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Auditor Report of Encore Software Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of ENCORE SOFTWARE LIMITED ("the Company"), which comprise the balance sheet as at 31st March 2015, the statement of profit and loss and the 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 and presentation 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 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.

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 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, 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 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 financial statements.

BASIS OF QUALIFIED OPINION

a) The entire net worth of the Company has been eroded. However the Company is continuing to prepare accounts under going concern concept.

b) Provision for retirement benefits in the form of gratuity and leave encashment has been made on estimated basis instead of on actuarial valuation as on the balance sheet date in accordance with Accounting Standard (AS)-15 (revised) on 'Employee Benefits (refer note no. 2.8).

The impact of the above on the 'loss' for the year is unascertained.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for qualified opinion paragraph, the aforesaid 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 31st March 2015;

b) in the case of the Statement of Profit and Loss, of the loss 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, 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 the paragraph 3 and 4 of the Order, to the extent applicable.

2. 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 as appears from our examination of those books;

c. The Balance Sheet, the 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 aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 except for gratuity and leave salary which has been provided on estimated basis instead of obtaining actuarial valuation (refer note no 2.8);

e. On the basis of written representations received from the directors as on 31st March 2015, taken on record by the Board of Directors, none of the directors are 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 included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to our best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements under contingent liabilities

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

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

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

ANNEXURE REFERRED TO IN OUR REPORT TO THE MEMBERS OF ENCORE SOFTWARE LIMITED FOR THE YEAR ENDED ON 31st MARCH 2015

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

b. All the assets have been physically verified by the management during the year which, in our opinion, is reasonable having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such verification.

ii. The Company is a service company, primarily rendering software services. Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable.

iii. The Company has not granted any loans to companies, firms and other parties covered in the register maintained under section 189 of the Companies Act, 2013. Hence clause 3 (iii) (a) and (b) of the Companies Auditor's Report Order, 2015 is not applicable to the Company for the year under review.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. According to the information and explanations given to us, the Company has not accepted any deposits and hence the requirement of clause 3 (v) of Companies (Auditor's Report) Order, 2015 is not applicable to the Company during the year under review.

vi. We have been informed that maintenance of books of accounts pursuant to the rules made by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 for maintenance of cost records in respect of products of the Company are not applicable to the Company for the year under review and hence the requirement of clause 3 (vi) of Companies (Auditor's Report) Order, 2015 is not applicable to the Company during the year under review.

vii. a. The Company has been generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable except service tax.

Details of undisputed dues of provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable in arrears as at 31st March 2015 for a period of more than six months from the date they became payable are given below:

Period to Name of the Nature of Amount which amount Statute Dues (Rs.) relates

Finance Act Service Tax 51,09,656 2009-10 and 2010-11

Name of the Due date Date of payment Statute Various dates Not paid as on the date Finance Act of this report

b. Details of dues income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited with the relevant authorities as on 31st March 2015 on account of any dispute are given below:

Nature of Name of the Statute Dues Related Period Amount (Rs.)

Income Tax Act, 1961 Income Tax 2001-02 and 1,48,30,162 2005-06

Name of the Statute Forum where dispute is pending

Income Tax Act, 1961 Commissioner of Income Tax (Appeals), Bangalore

c. According to the records of the Company, there are no amounts required to be transferred to the Investor Education and Protection Fund by the Company in accordance with relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

viii. The accumulated losses of the Company at the end of the financial year are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year and in the preceding financial year.

ix. Based on our audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution or bank or debenture holders hence the provisions of clause 3(ix) of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

x. As far as we could ascertain, the Company has not given guarantees for loans taken by others from banks or financial institutions and hence the provisions of clause 3(x) of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

xi. According to the information and explanations given to us, the Company has not availed any term loans during the year under review and hence the provisions of clause 3(xi) of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

xii. According to the information and explanations given to us, no material frauds on or by the Company that causes material misstatements to financial statements have been noticed or reported during the year.

