Auditor Report of Prithvi Information Solutions Ltd.

Mar 31, 2013

Report on the Financial Statements:

We have audited the accompanying financial statements of PRITHVI INFORMATION SOLUTIONS LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

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"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

We further report that

(i) In respect of a creditor to whom payables amounting to Rs. 331.60 crores were under dispute/ litigation, the Company has entered into an agreement for settlement which is under progress as per information and explanations given to us.( Please refer to note number 43 to notes to financial statements)

(ii) With respect to FCCB the Company entered into an agreement with the bond holders to redeem the bonds by issue of share warrants on preferential basis. However it is rejected by FIPB.( Please refer to note number 34 to notes to financial statements)

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

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

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us

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 and with the returns received from branches not visited by us

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and 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.

I. (a) The Company has maintained proper records showing full particulars including q u a n ti ta ti ve details and situation of Fixed Assets.

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

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

II. (a) There is no inventory at the year end.

(b) The Company has established procedures for physical verification of inventory.

(c) The Company has maintained proper records for inventory.

HI. (a) The Company has granted interest free unsecured advances to Companies covered in the register maintained under section 301 of the Companies Act, 1956. The year end balance of advances granted to such parties was Rs. 243.26 crores.

(b) In our opinion and according to the information and explanation given to us, the rate of interest & other terms and conditions on which loans have been granted to parties, including advances to a wholly owned subsidiary, are not prima facie prejudicial to the interest of the Company except in case of Bastusilpi Constructions Pvt Ltd where interest free advances of Rs. 30 crores have been given.

(c) There are no covenants with regard to repayment of loan, other business advances given to private limited company/ other entities.

(d) There is no overdue amount in respect of advances granted to Companies, other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (f) and (g) of the Companies (Auditor''s Report) order, 2003 ( as amended ) are not applicable to the Company.

(f) As the Company has not taken any loans, the clause of whether the rate of interest and other terms and conditions on which loans have been taken from parties listed in the register maintained under section 301 is prejudicial to the interest of company, is not applicable.

(g) As no loans are taken by the company, the clause of repayment of interest & principal amount to parties is not applicable to the company.

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

V. (a) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintain U/s.301 of the Companies Act, 1956 has been so entered.

(b) In our opinion and according to the information and explanations given to us, the sale of services made in pursuance of such contracts or arrangements exceeding value of rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

VII. In our opinion, the company is having internal audit system, commensurate with its size and the nature of its business and the internal audit is carried out by external firm of chartered accountants.

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

IX. (a) Undisputed statutory dues including PF, ESI, Tax Deducted at source (TDS), Central sales Tax(CST) as applicable have not generally been regularly deposited with appropriate authorities and there had been significant delays in few cases. ''-

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

XI. Based on our audit procedures and as per the information and explanations given to us, the company did not have any overdue loans as at the end of the year except crystallized liability of Rs. 1761 lakhs on discounted bills that were over due at the year end.

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

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

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

XV. According tc ''information and explanations given to us, the Company has not given any guarantee for loans k ;
XVI. According to the information and explanations given to us, the Term Loans obtained by the company were applied for the purpose for which such loans were obtained by the Company.

XVII. According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we report that no funds raised by the Company on short-term have been use for long term Investments.

XVIII. According to the information and explanations given to us, 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 and hence the applicability of the clause regarding the price at which shares have been issued and whether the same is prejudicial to the interest of the Company does not arise.

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

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

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

For P. MURALI & CO.,

Chartered Accountants FRN: 007257S

PLACE : HYDERABAD P. MURALI MOHANA RAO

Partner

DATE : 30-05-2013 Membership No. 23412

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Mar 31, 2010

1. We have audited the attached balance sheet of Prithvi Information Solutions Limited ("The Company") as at 31st March 2010, the profit and loss account and cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

2. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (the ‘Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (the ‘Act), we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. The Company has substantial operations in the United States and due to their relative inaccessibility from India the accounts for year ended 31st March 2010 were audited by M/s Ram Associates a CPA firm based at Hamilton, New Jersey. In forming our opinion we have relied upon these audited final accounts concerning U S operations and the audit report dated 18th June, 2010 as per provisions of AAS 10.

4. We further report that

(i) The Company is contesting few ongoing litigations refer note - to the accounts. The manner and timing of settlement of these disputes may stress the financial resources of the Company. Further in respect of factored invoices which are the subject matter of a dispute the Company has collected some factored invoices and retained the amounts with it, pending disposal of litigation.

(ii) During the year withdrawals were made in cash from the Companys bank accounts aggregating to Rs.89 Lakhs as the amounts were used for spending on salaries of staff for software division. These expenses could not be explained satisfactorily by the Company.

