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Auditor Report of Seshachal Technologies Ltd.

Mar 31, 2012

1. We have audited the attached Balance Sheet of SESHACHAL TECHNOLOGIES LIMITED as at 31st March 2012 and also the Profit and Loss Account for the year ended on that date. 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.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by Companies (Auditor's Report) Order, 2003 and amendment thereto by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we state that

(i). 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.

(ii) In our opinion, proper books of account as required by law have been kept by the company, so far as it appears from our examination of those books.

(iii) The Balance Sheet, Profit and Loss Account Statement referred to in this report are in agreement with the books of account maintained.

(iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the requirements of the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956;

(v) On the basis of written representations received from the Directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors

SESHACHAL TECHNOLOGIES LIMITED

is disqualified as on 31st March, 2012 from being appointed as a director in terms clause (g) of subsection (1) of Section 274 of the Companies Act, 1956 ;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the significant accounting policies and other notes thereon give 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:

a) In the case of the Balance Sheet, of the state of affairs of the Company as on 31st March, 2012,

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

ANNEXURE TO AUDITORS' REPORT

(Referred to in Paragraph (3) of our Report of even date on the Accounts of M/s. SESHACHAL TECHNOLOGIES LIMITED for the year ended 31st Match 2012)

(i) In respect of Fixed Assets:

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

b) The Company has a regular programme of physical verification of its Fixed Assets by which fixed assets are verified in a phased manner. In accordance with this programme, fixed assets were verified during the year and no material discrepancies were noticed on such verification,. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and the nature of its assets;

c) During the year, there was no sale of substantial part Fixed Assets and hence the going concern of the Company is not affected.

(ii) In respect of Inventories:

The Company is a service company, primarily rendering Information Technology Services. Accordingly, it does not hold any physical Inventories. Thus, paragraph 4 (ii) of the Order is not applicable.

(iii) In respect of Loans Granted and taken by Company:

a) The Company has not granted any Loans, Secured or Unsecured from Companies, firms or other parties covered in the Register maintained under Section 301 of the Act. Accordingly, paragraph 4 (iii) (b), (c) & (d) of the said Order are not applicable;

b) The Company has taken interest free loan from a Director covered in the Register maintained under Section 301 of the Companies Act 1956. The maximum amount outstanding during the year and the year-end balance of such loan to Rs. Nil and Rs.70,000 respectively

c) In our opinion, the terms and conditions on which the loan has been taken from is interest free nature and not, prima facie, prejudicial to the interest of the Company;

d) According to the information and explanation given to us, the payment of the principal amount is as stipulated.

(iv) In respect of Internal Control System:

In our opinion and according to the information and explanations given to us, there is an adequate Internal Control procedure commensurate with size of the Company and the nature of its business with regard to purchases of Fixed Assets and sale of services. The activities of the Company do not involve purchase inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(v) In respect of transactions with related parties as per Register of Companies u/s 301:

a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in Section 302 of the Companies Act 1956 have been entered in the Register required to be maintained under that section;

b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements referred to in (v) (a) above and exceeding the value of Rs.5.00 lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In respect of Deposits from the Public:

The Company has not accepted any Deposits from the Public. Accordingly, paragraph 4 (vi) of the Order is not applicable.

(vii) In respect of Internal Audit System:

In our opinion, paragraph 4 (vii) of the Order is not applicable to the Company since the Company has not fulfilled any of the conditions given in that paragraph;

(viii) In respect of Cost Controls:

The Central Government of India has not prescribed the maintenance of cost records under Section 209 (l) (d) of the Companies Act 1956 for any of the Services rendered by the Company. Accordingly, paragraph 4 (viii) of the Order is not applicable;

(ix) In respect of Statutory Dues:

a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed Statutory dues including Provident Fund, Income Tax, Service Tax and other material Statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Sales Tax, Wealth Tax, Employees State Insurance, Investor Education, Protection Fund, Customs Duty, and Excise Duty. There were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the aforesaid section has not yet been made effective by the Central Government of India. According to the information and explanations given to us, no undisputed amount payable in respect of provident Fund, Income Tax, Service tax and other material statutory dues were in arrears as at 31st March 2012 for a period of more than six months from the date they became payable;

b) According to the information and explanation given to us, there are no disputed dues relating to Income Tax, Cess which have not been deposited with the appropriate authorities on account of any dispute;

(x) In respect of Cash Loss:

In our opinion, paragraph 4 (x) of the order is not applicable to the Company since the Company has not fulfilled conditions given in that paragraph.

(xi) In respect of dues to Financial; Institutions, Banks and Debentures Holders:

The Company did not have any outstanding dues to any Financial Institutions, Banks or Debenture Holders during the year. Accordingly, paragraph 4 (xi) of the Order is not applicable.

