Mascon Global

1. We have audited the attached Balance Sheet of M/s. MASCON GLOBAL
 LIMITED, Chennai, as at 31st March 2008 and also the Profit and Loss
 Account and Cash Flow Statement of the Company for the year ended on
 that date annexed thereto. 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 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 issued
 by the Central Government of India in terms of sub-section (4A) of
 section 227 of Companies Act, 1956, we enclose in the Annexure a
 statement on the matters specified in paragraph 4 and 5 of the said
 Order, to the extent applicable.
 
 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 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 the examination of
 the books.
 
 c.  The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by the report are in agreement with the books of account.
 
 d.  In our opinion the Balance Sheet, Profit and Loss Account and the
 Cash Flow Statement dealt with by this report are in conformity with
 the Accounting Standards referred to in sub-section (3C) of Section 211
 of the Companies Act, 1956.
 
 e.  In our opinion, on the basis of written representations from the
 Directors taken on record by the Board of Directors of the Company, we
 report that, no director is disqualified from being appointed as
 Director of the Company, under Clause (g) of subsection (1) of Section
 274 of Companies Act, 1956.
 
 f.  Attention is invited to the Unpaid Dividend Account of Rs.40,633,
 due to be remitted during the year to Investor Education and Protection
 Fund, subsequently remitted as on date.
 
 g.  Without qualifying our opinion, we draw attention to Note No.7 of
 Schedule 18 of the financial statements regarding management assessment
 of the carrying value of its investment in its Wholly Owned
 Subsidiaries (WOS), as at 31st March 2008. These WOS (in particular to
 MGL Americas Inc., USA, Versatech Consulting Inc., USA., E-Businessware
 Inc., USA) have their net worth below the carrying value of the
 companys investments. The management believes that these investments
 are made considering the long term involvement and considering the
 business plans of these WOS, and the dimunition are not permanent in
 nature.  Accordingly such investments are carried at cost.
 
 h. In our opinion and to the best the of our information and according
 to the explanations given to us, the said accounts read with the 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;
 
 a) in the case of the Balance Sheet of the state of affairs of the
 Company as at 31st March 2008,
 
 b) in the case of the Profit and Loss Account, of the Profit of the
 company for the year ended on that date, and
 
 c) in the case of the Cash Plow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 Statement referred to in paragraph 3 of our Report of even date to the
 Members of M/s. Mascon Global Limited, on the accounts for the year
 ended 31st March 2008.
 
 i) In respect of Fixed assets:
 
 a) The Company has maintained proper records showing full particulars
 including quantitative details and situation of its fixed assets,
 except in respect of certain locations where it is in the process of
 updating.
 
 b) The fixed assets have been physically verified by the management in
 a phased manner in accordance with a programme of verification which,
 in our opinion is reasonable having regard to the size of the Company
 and the nature of its assets. According to the information and
 explanations given to us, no material discrepancies were noticed on
 such verification.
 
 c) The company has disposed off certain fixed assets during the year,
 which in our opinion and according the information and explanations
 offered thereon, do not affect the going concern of the Company.
 
 ii) The Company did not have any Inventories and accordingly, the
 provisions of clause 4(h) of the Order is not applicable to the Company
 for the year
 
 iii) a) The Company, during the year has not taken any loans secured or
 unsecured from Companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies, Act, 1956.  b)
 The Company, during the year, has not granted secured or unsecured loan
 to Companies, Firms or other parties covered in the register maintained
 under Section 301 of the Companies Act, 1956.
 
 iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control systems commensurate
 with the size of the company and the nature of its business with regard
 to purchase of fixed assets and with regard to sale of goods/services.
 During the course of our audit, we have not observed any continuing
 failure to correct major weakness in internal control system.
 
 v) a) The particulars of contracts or arrangements referred to in
 section 301 of the Companies Act, 1956, have been entered in the
 register required to be maintained under that section, and
 
 b) The transactions made in pursuance of such contracts or arrangements
 have been made at prices which are reasonable having regard to the
 prevailing market prices at the relevant time.
 
 vi) The Company has not accepted any deposits from the public.
 
 vii) In our opinion, the company has an adequate Internal Audit System
 commensurate with the size and nature of its business.
 
 viii) The Central Government has not prescribed the maintenance of cost
 records under Section 209(i)(d) of the Companies Act, 1956 for any of
 the products of the Company.  ix) In respect of statutory dues:
 
 a) According to the records of the company, the company is generally
 regular in depositing with appropriate authorities, the undisputed
 statutory dues applicable to the company, except that there were few
 delays in the remittances of Provident fund, Tax deducted at Source in
 India and Investor Education and Protection Fund.
 
 b) According to the records of the company and based on the information
 and explanations offered thereon, there were no undisputed statutory
 amounts payable as at 31st March 2008 for a period of more than six
 months from the date they became payable, except for US State Taxes
 payable amounting to Rs. 1,408,964/-
 
 c) According to the records of the company and based on the information
 and explanations offered thereon, the disputed statutory dues that have
 not been paid as on 31st March 2008, on account of disputed matters
 pending before appropriate authorities is as given under:
 
 Name of the Statute   Nature of dues    Forum where dispute is pending
 
 Income Tax Act,       Income tax
 1961                                    Income tax Appellate Tribunal
 
 Assessment year       Rupees in lakhs
 
 2002-03                    97.41
 
 x) The company does not have accumulated losses that are more than
 fifty percent of its net worth. The company has not incurred any cash
 losses during the financial year covered by our audit and in the
 immediately preceding financial year.
 
 xi) In our opinion and according to the information and explanations
 given to us, the company has during the year, not defaulted in
 repayment of dues to any financial institutions/ banks, except as
 follows:
 
 Particulars                      Period of Delays      Amount (in Rs.)
                                   (Approximated)
 
 Banks:
 
            Principal dues    Quarter ended 31.3.2008   Rs.4,05,20,113
 
            Interest dues          March 2008           Rs. 59,05,899
 
 xii) The company has not granted any loans or advances on the basis of
 security by way of pledge of shares, debentures or other securities.
 
 xiii) The company is not a Chit fund, Nidhi or mutual benefit fund or
 Society.
 
 xiv) The company is not dealing or trading in shares, securities,
 debentures or other investments.
 
 xv) The company during the pre\ious year, has given a guarantee for
 loan taken by a company from bank, the terms and conditions thereof are
 not prejudicial to the interests of the company.
 
 xvi) In our opinion and according to the information and explanations
 given to us, the company during the year has prima facie applied the
 term loans 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 no funds raised on short term basis, have been used for long term
 investments.
 
 xviii) According to the information and explanations given to us, the
 company has, during the year converted a portion of the warrants issued
 during the earlier year and allotted equity shares, (Note No.2 of
 Schedule 18) which has been subscribed by the Chairman of the Company.
 In our opinion, the price at which the warrants have been converted in
 to equity shares are not prejudicial to the interests of the company.
 
 xix) The company has not issued any debentures during the year.
 
 xx) The company has not raised any issues from the public during the
 year. The management has disclosed the end use of the money for GDR,
 Preferential issue of shares issued during the year and the same has
 been verified.
 
 xxi) According to the information and explanations given to us, a fraud
 on or by the company has not been noticed or reported during the year.
 
                                         For M/s. G. BALU ASSOCIATES
                                            CHARTERED ACCOUNTANTS
 
                                             G. Balasubramanyan
                                                   Partner
                                            Membership No. 7628
 
 Place: London
 Date : June 19, 2008