Bharatiya Global Infomedia Ltd

To the Members of

BHARATIYA GLOBAL INFOMEDIA LIMITED

We have audited the attached Balance Sheet of BHARATIYA GLOBAL INFOMEDIA LIMITED asat 31st March 2011 and the Profit and Loss Account for the year ended on that date annexedthereto. These financial statements are the responsibility of the company's management.Our responsibility is to express an opinion on these financial statements based onouraudit.

1. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion and report thereto:

2. As required by the Companies (Auditor's Report) Order, 2003 issued by the CentralGovernment in terms of section 227 (4A) of the Companies Act, 1956 and on the basis ofsuch checks of the books and records of the company, as we considered appropriate, and interms of the information and explanations given to us, we enclose in the annexure astatement on the matters specified in paragraph 4 and 5 of the said order to the extentapplicable to the company.

3. Further to our comments in annexure referred to in paragraph (3) above, we reportthat:

(a) We have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purpose of our audit.

(b) In our opinion, the company as required by law, has kept proper books of account sofar as appears from ourexaminationof such books.

(c) The Balance Sheet and Profit & Loss Account dealt with by this report are inagreement with the books of account.

(d) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by thisreport, comply with the Accounting Standards referred in sub - section 3(C) of section 211of the companies Act, 1956.

(e) On the basis of written representations received from the directors as on31.03.2011 and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on 31.03.2011 from being appointed as directors in terms ofclause (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 explanationsgiven to us, the said statements of accounts subject to investment in BGIL films &technologies Ltd .not being in the name of the company as detailed in note no. 12 of Noteson Accounts (Schedule No. 16) and Non-provision of retirement benefits as detailed in Noteno. 13 of Notes on accounts (Schedule No. 16) together with the other notes, give theinformation required by the Companies Act, 1956 inthe manner so required and give a trueand 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 31STMarch 2011 and

ii) In the case of Profit and Loss Account, of the profit for the year ended on thatdate.

Referred to in paragraph 3 of our report of even date,

(i) (a) The company has generally maintained proper records showing particularsincluding quantitative details and situation of fixed assets.

(b) As explained to us, the Fixed Assets are physically verified by the management atreasonable intervals in a phased verification programme, which in our opinion, isreasonable having regard to the size of the company and the nature of its business. Nomaterial discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off any part of its Fixed Assets soas to affect its going concern.

(ii) (a) The inventory has been physically verified during the period by themanagement. In our opinion, the frequency of verification is reasonable.

(B) In our opinion, the procedures of physical verification of inventories followed bythe management are reasonable and adequate in relation to the size of the company and thenature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, thecompany is maintaining proper records of inventory. The discrepancies noticed on physicalverification of inventory as compared to book records were not material.

(iii) (a)According to the information and explanations given to us, the company hasneither granted nor taken any loans, secured or unsecured to/from companies, firms orother parties, covered in the register maintained under section 301 of the Companies Act,1956 except Rs. 2,34,64,831/- taken from parties as unsecured loans and Rs. 59,27,956/- assecured loans. The Company is not regular in repayment of these loans. In respect of someunsecured loans obtained from parties other than banks/financial institutions, there areno specific terms and conditions as to the repayment of these loans. In the absence of anyterms and conditions regarding repayment of these unsecured loans, we are unable tocomment whether the same are prima facie prejudicial tothe interest of the company.

(iv) In our opinion and according to the information and explanations given to us,there are adequate internal control procedures commensurate with the size of the companyand the nature of its business with regard to purchases of inventory, fixed assets andwith regard to the sale of goods. During the course of our audit, no major weakness hasbeen noticed in internal controls.

(v) (a) On the basis of the audit procedures performed by us and according to theinformation, explanations and representations given to us, we are of the opinion that, thetransactions in which directors were interested as contemplated under section 297 andsub-section (6) of section 299 of the Companies Act, 1956, and which were required to beentered in the register maintained under section 301 of the Companies Act, 1956, have soentered.

(b) According to the information and explanations given to us, transactions exceedingthe value of Rs. 5,00,000/- have been made at prices which are reasonable having regard tothe prevailing market prices atthe relevanttime.

(vi) The company has not accepted any deposits as defined under sections 58A of theCompanies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) In our opinion, the company has an internal audit system commensurate with thesize and nature of its business.

(viii) According to the information and explanations given to us, maintenance of costrecords have not been prescribed by the Central Govt, under section 209 (1) (d) of theCompanies Act, 1956.

(ix) (a) According to the records of the company, in our opinion the company is notregular in depositing with appropriate authorities undisputed statutory dues includingprovident fund, investor education and protection fund, employee's state insurance, incometax, sales tax, wealth tax, custom duty, excise duty, cess and any other statutory duesapplicabletoit.

(b) According to the information and explanations given to us, there are no undisputedamount payable in respect of income tax, sales tax, customs duty, wealth tax and exciseduty were outstanding as on 31st March 2011 for a period of more than six months from thedate becoming payable except thefollowing:

(X) The company has no accumulated losses as at 31st March 2011 and it has not incurredany cash losses during the financial period ended on that date or in the immediatelypreceding financial year.

(xi) Accordingtotherecordsofthecompanyexamined by us and the information andexplanations given to us, the company has not defaulted in repayment of dues to anyfinancial institution or bank or debenture holders as at the balance sheet date, howeverRs. 11.94 lacs was overdue as at 31.03.2011.

(xii) The company has not granted any loans and advances on the basis of security byway of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefitfund/society.

(xiv) In respect of shares, securities, debentures and other investments, dealt in ortraded by the company, proper records have been maintained in respect of transactions andcontracts, and timely entries have been made therein.

(xv) According to the information and explanations given to us, the company has notgiven any guarantee for loans taken by others, from banks or financial institutionsduringthe year.

(xvi) The Company has not obtained any term loans during the current year except forunsecured loans taken from Banks/financial institutions/other parties.

(xvii) Based on the information and explanations given to us and on an overallexamination of the balance sheet of the company, in our opinion, there are no funds raisedon a short term basis which have been used for long term investment and vice-versa.

(xviii) According to the information and explanations given to us, the company has notmade preferential allotment of shares to parties and companies covered in the registermaintained under section 301 of the Act during the period except allotment of 2280778bonus equity shares of Rs. 10/- each during the year.

(xix) According to the information and explanations given to us, during the periodcovered by our audit report, the company has not issued any debentures.

(xx) The company has not raised money by way of public issuesduringthe period.

(xxi) Based on the audit procedures performed and information and explanations given tous, we report that no fraud on or by the company has been noticed or reported during thecourse of our audit.