For Ishwar & Gopal Chartered Accountants

K V Gopalakrishnayya Place: Bangalore Partner Date: 29th May 2015 Membership No. 021748 Firm Registration No. 001154S


Mar 31, 2014

Report on the Financial Statements

1. We have audited the accompanying financial statements of Encore Software 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

2. 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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th 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

3. 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.

4. 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.

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

Basis for Qualified Opinion

6. Entire net worth of the Company has been eroded. However the Company is continuing to prepare accounts under going concern concept.

7. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 Profit and Loss Account, of the loss 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

8. 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.

9. 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 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 AUDITORS'' REPORT (AS REFERRED TO IN CLAUSE 1 OF OUR REPORT TO THE MEMBERS OF ENCORE SOFTWARE LIMITED.

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

b. The fixed assets have been physically verified by the management during the year according to a periodical phased programme. In our opinion, the frequency of such verification is reasonable having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such verification.

c. During the year, the Company has not disposed off substantial part of the assets.

2. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms Report Order, 2003 (as amended) is not applicable to the Company for the year under review.

3. a. The Company has not granted any loans to companies and other parties covered in the register maintained under section 301 of the Companies Art, 19S6. Hence clause 4 (iii) (a) to (d) of the Companies Auditor''s Report Order, 2003 (as amended) is not applicable to the Company for the year under review.

b The Company has taken interest free loans repayable on demand from parties (2 in number) covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 54,79,478/- and the year-end balance of loans taken was Rs. 45,99,353/-. c In our opinion, the rate of interest and other terms and conditions are not prima facie, prejudicial to the interests of the company.

d. The Company has not defaulted in repayment of principal amount and interest as per the terms of the said loans.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5. a. According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered. b. In our opinion and according to the information and explanations given to us, the transactions entered in the registers maintained under Section 301 and except for items which are of special nature for which no alternative sources of supply is available or no comparison could be made of the prices in the absence of quotations/similar transactions with other parties, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time;

6. The Company has not accepted any deposits to which the provisions of section 58A and 58AA of the companies Act, 1956 and the rules framed there under apply.

7. In our opinion, the Company''s internal audit system is commensurate with the size and nature of its business.

8. Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 in respect of any activity of the Company.

9. a. There are delays in depositing with the appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, wealth tax, customs duty and other material statutory dues applicable. b According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and cess were in arrears as at March 31, 2014 for a period of more than six months from the date they became payable except for

Period to Name of the Nature of Amount which amount Statute Dues (Rs.) relates Due date

Central Excise Service Tax 52,09,656 2009-10 and Various dates Act 2010-11

Name of the Statute Date of payment

Central Excise Not paid as on the date Act of this report

c. According to the information and explanation given to us, there are no amounts of income tax, wealth tax, customs duty, sales tax, excise duty and cess which have not been deposited with the relevant authorities on account of any dispute.

10. The accumulated losses of the Company at the end of the financial year are more than 50% of net worth. The Company has incurred cash losses during the financiaI year covered by our audit and in the preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to debenture holders/financiaI institutions/banks.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clauses 4(xii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

13. 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 are not applicable to the Company.

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

15. As far as we could ascertain, the Company has not given guarantees for loans taken by others from banks or financial institutions and hence the provisions of clause 4(xv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

16. In our opinion, no term loans have been borrowed during the year.

17. 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.

18. There was no issue of shares during the year. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the year under review.

19. According to the information and explanations given to us, there are no debentures issued by the Company during the year. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 regarding creation of securities are not applicable.

20. The Company has not raised any monies by way of public issue during the year. Accordingly, the provisions of paragraph 4(xx) of the Companies (Auditor''s Report) Order, 2003 regarding end use of money are not applicable.

21. According to the information and explanations given to us, no material frauds on or by the Company that causes material misstatements to financial statements have been noticed or reported during the year.

