1.  We have audited the attached Balance Sheet of Accel Transmatic
 Limited as at 31st March 2012, the Profit and Loss Account and the Cash
 Flow Statement for the year ended on that date annexed thereto.These
 financial statements are the responsibility of the company''s
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. These standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes, examining on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management as well as evaluating the overall financial statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 as
 amended by Companies (Auditor''s Report) (Amendment) Order, 2004 issued
 by the Government of India in terms of Section 227 (4A) of the
 Companies Act, 1956, we give in the Annexure a statement on the matters
 specified in Paragraphs 4 and 5 ofthe said Order;
 
 4.  Without qualifying our opinion attention is invited to Note No.  2.
 As stated therein, the Company has suffered cash loss from its
 operations during the year, without considering the profit on transfer
 of its Software Division.The accumulated loss is more than 50% of its
 Net worth. This raises concerns about the ability of the Company to
 continue as a going concern. However, in view ofthe facts stated in the
 said notes, the Accounts have been drawn up on a going concern basis.
 
 5.  Further to our comments stated above, we report that:
 
 (a) We have obtained all the information and explanations, which to the
 best of our knowledge 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 the company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report comply with the Accounting
 Standards referred to in sub-section (3C) of Section 201 of the
 Companies Act, 1956;
 
 (e) On the basis of written representations received from the
 directors, and taken on record by the Board of Directors, we report
 that none of the directors is disqualified as on 31st March 2012, from
 being appointed as a director in terms of clause (g) of sub-section (1)
 of Section 274 ofthe Companies Act, 1956;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read with the notes on
 the accounts attached thereto, 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 accounting principles generally accepted in
 India:
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 company as at 31st March 2012;
 
 ii.  in the case of the Profit and Loss Account, of the Profit for the
 year ended on that date;
 
 and
 
 iii. in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 Annexure referred to in paragraph 3 of our audit Report of even date
 
 1) a.  The company is maintaining records showing full particulars,
 including quantitative details of fixed assets.
 
 b.  The fixed assets of the company have been physically verified by
 the management during the year, which, in our opinion is reasonable
 having regard to the size of the company and the nature of assets and
 as per the information and explanation furnished to us, no material
 discrepancies have been noticed on such verification.
 
 c.  There has not been any disposal of any substantial portion of fixed
 assets ofthe company during the year, which would affect the status
 ofthe company as a going concern, except as stated in Note No.23
 attached to the Accounts.
 
 2) The inventory of the Company at the year end consists of Digital
 Assets value Rs. Nil (Intangible Assets) under contract/co - production
 only and hence, the question of physical verification of inventory does
 not arise. Hence the Paragraph 4(ii)(a),4(ii)(b) & 4(ii)(c) of
 Companies (Auditor''s Report) (Amendment) Order are not commented upon
 by us.
 
 3) a.  As explained to us, the Company has not advanced any amounts to
 Companies, Firms or other parties covered in the Register maintained
 under Section 301 ofthe Companies Act, 1956 and hence, relative
 reporting requirement of Para 4 (iii (a) to (d)) of the Order is not
 applicable and not commented upon.
 
 b.  The Company has taken unsecured loans from parties / companies in
 which Directors are interested covered in the register maintained under
 Section 301 of the Companies Act, 1956. The number of parties and the
 amount involved are given below:
 
                           Maximum Amount        Balance as on
 Number of Parties         Outstanding           31.03.2012
 
     3                     12,93,94,333/-        7,86,73,333/-
 
 c.  In respect of unsecured loans taken as above, in our opinion and
 according to the information and explanation furnished to us, the rate
 of interest, where applicable, and other terms and conditions of loans
 are not prima facie prejudicial to the interest ofthe company.
 
 d.  As per the information and explanations given to us, the payment of
 principal amount and interest thereon is as stipulated.
 
 4) In our opinion and according to the information and explanations
 given to us, the internal control system for the purchase of fixed
 assets and for the sale of services are generally commensurate with the
 size of the company and nature of its business.There are no major
 weaknesses in internal control of a continuing nature.
 
 5) a.  According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements that need to be entered into the register maintained under
 section 301 of the Companies Act, 1956 have been so entered.
 
 b.  In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance to contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 with the aforesaid parties exceeding value of
 Rupees Five Lakhs in respect of each such party which have been entered
 into during the financial year are at prices which are reasonable
 having regard to the prevailing market prices at the relevant time
 
 6) In our opinion and according to the information and explanation
 furnished to us, the company has complied with the directions issued by
 the Reserve Bank of India and the provisions of Section 58A and 58AA
 and other relevant provisions of the Companies Act, 1956 with regard to
 the deposits accepted from the public.
 
