate authorities and at the end of the financial year the following amounts were outstanding from the date they became payable :

Nature of Due Amount .

VAT payable 1,34,948

TDS payable 12,37,780

b) According to the information and explanations given to us, there are disputed amounts which are payable in respect of Income Tax which are outstanding for more than 6 months from the date they became payable.

Name of the Statute Assessment Amount Forum where dispute is year pending

Income Tax 2009-10 6,43,94,600 ITAT, Hyderabad

Income Tax 2011-12 1,70,34,842 CIT - Appeals

X. The Company has been registered for a period of not less than 5 years, and there are no accumulated loses at the end of the financial year and the company has not incurred cash losses in this financial year and in the immediately preceding financial year.

XI. According to information and explanations given to us, the Company has defaulted in repayment of dues to financial Institutions or banks.

Dues to Financial institutions as of 31st march 2014 AmountRs.

Dewan Housing Finance Limited 2,43,64,956

XII. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities and hence the applicability of the clause regarding maintenance of adequate documents in respect of loans does not arise.

XIII. This clause is not applicable to this Company as the Company is not covered by the provisions of special statute applicable to Chit Fund in respect of Nidhi /Mutual Benefit Fund/Societies.

XIV. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, Debentures and other investments and hence the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order 2003, 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 Banks or Financial Institutions, and hence the applicability of this clause regarding terms and conditions which are prejudicial to the interest of the company does not arise.

XVI. The Company has not obtained any Term Loan during the previous year and hence the clause of whether the long term proceeds is utilized for the purpose of short term or not, does not arise and hence this clause is not applicable.

XVII According to the information and explanations given to us, no funds are raised by the Company on short- term basis. Hence the clause of short term funds being used for long-term investment does not arise.

XVIII. According to the information and explanations given to us, the Company has made preferential allotment of 9,90,000 Shares to parties covered in the Register maintained under section 301 of the Companies Act, 1956 amounting to Rs.9,90,00,000. The price at which shares have been issued is not prejudicial to the interest of the Company.

XIX. According to the information and explanations given to us, the company does not have any debentures and hence the applicability of the clause regarding the creation of security or charge in respect of debentures issued does not arise.

XX. According to information and explanations given to us, the company has not raised money by way of public issues during the year; hence the clause regarding the disclosure by the management on the end use of money raised by Public Issue is not applicable.

XXI. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under audit.

For P.Murali & Co., Chartered Accountants Firm''s Regn No 007257S

P.''Murali Mohana Rao Place: Hyderabad Partner Date:30.05.2014 Membership No. 023412


Mar 31, 2013

Report on the Financial Statements:

We have audited the accompanying financial statements of Cybermate Infotek Limited "the Company", which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss for the year ended, and Cash flow statement and 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 and financial performance 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.

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 March 31, 2013; and

(b) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

(c) In the case of the Cash Flow, of the cash flows for the period ended on that date;

ANNEXURE TO THE AUDITOR''S REPORT:

I. a) The Company has maintained proper records showing full particulars including quantitative details and situation of its Fixed Assets.

b) As explained to us, the fixed assets have been physically verified by the management reasonable intervals and no discrepancies between the book records and the physical inventory have been noticed on such verification.

c) During the year, the Company has not disposed off major fixed assets.

II. The Company does not have any inventory. Accordingly, the provisions of clause 4(ii) of the Order are not applicable.

III. a) 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.

b) As the Company has not granted any loans, the Clause of whether the rate of interest & other terms and conditions on which loans have been granted to parties listed in the register maintained under Section 301 prejudicial to the interest of company, is not applicable.

c) As no loans are granted by company, the clause of receipt of interest & principal amount from parties , is not applicable to the company.

d) No loans have been granted to Companies, Firms and other parties listed in the register U/S 301 of the Companies Act, 1956. Hence, overdue Amount of more than rupees one Lac does not arise and the clause is not Applicable.

e) The Company has taken Interest Free unsecured loans from Parties covered in the register maintained U/s.301 of the Companies Act, 1956.

f) The Company is not regular in repayment of the Loans taken from the part ies ment ioned in register maintained U/s.301 of the Companies Act, 1956.

IV. In our opinion and according to the information and explanation given to us, there are generally adequate internal controls commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and for sale of goods and services. There is no continuing failure by the Company to correct any major weaknesses in internal control.

V. a) In our opinion and according to the information and explanations given to us, since no contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been made by the Company in respect of any party in the financial year, the entry in the register U/s. 301 of the Companies Act, 1956.

b) According to the information and explanations given to us, as no such contracts or arrangements made by the Company, the applicability of the clause of charging the reasonable price having regards to the prevailing market prices at the relevant time does not arise.

VI. The Company has not accepted any deposits from the public and hence the applicability of the clause of directives issued by the Reserve Bank of India and provisions of section 58A, 58AA or any other relevant provisions of the Companies Act,1956 and the rules framed there under does not arise. As per information and explanations given to us the order from the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal has not been received by the Company.

VII. In our opinion, the company is having internal audit system, commensurate with its size and nature of its business.

VIII. In respect of the Company, the Central Government has not prescribed maintenance of cost records under clause (d) of Sub Section (1) of Section 209 of the Companies Act, 1956.

IX. a) The Company is not regular in depositing following statutory dues with the appropriate [authorities and at the end of last financial year.

Nature of due Amount Rs. Provident Fund 4,82,198/- TDS Payable 9,70,244/- Professional Tax Payable 1,04,600/- Service Tax Payable 5,14,598/-

b) According to the information and

explanations given to us, there are disputed amounts that are payable in respect of Income Tax as at the end of the period, for a period more than six months from the date they became payable.