For Ishwar & Gopal Chartered Accountants

K V Gopalakrishnayya Place: Bangalore Partner Date: May 29, 2014 Membership No. 21748 Firm Registration No. 0011545


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying attach balance sheet financial statements of Encore Software Limited ("the Company"), which comprise the Consolidated Balance Sheet as at March 31, 2013, and the Consolidated Statement of Profit and Loss and Consolidated 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 consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India. 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

We report that the Consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standards (AS) 21 - Consolidated Financial Statements - notified under section 211 (3C) of the Companies Act, 1956.

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 subject to in the case of the Consolidated Balance Sheet, of the state of affairs of the Company as at March 31, 2013; in the case of the Consolidated Profit and Loss Account, of the profit for the year ended on that date; and in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to preparation of accounts of the Company under "going concern concept" despite complete erosion of shareholders funds. Our opinion is qualified in respect of this matter.

For Ishwar & Gopal

Chartered Accountants

K V Gopalakrishnayya

Place: Bangalore Partner

Date: May 30, 2013 Membership No. 21748

Firm Registration No 001154S


Mar 31, 2012

We have audited the attached Balance sheet of Encore Software Limited (the Company) as at March 31, 2012, the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Company's 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 misstatements. 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.

As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) '(Amendment) Order, 2004 (the 'order' ) issued by the Central Government of India in terms of sub - section (4A) of Section 227 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 purpose of our audit:

b) In our opinion, proper books of account as required by the law, have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statements dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statements 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) On the basis of the written representation received from the Directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2012 from being appointed as a Director in terms Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

f) The accounts of the Company have been prepared on going concern concept despite the complete erosion of Shareholders' funds.

g) In our opinion and to the best of our information and according to the explanations given to us, subject to preparation of accounts of the Company on ' going concern concept' despite the complete erosion of shareholders' funds the said accounts read together with the significant accounting policies and notes applicable are give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

I. In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

II. In so far as it relates to the Profit and Loss Account of the loss of the Company for the year ended on that date.

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

Annexure to the Auditors' Report to the members of Encore Software Limited for the year ended March 31, 2012.

(i) Fixed Assets

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

(b) The Company has a phased programme of physical verification of fixed assets which, in our opinion is reasonable, having regard to the size of the Company and nature of its business, In accordance with such programme the Management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification.

(c) As per the information and explanation furnished to us, fixed assets are not disposed of during the year by the Company.

(ii) Inventories:

(a) The Management has conducted physical verification of inventories. In our opinion, the frequency of t verification is reasonable.

(b) In our opinion and according to the information and explanation furnished to us, the procedures followed by the Management for the physical verification of inventories are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanation furnished to us, the Company has maintained proper record of inventories. The discrepancies noticed between the physical stock and book records were not material.

(iii) Loans:

(a) The Company has not granted any loans secured or unsecured to Companies, firms or other parties ' listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken the following loans from the parties listed in the Register maintained under section 301 of the Companies Act, 1956.

(i) An unsecured interest free loan from a Company in which maximum amount involved during the year was Rs. 3,32,849 and the year-end balance was Rs.3,32,849.

(ii) An unsecured loan from a Director in which maximum amount involved during the year was Rs, 45,79,501/- and the year-end balance was Rs. 35,00,179/-.

(c) In our opinion, the terms and conditions on which an unsecured interest free loan taken was not, prima facie, prejudicial to the interest of the Company.

(d) We have been informed that there is no stipulation as to repayment of the above referred unsecured interest free loan.

(e) As there is no stipulation as regards to repayment of interest free unsecured loan taken by the Company from a Company listed in the register maintained under Section 301 of the Companies Act ,1956 question of overdue outstanding does not arise.

(iv) Internal Control Procedures:

In our opinion and according to the information and explanations provided to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing major weakness in such internal controls.

(v) In respect of transactions covered under Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been entered in the register;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contacts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time;

(vi) The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India, the provisions of Section 58A; 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under are not applicable.

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

(viii) Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of any of the activities of the Company.