 7) The Internal audit of the company was conducted during the year, by
 a firm of Chartered Accountants, the scope and coverage of which is
 commensurate with the size of the Company and nature of its business.
 
 8) As per the information and explanation furnished to us, Cost records
 u/s 209(1 )(d) of the Companies Act, 1956 have not been prescribed in
 respect of the Services of the Company.
 
 9.) a.  There were delays in depositing undisputed statutory dues
 including Provident fund, Employee''s State Insurance, Income Tax,
 Service Tax & Sales Tax with the appropriate authorities during the
 year. According to the information and explanations given to us, there
 are no undisputed amounts payable in respect of Income Tax, Wealth tax,
 Service tax, Sales tax, Excise duty, Customs Duty, Cess and other
 statutory dues which were outstanding at the year end for a period of
 more than six months from the date they became payable, other than as
 stated below
 
                                                   (Amount in Rupees)
 
                        Outstanding at the      Payable for more
 Paricuars              end of the year         than 6 months
 
 Professional Tax           927,718/-                887,498/-
 
 Employees State            361,494/-                265,157/-
 Insurance
 
 Provident fund             173,752/-                 18,348/- 
 
 Tax Deducted at          6,056,305/-              2,853,040/- 
 Source
 
 b.  As per the information and explanation furnished to us, there were
 no dues of sales-tax, income-tax, wealth-tax, service tax, excise duty,
 customs duty and cess which have not been deposited on account of any
 dispute, as at the year end, except the following
 
 SI    Particulars         Amount          Forum where Dispute is
 No                        involved (Rs)   pending
 
 1     Income tax           13,595,330     Income Tax Appellate Tribunal
       Demands                             Kochi
 
 2     Customs               3,388,000     Honorable High Court Of 
       Duty                                Kerala
 
 3     PF &                  2,171,000     Honorable High Court Of
       Others                              Kerala - Rs.10.59 lacs, 
                                           Registrar - EPF Appellate
                                           Tribunal - Rs.7.77 lacs, Suit
                                           in Civil Court Chennai - 
                                           Rs.0.64 lacs, Suit in civil 
                                           court Kerala - Rs.2.71 lacs.
 
 10) The company''s accumulated loss at the end of the financial year is
 more than fifty per cent of net worth of the company.  The company has
 incurred cash loss during the year but has not incurred during the
 immediately preceding financial year.
 
 11) As per the information and explanations furnished to us and on our
 verification of records of the company, there have been no delays in
 repayment of dues to financial institutions or banks.
 
 12) In our opinion and according to the information and explanations
 given to us, and based on the documents and records produced to us, the
 company has not granted any loans or advances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 13) In our opinion and according to the information and explanations
 given to us, the nature of activities of the company does not attract
 any special statute applicable to chit fund and nidhi/ mutual benefit
 fund/ societies.
 
 14) In our opinion, the company is not dealing or trading in shares,
 securities, debentures or other investments, and accordingly, the
 relative reporting requirements of the order are not applicable to the
 company.
 
 15) According to the information and explanations given to us, the
 company has given a corporate guarantee to a bank on behalf of a
 company in which the Directors are interested for Rs.3,50,00,000/- for
 availing loan from the banks by the said company, the terms of
 conditions of which are not prima facie prejudicial to the interest of
 the company.
 
 16) In our opinion and according to the information and explanations
 given to us,Term Loans availed during the year has been utilised for
 the purpose for which they have been availed.
 
 17) According to the information and explanations given to us and on an
 overall verification of the attached Balance Sheet of the company, we
 report that the funds raised by the company on short-term basis have
 not been used to finance long-term assets except to the extent of
 Rs.8,54,52,739/-.
 
 18) During the year, the company has not made any preferential
 allotment of shares to parties or companies covered in the register
 maintained under section 301 of the Companies Act, 1956.
 
 19) The company does not have any outstanding debentures as at the
 year-end.
 
 20) The company has not raised any money by way of public issues during
 the year.
 
 21) According to the information and explanations given to us, no fraud
 on or by the company has been noticed or reported during the course of
 our audit.
 
                                  For Varma & Varma 
 
                                  Chartered Accountants 
 
                                  F.R.N.004532S
 
 Place: Chennai                   P.R Prasanna Varma F.C.A
 
 Date: 29.05.2012                 M No: 25854
 
                                  Partner