Auditor Report of Sterling Webnet Ltd.

Mar 31, 2013

We have audited the accompanying financial statements of STERLING WEBNET LIMITED (Formerly known as SAARC NET LIMITED) which comprise the Balance Sheet as at 31 March 2013 and the Statement of Profit and Loss and 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 of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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:

i) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2013;

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

iii) In the case of 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, as amended, 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;

c. the Balance Sheet, Statement of Profit and Loss dealt with by this Report are in agreement with the books of account .

d. in our opinion, the Balance Sheet & Statement of Profit and Loss comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; and

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

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of STERLING WEBNET LIMITED (Formerly known as SAARC NET LIMITED) on the accounts of the company for the year ended 31st March, 2013.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. company does not have inventories during the year hence other sub clause not applicable

3. (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 not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(e)According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. The Company has no manufacturing activities during the year hence clause (viii) of paragraph 4 of the Order is not applicable to the Company

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 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 is no amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

10. The accumulated losses at the end of the financial year are not more than 50% of its net worth and it has incurred cash losses of Rs 405,000/- during the financial year under report and it has also incurred cash losses in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

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

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company is trading in Shares, Mutual funds & other Investments. Proper records & timely entries have been maintained in this regard & further investments specified are held in their own name.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For, Y. D. & Co

CHARTERED ACCOUNTANTS

FRN: 018846N

PLACE: LUDHIANA

DATE: 31.08.2013

CA RAKESH PURI

PARTNER

M. No.: 092728

---

Mar 31, 2012

We have audited the attached Balance Sheet of SAARC NET LIMITED, New Delhi as at 31st March 2012 and also the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Company''s (Auditor''s Report) (Amendment) Order, 2004, (together the ''Order'') issued by the Central Government of India in terms of Section 227 (4A) of ''The Companies Act,1956'' of India and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we give in the Annexure, a statement on the matters specified in paragraph 4 & 5 of the said ''Order''.

Further to our comments in the Annexure referred to in paragraph 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 those books.

c. The balance sheet and Profit & Loss account and Cash Flow Statement dealt by this report are in agreement with the books of accounts.

d. In our opinion, the Balance Sheet and 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 Company Act, 1956, to the extent applicable.

e. 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 director 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.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes on the accounts thereon 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 balance Sheet of the state of affairs of the company as at 31st March 2012

ii. in the case of the Profit & Loss Account of the Loss for the year ended on that date and

iii. in the case of the cash flow statement, of the cash flow for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH-2 OF OUR REPORT OF EVEN DATE

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

b) We have been informed that major fixed assets have been physically verified by the management at reasonable intervals which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. As informed to us no material discrepancies have been noticed on such verification.

c) According to information and explanation given to us, the company has not disposed off any fixed assets during the year.

2. a) The management has conducted physically verification of inventory at reasonable intervals, which have been confirmed by them.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company has maintained proper records of inventory and no material discrepancies were noticed on physical verification as compared to book records.

3. a) The Company has not granted any loan to parties listed in the register maintained under section 301 of the Companies Act 1956. Accordingly, clause (iii) (b) (c), and (iii) (d) of paragraph 4 of the Order are not applicable to the Company.

(b) The Company has not taken loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause (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 explanation given to us the Company has adequate internal control procedure commensurate with the size of the Company and nature of its business with regard to purchases of inventory, fixed assets and with regarded to the sale of goods. Further, on the basis of our examination of the books of accounts and records of the Company and according to information and explanation given to us, we have not come across any continuing failure to correct any major weakness in internal control.

5. In accordance with information and explanation given to us, we are of the opinion that the company has not entered into any contract or arrangement during the year that needed to be entered into the register maintained in pursuance of section 301 of the Companies Act, 1956. Accordingly, clause (v) (a) and (v) (b) of paragraph 4 of the Order are not applicable to the Company.

6. According to the information and explanations given to us, the Company has not accepted any deposits during the year from the public within the meaning of the provisions of section 58A and 58AA of The Companies Act,1956 and the rules made there under.

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

8. The Company has no manufacturing activities during the year, hence clause (viii) of paragraph 4 of the Order is not applicable to the Company.

9. (a) According to records of the Company, the Company is regular in depositing undisputed statutory dues except Tax Deducted at Source with appropriate authority. According to the information & explanations given to us, there is no undisputed statutory dues which were in arrears, as at 31st March, 2012 for a period of more than six months from the date they became payable.