(ix) In respect of statutory dues:

(a) According to the information and explanations given to us undisputed statutory dues including Provident Fund, investor education and protection fund, Employees' State Insurance, Income-Tax,

Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and any other statutory dues applicable have not been regularly deposited with the appropriate authorities. According to the information and explanation given to us, there are no outstanding statutory dues as at March 31, 2012 for a period of more than 6 months from the date of becoming payable except for

Name of the Nature of Amount Period to Due Date Date of Payment Statute dues (Rs.) which the amount relates

Central Excise Service Tax Rs. 6,271,650/ 2009-10 and Various Not paid as on Act 2010-11 dates the date of this report

The above data has been furnished to the extent dues payable have been identified from the records of the Company.

(b) According to the information and explanations provided to us, the disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as - under:

Name of the Nature of Amount (Rs.) Period to which Forum where dispute Statute dues the amount is pending relates

Income Tax Act, Income Tax Rs. 68,77,586/- 2000-2001 Honorable High Court 1961 of 1961 Karnataka

(x) In our opinion, the accumulated losses of the Company are more than fifty percent of its net worth. The Company has cash losses during the year under review and also during the immediately preceding year.

(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to the Banks. The Company has neither taken any loans from Financial Institutions nor issued any Debentures.

(xii) Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of Shares, Debentures and other securities. Accordingly, Clause 4 (xii) of the order is not applicable.

(xiii) The Company is not a chit / nidhi / mutual benefit fund / society and Clause xiii of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments. The investments made by the Company in the shares and other securities are in the name of the Company.

(xv) On the basis of 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) Based on information and explanation given to us by the Management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on short term basis have been used for long term investments.

(xviii) During the year under review, the Company has not made preferential allotment of Shares to parties listed in the Register maintained under Section 301 of the Act.

(xix) The-Company has not issued Debentures. Accordingly, Clause 4(xix) of the order is not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, Clause 4(xx) of the order is not applicable.

(xxi) Based on the audit procedures performed and information and explanations given to us by the Management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Ishwar & Gopal

Chartered Accountants

K V Gopalakrishnayya

Place: Bangalore Partner

Date: May 30, 2012 Membership No. 21748

Firm Registration No 001154S


Mar 31, 2011

We have audited the attached Balance sheet of Encore Software Limited (the Company) as at March 31, 2011, the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Company's 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 misstatements. 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.

As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (the 'order') issued by the Central Government of India in terms of sub - section (4A) of Section 227 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 purpose of our audit:

b) In our opinion, proper books of account as required by the law, have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statements dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statements 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) On the basis of the written representation received from the Directors, as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2011 from being appointed as a Director in terms Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

f) The accounts of the Company have been prepared on going concern concept despite the complete erosion of Shareholders' funds.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes applicable are give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

I. In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

II. In so far as it relates to the Profit and Loss Account of the loss of the Company for the year ended on that date.

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

Annexure to the Auditors' Report to the members of Encore Software Limited for the year ended March 31, 2011.

(i) Fixed Assets

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

(b) The Company has a phased programme of physical verification of fixed assets which, in our opinion is reasonable, having regard to the size of the Company and nature of its business, In accordance with such programme the Management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification.

(c) As per the information and explanation furnished to us, fixed assets are not disposed of during the year by the Company.

(ii) Inventories:

(a) The Management has conducted physical verification of inventories. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation furnished to us, the procedures followed by the Management for the physical verification of inventories are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanation furnished to us, the Company has maintained proper record of inventories. The discrepancies noticed between the physical stock and book records were not material.

(iii) Loans:

(a) The Company has not granted any loans secured or unsecured to Companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken the following loans from the parties listed in the Register maintained under section 301 of the Companies Act, 1956.

(i) An unsecured interest free loan from a Company in which maximum amount involved during the year was Rs. 3,32,849 and the year-end balance was Rs.3,32,849.

(ii) An unsecured loan from a Director in which maximum amount involved during the year was Rs, 1,45,00,000/- and the year-end balance was Rs. 45,79,501/-.

