1.  We have audited the attached Balance Sheet of BS TRANSCOMM LIMITED
 as at 31st March, 2011, the Profit & Loss Account and also 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. 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 statements
 presentation. We believe that our audit provide a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 as
 amended by the Companies (Auditor''s Report) Order, (Amendment) 2004
 issued by the Central Government of India in terms of Section 227(4A)
 of the Companies Act, 1956 (herein after referred to as the Act), we
 annex hereto a statement on the matters specified in paragraphs 4 and 5
 of the said order.
 
 4.  Further to our comments in annexure referred to 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 purpose of our
 audit;
 
 b. In our opinion, proper books of accounts as required by law have
 been kept by the company so far as it appears from our examination of
 the 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 accounts;
 
 d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow Statement dealt with by this report have been prepared in
 compliance with the Accounting Standards referred to in Section 211(3C)
 of the Companies Act, 1956.
 
 e.  On the basis of the written representations received from the
 directors as on 31st March,2011 and taken on record by the Board of
 Directors, none of the directors is disqualified as on 31st March, 2011
 from being appointed as the directors of the company in terms of
 Section 274(1)(g) of the Companies Act, 1956.
 
 f.  In our opinion and to the best of information and according to the
 explanations given to us, the said accounts read together with
 significant accounting policies and other notes thereon 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, 2011;
 
 ii) In the case of Profit and Loss Account, of the Profit for the year
 ended as 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 AUDITORS'' REPORT OF EVEN DATE TO
 THE MEMBERS OF BS TRANSCOMM LIMITED ON THE FINANCIAL STATEMENTS FOR THE
 YEAR ENDED 31ST MARCH, 2011.
 
 i). (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As explained to us, the management has conducted partial physical
 verification of major fixed assets during the year, which in our
 opinion is reasonable having regard to the size of the Company and
 nature of its assets. No material discrepancies were noticed on such
 verification.
 
 (c) During the year, Company has not disposed of any substantial /
 major part of fixed assets
 
 ii). (a) As explained to us, the inventory has been physically verified
 during the year by the management in our opinion the frequency of
 verification is reasonable.
 
 (b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of inventory
 followed by the management are required to be streamlined and
 strengthened to be reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanation
 given to us, and on the basis of our examination of the records of
 inventory, the Company is maintaining proper records of inventory. The
 discrepancies noticed on physical verification of inventory as compared
 to the book records were not material and have been properly dealt with
 in the books of accounts.
 
 iii).(a) According to the information and explanation given to us, the
 Company has made an advance of Rs.7,30,22,756/- to its subsidiary and
 granted a loan of Rs.6,27,77,620/- to its associate company, covered in
 the register maintained under Section 301 of the Companies Act, 1956.
 
 (b) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not prima facie prejudicial to the interest of the
 company.
 
 (c) In respect of the loans granted, repayment of the principal amount
 is as stipulated and payment of interest have been regular.
 
 (d) There is no overdue amount of loans granted to companies, firms or
 other parties listed in the register maintained under section 301 of
 the Companies Act, 1956.
 
 (e) According to the information and explanations given to us, the
 company has taken unsecured loans from other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956. The
 amount involved during the period and outstanding balances of said
 loans aggregated to Rs. 10.90 Lakhs.
 
 (f) The rate of interest & other terms and conditions of unsecured
 loans taken by the company, are not prima facie prejudicial to the
 interests of the company, and
 
 (g) Payment of principal amount and interest are regular.
 
 iv). In our opinion and according to the information and explanation
 given to us, the internal control systems need to be documented and
 strengthened to commensurate with the size of the company and nature of
 its business with regard to purchase of inventory and fixed assets, and
 for the sale of goods and services. According to the information and
 explanation given to us, there is no continuing failure to correct
 major weaknesses in internal control system.
 
 v). In respect of transactions entered in the register maintained in
 pursuance of section 301 of the Companies Act, 1956.
 
 (a) In our opinion and according to the information and explanation
 given to us, we are of the opinion that the transactions that need to
 be entered into 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 of arrangements entered
 in the register maintained under section 301 of the Companies Act, 1956
 in respect of other parties are reasonable.
 
 vi). In our opinion and according to the information and explanation
 given to us, the company has not accepted deposits from the public and
 therefore, the provisions section 58A and 58AA of the Companies Act,
 1956 and rules therefore not applicable to the Company.
 
 vii). In our opinion, the company is having internal audit system,
 commensurate with its size and nature of its business.
 
 viii). According to the information and explanations given to us, the
 Central Government has not prescribed the maintenance of the cost
 records under section 209(1)(d) of the Companies Act, 1956.
 
 ix). (a) According to the records of the company and information and
 explanation given to us, the company has been regular in depositing
 undisputed statutory dues including Provident Fund, Investor Education
 and Protection Fund, Employee State Insurance, Income Tax, Sales Tax,
 Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess and other
 applicable statutory dues with the appropriate authorities during the
 year. According to the information and explanations given to us, there
 are no arrears of statutory dues as at 31st March, 2011 which are
 outstanding for a period of more than six months from the date they
 become payable.
 
 (b) According to the records of the company and information and
 explanation given to us, there are no dues of Sales Tax, Income Tax,
 Service Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have
 not been deposited on account of any dispute.
 
 x) The Company does not have accumulated losses as at the end of the
 financial year and the Company has not incurred cash losses during
 current year under report and in the immediately preceding financial
 year.
 
 xi) According to the information and explanations given to us, the
 company has not defaulted in the repayment of dues to financial
 institutions, banks or debenture holders.
 
 xii) According to the information and explanations given to us, the
 Company has not granted any loans and advance on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 xiii) The company is not a Chit fund/ Nidhi/ Mutual Benefit fund /
 Society. Therefore, the provisions of clause 4(xiii) of this order are
 not applicable to the Company.
 
 xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of this order are not applicable.
 
 xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks and financial institutions, and hence the applicability of this
 clause regarding terms and conditions which are prejudicial to the
 interests of the company does not arise.
 
 xvi) To the best of our knowledge and belief and according to the
 information and explanations given to us, the term loans taken during
 the year have been applied for the purpose for which they were
 obtained.
 
 xvii) According to the information and explanations given to us, and on
 an overall examination of the Balance Sheet of the Company, We report
 that there are no funds raised on short- term basis have been used for
 long term investment.
 
 xviii) The Company has not made any preferential allotment to parties
 and companies covered under register maintained under section 301 of
 the Companies Act, 1956 during the year and the question of whether the
 price at which the shares have been issued is prejudicial to the
 interest of the Company does not arise.
 
 xix) According to the information and explanations given to us The
 Company does not have any debentures and hence the applicability of the
 clause regarding the creation of security or charge in respect of
 debentures issued does not arise.
 
 xx) According to the records of the company and information and
 explanation given to us, the Company has raised money by way of public
 issue during the year and the fund raised by the company has been
 utilised for the purpose for which it is raised. It has disclosed the
 utilization of funds in  Notes to Accounts
 
 xxi) To the best of our knowledge and belief and according to the
 information and explanation and explanation given to us, no fraud and
 or by the Company has been noticed or reported during the course of our
 audit.
 
                                               For P. MURALI & CO.,
 
                                              Chartered Accountants
 
                                                         M.V. JOSHI
 
                                                            Partner
 
                                               Membership No: 24784
  
                                                   Place: Hyderabad
 
                                                   Date: 30.05.2011