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Auditor Report of Tera Software Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Tera Software Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the statement of Profit and Loss account for the year then ended 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 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 of 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. 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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, of the state of affairs of the Company as at March 31, 2015 and its profits 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 Companies Act,2013,we give in the Annexure a Statement on the matters specified in paragraphs 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 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 it 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 Companies Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2015 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 the 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 of pending litigations on its financial position in its financial statements - Refer Note 26(c) to the financial statements

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses ,if any, on long-term contracts including derivative contracts

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditor's Report of Even Date to the Members of TERA SOFTWARE LIMITED

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

(b) As per the information and explanations given to us the fixed assets of the company have been physically verified by the management during the year in regular intervals. In our opinion the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the company and the nature of its assets. The discrepancies noticed have been properly dealt with in the books of account.

ii. (a) As explained to us, the inventories of the company have been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) In our opinion the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material.

iii. During the year the Company has not granted any loans, secured or unsecured to Companies, firms or other parties listed in the register maintained Under Section 189 of the Companies Act to parties listed in the register maintained Under Section 189 of the Companies Act. Hence clause iii(a), iii(b) of the order is not applicable.

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, for the purchase of inventory, fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal controls.

v. The company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under with regard to the deposits accepted. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank Of India or any court or any other tribunal, on compliance or non -compliance of the same.

vi. In respect of the company, the Central Government of India has not prescribed for the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act. Accordingly clause vi of the order is not applicable.

vii. (a) According to the information and explanations given to us, and on the basis of our examination of the books of account, the Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Employees' State Insurance, Provident Fund, Income-tax, Sales-tax, Service-tax, Wealth-tax, Customs duty, Excise duty, Cess and other material statutory dues as applicable to it other than the following:

S No Nature of Dues Amount (Rs) Period to which the amount relates

1 Tax Deducted at Source 8,540 2007-08

2 Tax Deducted at Source 49,390 2008-09

3 Tax Deducted at Source 8,170 2009-10

4 Tax Deducted at Source 3,00,460 2011-12

5 Tax Deducted at Source 7,09,930 2012-13

6 Tax Deducted at Source 2,35,210 2013-14

(b) According to the information and explanations given to us, no disputed amounts payable in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute other than the following:

S.No. Name of the Nature of the Amount Period to which Statute Dues (Rs) the amount relates

1 AP VAT Act, 2005 Value Added Tax 339,455 2007-08

2 AP VAT Act, 2005 Value Added Tax 1,430,252 2006-07

3 AP VAT Act, 2005 Value Added Tax 1,430,252 2005-06

4 APGST Act, 1957 Sales Tax 2,860,507 2004-05

5 APGST Act, 1957 Sales Tax 3,580,063 2003-04

6 APGST Act, 1957 Sales Tax 1,430,253 2002-03

7 The Kerala VAT Value Added Tax 84,16,222 2005-06 Rules, 2005

8 The Kerala VAT Value Added Tax 61,50,240 2006-07 Rules, 2005

9 The Kerala VAT Value Added Tax 7,42,446 2007-08 Rules, 2005

10 The Kerala VAT Value Added Tax 8,52,280 2008-09 Rules, 2005

11 The Kerala VAT Value Added Tax 4,66,474 2009-10 Rules, 2005

S.No. Name of the Forum where dispute Statute is pending

1 AP VAT Act, 200 High Court of AP

2 AP VAT Act, 200 High Court of AP

3 AP VAT Act, 200 High Court of AP

4 APGST Act, 1957 High Court of AP

5 APGST Act, 1957 High Court of AP

6 APGST Act, 1957 High Court of AP

7 The Kerala VAT Deputy Commissioner Rules, 2005 (Appeals), Kerala

8 The Kerala VAT Deputy Commissioner Rules, 2005 (Appeals), Kerala

9 The Kerala VAT Deputy Commissioner Rules, 2005 (Appeals), Kerala

10 The Kerala VAT Deputy Commissioner Rules, 2005 (Appeals), Kerala

11 The Kerala VAT Deputy Commissioner Rules, 2005 (Appeals), Kerala

(c) According to the information and explanations given to us, the amount which is required to be transferred to Investment education and protection fund in accordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and rules made there under has been transferred to Investment education and protection fund within time.

