Avaya GlobalConnect

1.  We have audited the attached Balance Sheet of Avaya GlobalConnect
 Limited, as at September 30, 2008, the related Profit and Loss Account
 and Cash Flow Statement for the year ended on that date annexed
 thereto, which we have signed under reference to this report. These
 financial statements are the responsibility of the Companys
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those 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 (Auditors Report) Order, 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004,
 issued by the Central Government of India 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 we
 considered appropriate and according to the information and
 explanations given to us, we give in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 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 211 of the Act;
 
 (e) On the basis of written representations received from the
 directors, as on September 30, 2008 and taken on record by the Board of
 Directors, none of the directors is disqualified as on September 30,
 2008 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said financial statements together
 with the notes thereon and Schedules 1 to 21 annexed thereto give in
 the prescribed manner the information required by the Act 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 September 30, 2008;
 
 (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 to Auditors Report
 
 [Referred to in paragraph 3 of the Auditors Report of even date to the
 members of Avaya GlobalConnect Limited on the financial statements for
 the year ended September 30, 2008]
 
 1.  (a) The Company is maintaining proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) The fixed assets of the Company have been physically verified by
 the management during the year and no material discrepancies between
 the book records and the physical inventory have been noticed. In our
 opinion, the frequency of verification is reasonable.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fixed assets has not been disposed
 of by the Company during the year.
 
 2.  (a) The inventory has been physically verified by the management
 during the year. In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion, the procedures of physical verification of
 inventory followed by the management are reasonable and adequate in
 relation to the size of the Company and the nature of its business.
 
 (c) On the basis of our examination of the inventory records, in our
 opinion, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to book records were not material.
 
 3.  The Company has not taken or granted any loans, secured or
 unsecured, from/to companies, firms or other parties covered in the
 register maintained under Section 301 of the Act. Accordingly, clauses
 (iii)(b), (iii)(c), (iii)(d), (iii)(f) and (iii)(g) of paragraph 4 of
 the Order are not applicable to the Company for the current year.
 
 4.  In our opinion and according to the information and explanations
 given to us, having regard to the explanation that most items of
 inventory purchased and goods and services sold are of special nature
 for which suitable alternative sources do not exist for obtaining
 comparative quotations, there is an adequate internal control system
 commensurate with the size of the Company and the nature of its
 business for the purchase of inventory, fixed assets and for the sale
 of goods and services. Further, on the basis of our examination of the
 books and records of the Company, and according to the information and
 explanations given to us, we have neither come across nor have been
 informed of any continuing failure to correct major weaknesses in the
 aforesaid internal control system.
 
 5.  (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in Section 301 of the Act have been entered in the register
 required to be maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, there are no transactions made in pursuance of contracts
 or arrangements entered into the register maintained under in pursuance
 of Section 301 of the Act and exceeding the value of Rupees Five Lakhs
 in respect of any party during the year, which have been made at prices
 which are not reasonable having regard to the prevailing market prices
 at the relevant time. In our opinion, prior approval of the Central
 Government was required to be obtained for certain transactions, which
 was not obtained. As stated in Note 4 of Schedule 21, approval of the
 Central Government in respect of the application filed by the Company
 is pending.
 
 6.  The Company has not accepted any deposits from the public within
 the meaning of Sections 58A and 58AA of the Act and the rules framed
 there under.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 8.  The Central Government of India has not prescribed the maintenance
 of cost records under clause (d) of sub- section (1) of Section 209 of
 the Act for any of the products of the Company.
 
 9.  (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing the undisputed statutory dues
 including provident fund, investor education and protection fund,
 income-tax, sales-tax, wealth tax, service tax, customs duty, excise
 duty, cess and other material statutory dues as applicable with the
 appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income-tax, sales-tax and excise duty as at September 30, 2008 which
 have not been deposited on account of a dispute, are as follows -
 
 Name of the              Nature of dues              Amount
 statute                                         (Rs. Crores)
 
 The Income Tax           Several demands,              4.27
 Act, 1961                including interest
                          thereon
 
 The Central Excise       Demands on account            1.57
 Act, 1944                of incorrect duty credit /
                          short payment
 
 The Central Excise       Service Tax including         4.20
 Act, 1944                applicable interest and
                          penalty thereon
 
 West Bengal Sales        Interest for works            0.07
 Tax Act, 1994            contract tax / sales tax
 
 Financial year to        Forum where the
 which the amount         dispute is pending
 relates
 
 2000-01 to               Income Tax
 2002-03                  Appellate Tribunal
 
 1991-92 to               Customs, Excise &
 2002-03                  Service Tax Appellate
                          Tribunal
 
 2003-04 to               Customs, Excise &
 2006-07                  Service Tax Appellate
                          Tribunal
 
 2003-04 to               Assistant
 2005-06                  Commissioner
                         (Commercial Taxes)
 
 10.  The Company has no accumulated losses as at September 30, 2008 and
 it has not incurred any cash losses in the financial year ended on that
 date or in the immediately preceding financial year.
 
 11.  According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 13.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund/societies are not applicable to the
 Company.
 
 14.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments.
 
 15.  In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or financial institutions during the year.
 
 16.  The Company has not obtained any term loans.
 
 17.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under Section
 301 of the Act during the year.
 
 19.  The Company has not issued any debentures.
 
 20.  The Company has not raised any money by public issues during the
 year.
 
 21.  During the course of our examination of the books and records of
 the Company, carried out in accordance with the auditing standards
 generally accepted in India and according to the information and
 explanations given to us, we have neither come across any instance of
 fraud on or by the Company, noticed or reported during the year, nor
 have we been informed of such case by the management.
 
                                                 Sharmila A. Karve
                                                           Partner
                                          Membership Number F43229
 
                                              For and on behalf of
 Place: Mumbai                                    Lovelock & Lewes
 Date : November 24, 2008                    Chartered Accountants