(c) In our opinion, the terms and conditions on which an unsecured interest free loan taken was not, prima facie, prejudicial to the interest of the Company.

(d) We have been informed that there is no stipulation as to repayment of the above referred unsecured interest free loan.

(e) As there is no stipulation as regards to repayment of interest free unsecured loan taken by the Company from a Company listed in the register maintained under Section 301 of the Companies Act ,1956 question of overdue outstanding does not arise.

(iv) Internal Control Procedures

In our opinion and according to the information and explanations provided to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing major weakness in such internal controls.

(v) In respect of transactions covered under Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been entered in the register;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contacts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time;

(vi) The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India, the provisions of Section 58A; 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under are not applicable.

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

(Viii) Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of any of the activities of the Company.

(ix) In respect of statutory dues:

(a) According to the information and explanations given to us undisputed statutory dues including Provident Fund, investor education and protection fund, Employees' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and any other statutory dues applicable have not been regularly deposited with the appropriate authorities. According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2011 for a period of more than 6 months from the date of becoming payable.

Period to Name of the Nature of dues Amount which the amount Statute (Rs.) relates

Income Tax Tax Deducted Rs. 1,660,331/- 2010-11 Act, 1961 at Source

Central Excise Service Tax Rs. 7,353,266/- 2009-10 Act and 2010-11

Name of the Due Date Date of Payment Statue

Income Tax Various Rs.1,262,794/-Paid as on Act,1961 dates the date of this report

Central Excise Various Not paid as on the date Act dates of this report

The above data has been furnished to the extent dues payable have been identified from the records of the Company.

(b) According to the information and explanations provided to us, there is no dispute in respect of Income Tax, Sales Tax, Service Tax, Custom Duty, Wealth Tax, Excise Duty.

Name of the Nature of dues Amount (Rs.) Statute

Income Tax Act, Income Tax Rs.68,77,586/- 1961

Name of the Period to which the Forum where dispute Statue amount relates is Pendlng

Income Tax Act 2000-2001 Honourable High Court of 1961 Karnataka

(x) In our opinion, the accumulated losses of the Company are more than fifty percent of its net worth. The Company has not incurred cash losses only during the preceding year, but has incurred cash loss during the current Financial Year.

(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to the . Banks. The Company has neither taken any loans from Financial Institutions nor issued any Debentures.

(xii) Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of Shares, Debentures and other securities. Accordingly, Clause 4 (xii) of the order is not applicable.

(xiii) The Company is not a chit / nidhi / mutual benefit fund / society and Clause xiii of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments. The investments made by the Company in the shares and other securities are in the name of the Company.

(xv) On the basis of 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) Based on information and explanation given to us by the Management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that no funds raised on short term basis have been used for long term investments.

(xviii) During the year under review, the Company has not made preferential allotment of Shares to parties listed in the Register maintained under Section 301 of the Act.

(xix) The Company has not issued Debentures. Accordingly, Clause 4(xix) of the order is not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, Clause 4(xx) of the order is not applicable.

(xxi) Based on the audit procedures performed and information and explanations given to us by the Management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Ishwar & Gopal Chartered Accountants

K V Gopalakrishnayya Partner Membership No. 21748 Firm Registration No 001154S

Place: Bangalore Date : May 26, 2011


Mar 31, 2010

We have audited the attached Balance sheet of Encore Software Limited (the company) as at March 31, 2010, the Profit and Loss Account and Cash Row 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 misstatements. 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 F financial Statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order 2004 (the order) issued by the Central Government of India in terms of sub - section (4A) of Section 227 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 purpose of our audit:

b) In our opinion, proper books of account as required by the law, have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Row Statements dealt with by this report are in agreement with the book of accounts ;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statements 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) On the basis of the written representation received from the Directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31,2010 from being appointed as a Director in terms clause (g) of Sub-Section(l) of Section 274 of the Companies Act, 1956.

f) The accounts of the Company have been prepared on going concern concept despite the complete erosion of Shareholders funds.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes applicable give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

I. In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

II. In so far as it relates to the Profit and Loss Account of the profit of the Company for the year ended on that date.

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

Annexure to the Auditors Report to the members of Encore Software Limited for the year ended March 31, 2010.

