eClerx Services

1.  We have audited the attached Balance Sheet of eClerx Services
 Limited, [the Company] as at March 31, 2009, and also the Profit and
 Loss Account and the Cash Flow Statement for the year ended on that
 date annexed thereto (collectively referred as the financial
 statements]. 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 [the
 Order] [as amended], issued by the Central Government of India in
 terms of sub- section [4A] of section 227 of the Companies Act, 1956
 (the Act), we enclose in the Annexure a statement on the matters
 specified in paragraphs 4 and 5 of the Order.
 
 4.  Further to our comments in the 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 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 financial statements dealt with by this report are in agreement
 with the books of account;
 
 d.  On the basis of written representations received from the
 directors, as at March 31, 2009 and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as at
 March 31, 2009 from being appointed as a director in terms of clause
 (g) of sub-section [1] of section 274 of the Act;
 
 e.  In our opinion and to the best of our information and according to
 the explanations given to us, the financial statements dealt with by
 this report comply with the accounting standards referred to in
 sub-section (3C) of section 211 of the Act and the Rules framed there
 under and give the information required by the Act, in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India, in the case of:
 
 i] the Balance Sheet, of the state of affairs of the Company as at
 March 31, 2009;
 
 ii] the Profit and Loss Account, of the profit for the year ended on
 that date; and
 
 iii] the Cash Flow Statement, of the cash flows for the year ended on
 that date.
 
 
 
 Annexure to the Auditors Report
 
 Based on the audit procedures performed for the purpose of reporting a
 true and fair view on the financial statements of the Company and
 taking into consideration the information and explanations given to us
 and the books of account and other records examined by us in the normal
 course of audit, we report that:
 
 (i) [a] The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 [b] Fixed assets are physically verified by the management in
 accordance with a phased programme designed to cover all the assets
 once in two years, which, in our opinion, is reasonable having regard
 to the size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification.
 
 (c) In our opinion, a substantial part of fixed assets has not been
 disposed off during the year.
 
 (ii) [a] The Company does not have any tangible inventory. Accordingly,
 the provisions of clause 4(ii) of the Order are not applicable.
 
 [iii] (a) There are three companies covered in the register maintained
 under section 301 of the Act to which the Company has granted unsecured
 loans. The maximum amount outstanding during the year was Rupees 16.40
 million and the year-end balance was Rupees 10.03 million.
 
 (b) In our opinion, the rate of interest and other terms and conditions
 of such loans are not, prima facie, prejudicial to the interest of the
 Company.
 
 (c) In respect of such loans granted, repayment of the principal
 amounts is as stipulated and payment of interest has been regular
 
 (d) There is no amount overdue in respect of loans granted to
 companies, firms or other parties listed in the register maintained
 under section 301 of the Act.
 
 [e] The Company has not taken any loans, secured or unsecured from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Act. Accordingly, the provisions of clauses
 4(iii)(f) and 4[iii](g) of the Order are not applicable.
 
 (iv) Owing to the nature of its business, the Company does not maintain
 any physical inventories or sells any goods. Accordingly, clause 4(iv]
 of the Order with respect to purchase of inventories and sale of goods
 is not applicable. In our opinion, there is an adequate internal
 control system commensurate with the size of the Company and the nature
 of its business for the purchase of fixed assets and for the sale of
 services. During the course of our audit, no major weakness has been
 noticed in the aforesaid internal control system.
 
 (v) (a) In our opinion, the particulars of all contracts or
 arrangements that need to be entered into the register maintained under
 section 301 of the Act have been so entered.
 
 (b) In our opinion, the transactions made in pursuance of such
 contracts or arrangements and exceeding the value of Rupees five lakhs
 in respect of any party during the year have been made at prices which
 are reasonable having regard to prevailing market prices at the
 relevant time.
 
 (vi) The Company has not accepted any deposits from the public within
 the meaning of sections 58A and 5SAA of the Act and the Companies
 (Acceptance of Deposits] Rules, 1975. Accordingly, the provisions of
 clause 4(vi) of the Order are not applicable.
 
 [vii] In our opinion, the Company has an internal audit system
 commensurate with its size and the nature of its business.
 
 (viii) To the best of our knowledge and belief, the Central Government
 has not prescribed maintenance of cost records under clause (d) of
 sub-section CD of section 209 of the Act, in respect of the services
 rendered by the Company. Accordingly, the provisions of clause 4(viii)
 of the Order are not applicable.
 
 [ix] (a) The Company is regular in depositing the undisputed statutory
 dues including investor education and protection fund, employees state
 insurance, income tax, wealth tax, service tax, custom duty, excise
 duty, cess and other material statutory dues, as applicable, with the
 appropriate authorities.  Further, no undisputed amounts payable in
 respect thereof of were outstanding at the year end for a period of
 more than six months from the date they become payable.
 
 (b) There are no amounts in respect of sales tax, customs duty, wealth
 tax, service tax, excise duty and cess that have not been deposited
 with the appropriate authorities on account of any dispute. The dues
 outstanding in respect of income-tax on account of any dispute, are as
 follows:
 
 Name                Nature             Amount
 of the              of dues           (Rupees
 statute                               in million)
 
 Income              Income             9.02
 Tax Act,            tax
 19B1                demand
 
 Period to which           Forum where
 the amount                dispute is
 relates                   pending
 
 Assessment               Commissioner
 Year 2006-07             of Income
 Tax
 
 [x] In our opinion, the Company has no accumulated losses at the end of
 the financial year and it has not incurred cash losses in the current
 and the immediately preceding financial year.
 
 [xi] In our opinion, the Company has not defaulted in repayment of dues
 to a financial institution or a bank during the year.
 
 (xii) In our opinion, the Company has not granted any loans and
 advances on the basis of security by way of pledge of shares,
 debentures and other securities. Accordingly, the provisions of clause
 4(xii) of the Order are not applicable.
 
 [xiii] The Company is not a chit fund or a nidhi/ mutual benefit fund/
 society. Accordingly, the provisions of clause 4(xiii) of the Order are
 not applicable.
 
 (xiv) The Company is not dealing in or trading in shares, securities,
 debentures and other investments. Accordingly, the provisions of clause
 4(xiv) of the Order are not applicable.
 
 (xv) In our opinion, the Company has not given any guarantees for loans
 taken by others from banks or financial institutions. Accordingly, the
 provisions of clause 4Cxv] of the Order are not applicable.
 
 (xvi) The Company did not have any term loans outstanding during the
 year. Accordingly the provisions of clause 4(xvi) of the Order are not
 applicable.
 
 [xvii] In our opinion, no funds raised on short- term basis have been
 used for long-term investment.
 
 [xviii] The Company has not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 section 301 of the Act. Accordingly, the provisions of clause 4(xviii]
 of the Order are not applicable.
 
 [xix] The Company has neither issued nor had any outstanding debentures
 during the year.  Accordingly, the provisions of clause 4Cxix] of the
 Order are not applicable.
 
 (xx) We have verified that the end use of money raised by public issues
 is as disclosed in the notes to the financial statements covered by our
 audit report.
 
 (xxi) No fraud on or by the Company has been noticed or reported during
 the year covered by our audit.
 
                                     For Walker, Chandiok & Co
                                     Chartered Accountants
 
                                     per Khushroo B. Panthaky
                                     Partner
                                     Membership No.F-42423
 
 Mumbai
 June 8, 2009