viii. The Company has no accumulated losses as at March 31 2015, and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

ix. According to the information and explanation given to us, we are of the opinion that, the company during the year has not defaulted in repayment of dues to banks and other financial institutions.

x. 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, clause (x) of the Order is not applicable;

xi. The company has applied the term loans for the purpose for which the loans were obtained.

xii. During the course of our examination of the books and records of the Company, we have not come across any instance of material fraud on or by the Company. Hence clause (xii) of the order is not applicable.

For NARVEN ASSOCIATES Chartered Accountants FRN:05905S

Sd/- G.VRamana (PARTNER) Membership No.:025995

Place:Hyderabad Date:30.05.2015


Mar 31, 2014

1. We have audited the accompanying financial statements of TERA SOFTWARE LIMITED, ("THE Company") Which comprise the Balance sheet as at March 31st, 2014, the statement of Profit and Loss and The Cash Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. The companies 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 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.

Auditors'' 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 but not for the purpose of expressing an opinion on the effectiveness of the Company''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

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

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

6. 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 Companies Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

7. 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, 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 Balance Sheet, the statement of profit and loss and the Cash Flow Statement comply with the Accounting Standards notified under 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 INDEPENDENT AUDITORS'' REPORT

Referred to in Paragraph 6 under the heading of "Report on other Legal Regulatory Requirements" of our report of even date.

1. In respect of its fixed assets:

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

b) As explained to us, all the fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed have been properly dealt with in the books of account;

c) In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories:

a) As explained to us, the inventories of the company have been physically verified by the management at reasonable intervals during the year.

b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business;

c) In our opinion the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material.

3. In respect of loans, secured unsecured, granted or taken by the company to / from companies, firms or other parties covered in the register maintained under section 301 of the companies act,1956:

a) The Company had not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act''1956. Accordingly, clauses (iii)(b) to (iii)(d) of the aforesaid order are not applicable to the company.

b) During the year, the company had not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act''1956. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs.5 lakhs and the year-end balance is Rs. Nil.

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 for purchase of inventory, fixed assets and for the sale of goods and Services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal controls.

5. In respect of the contracts or arrangements referred to in section 301 of the companies act, 1956

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in 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, there are no transactions in pursuance of contracts or arrangements entered in the registers maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000/- (Rupees five lakh ) or more in respect of any party.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public.

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

8. According to the information and explanations given to us the company is not required to maintain cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the services carried out by the company.

9. In respect of statutory dues:

a) According to the records of the company and the information and explanations provided to us, the Company is generally regular in depositing with appropriate authorities undisputed amount of provident fund, investor education protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, cess and other statutory dues applicable to it and no undisputed amounts payable were outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable except. As explained to us, the Excise Duty and Customs Duty are not applicable to the company;

b) According to the information and explanations given to us, there are no dues in respect of Income Tax, Excise Duty, Customs Duty, Wealth Tax, Service tax, Sales Tax and Cess that have not been paid to the concerned authorities on account of any dispute other than the following;