(b) According to information and explanation given to us and the records examined by us, there are no disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities.

10. In our opinion, the Company has accumulated losses at the end of the year, which is not more than fifty percent of its net worth. Further, the Company has not incurred cash losses during the financial year covered by our audit and not incurred in immediately preceding financial year.

11. As per information and explanation given to us the Company has not received any loan from Banks and financial institution or issued any debentures.

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

13. The Company is not a chit fund or a Nidhi / Mutual benefit Funds / society. Therefore clause 4 (xiii) of the Order is not applicable to the Company.

14. The Company has maintained proper records of transaction and contracts in respect of the shares and other securities and timely entries have been made therein. The investment in shares has been made in the company''s name.

15. The details of guarantees given for the loans taken by others have not been made available to us and hence the terms and conditions of the guarantees given by the Company, for loans taken by others from banks during the year can not be commented.

16. The company has not raised any term loans during the year.

17. According to the basis of information and explanation given to us and on the basis of overall examination of the Balance Sheet of the company, no fund raised for short term basis have been utilized for long term investment.

18. The Company has not made any preferential allotment of shares to any party or company covered in the register maintained under Section 301 of the Companies Act, 1956.

19. Since the Company does not have any debentures, provisions of Para (xix) of the Order are not applicable to the Company.

20. Since the Company has not raised money by Public Issue during the year, the provisions of Para (xx) of the Order are not applicable to the Company.

21. To the best of our knowledge and belief and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company nor we have been informed of such cases by the management.

For, Y. D. & Co

CHARTERED ACCOUNTANTS

FRN:018846N

PLACE: LUDHIANA

DATE: 01.09.2012

CA RAKESH PURI

PARTNER

M. No.: 092728

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of SAARC NET LIMITED, New Delhi as at 31st March 2010 and also the Profit & Loss Account and the Cash Flow Statement of the Company 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companys (Auditors Report) (Amendment) Order, 2004, (together the Order) issued by the Central Government of India in terms of Section 227 (4A) of The Companies Act, 1956 of India and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we give in the Annexure, a statement on the matters specified in paragraph 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 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 those books.

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

d) In our opinion, the Balance Sheet and 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 Company Act, 1956, to the extent applicable.

e) 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 director 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.

f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with notes thereon in Schedule L 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.

1. In the case of the Balance Sheet of the state of .affairs of the company as at 31 st March,2010.

2. In the case of the Profit & Loss Account of the Loss for the year ended on the date; and

3. In the case of Cash Flow Statement of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT TO THE MEMBERS OF SAARC NET LIMITED (Referred to in paragraph 3 of our report of even date)

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

b) We have been informed that major fixed assets have been physically verified by the management at reasonable intervals which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. As informed to us no material discrepancies have been noticed on such verification.

c) According to information and explanation given to us, the company, has not disposed off any fixed assets during the year.

2) a) The management has conducted physically verification of inventory at reasonable intervals, which have been confirmed by them.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company has maintained proper records of inventory and no material discrepancies were noticed on physical verification as compared to book records.

3) a) The Company has granted unsecured loans to three parties listed in the register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs.122.26 lacs and the year end balance of loan given to such parties was Rs.122.26 lacs.

b) In our opinion and according to the information and explanation given to us, the terms and conditions on which loan granted to Companies and related parties covered in the register maintained under section 301 of the Companies Act,1956 are not Prima Facie, prejudicial to the interest of the Company. However no interest has been charged on the loans granted.

c) As explained to us the aforesaid loans have been granted as interest free and repayable on demand basis. The parties to whom loans have been granted, have not repaid the principal amount during the year.

d) As explained to us, the aforesaid loans granted are repayable on demand basis and parties have not repaid loans during the year, the overdue amount in excess of Rs. One lac can not be commented.

e) The Company has not taken loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause (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 explanation given to us the Company has adequate internal control procedure commensurate with the size of the Company and nature of its business with regard to purchases of inventory, fixed assets and with regarded to the sale of goods and services. Further, on the basis of our examination of the books of accounts and records of the Company and according to information and explanation given to us, we have not come across any continuing failure to correct any major weakness in internal control.