5. Further to our comments in the Annexure referred to in paragraph 2 above and basis our observations in paragraphs 4 above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

(c) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the Directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(f) 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 March 31, 2010;

(b) in the case of the Profit & Loss Account, of the profit for the year ended on the date; and

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

Annexure to the Auditors Report Annexure referred to in paragraph 3 of our report of even date Re: Prithvi Information Solutions Limited (‘the Company)

i. a. The Company has maintained fixed assets register giving quantitative details and situations of fixed assets.

b. Fixed assets have been physically verified by Management during the year.

c. There was no substantial disposal of fixed assets during the year.

ii. a. The Management has conducted physical verification of inventory during the year. There was no inventory at the year end.

b. The Company has established procedures for physical verification of inventory.

c. The Company has maintained proper records for inventory.

iii. a. The Company has granted interest free loans/ advance to 4 (four) parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 16892 Lakhs and the year-end balance of loans granted to such parties was Rs. 16445 Lakhs.

b. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans, including loan to a wholly owned subsidiary, are not prima facie prejudicial to the interest of the Company except in case of a Private Limited Company where interest free advance of Rs. 428 Lakhs does not carry any interest and is prejudicial to the Companys Interest.

c. The loan/advance granted is re-payable on demand in case of wholly owned subsidiary and as informed, the company has not demanded repayment of loan during the year. There are no covenants with regard to repayment of loan given to Private Limited Company. There has been no default on the part of other parties to whom the money has been lent. As substantial part of amount advanced is spent in asset and business acquisitions by the borrowing company any repayments in near future are not expected; the Company may convert these loans to investment in share capital of the borrowing company.

d. There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

e. As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parries covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clauses 4(iii)(f) and (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. a. According to the information and explanations provided by Management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, the sale of services made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time. However, in respect of referral services availed from one party, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time in the absence of comparable transactions. Further the Company has entered into execution of contracts for supplies to be made to BSNL, against orders placed on the Company, on back to back basis retaining a margin of 1% for the Company; the normal margin retentions in such transactions is 1.6%.

vi. The Company has not accepted any deposits from the public.

vii. The Company has an internal audit system in India and the internal audit is carried by external firm of chartered accountants, which in our opinion needs to be strengthened further. However no such audits are carried for the Companys branch operations in US – which constitute larger share of commercial operations of the business.

viii.To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the products of the Company.

ix. a. Undisputed statutory dues including employees state insurance, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable have not generally been regularly deposited with appropriate authorities and there had been significant delays in few cases.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable except following amounts on account of income tax.

Name of the Statute Nature of Dues Amount Period to Due Date Date of Payment Rs. Which the Amount Relates

Income Tax Act,1961 Income Tax 42,56,140 2008-2009 31.03.2009 -

Income Tax FBT 38,88,032 2008-2009 31.03.2009 -

c. According to the information and explanation given to us, there are no dues of sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute; however dues of customs duty of Rs 2667 Lakhs has not been deposited and is disputed.

x. The Company has no accumulated losses at the end of the financial year nor has it incurred cash losses in the current financial year or previous financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, the Company did not have any overdue loans as at the end of the year other than the loans under litigation and crystallized liability of Rs.2887 Lakhs on discounted bils that were overdue at the year end . The Company did not have any outstanding debentures during the year.

xii. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. 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.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

xv. The Company has not given any guarantee in respect of loans taken by others from bank or financial institutions in respect of which it has not charged any commission.

xvi. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long-term investment.

xvii. 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.

xviii. The Company did not have any outstanding debentures during the year.

xix. 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, other than the ones under litigation, has been noticed or reported during the course of our audit.

For V.K. Asthana & Company,

Chartered Accountants



Hyderabad Vijay Kumar Asthana

September 02, 2010 Proprietor,

M.No.19664

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Mar 31, 2009

1. We have audited the attached balance sheet of Prithvi Information Solutions Limited ( "The Company") as at 31st March 2009, and also 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 management, as well as evaluating the overall financial statement presentation.

2. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (the Act), we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 f the said Order.

3. The financial statements of.the Company, as at and for the year ended 31 March 2008 were audited by M/s. S. R. Batliboi & Associates, Chartered Accountants vide their qualified report 9 July 2008. The balances as at 31 March 2008 as per the audited financial statements, regrouped and/or reclassified wherever necessary, have been considered as opening balances .for the purpose of these financial statements. Further on account of the Companys substantial operations in the United-States and their relative inaccessibility from India the accounts for year ended 31st March 2009 were audited by .M/s Ram Associates a CPA firm based at Hamilton; New Jersey. In forming our opinion we have relied upon these audited final accounts concerning U S operations and the audit report dated 30th November, 2009 and subsequent clarifications sought by us as per provisions of AAS 10.

4. Subsequent to 31 March 2009 the Company had received notices for attachment of the Companys bank accounts and receivables from customers/from the Debt Recovery Tribunal. Pending finalization of proceedings in this regard, we are unable to comment upon the consequential impact, if any, on the accompanying financial statements.

