We have audited the attached, balance sheet of M/s FRONTIER INFORMATICS
 LIMITED, as at 31.03.2012, the profit and 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,
 
 1) 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
 including 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.
 
 2) As required by the Companies (Auditor''s Report) Order, 2003 issued
 by the Central Government of India in terms of sub-section (4A) of
 section 227 of the Companies Act, 1956, we enclose the Annexure, a
 statement of the matters specified in paragraphs 4 and 5 of the said
 Order.
 
 3) Further to our comments in the Annexure referred to above, we report
 that:
 
 (i) 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;
 
 (ii) In our opinion, proper books of accounts as required by law have
 been kept by the company so far as appears from our examination of
 those books and proper returns adequate for the purposes of our audit
 have been received from the branches not visited by us. The branch
 Auditor''s Reports have been forwarded to us and have been appropriately
 dealt with.
 
 (iii) The Balance Sheet, Profit and Loss Account and Cash Flow
 statement dealt with by this report are in agreement with the books of
 account.
 
 (iv) 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 Companies Act, 1956;
 
 (v) On the basis of written representations received from the
 Directors, as on 31st March, 2012 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 SI*1 March 2012, from being appointed as a Director in terms if clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956.  
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts 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:
 
 a.  In the case of Balance Sheet, of the state of affairs of the
 company as at 31st March 2012,
 
 b.  In the case of Profit and Loss Account, of the Profit/Loss for the
 year ended on that date.
 
 c.  In the case of Cash Flow statement, of the Cash Flows for the year
 ended on that date.
 
 ANNEXURE TO AUDITOR''S REPORT
 
 Ref: FRONTIER INFORMATICS LIMITED
 
 (Referred to in paragraph 3 of our report of even date.)
 
 1) (a) The company has maintained proper records showing full
 particulars including quantitative details and situation of Fixed
 Assets.
 
 (b) All the Assets have been physically verified by the management
 during the year and there is a regular programme of verification 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) During the year, the company has iiot disposed off any of its
 assets. The company continues to be engaged in business of software
 development.
 
 2) The Company is engaged in software services and does not have any
 inventory; therefore clause (ii) of CARO does not apply.
 
 3) a) As the company has not granted any loans to the parties covered
 in the register maintained under section 301 of the Companies Act,
 Clause (iii) (a), (b), (c) and (d) of Para 4 of the order does not
 apply.
 
 b) The company had taken interest free loan from an associated company
 covered in the register maintained under section 301 of the Companies
 Act, 1956, during earlier years amounting to Rs. 19.68 lakhs out of
 which Rs 18.20 Lakhs is repaid during the year.
 
 c) 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 granted are not prima facie prejudicial to the interest of
 the company.
 
 4) In our opinion and according to the information and explanation
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business with regard to purchase of fixed assets and with regard to the
 sale of software products. During the course of our audit, we have not
 observed any continuing failure to correct major weakness in internal
 control.
 
 5) (a) According to the information and explanations given to us, we
 are of the opinion that the transactions 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, no transactions are made in pursuance of contracts or
 arrangements which need to be entered in the register maintained under
 section 301 of the Companies Act, 1956 exceeding the value of rupees
 five lakhs in respect of any party during the year.
 
 6) In our opinion and according to the information and explanations
 given to us, the company has not accepted any deposits as per the
 provisions of the Companies (Acceptance of Deposits) Rules, 1975,
 
 7) In our opinion, the company has an internal audit system
 commensurate with the size and nature of its business.
 
 8) In our opinion and according to the information and explanations
 given to us, the Central Government has not prescribed for the
 maintenance of cost records under section 209(1)(d) of the Companies
 Act, 1956.
 
 9) (a) The company is due to pay certain statutory dues payable under
 are;
 
 Provident Fund dues           Rs. 10,03,999
 
 Others                        Rs 1,29,675
 
 (b) According to the information and explanation given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, customs duty, excise duty and cess were in arrears, as at
 31.03.2011 for a period of more than six months from the date they
 became payable excepting undisputed dividend tax payable by the company
 amounting to Rs.9,75,000/- as on that date.
 
 (c) According to the information and explanation given to us, there are
 no dues of customs duty, wealth tax, sales tax, excise duty and cess
 which have not been deposited on account of any dispute except disputed
 income tax dues amounting to Rs 12,74,01C/- relating to Asst year
 2001.02 which is due for a consequential order favoring the company and
 Rs 19,41,784/- relating to Asst Year 2002.03, which is under appeal.
 These amounts have been due for a period of more than six months.
 
 (d) The accumulated losses of the company are more than the company''s
 net worth. The company has made Cash loss of Rs 5.16 lakhs during the
 current year (Previous Year loss Rs 31.36 lakhs).
 
 11) In our opinion and according to the information and explanations
 given to us, the company has not defaulted in repayment of dues to any
 scheduled Bank.
 
 12) We are of the opinion that the company has not granted loans and
 advances on the basis of security by way of pledge of shares debentures
 and other securities.
 
 13) We are of the opinion that the company is not a chit fund or a
 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 in or trading in shares,
 securities, debentures and other investments. Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
 2003 are not applicable to the company.
 
 15) In our opinion, the company has not given any guarantee for loans
 taken by others from banks or financial institutions.
 
 16) In our opinion, the company has not raised any term loan(s) during
 the year..
 
 17) According to the information and explanations given to us and on an
 overall examination of the balance sheet of the company, we report that
 no funds raised on short-term basis have been used for long-term
 investment. No long-term funds raised have been used to finance
 short-term assets except permanent working capital.
 
 18) According to the information and explanations given to us, the
 company has not made preferential allotment of shares to parties and
 companies covered in the register maintained under section 301 of the
 Act
 
 19) According to the information and explanations given to us, during
 the period covered by our audit report, the company had not issued any
 debentures.
 
 20) According to the information and explanations given to us, during
 the period covered by our audit report, the company has not raised any
 funds through public issue.
 
 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 Niranjan & Narayan, 
 
                                  CHARTERED ACCOUNTANTS 
 
                                  Firm No: 005899s
 
 Place: Hyderabad 
 
 Date: 28.07.2012
 
                                  M. Niranjan
 
                                  Partner
 
                                  M.No: 029552