S. Name of the Statute Nature of the dues Amount (Rs) No.

1 AP VAT Act, 2005 Value Added Tax 339,455

2 AP VAT Act, 2005 Value Added Tax 1,430,252

3 AP VAT Act, 2005 Value Added Tax 1,430,252 4 APGST Act, 1957 Sales Tax 2,860,507

5 APGST Act, 1957 Sales Tax 3,580,063

6 APGST Act, 1957 Sales Tax 1,430,253

7 The Kerala VAT Rules, Value Added Tax 84,16,222 2005 (Appeals), Kerala

8 The Kerala VAT Rules, Value Added Tax 61,50,240 2005

9 The Kerala VAT Rules, Value Added Tax 7,42,446 2005

10 The Kerala VAT Rules, Value Added Tax 8,52,280 2005

11 The Kerala VAT Rules, Value Added Tax 4,66,474 2005

S. Name of the Statute Period to Forum where dispute No. which the is pending amount relates

1 AP VAT Act, 2005 2007-08 High Court of AP

2 AP VAT Act, 2005 2006-07 High Court of AP

3 AP VAT Act, 2005 2005-06 High Court of AP 4 APGST Act, 1957 2004-05 High Court of AP

5 APGST Act, 1957 2003-04 High Court of AP

6 APGST Act, 1957 2002-03 High Court of AP

7 The Kerala VAT Rules, 2005-06 Deputy Commissioner 2005 (Appeals), Kerala

8 The Kerala VAT Rules, 2006-07 Deputy Commissioner 2005 (Appeals), Kerala

9 The Kerala VAT Rules, 2007-08 Deputy Commissioner 2005 (Appeals), Kerala

10 The Kerala VAT Rules, 2008-09 Deputy Commissioner 2005 (Appeals), Kerala

11 The Kerala VAT Rules, 2009-10 Deputy Commissioner 2005 (Appeals), Kerala

10. The Company has no accumulated losses at the end of the financial year and has not incurred any cash losses during the year or in the immediately preceding financial year;

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

12. Based on our examination and 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. Accordingly, clause 4(xii) of the Order is not applicable.

13. The Company is not a chit/nidhi/mutual benefit fund/society. Accordingly, clause 4(xiii) of the Order is not applicable.

14. The Company is not dealing or trading in shares, securities, debentures and other investments; accordingly, clause 4(xiv) of the Order is not applicable.

15. 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;

16. According to the information and explanations given to us and on the basis of our examination of the books of account, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

1 7. On the basis of our examination of the books of accounts and the information and explanation given to us, in our opinion, the funds raised on short-term basis have not been used for long-term investment and vice versa.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register Maintained under Section 301 of the Companies Act''1956.

19. The Company has not issued any Debentures during the year;

20. The Company has not raised any money by public issue during the year;

21. 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 NARVEN ASSOCIATES Chartered Accountants Firm Reg. no: 005905S

Sd/- (CA G.V.Ramana) Partner Membership No: 025995

Place: Hyderabad Date: 30.05.2014


Mar 31, 2013

Report on the Finandal Statements

1. We have audited the accompanying finandal statements of TERA SOFTWARE LIMITED, ("The Company") Which comprise the Balance sheet as at March 31st, 2013, the statement of Profit and Loss and The Cash Flow Statement for the year ended, and a summary of significant accounting polides and other explanatory information.

Management''s Responsibility for the Finandal Statements

2. The company''s management is responsible for the preparation of these finandal statements that give a true and fair view of the finandal position, finandal 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"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the finandal statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these finandal 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 finandal statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the finandal statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the finandal 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 finandal statements in order to design audit procedures that are appropriate in the drcumstances. An audit also includes evaluating the appropriateness of accounting polides used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the finandal statements.

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

Opinion

5. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid finandal 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 prindples 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;

b) In the case of the statement of profit and loss, of the profit for the year ended on that date; and

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

Report on other Legal and Regulatory Requirements

6. 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 Companies Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

7. 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, 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 Balance Sheet, the statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956.

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

Referred to in Paragraph 6 under the heading of "Report on other Legal Regulatory Requirements" of our report of even date.

1. In respect of its fixed assets:

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

b) As explained to us, all the fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed have been properly dealt with in the books of account;

c) In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories:

a) As explained to us, the inventories of the company have been physically verified by the management at reasonable intervals during the year.

b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business;

c) In our opinion the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material.

3. In respect of loans, secured, unsecured, granted or taken by the company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956:

a) The Company had not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act''1956. Accordingly, clauses (iii)(b) to (iii)(d) of the aforesaid order are not applicable to the company.

b) During the year, the company had not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act''1956. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs.5 lakhs and the year-end balance is Rs. Nil.

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 for purchase of inventory, fixed assets and for the sale of goods and Services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal controls.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act,1956

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in 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, there are no transactions in pursuance of contracts or arrangements entered in the registers maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000/- (Rupees five lakh ) or more in respect of any party.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public.

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

8. According to the information and explanations given to us the company is not required to maintain cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the services carried out by the company.