5. We further report that

(i) We did not observe the counting of the physical inventories as at-31 March 2009 since that date was prior to the time we were appointed as auditors of the Company. However on the basis of subsequent dispatches in the first fortnight of the following year the inventory valuations can be relied upon.

(ii) Subsequent to the Balance Sheet date the Company was served with a DRI show cause notice raising additional demand for customs duty of Rs. 26,66,72,693, the Company has however made provision for the same even though the same is being contested.

( iii ) The Company had exposure to forward exchange contracts for hedging against its operational exposure to foreign exchange fluctuations, accordingly no provision was made for mark to market losses as per requirements of AS 11 (para 39 ) as the provision is intended for trading or speculation purpose forward contracts only. Nad the same policy adopted in previous year the profits for previous years would have been higher by Rs.30,95,51,850 and the profit for current year would have been lower to the same extent.

6. Further to our comments in the Annexure referred to in

paragraph 3 above and basis our observations in paragraphs 3 to 5 above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

(c) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the Directors, as on 31st March 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2009 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; .

(f) 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 March 31, 2009;

b. in the case of the Profit & Loss Account, of the profit: for the year ended on the date; and

c. 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 Re: Prithvi Information Solutions Limited (the Company)

i. a. The Company has maintained fixed assets register giving quantitative details, and situations of fixed assets. b. Fixed assets have been physically verified by Management during the year.

c. There was.no substantial disposal of fixed assets during the year.

ii. a. The Management has conducted physical verification of inventory at the year end b. The Company has established, procedures for physical verification of inventory

c. The Company has maintained proper records for inventory.

iii. a. The Company has granted an interest free advance to a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.386,575,903 and the year-end balance of loans granted- to such party "was Rs.386,575,903.

In our opinion and according to the information, and explanations qiven to us; as the loan/advance was made to a wholly owned subsidiary.

The loan granted is re-payable on demand. As informed the Company has not demanded repayment of loan during the year, thus, there has been no default on the part of the party to whom the money has been lent. The terms of loan do not stipulate payment of interest.

d. There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

e. As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parries covered in the register maintained under Section 301

of the Companies Act, 1956. Accordingly, the provisions of clauses 4(iii)(f) and (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business; for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, ho major weakness has been noticed in the internal control system in respect. of these areas.

v. a. According to the information and explanation provided Management, we are. of the opinion that the particulars of contracts or arrangements referred to in . Section 301 of the Act that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, . the sale of services made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time. However, in respect of referral services availed from one party, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time in the absence of comparable transactions.

vi. The Company has not accepted any deposits from the public.

vii. The Internal Audit of the company being carried out by a firm of Chartered Accountants whose terms of reference are adequate.

viii. To the best of our knowledge and as explained, the Central Governmenthas not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for the products of the Company.

ix. a. Undisputed statutory dues including Income Tax employees state insurance, sales-tax, wealth-tax, service tax, customs duty, excise

duty, cess and other material statutory dues as applicable have generally been regularly deposited with delay to appropriate authorities.

b. According ,to the information and explanations, given to us, no undisputed amounts payable in respect of provident fund, investor education and protection,fund, employees state insurance, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and .other undisputed, statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable, however self-assessment income tax payable of Rs.27,155,535 for assessment year 2008-09 was paid after more than 6 months delay

c. According to the information and explanation given to us, there are no dues of sales-tax, wealth tax, -service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute; however dues of income tax of Rs 54.37Croreson the balance sheet date which were subsequently reduced to Rs. 2.62 Crores vide consequential orders received have not been deposited on account of disputes.

x. The Company has no accumulated losses at the end of the financal year and it has not incurred cash losses in the; current, and immediately preceding financial year

xi. Based on our audit procedures and as per the information and explanations given by the management, the Company did not have any overdue loans except a short term loan to a Bank as at the end of the year . The Company did not have any outstanding debentures during the year

xii. According to the information and explanations given to us and based on the documents and records produced to us the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. 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.

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended), are not applicable to the Company.

xv. The Company has given a. guarantee in respect of loans taken by others from bank or financial institutions in respect of which it has not charged any commission. In our opinion, the same is prejudicial to the interest of the Company.

xvi. No Term Loans have been taken by the Company during the year under audit.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for Long-term investment.

xviii. 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.

xix. The Company did not have any outstanding debentures during the year.

xx. We have verified that the end use of money raised by public issue is asdisclosed in the notes to the financial statements.

xxi. 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 oh or by the Company has been noticed or reported during the course of , our audit.



For V.K. Asthana & Company,

Chartered Accountants

Hyderabad vijay Kumar Asthana

January 23, 2010 Proprietor,

M.No.19664.