Auditor Report of Dhanus Technologies Ltd.

Dec 31, 2011

1. We have audited the attached Balance Sheet of Dhanus Technologies Limited ('the Company') as at 31st December, 2011 and also the Statement of Profit and Loss and 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) 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 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 law have been kept by the company so far as appears from our examination of such books, subject to Note No.1.2. (a) and (b).

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, subject to Note No. 1.2. (a) and (b).

d) In our opinion, the Balance Sheet, statement of Profit and Loss and cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section [3C] of Section 211 of the Companies Act, 1956, except for AS-6 - "Depreciation", AS-9 - "Revenue Recognition", AS-10 - "Fixed Assets", AS-22 - "Deferred Taxes" and AS-28 - "Impairment of Assets".

e) The effects of non reconciliation of Trade receivables, exceeding over a period of six months, and as well as payables, the effects on profit/loss is not quantifiable. The quantum of bad debts involved in the Trade Receivables are not yet confirmed, the effect to that extent on profit/loss is not quantifiable.

f) Reference to Note No.1.2.(a) and (b) and Para (e) above regarding revenue recognition under AS-9 - "Revenue Recognition" issued by the Institute of Chartered Accountants of India and also expense recognition, the effects on profit/loss is not quantifiable.

g) Non application of AS-28 - "Impairment of Assets" to the value of assets including fixed assets, trade receivables and loans and advances, the effect of which is not quantifiable from a mark to market perspective. The physical verification, valuation of fixed assets and updating of fixed assets register is yet to be completed. Also tests of impairment, ownership and valuation of fixed assets - Tangible are under completion and we are unable to express opinion on the same.

h) Investments in, M/s Borusan Telekom, Turkey amounting to 1 million USD and M/s. Sreeven Infocom Limited amounting to Rs. 2,50,00,000/-, is, in our opinion, irrecoverable.

i) On the basis of the written representations received from the directors, as on December 31, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st December, 2011 from being appointed as a director in terms of clause [g] of sub-section [1] of Section 274 of the Companies Act, 1956.

j) The company has not provided for the cess payable under Sec.441A of the Companies Act, 1956 as the notification regarding rate and mode of payment has not received.

5. Subject to clauses [b] to [h] above, the cumulative effect of which is not quantifiable and the effect of which results in our inability to express an opinion on the same, 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:

i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st December, 2011,

ii) in the case of the statement of Profit and Loss, of the Loss of the company for the year ended on that date and

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

Annexure referred to in paragraph 3 of our Report of even date

In terms of the information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under:

1. a) The company is in the process of maintaining proper records showing full particulars including quantitative details, value and the situation of fixed assets.

b) The fixed assets of the company have been physically verified by the management at reasonable intervals. We have relied on Management Representations for physical verification and valuation of fixed assets (Refer Auditors' Report Para 4 (g) above) and accounting for discrepancies thereon.

c) During the year the Company has not disposed off substantial part of the fixed assets and the going concern status of the company is not affected.

2. a) According to the information and explanations given to us, inventories have been physically verified during the year by the management. We have relied on Management Representations for physical verification, inventories valuation of finished goods and Work-in-Progress.

b) We have relied on management representations for discrepancies in inventory check.

3. a) In our opinion, the company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. As such, the clauses iii (b), iii (c) and iii (d) of paragraph 4 of the order are not applicable to the company.

b) In our opinion, the company has not taken any loans, secured or unsecured from the companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. As such, the clauses iii (f) and iii (g) of paragraph 4 of the order are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures; however the same is not fully commensurate with the size of the company and the nature of its business with regard to purchase of inventories including components, plant and machinery, equipment and other assets and with regard to the sale of goods. The Internal control requires elaborate strengthening.

5. a) In our opinion and 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 made in pursuance of contracts or arrangements entered in the register maintained under Sec. 301 of the Companies Act. 1956 and exceeding the value of Rupees five lakhs in respect of any party during the year 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 from the public. The provisions of Sections 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable to the Company.

7. In our opinion and according to the information and explanations given to us, the company has an internal audit system commensurate with the size of the company and nature of its business.

8. In our opinion, the Central Government has not prescribed the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 for the services of the company.