9. In respect of statutory dues:

a) According to the records of the company and the information and explanations provided to us, the Company is generally regular in depositing with appropriate authorities undisputed amount of provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, cess and other statutory dues applicable to it and no undisputed amounts payable were outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable except. As explained to us, the Excise Duty and Customs Duty are not applicable to the company;

b) According to the information and explanations given to us, there are no dues in respect of Income Tax, Excise Duty, Customs Duty, Wealth Tax, Service tax, Sales Tax and Cess that have not been paid to the concerned authorities on account of any dispute other than the following;

Sl. No. Name of the Statute Nature of the dues Amount Period to Forum where dispute (Rs) which the is pending amount relates

1 AP VAT Act, 2005 Value Added Tax 339,455 2007-08 High Court of AP

2 AP VAT Act, 2005 Value Added Tax 1,430,252 2006-07 High Court of AP

3 AP VAT Act, 2005 Value Added Tax 1,430,252 2005-06 High Court of AP

4 APGST Act, 1957 Sales Tax 2,860,507 2004-05 High Court of AP

5 APGST Act, 1957 Sales Tax 3,580,063 2003-04 High Court of AP

6 APGST Act, 1957 Sales Tax 1,430,253 2002-03 High Court of AP

7 The Kerala VAT Value Added Tax 84,16,222 2005-06 Deputy Commissioner Rules, 2005 (Appeals), Kerala

8 The Kerala VAT Value Added Tax 61,50,240 2006-07 Deputy Commissioner Rules, 2005 (Appeals), Kerala

9 The Kerala VAT Value Added Tax 7,42,446 2007-08 Deputy Commissioner Rules, 2005 (Appeals), Kerala

10 The Kerala VAT Value Added Tax 8,52,280 2008-09 Deputy Commissioner Rules, 2005 (Appeals), Kerala

11 The Kerala VAT Value Added Tax 4,66,474 2009-10 Deputy Commissioner Rules, 2005 (Appeals), Kerala

10. The Company has no accumulated losses at the end of the finandal year and has not incurred any cash losses during the year or in the immediately preceding finandal year;

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to finandal institutions, banks and debenture holders.

12. Based on our examination and 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. Accordingly, clause 4(xii) of the Order is not applicable.

13. The Company is not a chit/nidhi/mutual benefit fund/society. Accordingly, clause 4(xiii) of the Order is not applicable.

14. The Company is not dealing or trading in shares, securities, debentures and other investments; accordingly, clause 4(xiv) of the Order is not applicable.

15. 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 finandal institutions;

16. According to the information and explanations given to us and on the basis of our examination of the books of account, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

17. On the basis of our examination of the books of accounts and the information and explanation given to us, in our opinion, the funds raised on short-term basis have not been used for long-term investment and vice versa.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register Maintained under Section 301 of the Companies Act''1956.

19. The Company has not issued any Debentures during the year;

20. The Company has not raised any money by public issue during the year;

21. 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 NARVEN ASSOCIATES

Chartered Accountants

Firm Reg. No: 005905S

Sd/-

(CA. D.C. Naidu)

Place: Hyderabad Partner

Date: 28/05/2013 Membership No: 24643


Mar 31, 2012

1. We have audited the attached Balance Sheet of TERA SOFTWARE LIMITED, as at March 31,2012 and the Profit and Loss Account and also the 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.

2. 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 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 the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies {Auditor's Report) Order, 2003 as amended by the Companies {Auditor's Report) (amendment) order, 2004 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.

4. Further to our comments in the Annexure 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 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 appears from our examination of those books;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

(v) On the basis of written representations 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 is disqualified as on March 31,2012 from being appointed as a director in terms of Clause (g) of sub-section (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 accounts 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 :

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

(b) In the case of Profit and Loss Account, of the Profit for the year ended on that date; and (0 In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to Auditor's Report Referred to in Paragraph 3 of our report of even date

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

(b) A major portion of fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed have been properly dealt with in the books of account;

(c) In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

(ii) (a) As explained to us, the inventories of the company have been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) In our opinion the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material.