X. The Company has been registered for a period of not less than 5 years, and the company has no accumulated losses at the end of the financial year and the company has not incurred cash losses in this financial year and in the immediately preceding financial year.

XI. According to information and explanations given to us, the Company has defaulted in repayment of dues to financial Institutions or banks.

XII. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities and hence the applicability of the clause regarding maintenance of adequate documents in respect of loans does not arise.

XIII. This clause is not applicable to this Company as the Company is not covered by the provision of special statute applicable to Chit Fund in respect of Nidhi/Mutual Benefit Fund/Societies.

XIV. According to the information and explanations given to us, the Company is not dealing or trading in shares securities, Debentures and other investments and hence the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order 2003, are not applicable to the Company.

XV. According to the information explanations given to us, the Company has not given any guarantee for loans taken by others from Banks or Financial Institutions, and hence the applicability of this clause regarding terms and conditions which are prejudicial to the interest of the Company does not arise. In our opinion, 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 the Company.

XVI. According to the information and explanations given to us, the Term Loans obtained by the company were applied for the purpose for which such loans were obtained by the company.

XVII. According to the information and explanations given to us, the Company has not used short term funds for long term Investment.

XVIII. According to the information and explanation given to us, the Company has not made preferential allotment to parties covered in the Register maintained Under Section 301 of the Companies Act, 1956. Hence this clause is not applicable.

XIX. According to the information and explanations given to us, the Company has not issued debentures and hence the applicability of the clause regarding the creation of security or charge in respect of debentures issued does not arise.

XX. According to information and explanations given to us, the Company has not raised any money by way of public issues during the year; hence the clause regarding the disclosure by the management on the end use of money raised by Public Issue is not applicable.

XXI. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under audit.

For P. MURALI & CO.,

CHARTERED ACCOUNTANTS FRN NO: 007257S

Sd/-

P. MURALI MOHANA RAO

PARTNER M.No.023412

PLACE: Hyderabad

DATE : 29-05-2013


Mar 31, 2010

We have audited the attached Balance Sheet of M/s. CYBERMATE INFOTEK LIMITED as at 31st March 2010 and also 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 Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit

We conducted our audit in accordance with 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 mis-statement. 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 s reasonable basis for our opinion.

As required by the companies (Auditors Report) Order, 2003 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:

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 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 the 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 and Cash Flow statement dealt with by this report are in compliance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act with exception to

(i) Consolidation of Financial Statements in accordance with AS 21 and

(ii) Collection of Overdue debtors as mentioned in Note No 12 (yi)

e) On the basis of written representation received from the directors, as on 31.03.2010, and taken on record by the Board of Directors, we report that hone of the director is disqualified as on 31st March 2010 from being appointed as director in terms of Clause (g) of section 274 (1) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanation" 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. In the case of the Balance Sheet, of the State of Affairs of the company as at 31st March 2010

II. In the case of the Profit and Loss Account, of the Profit for the year ended on that date and

III. In the case of Cash Flow statement, of the cash flows for the year ended on that date

ANNEXURE TO THE AUDITORS REPORT

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

b) As per the information and explanation given to us, the management at reasonable intervals carried out the physical verification of the fixed assets. No material discrepancies were noticed on such verification.

c) There was no substantial disposal of fixed assets during the year under audit

2 Due to the nature of its business, clause (ii) of the order, relating to physical verification of inventory is not applicable to the company.

3. As informed, the Company has neither granted nor taken any bans, secured or unsecured to /from companies, firms or other parties covered in the register maintained under section 301 of the companies Act.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with size of the company and the nature of its business, for the purchase of fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls in respect of this area.

5. The Company has not accepted any deposits from public to which the provisions of Section 58A of the act, and the rules made there under apply.

6. In our opinion, the company has an internal audit system, which is commensurate with the size and the nature of its business

7. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records prescribed under section 209(l)(d) of the act

8. (a) According to the information and

explanation given to us and the records examined by us, certain delays were observed in payments of statutory and institutional dues.

As at 31st March 2010 the folbwing amounts were outstanding as

1. Statutory dues

(a) TDS Payable Rs. 12,32,980

fb) PF Payable Rs. 1,55,360

Rs. 13,88,340

2. Institutional Dues

(a) ICICI Bank-Hire Purchase(computers) 9,75,555

(b) Orix Auto Services-Hire Purchase(computers) 74,000

10,49,555

(b) There is a disputed sales- tax liability of Rs.20, 94,131/- relating to the . Assessment Year 2001-2002.The case is pending disposal with the Appellate Tribunal

9. The company has been registered for a period of more than five years and has no accumulated bsses at the end of the year under audit

10. Based on our examination of the records and the information and explanation given to us, the company has not granted any ban and or advances on the basis of security by way of pledge of shares, debentures and other securities.

11. The company is not a chit fund, nidhi, mutual benefit fund or a society.

12. 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 order are not applicable to the company.

13. According to the information and explanations given to us the company has not givenany guarantee for bans taken by others from bank or financial institutions except bans to empbyees given by banks.

14. According to the information and explanations given to us and on overall examination of the balance sheet of the company, we report that the company has not raised any funds on short- term basis.

16. The company has not made any preferential albtment of shares during the year.

17. During the year covered by our audit report the company has not issued any secured debentures.

18. As per the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For B.Rama Rao & Co. Chartered Accountants Sd/-

Place: Hyderabad G V.Ranga Babu

Date : 31.05.2010 Partner

Membership No: 202432



 
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