9. a) According to the records of the company, the company is irregular in depositing undisputed statutory dues including Income tax along with TDS, Sales Tax, Service tax, Provident Fund and other statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, undisputed amount payable in respect of Income Tax along with TDS, Sales Tax, Service tax and other statutory dues were outstanding as at 31st December, 2011 for a period of more than six months from the date they became payable. The amounts involved in all the statutory dues as undisputed indicated above is not quantifiable, we are not in a position to comment on this issue.

c) According to the records of the company, the dues outstanding of income tax, service tax on account of dispute, are as follows:

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

Income Tax Act, Income tax 577.07 Assessment year Income Tax Appellate 1961 liability 2006-2007 Tribunal (ITAT) - Chennai Bench, Chennai

Income Tax Act, Income tax 2009.19 Assessment year Income Tax Appellate 1961 liability 2007-2008 Tribunal (ITAT) - Chennai Bench, Chennai

Income Tax Act, Income tax 4037.00 Assessment year Commissioner of 1961 liability 2008-2009 Income Tax (Appeals) - Chennai

Income Tax Act, Income tax 3756.62 Assessment year Commissioner of 1961 liability 2009-2010 Income Tax (Appeals) - Chennai

Service Tax Act and Service tax 317.51 June 2007 till March Commissioner of Rules liability 2011 Service Tax., vide show cause notice No.445/ 2011 dt, 12/10/2011.

10. The company has neither accumulated losses as at 31st December, 2011 nor has it incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given to us by the management, the company has defaulted in both interest and principal on term loans and cash credits availed from UCO Bank T- Nagar, Chennai. The recovery of the same loan amounts is under the process of DRT (i.e., Debt Recovery Tribunal). Previously it was also restructured for recovery of loans from the company.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. However the Promoters' stakes, as before pledged on the above Uco Bank loan liabilities, has been realized and adjusted towards the loan amounts by the Bank,

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 [Auditors Report] Order, 2003 (as amended) 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. Accordingly, clause 4[xiv] of Companies [Auditors Report] Order, 2003 (as amended) are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. We have relied on management representations to report this clause.

16. Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained. We have relied on management representations to report this clause.

17. According to the information and explanation given to us and on overall examination of the balance sheet of the company, short-term funds has not been applied for long term purposes.

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act 1956, and the price at which the shares have been issued are not prejudicial to the interest of the company.

19. The Company has not issued any debentures during the year and therefore the question of creation of charge or security does not arise. However the company during the year has issued shares Warrants and converted the same to the equity share capital of the company.

20. The Company has not raised any funds through public issue during the financial year under report. However, the Company during the year under report has issued bonus shares by capitalization of its reserves and surplus.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For P C ACHARYA & Co

Chartered Accountants

Firm Registration No: 009628S

P C ACHARYA

Place : Chennai Partner

Date : March 21, 2012 Membership No: 210719

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Dec 31, 2010

We have audited the attached Balance Sheet of M/s Dhanus Technologies Limited as at 31st December, 2010 and the Profit and Loss Account 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 to support the financial statement amounts and disclosures in the financial statement, assessing the accounting principles used in the preparation of financial statements, assessing significant estimates made by management in the preparation of financial statements and evaluating overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies [Auditors Report] Order, 2003 issued by the Central Government in terms of Section 227[4A] of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

Further to our comments as above, we state 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 such books, subject to Note No.2a.

c) The Balance Sheet and the Profit and Loss account referred to in this report are in agreement with the books of account, subject to Note No.2a.

d) In our opinion, the Profit and Loss account and the Balance Sheet comply with the Accounting Standards referred to sub-section [3C] of Section 211 of the Companies Act, 1956, except for AS-6-"Depreciation", AS-9-"Revenue Recognition", AS-10 - "Fixed Assets", AS-22 - "Deferred Taxes" and AS-28 - "Impairment of Assets".

e) Non application of AS-28 to the value of assets, the effect of which is not quantifiable from a mark to market perspective. Also tests of impairment, ownership and valuation of new and pre-existing fixed assets are under completion and we are unable to express opinion on the same.

f) Investments in, M/s Borusan Limited, Turkey amounting to 1 million USD and M/s. Sreeven Infocom amounting to Rs. 2,50,00,000/-, is, in our opinion, irrecoverable.

g) On the basis of written representation received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st December, 2010 from being appointed as a director in terms of clause [g] of sub-section [1] of Section 274 of the Companies Act, 1956.

h) The company has not provided for the cess payable under Sec.441A of the Companies Act, 1956 as the notification regarding rate and mode of payment has not received.

Subject to clauses [d] to [f] above, the cumulative effect of which is not quantifiable and the effect of which results in our inability to express an opinion on the same, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account read together with the other notes and accounting policies give the information required by the Companies Act, 1956, in the manner so required and gives a true and fair view in conformity with the accounting principles accepted in India:

i) in so far as it relates to the Balance Sheet, of the state of affairs of the company as at 31st December, 2010,

ii) in so far as it relates to the Profit and Loss account, of the Loss of the company for the year ended 31st December, 2010,, and

iii) in case of Cash Flow Statement, of the cash flows for the year ended 31st December, 2010.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our even date)

In terms of the information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under:

1. a) The company is in the process of maintaining proper records showing full particulars including quantitative details and the situation of fixed assets.

b) The fixed assets of the company have been physically verified by the management at reasonable intervals. We have relied on Management Representations for physical verification of fixed assets and accounting for discrepancies thereon.

c) During the year the Company has not disposed off substantial part of the fixed assets and the going concern status of the company is not affected.