(xii) In respect of Secured Loans and Advances Granted:

The Company has not granted any Loans and Advances on the basis of Security by way of pledge of Shares, Debentures and other Securities. Accordingly, paragraph 4 (xii) of the Order is not applicable;

(xiii) In respect of Chit Fund, Nidhi or Mutual Benefit Company:

In our opinion and according to the information and explanations given to us, the Company is not a Chit Fund / Nidhi / Mutual Benefit Fund / Society. Accordingly, paragraph 4 (xiii) of the Order is not applicable.

(xiv) In respect of Investment Company:

According to the information and explanations given to us, the Company is not dealing or Trading in Shares, Securities, Debentures and other Investments. Accordingly paragraph 4 (xiv) of the Order is not applicable.

(xv) In respect of Guarantees given by Company:

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. Accordingly, paragraph 4 (xv) of the Order is not applicable.

(xvi) In respect of Term Loans:

The Company did not have any Term Loans outstanding during the year. Accordingly, paragraph 4 (xvi) of the Order is not applicable.

(xvii) In respect of Funds raised on short term basis:

The Company has not raised any funds on short term basis. Accordingly, paragraph 4 (xvii) of the Order is not applicable.

SESHACHAL TECHNOLOGIES LIMITED

(xviii) In respect of Preferential Issue made to Parties covered in the Register u/s 301:

1. The Company has not made any preferential allotment of Shares to the Directors of the Company parties and Companies covered in the register maintained Under Section 301 of the Companies Act, 1956. Accordingly, paragraph 4 (xviii) of the Order is not applicable.

(xix) In respect of Debentures Issued:

The Company did not issued any Debentures during the year. Accordingly, paragraph 4 (xix) of the Order is not applicable.

(xx) In respect of end use of Public Issue Funds:

The Company has not raised any money by Public Issue during the Year. Accordingly, paragraph 4 (xx) of the Order is not applicable.

(xxi) In respect of Frauds:

As presented to us by the Management and based on our examination in the normal course of Audit, no material frauds on or by the Company have been noticed or reported during the year.



P S NAGARAJU & CO., Chartered Accountants FRN No: 011447S



Sd/- C A P S NAGARAJU PARTNER MEMBERSHIP NO: 210268

PLACE: HYDERABAD DATE: 3rd SEPTEMBER, 2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of Seshachal Technologies Limited as at 31st March 2010 and the related Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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.

2. We conducted the audit in accordance with the 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 a reasonable basis for our opinion.

3. As required by Companies (Auditors report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub - section 4(A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure A a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure A referred to in paragraph 3 above, we report that:

i. 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;

ii. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

iii. The Balance sheet, Profit and Loss Account and Cash Flow Statement dealt with by this reportare in agreement with the books of account;

iii. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub- Section (3c) of the Section 211 of the Act;

iv. On the basis of written representations received from the directors, as on 31st March 2010 and taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub- section (1) of Section 274 of the Act;

v. In our opinion, and to the best of our information and explanations given to us with a specific attention to note 6 of Schedule 9(A) & note 3 of Schedule 9(B), the said financial statements together with the notes there on and attached there to give in the prescribed manner the information required by the Act 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 2010 and

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

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

ANNEXURE A TO AUDITORS REPORT

(Referred to in paragraph (3) of the Auditors Report of even date) i) In respect of its Fixed Assets:

a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the Fixed Assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion, the Company has not disposed off a substantial part of its. Fixed Assets during the year and the going concern status of the Company is not affected.

ii) In respect of its inventories:

The Company does not have any inventory. Therefore, the provisions of clause 4 (ii) of the Companies (Auditors Report), 2003 are not applicable to the Company.

iii) The Company has not granted or taken loan secured/ unsecured to/ from Companies, Firms or parties covered in the registrar maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4 (iii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us, there is an internal control commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the financial year, the Company did not undertake any activity of sale of services. During the course of our audit, we were not observed any major weaknesses in the internal control system.

v) According to the information and explanations given to us, there are no contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under section.

vi) The company has not accepted any deposits from the public during the year. Therefore, the provisions of clause (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

viii) The Central Government has not prescribed maintenance of Cost records under Section 209(1 )(d) of the Act.

ix) In respect of statutory dues:

a. According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2010 for a period of more than six months from the date they became payable;

b. According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, wealth Tax, Service Tax and Excise Duty which have not been deposited on account of any dispute.

x) In our opinion the accumulated losses of the company are not more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and cash losses immediately preceding financial year.

xi) Based on our audit procedures and on the information and explanations given by the management, no loans were taken by the Company during the year under the audit.

xii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefits fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institution.

xv) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, there are no funds raised on short-term basis during the year under audit and hence the question of using the same for long-term investment does not arise.

xvi) According to the information and explanation given to us, the Company has not issued any debentures during the year under audit.

xvii) The Company has not raised any money by public issue of shares during the year.

xviii)The Company has not raised any money by way of term loans.

xix) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

xx) The clauses pertaining to inventory and various other clauses of CARO, 2003 other than those specified in the above annexure are not applicable to the Company.

For P.S. NAGARAJU & CO., Chartered Accountants

CA PS. NAGARAJU

Partner

M. No.210268

Place: Hyderabad

Date: 02/09/2010

 
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