Sowbhagya Media Ltd

To

The Members of Sowbhagya Media Limited,

Hyderabad.

We have audited the attached Balance Sheet of Sowbhagya Media Limited as at 31stMarch, 2011 and Profit & Loss Account and Cash Flow Statement of the Company for theyear ended on that date annexed thereto. These financial statements are the responsibilityof the Company's management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

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 of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accounting principles usedand significant estimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basis for ouropinion.

1. As required by the Companies (Auditor's Report) Order, 2003, as amended, issued bythe Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, weenclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of thesaid order wherever applicable.

2. Subject to our comments in the Annexure referred to in paragraph 1 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, 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 Company's Balance Sheet ,Profit & Loss Account & Cash Flow Statementdealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and the Profit & Loss Account & Cash FlowStatement are in compliance with the Accounting Standards referred to in sub-section (3C)of Section 211 of the Companies Act, 1956 to the extent applicable;

e) On the basis of the written representation from the directors as at 31st March, 2011and taken on record by the Board of Directors, we report that none of the Directors isdisqualified as at 31st March, 2011 from being appointed as a Director in terms ofclause(g) of sub-section (1) of Section 274 of the Companies Act, 1956; and

f) In our opinion and to the best of our information and according to the explanationsgiven to us, the said Balance Sheet and Profit and Loss Account, Cash flow statementtogether with the notes thereon give the information required by the Companies Act, 1956in 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, 2011;

ii. in the case of the Profit and Loss Account, of the loss of the Company for the yearended on that date;

iii. in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date.

ANNEXURE TO AUDITORS REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

1. (a) The Company has maintained proper records to show full particulars includingquantitative details and situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by themanagement periodically, which in our opinion is reasonable, having regard to the size ofthe Company and nature of its assets. No material discrepancies were noticed on suchphysical verification.

(c) In our opinion the Company has not disposed off substantial part of Fixed Assetsduring the period and the going concern status of the Company is not affected.

2. The Company does not deal with stocks and it does not hold any physical inventories.Thus paragraph 4 (ii) of the Order is not applicable.

3. The Company has not taken any loans, secured or unsecured from companies, firms orother parties listed in the register maintained under Section 301 of the Companies Act,1956.

4. In our opinion and according to the information and explanations given to us, thereare adequate internal control procedures commensurate with the size of the Company and thenature of its business for the purchase of stores, raw materials, including components,plant and machinery, equipments, other assets and for sale of finished goods.

5. In our opinion and according to the information and explanations given to us, thetransactions aggregating during the year to Rs. 5,00,000/-made in pursuance of contract ofpurchase of goods and materials and sale of goods, materials and services that need to beentered into the register maintained under Section 301 of the Companies Act have been dulyentered during the period under review.

6. In our opinion and according to the information and explanations given to us, theCompany has not accepted any deposits from public within the meaning of Rule 2(b) of theCompanies (Acceptance of Deposits) Rule 1975, and the provisions of Sec. 58 A of theCompanies Act, 1956.

7. In our opinion the Company has an internal audit system commensurate with the sizeand nature of its business.

8. The Central Government of India has not prescribed the maintenance of Cost Recordsunder Section 209(1) (d) of the Companies Act, 1956 for this type of Company.

9. (a) The Company is regular in depositing undisputed statutory dues includingprovident fund, sales tax, income tax, wealth tax, professional tax and other materialstatutory dues with appropriate authorities when applicable. According to the informationand explanations given to us, there are no undisputed amounts payable in respect of suchstatutory dues which have remained outstanding as at 31st March, 2011 for a periodexceeding six months from the date they become payable.

(b) According to the information and explanations given to us, there are no dues ofsales tax, income tax, wealth tax and other statutory dues, which have not been depositedon account of any disputes.

10. In our opinion and according to the information and explanations given to us andaccording to the books of account examined by us, the company has not incurred cash lossesduring the year under review. The company has no accumulated losses at the end of thefinancial year.

11. In our opinion and according to the information and explanations given to us, theCompany has not defaulted in repayment of dues to Banks and Financial Institutions.

12. The Company has not granted any loans or advances on the basis of security by wayof pledge of shares, debentures or other securities.

13. In our opinion, the Company is not a chit fund or nidhi/ mutual benefit fund/society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditor's Report)Order 2003 are not applicable to the Company.

14. In our opinion, the Company is not dealing or trading in shares, securities,debentures and other investments during the year under review. Accordingly the provisionsof clause 4 (xiv) of the Companies (Auditor's Report) Order 2003 are not applicable to theCompany.

15. According to the information and explanations given to us, the Company has notgiven any guarantee for loans taken by others from banks or financial institutions.

16. The Company did not have any term loans outstanding during the year.

17. According to the information and explanation 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. No long-term funds have beenused to finance short-term assets except permanent working capital.

18. According to the information and explanation given to us the Company has not madeany preferential allotment of shares to parties and companies covered in the registermaintained under Section 301 of the Companies Act, 1956.

19. No debentures have been issued by the Company and hence, the question of creatingsecurities in respect of these does not arise.

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

21. In our opinion, according to the information and explanations given to us no fraudon or by the Company has been noticed or reported during the year under review that causesthe financial statements to be materially misstated.