2. a) According to the information and explanations given to us, inventories have been physically verified during the year by the management. We have relied on Management Representations for physical verification, stock valuation of finished goods and WIR

b) We have relied on management representations for discrepancies in inventory check.

3. a) In our opinion, the company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. As such, the clauses iii (b), iii (c) and iii (d) of paragraph 4 of the order are not applicable to the company.

b) In our opinion, the company has not taken any loans, secured or unsecured from the companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. As such, the clauses iii (f) and iii (g) of paragraph 4 of the order are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures; however the same is not fully commensurate with the size of the company and the nature of its business with regard to purchase of inventories including components, plant and machinery, equipment and other assets and with regard to the sale of goods. The Internal control requires elaborate strengthening.

5. a) In our opinion and 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 made in pursuance of contracts or arrangements entered in the register maintained under Sec. 301 of the Companies Act. 1956 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year 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 from the public. The provisions of Sections 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable to the Company.

7. In our opinion and according to the information and explanations given to us, the company has an internal audit system commensurate with the size of the company and nature of its business.

8. In our opinion, the Central Government has not prescribed the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956.

9. a) According to the records of the company, the company is irregular in depositing undisputed statutory dues including Income tax, Sales Tax, Customs duty, Cess and other statutory dues with the appropriate authorities. There have been delays in few cases. According to the information and explanations given to us no undisputed amount payable in respect of Income Tax, Sales Tax, Wealth Tax and Customs duty were outstanding as at 31st December, 2010 for a period of more than six months from the date they became payable. However we have relied on management representations to report this clause.

b) According to the information and explanations given to us, there are no dues in respect of Income tax, Sales Tax, Wealth tax, Customs duty and Cess that have not been deposited with the appropriate authorities on account of any dispute. However we have relied on management representations to report this clause.

10. The company has neither accumulated losses as at 31st December, 2010 nor it has incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by management, the company has defaulted in its interest on term loan from UCO Bank; the repayment schedule has been since restructured.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute as specified under clause [xiii] of paragraph 4 of the Companies [Auditors Report] Order, 2003 are not applicable to the Company.

14. According to the information and explanation given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly clause 4[xiv] of Companies [Auditors Report] Order, 2003 is not applicable.

15. The company has not given any guarantee for loans taken by others from bank or financial institutions. We have relied on management representations to report this clause.

16. The term loans have been applied for purpose for which it has been raised. We have relied on management representations to report this clause.

17. According to the information and explanation given to us and on overall examination of the balance sheet of the company, short-term funds has not been applied for long term purposes.

18. The Company has not made preferential allotment of shares to parties covered in the register maintained under Section 301 of the Companies Act 1956 and the price at which the shares have been issued are not prejudicial to the interest of the Company.

19. The Company has not issued debentures during the year and therefore the question of creation of charge or security does not arise.

20. The Company has not raised funds through public issue during the financial year under report. Hence this clause is inapplicable.

21. According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

For P C ACHARYA & Co Chartered Accountants

P C ACHARYA

Place : Chennai Proprietor

Date : 28th February, 2011 MRN: 210719

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Jun 30, 2009

We have audited the attached Balance Sheet of M/s Dhanus Technologies Limited as at 30th June, 2009 and the Profit and Loss Account 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 to support the financial statement amounts and disclosures in the financial statement, assessing the accounting principles used in the preparation of financial statements, assessing significant estimates made by management in the preparation of financial statements and evaluating overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies [Auditors Report] Order, 2003 issued by the Central Government in terms of Section 227[4A] of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

Further to our comments as above, we state 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 such books, subject to Note N6.2a.

c) The Balance Sheet and the Profit and Less account referred to in this report are in agreement with the books of account, subject to Note No.2a.

d) In our opinion, the Profit and Loss account and the Balance Sheet comply with the Accounting Standards referred to sub-section [3C] of Section 211 of the Companies Act, 1956, except for AS-6 - "Depreciation", AS-9 - "Revenue Recognition", AS-10 - "Fixed Assets", AS-22 - "Deferred Taxes" and AS-28 - "Impairment of Assets".

e) The effects of non reconciliation of receivables and payables as well as the effects on income taxes based on delayed receivables are not quantifiable.

f) Attention is invited to Note No.2a regarding revenue recognition and expense recognition, the effect of which is hot quantifiable.

g) Non application of AS-28 to the value of current assets including debtors and loans and advances, the effect of which is not quantifiable from a mark to market perspective. Also physical verification of fixed assets is yet to be completed. Also tests of impairment, ownership and valuation of new and pre-existing fixed assets are under completion and we are unable to express opinion on the same.

h) Investments in M/s Borusan Telekom, Turkey amounting to 1 million USD is, in our opinion, irrecoverable.

i) On the basis of written representation received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June, 2009 from being appointed as a director in terms of clause [g] of sub-section [1] of Section 274 of the Companies Act, 1956.

j) The company has not provided for the cess payable under Sec.441Aof the Companies Act, 1956 as the notification regarding rate and mode of payment has not received.