5) In accordance with information and explanation given to us, we are of the opinion that the company has not entered into any contract or arrangement during the year that needed to be entered into the register maintained in pursuance of section 301 of the Companies Act, 1956. Accordingly, clause (v) (a) and (v) (b) of paragraph 4 of the Order are not applicable to the Company.

6) According to the information and explanations given to us, the Company has not accepted any deposits during the year from the public within the meaning of the provisions of section 58A and 58AA of The Companies Act, 1956 and the rules made there under.

7) In our opinion the Companys internal audit system is commensurate with the size and nature of the business of the Company.

8) The Company has no manufacturing activities during the year, hence clause (viii) of paragraph 4 of the Order is not applicable to the Company.

9) a) According to records of the Company, the Company is not regular in depositing undisputed statutory dues of Income Tax, Fringe Benefit Tax and Service Tax with appropriate authorities. The details of undisputed amount payable on account of Income Tax, Fringe Benefit Tax and Service Tax dues which have remained outstanding as at 31-03-2010 for a period more than six months from the day they became payable are as follows;

Income Tax Rs.29, 83,770.00

FBT Rs. 49,715.00

Service Tax Rs. 16,41,774.00

b) According to information and explanation given to us and the records examined by us, there are no disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities.

10) In our opinion, the Company has accumulated losses at the end of the year, which is not more than fifty percent of its net worth. Further, the Company has also incurred cash losses during the financial year covered by our audit as well as in immediately preceding financial year also.

11) As per information and explanation given to us the Company has not received any loan from Banks and financial institution or issued any debentures.

12) According to the information and explanation given to us the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

13) The Company is not a chit fund or a Nidhi / Mutual benefit Funds / society. Therefore clause 4 (xiii) of the Order is not applicable to the Company.

14) The Company has maintained proper records of transaction and contracts in respect of the shares and other securities and timely entries have been made therein. The investment in shares has been made in the companys name.

15) The details of guarantees given for the loans taken by others have not been made available to us and hence the terms and conditions of the guarantees given by the Company, for loans taken by others from banks during the year can not be commented.

16) The company has not raised any term loans during the year.

17) According to the basis of information and explanation given to us and on the basis of overall examination of the Balance Sheet of the company, no fund raised for short term basis have been utilized for long term investment.

18) The Company has not made any preferential allotment of shares to any party or company covered in the register maintained under Section 301 of the Companies Act, 1956.

19) Since the Company does not have any debentures, provisions of Para (xix) of the Order are not applicable to the Company.

20) Since the Company has not raised money by Public Issue during the year, the provisions of Para (xx) of the Order are not applicable to the Company.

21) To the best of our knowledge and belief and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company nor we have been informed of such cases by the management.

For MANV & ASSOCIATES

Firm Regd. No. 007351N

Chartered Accountants

Sd/-

VIJAY KUMAR JAIN

Place : New Delhi Partner

Dated : 31st August 2010 M. No. 087502

---

Mar 31, 2009

1. We have audited the attached Balance Sheet of SAARC NET LIMITED, New Delhi as at 31st March 2009 and also the Profit & Loss Account and the Cash Flow Statement of the Company 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companys (Auditors Report) (Amendment) Order, 2004, (together the Order) issued by the Central Government of India in terms of Section 227 (4A) of The Companies Act, 1956 of India and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we give in the Annexure, a statement on the matters specified in paragraph 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 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 those books;

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

d) In our opinion, the Balance Sheet and 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 Company Act, 1956, to the extent applicable.

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

0 In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with notes thereon in Schedule L subject to Note No. B1 regarding commission income, Note No. B2 regarding the sales return of computer software, Note No. B3 regarding capital work in progress, Note No. B4 regarding loan and advances granted of Rs. 296.73, Note No. B5 regarding investment in NSC and Note No. B6 regarding confirmation of sundry debtors, sundry creditors and loan and advances granted, 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:

1. In the case of the Balance Sheet of the state of affairs of the Company as at 31 st March,2009;

2. In the case of the Profit & Loss Account of the Loss of the Company for the year ended on the date; and

3. In the case of Cash Flow Statement of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT TO THE MEMBERS OF SAARC NET LIMITED (Referred to in paragraph 3 of our report of even date)

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

b) We have been informed that major fixed assets have been physically verified by the management at reasonable intervals which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. As informed to us no material discrepancies have been noticed on such verification.

c) During the year, the Company has disposed of all the assets of Hyderabad Branch office i.e. Office Equipment, Computers and Furniture and Fixture due to not having any business activity in Hyderabad Branch, as explained to us. According to information and explanation given to us, we are of the opinion that the sale of aforesaid fixed assets has not affected the going concern status of the Company.