(iii) (a) The Company had not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(b) to (iii)(d) of the aforesaid order are not applicable to the company.

(b) During the year, the company had taken unsecured loans from two parties covered in the register maintained under section 301 of the Companies Act, 1956. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs.155 lakhs and the year-end balance is Rs. 5.12 lakhs.

(c) In our opinion the rate of interest and other terms and conditions on which loans have been taken from the other parties listed in the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

(d) The principal amount and the interest on the same are repayable as per the repayment schedule. In respect of the said loans, there are no over due amounts and the company is regular in repayments.

(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 for purchase of inventory, fixed assets and for the sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal controls.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in 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, there are no transactions in pursuance of contracts or arrangements entered in the registers maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5.00 lakh or more in respect of any party.

(vi) In our oP1n,on and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public.

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

(viii) According to the information and explanations given to us the company is not required to maintain cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of the services carried out by the company.

(ix) (a) According to the records of the company and the information and explanations provided to us, the Company is generally regular in depositing with appropriate authorities undisputed amount of provident fund, investor education protection fund, employees 'state insurance, income-tax, sales-tax, wealth-tax, service tax, cess and other statutory dues applicable to it and no undisputed amounts payable were outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable. As explained to us, the Excise Duty and Customs Duty are not applicable to the company;

(b) According to the information and explanations given to us, there are no dues in respect of Income Tax, Excise Duty, Customs Duty, Wealth Tax, Service tax, Sales Tax and Cess that have not been paid to the concerned authorities on account of any dispute other than the following;

(Rs.in Lakh)

S. no. Name of the Nature of the Amount Statute dues (Rs.)

1 AP VAT Act, 2005 Value Added Tax 3.39

2 AP VAT Act, 2005 Value Added Tax 14.30

3 AP VAT Act, 2005 Value Added Tax 14.30

4 APGST Act, 1957 Sales Tax 28.60

5 APGST Act, 1957 Sales Tax 35.80

6 APGST Act 1957 Sales Tax 14.30

7 The Kerala VAT Value Added Tax 84.16 Rules, 2005

8 The Kerala VAT Value Added Tax 61.50 Rules, 2005

9 The Kerala VAT Value Added Tax 7.42 Rules, 2005

10 The Kerala VAT Value Added Tax 8.52 Rules, 2005

11 The Kerala VAT Value Added Tax 4.66 Rules, 2005

(Rs.in Lakh)

S. no. Name of the Period to which Forum where Statute the amount dispute is pending relates

1 AP VAT Act, 2005 2007-08 High Court of AP

2 AP VAT Act, 2005 2006-07 High Court of AP

3 AP VAT Act, 2005 2005-06 High Court of AP

4 APGST Act, 1957 2004-05 High Court of AP

5 APGST Act, 1957 2003-04 High Court of AP

6 APGST Act 1957 2002-03 High Court of AP

7 The Kerala VAT 2005-06 Deputy Commissioner Rules, 2005 (Appeals), Kerala

8 The Kerala VAT 2006-07 Deputy Commissioner Rules,2005 (Appeals), Kerala

9 The Kerala VAT 2007-08 Deputy Commissioner Rules, 2005 (Appeals), Kerala

10 The Kerala VAT 2008-09 Deputy Commissioner Rules, 2005 (Appeals), Kerala

11 The Kerala VAT 2009-10 Deputy Commissioner Rules, 2005 (Appeals), Kerala

(x) The Company has no accumulated losses at the end of the financial year and has not incurred any cash losses during the year or in the immediately preceding financial year;

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

(xii) Based on our examination and 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. Accordingly, clause 4(xii) of the Order is not applicable.

(xiii) The Company is not a chit / nidhi / mutual benefit fund/society. Accordingly, clause 4(xiii) of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments; Accordingly, clause 4(xiv) of the Order is not applicable.

(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) According to the information and explanations given to us and on the basis of our examination of the books of account, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

(xvii) On the basis of our examination of the books of accounts and the information and explanation given to us, in our opinion, the funds raised on short-term basis have not been used for long-term investment and vice versa.