Subject to clauses [d] to [h] above, the cumulative effect of which is not quantifiable and the effect of which results in our inability to express an opinion on the same, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account read together with the other notes and accounting policies give the information required by the Companies Act, 1956, in the manner so required and gives a true and fair view in conformity with the accounting principles accepted in India:

i) in so far as it relates to the Balance Sheet, of the state of affairs of the company as at 30th June, 2009,

ii) in so far as it relates to the Profit and Loss account, of the profit of the company for the year ended 30th June, 2009,

iii) in case of Cash Flow Statement, of the cash flows for the year ended 30th June, 2009.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our even date)

In terms of the information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under:

1. a) The company is in the process of maintaining proper records showing full particulars including quantitative details and the situation of fixed assets.

b) The fixed assets of the company have been physically verified by the management at reasonable intervals. We have relied on Management Representations for physical verification of fixed assets and accounting for discrepancies thereon.

c) During the year the Company has not disposed off substantial part of the fixed assets and the going concern status of the company is not affected.

2. a) According to the information and explanations given to us, inventories have been physically verified during the year by the management. We have relied on Management Representations for physical verification, stock valuation of finished goods and WIP.

b) We have relied on management representations for discrepancies in inventory check.

3. a) In our opinion, the company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. As such, the clauses iii (b), iii (c) and iii (d) of paragraph 4 of the order are not applicable to the company.

b) In our opinion, the company has not taken any loans, secured or unsecured from the companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. As such, the clauses iii (f) and iii (g) of paragraph 4 of the order are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures; however the same is not fully commensurate with the size of the company and the nature of its business with regard to purchase of inventories including components, plant and machinery, equipment and other assets and with regard to the sale of goods. The Internal control requires elaborate strengthening.

5. a) In our opinion and 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 cur opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Sec. 301 of the Companies Act. 1956 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year 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 from the public. The provisions of Sections 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable to the Company.

7. In our opinion and according to the information and explanations given to us, the company has an internal audit system commensurate with the size of the company and nature of its business.

8. In our opinion, the Central Government has not prescribed the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956.

9. a) According to the records of the company, the company is irregular in depositing undisputed statutory dues including Income tax, Sales Tax, Customs duty, Cess and other statutory dues with the appropriate authorities. There have been delays in few cases. According to the information and explanations given to us no undisputed amount payable in respect of Income Tax, Sales Tax, Wealth Tax and Customs duty were outstanding as at 30th June 2009 for a period of more than six months from the date they became payable. However we have relied on management representations to report this clause.

b) According to the information and explanations given to us, there are no dues in respect of Income tax, Sales Tax, Wealth tax, Customs duty and Cess that have not been deposited with the appropriate authorities on account of any dispute. However we have relied on management representations to report this clause.

10. The company has neither accumulated losses as at 30th June 2009 nor it has incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by management, the company has defaulted in its interest on term loan from UCO Bank; the repayment schedule has been since restructured.

12. According to the information and explanations given to us, the company has not granted any loans and advances or the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute as specified under clause [xiii] of paragraph 4 of the Companies [Auditors Report] Order, 2003 are not applicable to the Company.

14. According to the information and explanation given to us, the company is not dealing or trading in shares, securities debentures and other investments. Accordingly clause 4fxiv] of Companies [Auditors Report] Order, 2003 is no applicable.

15. The company has not given any guarantee for loans taken by others from bank or financial institutions. We have relied on management representations to report this clause.

16. The term loans have been applied for purpose for which it has been raised. We have relied on management representations to report this clause.

17. According to the information and explanation given to us and on overall examination of the balance sheet of this company, short-term funds has not been applied for long term purposes.

18. The Company has not made preferential allotment of shares to parties covered in the register maintained under Section 301 of the Companies Act 1956 and the price at which the shares have been issued are not prejudicial to the interest of the Company.

19. The Company has not issued debentures during the year and therefore the question of creation of charge or security does not arise.

20. The Company has not raised funds through public issue during the financial year under report. Hence this clause i inapplicable.

21. According to the information and explanation given to us, no fraud on or by the Company has been noticed reported during the year.

For CNGSN & ASSOCIATE:

Chartered Accountant Dr C N GANGADARAI Place : Chennai Partner Date : 30.9.2009 Membership No.1120