Educomp Solutions Ltd

EDUCOMP SOLUTIONS LIMITED

1. We have audited the attached Balance Sheet of Educomp Solutions Limited ('theCompany') as at March 31, 2011 and also the Profit and Loss account and the cash flowstatement for the year ended on that date annexed thereto. These financial statements arethe responsibility of the Company's management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. 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 a 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.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by theCompanies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government ofIndia in terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956' of India(the 'Act') and on the basis of such checks of the books and records of the company as weconsidered appropriate and according to the information and explanations given to us, wegive in the Annexure a statement on the matters specified in paragraphs 4 and 5 of thesaid Order.

4. Further to our comments in the paragraph 3 above, we report that:

i. We have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

iii. The balance sheet, profit and loss account and cash flow statement dealt with bythis report are in agreement with the books of account;

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

v. On the basis of the written representations received from the directors, as on March31, 2011, and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on March 31, 2011 from being appointed as a director in termsof clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanationsgiven 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 accountingprinciples generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March31, 2011;

b) in the case of the profit and loss account, of the profit for the year ended on thatdate; and

c) in the case of cash flow statement, of the cash flows for the year ended on thatdate.

Place: Gurgaon

Date: May 30, 2011

Annexure to Auditor's Report

[Referred to in paragraph 3 of the Auditors' Report of even date to the members ofEducomp Solutions Limited on the Financial Statements for the year ended 31st March 2011]

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

(b) The company has a phased program of physical verification to cover all its assetsover a period of 3 years, which in our opinion is reasonable having regard to the size ofthe company and nature of its assets. Some of the fixed assets of the company werephysically verified by the management during the year and as informed no materialdiscrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, asubstantial part of fixed assets has not been disposed of by the company during the year.

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

(b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) The Company is maintaining proper records of inventory and no materialdiscrepancies were noticed on physical verification carried out at the end of the year.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured tocompanies, firms or other parties covered in the register maintained under section 301 ofthe Companies Act, 1956. Accordingly clauses (iii)(b), (iii)(c) and (iii)(d) of paragraph4 of the Order are not applicable to the Company.

(b) As informed, the Company has not taken any loans, secured or unsecured fromcompanies, firms or other parties covered in the register maintained under section 301 ofthe Companies Act, 1956. Accordingly clauses (iii)(f) and (iii)(g) of paragraph 4 of theOrder are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us,there exists an adequate internal control system commensurate with the size of the Companyand the nature of its business with regard to purchase of inventory, fixed assets and withregard to the sale of goods and services. During the course of our audit, we have notobserved any continuing failure to correct weakness in internal control system of thecompany.

(v) (a) According to the information and explanations given to us, we are of theopinion that the particulars of contracts or arrangements referred to in section 301 ofthe Companies Act, 1956 that need to be entered into the register maintained under section301 have been so entered.

(b) We are unable to comment if the transactions made with the parties listed insection 301 of the Companies Act, 1956, in pursuance of such contracts or arrangementsexceeding value of Rupees Five Lakhs have been entered into during the financial year atprices which are reasonable having regard to the prevailing market prices at the relevanttime as there are no market prices comparable to those transactions, however areconsidered to be proprietary in nature as explained by the management of the company.

(vi) The company has not accepted any deposits from the public within the meaning ofSections 58A and 58AA of the Act and the rules framed there under.

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

(viii) The Central Government of India has not prescribed the maintenance of costrecords under clause (d) of sub-section (1) of Section 209 of the Act for any of theproducts/business activities of the company.

(ix) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund, investor education and protectionfund, employees' state insurance, sales-tax, wealth-tax, service tax, customs duty, exciseduty, cess and other material statutory dues applicable to it.

Further, since the Central Government has till date not prescribed the amount of cesspayable under section 441 A of the Companies Act, 1956, we are not in a position tocomment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amountspayable in respect of provident fund, investor education and protection fund, employeesstate insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, exciseduty, cess and other undisputed statutory dues were outstanding, at the year end, for aperiod of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues ofwealth tax, service tax, customs duty, excise duty and cess which have not been depositedon account of any dispute. According to the information and explanation given to us,disputed sales tax and income tax that have not been deposited are as follows:

(x) In our opinion and according to the information and explanations given to us, thecompany does not have accumulated losses. Further, the company has not incurred cashlosses during the financial year covered by our audit and the immediately precedingfinancial year.

(xi) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in repayment of dues to a financial institution and banks.

(xii) According to the information and explanations given to us, the Company has notgranted any 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 (Auditor's 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 theCompanies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, theterms and conditions of the guarantees given by the company, for loans taken by othersfrom banks or financial institutions during the year, are not prejudicial to the interestof the company.

(xvi) In our opinion, the term loans have been applied for the purpose for which theloans were raised.

(xvii) According to the information and explanations given to us and on an overallexamination of the balance sheet of the Company, we report that no funds raised onshort-term basis have been used for long-term investment.

(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.

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

(xx) During the year covered by our audit report, the company has not raised any moneyby way of public issue.

(xxi) During the course of our examination of the books and records of the company,carried out in accordance with the generally accepted auditing practices in India, andaccording to the information and explanations given to us, we have neither come across anyinstance of fraud on or by the company, noticed or reported during the year, nor have webeen informed of such case by the management.

Place: Gurgaon

Date: May 30, 2011