(i) Fixed Assets

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

(b) The Company has a phased programme of physical verification of fixed assets which, in our opinion is reasonable, having regard to the size of the Company and nature of its business. In accordance with such programme the Management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification.

(c) As per the information and explanation furnished to us fixed assets are not disposed of during the year by the Company. (ii) Inventories:

(a) The Management has conducted physical verification of inventories. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation furnished to us, the procedures followed by the Management for the physical verification of inventories are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanation furnished to us, the Company has maintained proper record of inventories. The discrepancies noticed between the physical stock and book records were not material.

(iii) Loans:

(a) The Company has not granted any loans secured or unsecured to Companies, firms or other parties listed in the register maintained under Section 301 of Companies Act, 1956.

(b) The Company has taken the following loans from the parties listed in the Register maintained under Section 301 of the Companies Act, 1956:

(i) An unsecured interest free loan from a Company in which maximum amount involved during the year Rs. 3,32,849 and the year- end balance was Rs,3,32,849/-

(ii) An unsecured loan from a Director in which maximum amount involved during the year was Rs. 1,45,00,000 and the year end balance was Rs,1,45,00,000/- (Interest on the same is Rs. 13,96,797)

(c) In our opinion, the terms and conditions on which an unsecured interest free loan taken was not, prima facie, prejudicial to the interest of the Company.

(d) We have been informed that there is no stipulation as to repayment of the above referred unsecured interest free loan.

(e) As there is no stipulation as regards to repayment of interest free unsecured loan taken by the company from a company listed in the register maintained under Section 301 of the Companies Act ,1956 question of overdue outstanding does not arise.

(iv) Internal Control Procedures

In our opinion and according to the information and explanations provided to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing major weakness in such internal controls.

(v) In respect of transactions covered under Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been entered in the register;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contacts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time;

(vi) The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India, the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed there under are not applicable.

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

(Viii) Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of any of the activities of the Company.

(ix) In respect of statutory dues:

(a) According to the information and explanations given to us undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth tax, custom duty, excise duty, service tax, cess and any other statutory dues applicable to it have not been regularly deposited with the appropriate authorities. According to the information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2010 for a period of more than 6 months from the date of becoming payable.

The above data has been furnished to the extent dues payable have-been identified from the records of the Company.

(b) According to the information and explanations provided to us, there is no dispute in respect of Incom Tax, Sales Tax, Service Tax, Custom Duty, Wealth Tax, Excise Duty & Cess.

(x) In our opinion, the accumulated losses of the Company are more than fifty percent of its net worth. The Company has incurred cash losses only during the preceding year but has not incurred any cash loss during the current financial year.

(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to the banks. The Company has neither taken any loans from financial institutions nor issued any debentures.

(xii) Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of Shares, debentures and other securities. Accordingly, clause 4 (xii) of the order is not applicable.

(xiii) The Company is not a chit / nidhi / mutual benefit fund / society and clause xiii of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments. The investments made by the Company in the shares and other securities are in the name of the Company.

(xv) On the basis of 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) Based on information and explanation given to us by the Management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on overall examination of the Balance Sheet and Cash flow statement of the Company, we report that no funds raised on short term basis have been used for long term investments.

(xvili) During the year under review, the Company has not made preferential allotment of Shares to parties listed in the Register maintained under Section 301 of the Act.

(xix) The Company has not issued debentures. Accordingly, clause 4(xix) of the order is not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, clause 4(xx) of the order is not applicable.

(xxi) Based on the audit procedures performed and information and explanations given to us by the Management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Ishwar & Gopal Chartered Accountants K V Gopalakrlshnayya, Place: Bangalore Partner Bangalore, May 26, 2010. Membership No. 21748 Firm Registration No. 00154S





 
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