PCS Technology Ltd

To the members of PCS TECHNOLOGY LIMITED for the year ended 31 ^st March,2012

1) I have audited the attached Balance Sheet of PCS TECHNOLOGY LIMITED (the'Company'), as at 31^st March 2012, the Statement of Profit and Loss and theCash Flow Statement of the Company for the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the Company's management. My responsibilityis to express an opinion on these financial statements based on my audit.

2) I have conducted my audit in accordance with the auditing standards generallyaccepted in India. These standards require that I plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from any materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes, assessing theaccounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. I believe that my auditprovides a reasonable basis for my opinion.

3) As required by the Companies (Auditor's Report) Order, 2003 (the 'Order') issued bythe Central Government in terms of sub-section (4A) of section 227 of the Companies Act,1956, and on the basis of such checks of books and records of the Company as I considerednecessary and appropriate and according to the information and explanations given to meduring the course of the audit, I enclose in the Annexure, a statement on the mattersspecified in paragraph 4 and 5 of the said Order.

4) Further to my comments in the Annexure referred to in paragraph 3 above, I reportthat:

a) I have obtained all the information and explanations, which to the best of myknowledge and belief were necessary for the purpose of my audit.

b) In my opinion proper books of accounts as required by law have been kept by theCompany so far as appears from my examination of those books.

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement referred toin this report are in agreement with the books of accounts.

d) In my opinion the Balance Sheet, Statement of Profit and Loss and the Cash FlowStatement referred to in this report comply with the accounting standards referred to insub-section (3C) of section 211 of the Companies Act, 1956.

e) Based on the representations made by the Directors as on 31^st March 2012,and taken on record by the Board of Directors of the Company and the information andexplanations given to me, none of the Director is, as at 31^st March, 2012,prima-facie disqualified from being appointed as a director in terms of clause (g) ofsub-section (1) of section 274 of the Companies Act, 1956.

f) In my opinion and to the best of my information and according to the explanationsgiven to me, 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:

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 and Loss, of the profit of the Company forthe year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended onthat date.

ANNEXURE TO THE AUDITOR'S REPORT

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

(b) The assets have been physically verified by the management during the year and nodiscrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, constitute a substantial part of thefixed assets of the Company, however, in my opinion, this do not affect the going concernassumption.

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

(b) The procedures of physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) The Company is maintaining proper records of inventory. The discrepancies noticedon verification between the physical stocks and the book records were not material.

(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 theCompanies Act, 1956. Therefore, the provisions of sub-clauses (a) to (d) of clause (iii)of paragraph 4 of the Order are not applicable to the Company.

(b) The Company has taken loans from five parties covered in the register maintainedunder section 301 of the Companies Act, 1956. The maximum amount involved during the yearwas Rs. 6,898/-lacs and the balance at the end of the year is Rs. 6,173/- lacs

(c) In my opinion, the rate of interest and other terms and conditions on which loanshave been taken from the companies, firms or other parties listed in the registermaintained under section 301 of the Companies Act, 1956 are, not prima facie, prejudicialto the interest of the Company.

(d) There is no stipulation as to the time period for payment of the principal amountof unsecured loans taken.

(iv) In my opinion and according to the information and explanations given to me, thereare adequate internal control procedures commensurate with the size of the Company and thenature of business with regard to purchases of inventory, fixed asset and with regard tothe sale of goods and services. During the course of my audit, no major weakness has beennoticed in internal control system.

(v) (a) In my opinion and according to the information and explanations given to me,the particulars of contracts or arrangements referred to in section 301 of the Act havebeen entered in the register required to be maintained under that section.

(b) In my opinion, and according to the information and explanations given to me, thecontracts and arrangements entered in the register maintained under section 301 of theCompanies Act, 1956 have been made at prices which are reasonable having regard to theprevailing market price.

(vi) The Company has not accepted any deposits from the public and hence, theprovisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

(vii) In my opinion and according to the information and explanations given to me,there is an adequate internal audit system commensurate with the size of the Company andthe nature of its business.

(viii) On the basis of the records, I am of the opinion that prima-facie the costrecords and accounts prescribed by the Central Government under Section 209(1)(d) of theCompanies Act, 1956 have been made and maintained in respect of the Company's product towhich the said rule are made applicable. However, I have not carried out any detailedexamination of such accounts and records.

(ix) (a) The Company is generally regular in depositing undisputed statutory duesincluding provident fund, investor education and protection fund, employees' stateinsurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cessand other statutory dues with the appropriate authorities.

(b) According to the information and explanations given to me, no undisputed amountspayable in respect of income tax, wealth tax, sales tax, service tax, custom duty, exciseduty and cess were in arrears, as at 31^st March, 2012 for a period of more thansix months from the date they become payable.

(x) The Company has no accumulated losses and has not incurred any cash losses duringthe financial year covered by my audit or in the immediately preceding financial year.

(xi) According to the information and explanations given to me, the Company has notdefaulted in repayment of dues to financial institutions or banks.

(xii) According to the information and explanations given to me, no loans and advanceshave been granted by the Company on the basis of security by way of pledge of shares,debentures and other securities and hence the clause (xii) of paragraph 4 of the saidOrder relating to maintenance of documents and records are not applicable.

(xiii) In my opinion, the Company is not a chit fund or a nidhi/mutual benefitfund/society. Therefore, the provisions of sub-clauses (a) to (d) of clause (xiii) ofparagraph 4 of the said Order are not applicable to the Company.

(xiv) In my opinion, the Company is not dealing in shares, securities and debenturesand hence, the provisions of clause (xiv) of paragraph 4 of the said Order are notapplicable to the Company.

(xv) In my opinion and according to the information and explanations given to me, theCompany has not given any guarantee for loans taken by others from banks or financialinstitutions.

(xvi) The Company has raised new term loan during the year and the said term loan wasapplied for the purpose for which it was obtained.

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

(xviii) During the year, the Company has not made any preferential allotment of sharesto parties and companies covered in the register maintained under Section 301 of theCompanies Act, 1956.

(xix) The Company has not issued any Debentures during the financial year covered by myaudit.

(xx) The Company has not raised any money by way of public issue during the year.

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