(xviii)The Company has not made any preferential allotment of shares to parties and companies covered in the Register Maintained under Section 301 of the Companies Act, 1956.

(xix) The Company has not issued any Debentures during the year;

(xx) The Company has not raised any money by public issue during the year;

(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 NARVEN ASSOCIATES

Chartered Accountants

Firm Reg. no: 005905S

Sd/-

Place : Hyderabad (CA D.C. Naidu)

Date : 22.08.2012 Partner

Membership No.: 24643


Mar 31, 2011

1. We have audited the attached Balance Sheet of TERA SOFTWARE LIMITED, as at March 31, 2011 and the Profit and Loss Account and also the 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.

2. 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 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 the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (amendment) order, 2004 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.

4. Further to our comments in the Annexure 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 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 appears from our examination of those books;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

(v) On the basis of written representations 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 is disqualified as on March 31, 2011 from being appointed as a director in terms of Clause (g) of sub-section (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 accounts 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 :

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2011 ;

(b) In the case of Profit and Loss Account, of the Profit 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 to Auditors' Report Referred to in Paragraph 3 of our report of even date

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

(b) A major portion of fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed have been properly dealt with in the books of ac- count;

(c) In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going con- cern status of the company is not affected.

(ii) (a) As explained to us, the inventories of the company have been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) In our opinion the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material.

(iii) (a) The Company had not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act' 1956. Accordingly, clauses (iii)(b) to (iii)(d) of the afore- said order are not applicable to the company.

(b) During the year, the company had taken unsecured loans from two parties covered in the register maintained under section 301 of the Companies Act, 1956. In respect of the said loan, the maximum amount outstanding at any time during the year was Rs.62.67 lakhs and the year-end balance is Rs.62.67 lakhs.

(c) In our opinion the rate of interest and other terms and conditions on which loans have been taken from the other parties listed in the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

(d) The principal amount and the interest on the same are repayable as per the repayment schedule. In respect of the said loans, there are no over due amounts and the company is regular in repayments.

(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 for purchase of inventory, fixed assets and for the sale of goods and Services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal controls.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in 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, there are no transactions in pursuance of contracts or arrangements entered in the registers maintained under Section 301 of the Companies Act, 1956 ag- gregating during the year to Rs.5,00,000/- (Rupees five lakh ) or more in respect of any party.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the

provisions of Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Ac- ceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public.

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

(viii) According to the information and explanations given to us the company is not required to maintain cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the services carried out by the company.

(ix) (a) According to the records of the company and the information and explanations provided to us, the Company is generally regular in depositing with appropriate authorities undisputed amount of provident fund, investor educa- tion protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, excise duty, customs duty, cess and other statutory dues applicable to it and no undisputed amounts payable were outstanding as at 31 st March, 2011 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 in respect of Income Tax, Excise Duty, Customs Duty, Wealth Tax, Service tax, Sales Tax and Cess that have not been paid to the concerned authorities on account of any dispute other than the following;

S. No. Name of the Nature of the dues Amount (Rs) Statute

1 AP VAT Act, 2005 Value Added Tax 339,455

2 AP VAT Act, 2005 Value Added Tax 1,430,252

3 AP VAT Act, 2005 Value Added Tax 1,430,252

4 APGST Act, 1957 Sales Tax 2,860,507

5 APGST Act, 1957 Sales Tax 3,580,063

6 APGST Act, 1957 Sales Tax 1,430,253

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

AP VAT Act, 2005 2007-08 High Court

AP VAT Act, 2005 2006-07 High Court

AP VAT Act, 2005 2005-06 High Court

APGSTAct, 1957 2004-05 High Court

APGST Act, 1957 2003-04 High Court

APGST Act, 1957 2002-03 High Court

(x) The Company has no accumulated losses at the end of the financial year and has not incurred any cash losses during the year or in the immediately preceding financial year;

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

(xii) Based on our examination and 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. Accordingly, clause 4(xii) of the Order is not applicable.

(xiii) The Company is not a chit/nidhi/mutual benefit fund/society. Accordingly, clause 4(xiii) of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments; Accordingly, clause 4(xiv) of the Order is not applicable.

