Sasken Communication Technologies

1.  We have audited the attached Balance Sheet of Sasken Communication
 Technologies Ltd. (“the Company”) as at March 31, 2008, the Profit and
 Loss Account and the Cash Flow Statement for the year then ended
 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 statement
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditors’ Report) Order, 2003 (as
 amended), issued by the Central Government of India in terms of
 sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
 in the Annexure a statement on the matters specified in paragraphs 4
 and 5 of the said 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 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
 Companies Act, 1956;
 
 (e) On the basis of the written representations received from the
 directors, as on March 31, 2008, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2008 from being appointed as a director in terms of clause
 (g) of sub-Section (1) of Section 274 of the Companies Act, 1956;
 
 (f) 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:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2008;
 
 
 (ii) in the case of the Profit and Loss Account, of the profit for the
 year then 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.
 
 Annexure Referred to in Paragraph 3 of our Report of Even Date Re:
 Sasken Communication Technologies Ltd.
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) All fixed assets have not been physically verified by the
 management during the year but 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. As informed, no
 material discrepancies were noticed on such verification.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 (ii) 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.
 
 (iii) (a) As informed, the Company has not granted any loans, secured
 or unsecured to companies, firms or other parties covered in the
 register maintained under Section 301 of the Companies Act, 1956.  (b)
 As informed, 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 Companies Act, 1956.
 
 (iv) In our opinion and according to the information and explanations
 given to us, as represented by the management that some items are of a
 special nature for which alternative quotations cannot be obtained,
 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 software products and services. During
 the course of our audit, no major weakness has been noticed in the
 internal control system in respect of these areas.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in Section 301 of the Companies Act, 1956 that
 need to be entered into the register maintained under Section 301 have
 been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transaction made in pursuance of such contracts or
 arrangements exceeding value of Rupees Five Lakhs has been entered into
 during the financial year at a price which is reasonable having regard
 to the prevailing market price at the relevant time.
 
 (vi) The Company has not accepted any deposits from the public.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for
 the software products and services of the Company.
 
 (ix) (a) According to the records of the Company, the Company is
 regular in depositing with appropriate authorities undisputed statutory
 dues including provident fund, investor education and protection fund,
 employees’ state insurance, income-tax, sales-tax, wealth-tax, service
 tax, customs duty, excise duty, cess and other material statutory dues
 applicable to it with the appropriate authorities.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees’ state insurance, income-tax,
 wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
 other undisputed statutory dues were outstanding, at the year end, for
 a period of more than six months from the date they became payable.
 
 (c) According to the records of the Company, the dues outstanding of
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty and cess on account of any dispute, are as follows:
 
 Name of the statute       Nature of dues          Amount (Rs)
 
 Income Tax Act, 1961      Income Taxes               922,850
 Income Tax Act, 1961      Income Taxes             6,296,583
 Income Tax Act, 1961      Income Taxes             2,076,872
 Income Tax Act, 1961      Income Taxes             1,228,186
 Income Tax Act, 1961      Income Taxes            18,591,921
 Income Tax Act, 1961      Income Taxes             4,450,321
 Income Tax Act, 1961      Income Taxes             3,577,596
 Income Tax Act, 1961      Income Taxes            38,655,760
 Income Tax Act, 1961      Non-withholding of      17,898,637
                           Income Taxes
 KVAT Act, 2003                KVAT                 3,619,006
 CST Act, 1965                 CST                    224,988
 KVAT Act, 2003                KVAT                17,706,763
 CST Act, 1965                 CST                  8,441,022
 KVAT Act, 2003                KVAT                20,608,999
 CST Act, 1965                 CST                 12,547,166
 Total                                            156,846,690
 
                        Forum where dispute is
 Period                        pending
 
 AY 1992-93              Karnataka High Court
 AY 1999-00              CIT (Appeals)
 AY 2000-01              Karnataka High Court
 AY 2001-02              ITAT
 AY 2002-03              CIT (Appeals)
 AY 2003-04              CIT (Appeals)
 AY 2004-05              CIT (Appeals)
 AY 2005-06              CIT (Appeals)
 AY 2006-07              CIT (Appeals)
 FY 2003-04              JCCT (Appeals)
 FY 2003-04              JCCT (Appeals)
 FY 2005-06              JCCT (Appeals)
 FY 2005-06              JCCT (Appeals)
 FY 2006-07              JCCT (Appeals)
 FY 2006-07              JCCT (Appeals)
 
 Note : Of the above, Rs.77,044,628 has been deposited.
 
 (x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current and immediately
 preceding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 institution or bank. The Company did not have any outstanding
 debentures during the year.
 
 (xii) According to the information and explanations given to us and
 based on the documents and records produced to us, the Company has not
 granted loans and advances on the basis of security by way of pledge of
 shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 the Companies (Auditors’ Report) Order, 2003 (as amended) 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 the Companies (Auditors’ Report) Order,
 2003 (as amended) are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has given guarantee for loans taken by others from bank or
 financial institutions, the terms and conditions whereof in our opinion
 are not prima-facie prejudicial to the interest of the Company.
 
 (xvi) The Company did not have any term loans outstanding during the
 year.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the Balance Sheet and Cash Flow Statement of
 the Company, we report that 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 Companies Act, 1956.
 
 (xix) The Company did not have any outstanding debentures during the
 year.
 
 (xx) The Company has not raised any money through a public issue during
 the year.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the course of our audit.
 
                                             For S R Batliboi & Co.  
                                             Chartered Accountants
 
                                             per Sunil Bhumralkar
 Bangalore                                         Partner
 April 18, 2008                              Membership No. 35141