Interworld Digital Ltd

The Members,

INTERWORLD DIGITAL LIMITED

1. We have audited the attached Balance Sheet of INTERWORLD DIGITAL LIMITED asat 31st March 2012, the Statement of Profit & Loss and Cash flow statement of theCompany 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 (Auditors' Report) Order, 2003 issued by the CentralGovernment of India in terms of sub-section (4A) of section 227 of the Companies Act,1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and5 of the said order.

4. Further to our comments in the 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 purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by thecompany so far as appears from our examination of such books;

(c) The Balance Sheet, the Statement of Profit & Loss and the Cash flow statementdealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of Profit & Loss and the Cashflow statement dealt with by this report complies with the mandatory Accounting Standardsreferred in section 211 [3C] of the Companies Act, 1956;

(e) On the basis of written representations received from the directors as at31.03.2012 and taken on record by the Board of Directors, we report that none of thedirectors are disqualified as on 31st March, 2011 from being appointed as director interms 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 theexplanations given to us, the said accounts give the information required by the CompaniesAct, 1956, in the manner so required and give a true and fair view in conformity withaccounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch, 2012;

(ii) In the case of the Statement of Profit & Loss, of the profit of the companyfor the year ended on that date; and

(iii) In the case of Cash Flow Statement, of the cash flow of the company for the yearended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date to the members of M/s.Interworld Digital Limited)

(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) These fixed assets have been physically verified at reasonable intervals by themanagement and no material discrepancy was noticed on such verification.

(c) The company has not disposed off a substantial part of its fixed assets during theyear.

(ii) (a) The company is not dealing in any goods therefore there is no inventory.

(b) As already stated, since the company is not dealing any goods, there is no questionof procedure of physical verification of inventory.

(c) As already mentioned, the company is not dealing in any goods and therefore thereis no question of proper records of inventory.

(iii) (a) The company has not granted any loans, secured or unsecured, to companies,firms or other parties covered in the register maintained under section 301 of the Act.

(b) The company has not taken any loans, secured or unsecured, from companies, firms orother parties covered in the register maintained under section 301 of the Act.

(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 andthe nature of its business, for the purchase fixed assets and for the sale of services.During the course of our audit, we have not observed any continuing failure to correctmajor weaknesses in internal control system.

(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 Act have been entered in the register maintained under that section.

(b) In our opinion, transactions if any made in pursuance of such contracts orarrangements have been made at prices which are reasonable having regard to the prevailingmarket prices at the relevant time.

(vi) The company has not accepted deposits from the public within the meaning ofsections 58A, 58AA or any other relevant provisions of the Act.

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

(viii) Maintenance of cost records has not been prescribed by the Central Governmentunder clause (d) of sub-section (1) of section 209 of the Act.

(ix) According to the information and explanation given to us, no undisputed dues inrespect of provident fund, employees state insurance, income tax, wealth tax, service tax,sales tax, custom duty, excise duty, cess and other statutory dues were outstanding at theyearend for a period of more than six months from the date they become payable except asservice tax of Rs. 29,43,976.

(x) The company does not have any accumulated losses at the end of the financial yearcovered by our audit and has not incurred cash losses in the financial year and in theimmediately preceding financial year.

(xi) According to the information and explanations given to us, the company has notdefaulted in repayment of dues of the loan taken from bank. The company has neither takenany loan from a financial institution nor issued any debentures.

(xii) The company has not granted any loan or advance against the security by way ofpledge 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'sReport) Order, 2003 are not applicable to the company.

(xiv) According to the information and explanations given to us, the company is notdealing or trading in shares, securities, debentures and other investments.

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

(xvi) According to the information and explanations given to us, the company has notobtained any term loans.

(xvii) According to the information and explanations given to us, we report that noshort term funds have been used for long term investment.

(xviii) According to the information and explanations given to us, the company has madepreferential allotment of convertible warrants to the following company covered in theregister maintained under section 301 of the Act:

(xix) The company has not issued debentures during the period covered by our audit.

(xx) The company has not raised money by way of public issues during the period coveredby our audit.

(xxi) According to the information and explanations given to us, no fraud on or by thecompany has been noticed or reported during the course of our audit.