(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) According to the information and explanations given to us and on the basis of our examination of the books of account, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

(xvii) On the basis of our examination of the books of accounts and the information and explanation given to us, in our opinion, the funds raised on short-term basis have not been used for long-term investment and vice versa.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register Maintained under Section 301 of the Companies Act' 1956.

(xix) The Company has not issued any Debentures during the year;

(xx) The Company has not raised any money by public issue during the year;

(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 NARVEN ASSOCIATES Chartered Accountants Firm Reg. no: 005905S

Sd/- (CA D.C. Naidu) Partner Membership No: 24643

Place: Hyderabad Date : 18.06.2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of TERA SOFTWARE LIMITED, as at March 31, 2010 and the Profit and Loss Account and also 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.

2. 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.

3. As required by the Companies (Auditors Report) Order, 2003 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 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 report 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 appears from our examination of those books;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

(v) On the basis of written representations 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 is disqualified as on March 31, 2010 from being appointed as a director in terms of Clause (g) of sub-section (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, thesaid accounts 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(b) In the case of Profit and Loss Account, of the Profit 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 to Auditors Report Referred to in Paragraph 3 of our report of even date

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

(b) A major portion of fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed have been properly dealt with in the books of account;

(c) In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

(ii) (a) As explained to us, the inventories of the company have been physically verified by the management at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) In our opinion the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material.

(iii) (a) The Company had not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956. Accordingly, clauses (iii)(b) to (iii)(d) of the aforesaid order are not applicable to the company.

(b) The Company had not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956. Accordingly, clauses.

(iii) (g) of theaforesaid order are not applicable to the company.

(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 for purchase of inventory, fixed assets and for the sale of goods and Services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal controls.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in 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, there are no transactions in pursuance of contracts or arrangements entered in the registers maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000/- (Rupees five lakh ) or more in respect of any party.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public.

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

(viii) According to the information and explanations given to us the company is not required to maintain cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of the services carried out by the company.

(ix) (a) According to the records of the company and the information and explanations provided to us, the Company is generally regular in depositing with appropriate authorities undisputed amount of Provident Fund, Investor Education Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, cess and other statutory dues applicable to it and no undisputed amounts payablewere outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable. As explained to us, the Excise Duty and Customs Duty are not applicable to the company; (b) According to the information and explanations given to us, there are no dues in respect of Income tax, Excise Duty, Customs Duty, Wealth Tax, Service tax, Sales Tax and Cess that have not been paid to the concerned authorities on account of any dispute other than the following;



S.No. Name of the Nature of Amount Period to which Forum where

Statute the dues (Rs) the amount relates dispute is pending

1 APVAT Act, 2005 Value Added Tax 339,455 2007-08 High Court

2 APVAT Act, 2005 Value Added Tax 1,430,252 2006-07 High Court

3 APVAT Act, 2005 Value Added Tax 1,430,252 2005-06 High Court

4 APGST Act, 1957 Sales Tax 2,860,507 2004-05 High Court

5 APGST Act, 1957 Sales Tax 3,580,063 2003-04 High Court

6 APGST Act, 1957 Sales Tax 1,430,253 2002-03 High Court



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

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

(xii) Based on our examination and 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. Accordingly, clause 4(xii) of the Order is not applicable.

(xiii) The Company is not a chit/nidhi/mutual benefit fund/society.

Accordingly, clause 4

(xiii) of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, clause 4(xiv) of the Order is not applicable.

(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) According to the information and explanations given to us and on the basis of our examination of the books of account, the term loans obtained by the Company were applied for the purpose for which such loans were obtained.

(xvii) On the basis of our examination of the books of accounts and the information and explanations given to us, in our opinion, the funds raised on short-term basis have not been used for long-term investment and vice versa.

(xviii)The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of thejlompanies Act,1956.

(xix) The Company has not issued any Debentures during the year.

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

(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 NARVEN ASSOCIATES

Chartered Accountants

Firm Reg. no: 005905S

Sd/-

Place: Hyderabad (CA D.C. Naidu)

Date: 09.08.2010 Partner

Membership No: 24643



 
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