2) a) The management has conducted physically verification of inventory at reasonable intervals, which have been confirmed by them.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company has maintained proper records of inventory and no material discrepancies were noticed on physical verification as compared to book records.

3) a) The Company has granted unsecured loans to four parties listed in the register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs. 122.36 lacs and the year end balance of loan given to such parties was Rs.122.26 lacs.

b) In our opinion and according to the information and explanation given to us, the terms and conditions on which loan granted to Companies and related parties covered in the register maintained under section 301 of the Companies Act, 1956 are not Prima Facie, prejudicial to the interest of the Company. However no interest has been charged on the loans granted.

c) As explained to us the aforesaid loans have been granted as interest free and repayable on demand basis. The parties to whom loans has been granted, have not repaid the principal amount during the year except one party whose outstanding was of small amount.

d) As explained to us, the aforesaid loans granted are repayable on demand basis and parties have not repaid loans during the year, the overdue amount in excess of Rs. One lacs can not be commented.

e) The Company has not taken loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clause (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 explanation given to us the Company has adequate internal control procedure commensurate with the size of the Company and nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. Further, on the basis of our examination of the books of accounts and records of the Company and according to information and explanation given to us, we have not come across any continuing failure to correct any major weakness in internal control.

5) In accordance with information and explanation given to us, we are of the opinion that the company has not entered into any contract or arrangement during the year that needed to be entered into the register maintained in pursuance of section 301 of the Companies Act, 1956. Accordingly, clause (v) (a) and (v) (b) of paragraph 4 of the Order are not applicable to the Company.

6) According to the information and explanations given to us, the Company has not accepted any deposits during the year from the public within the meaning of the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules made there under.

7) In our opinion the Companys internal audit system is commensurate with the size and nature of the business of the Company.

8) The Company has no manufacturing activities during the year, hence clause (viii) of paragraph 4 of the Order is not applicable to the Company.

9) a) According to records of the Company, the Company is not regular in depositing undisputed statutory dues of Income Tax and Fringe Benefit Tax with appropriate authorities. The details of undisputed amount payable on account of Income Tax and Fringe Benefit Tax dues which have remained outstanding as at 31-03-2009 for a period more than six months from the day they became payable are as follows;

Income Tax Rs. 29,83,770.00

FBT Rs. 49,715.00

b) According to information and explanation given to us and the records examined by us, there are no disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities.

10) In our opinion, the Company has accumulated losses at the end of the year, which is not more than fifty percent of its net worth. Further, the Company has also incurred cash losses during the financial year covered by our audit but not in immediately preceding financial year.

11) As per information and explanation given to us the Company has not received any loan from Banks and financial institution or issued any debentures.

12) According to the information and explanation given to us the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

13) The Company is not a chit fund or a Nidhi/ Mutual benefit Funds / society. Therefore clause 4 (xiii) of the Order is not applicable to the Company.

14) The Company has maintained proper records of transaction and contracts in respect of the shares and other securities and timely entries have been made therein. Whether investments have been held by the companys in its own name. The demat account of the company through which transaction have been rotated, has not been produced before us for verification.

15) In our opinion, and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks during the year, are not prejudicial to the interest of the Company.

16) The company has not raised any term loans during the year.

17) According to the basis of information and explanation given to us and on the basis of overall examination of the Balance Sheet of the company, no fund raised for short term basis have been utilized for long term investment.

18) The Company has not made any preferential allotment of shares to any party or company covered in the register maintained under Section 301 of the Companies Act, 1956.

19) Since the Company does not have any debentures, provisions of Para (xix) of the Order are not applicable to the Company.

20) Since the Company has not raised money by Public Issue during the year, the provisions of Para (xx) of the Order are not applicable to the Company.

21) To the best of our knowledge and belief and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company nor we have been informed of such cases by the management.

For JAIN VIJAY & ASSOCIATES

Chartered Accountants

Sd/- VIJAY KUMAR JAIN

Place : New Delhi Partner

Dated : 31-08-2009 M. No. 087502