Megasoft

We have audited the attached Balance Sheet of Megasoft Limited (the
 Company) as at 31 December 2008 and 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.
 
 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.
 
 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 said Order.
 
 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 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 31 December 2008, and taken on record by the Board of
 Directors, none of the directors is disqualified as on 31 December 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 attached 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 31 December 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.
 
 Auditors’ Report
 
 [Referred to in paragraph 3 of the Auditors Report of even date to the
 Members of Megasoft Limited on the Financial Statements for the year
 ended 31 December 2008]
 
 (1) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) The Company has a phased programme of physical verification of its
 fixed assets which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. In accordance with
 such programme, the Management has physically verified certain fixed
 assets during the year and no material discrepancies were noticed on
 such verification.
 
 (c) Fixed assets disposed off during the year were not substantial and
 therefore do not affect the going concern assumption.
 
 (2) In our opinion and according to the information and explanations
 given to us, in view of the nature of activities of the Company, the
 provisions of Clause 4(ii) relating to inventory is not applicable to
 the Company.
 
 (3) The Company has neither granted nor taken any loans, secured or
 unsecured, to / from companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956 (the
 Act). Consequently, clauses (iii)(b), (iii)(c), (iii)(d), (iii)(f) and
 (iii)(g) of paragraph 4 of the Order are not applicable.
 
 (4) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business with regard
 to purchase of fixed assets and the sale of services. We have not
 observed any major weakness in the internal control system during the
 course of the audit.
 
 (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
 maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements exceeding Rs 5 lakhs in respect of any party during the
 year, which have been made at prices which are reasonable having regard
 to prevailing market prices at the relevant time.
 
 (6) The Company has not accepted any deposits from the public and hence
 the directives issued by the Reserve Bank of India and the provisions
 of Sections 58A, 58AA or any other relevant provisions of the Act and
 the Companies (Acceptance of Deposit) Rules, 1975 with regard to the
 deposits accepted from the public are not applicable.
 
 (7) In our opinion, the Company has an internal audit system,
 commensurate with its size and the nature of its business.
 
 (8) According to the information and explanations given to us, the
 Central Government has not prescribed the maintenance of cost records
 under Section 209(1)(d) of the Act in respect of services carried out
 by the Company.
 
 (9) (a) According to the information and explanations given to us, and
 on the basis of our examination of the books of account, the Company
 has been generally regular in depositing with the appropriate
 authorities undisputed statutory dues including provident fund,
 employees state insurance, income-tax, wealth tax, service tax,
 sales-tax, customs duty, cess and other material statutory dues
 applicable to it. In respect of provident fund and tax-deducted at
 source, instances were noticed where there were delayed remittances.
 
 (b) According to the information and explanations given to us, no
 undisputed dues payable in respect of provident fund, employees state
 insurance, income-tax, wealth tax, service tax, sales-tax, customs
 duty, cess and other material statutory dues were outstanding as at 31
 December 2008 for a period of more than six months from the date they
 became payable.
 
 (c) According to the information and explanations given to us there are
 no such statutory dues that have not been deposited with the
 appropriate authorities on account of any dispute.
 
 (10) The Company does not have any accumulated losses at the end of the
 financial year and has not incurred cash losses in the financial year.
 
 (11) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 banks.
 
 (12) According to the information and explanations given to us, the
 Company has not given any loans and advances on the basis of security
 by way of pledge of shares, debentures and other securities and hence
 the question of maintenance of adequate records for this purpose does
 not arise.
 
 (13) In our opinion and according to the information and explanations
 given to us, the Company is not a chit fund, nidhi, mutual benefit fund
 or a society.
 
 (14) In our opinion and according to the information and explanations
 given to us, the Company is not dealing or trading in shares,
 securities, debentures and other investments.
 
 (15) According to the information and explanations given to us, the
 Company has given corporate guarantees for foreign currency loans taken
 by wholly-owned subsidiaries from a bank. The terms and conditions of
 such guarantees are not prejudicial to the interest of the Company.
 
 (16) According to the information and explanations given to us, the
 Company has not availed any new term loan 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, funds
 raised on short-term basis have, prima-facie, not been used for long
 term investment.
 
 (18) During the year, the Company has not made any preferential
 allotment of securities to companies / firms / parties covered in the
 register maintained under section 301 of the Act.
 
 (19) The Company has not raised any money by public issues during the
 year.
 
 (20) To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud on or by the Company
 has been noticed or reported during the year.
 
          for Srikanth & Shanthi Associates    for TN Rajendran & Co.
                      Chartered Accountants    Chartered Accountants
 
                                MC Srikanth             TN Rajendran
                                    Partner                  Partner
                        Membership No.18588      Membership No.28778
 
 Chennai
 31 March 2009