1.  We have audited the attached Consolidated Balance Sheet of M/S
 SPECTACLE INFOTEK LIMITED (Formerly known as Spetacle Industries
 Limited) as at 31st March, 2011 and also the Consolidated Profit & 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 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 misstatements. 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.  In Respect of the Financial Statement of Subsidiaries we did not
 carry on the Audit. The Total Assets and total Revenue in respect of
 these Subsidiaries are Rs. 10,49,18,820.94 & 69,03,12,952 respectively.
 These Financial Statement have been Audited by other Auditors whose
 reports have been furnished to us and in our opinion, insofar as it
 relates to the Amounts included in respect of the subsidiaries is based
 solely on this certified financial statements.
 
 4.  As required by the Companies ( Auditors’ Report ) Order,2003 as
 amended by the Companies (Auditor’s Report) ( Amendment) Order,2004,
 issued by the Central Government of India in terms of sub-section
 227(4A) of Section 227 of ‘The Companies Act, 1956’ of India and on the
 basis of such checks of the books and records of the Company as we
 considered appropriate and according to the information and
 explanations given to us, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 & 5 of the said order.
 
 5.  Further to our Comments in the annexure referred to above:
 
 a) We have obtained all the information and explanations, which to the
 best of our knowledge and belief are necessary for the purpose 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 Consolidated Balance Sheet and Profit & Loss Account referred to
 in this report are in agreement with the books of account.
 
 d) In our opinion the Consolidated Balance Sheet and Profit & Loss
 Account dealt with by this report complies with the accounting
 standards referred to in Section 211 (3C) of the Companies Act, 1956.
 
 e) We do not have any observations or comments which have any adverse
 effect on the functioning of the company and requiring to be mentioned
 in thick type or in italics in terms of clause (e) of sub – section (3)
 of section 227 of the Companies Act, 1956.
 
 f) On the basis of the written representations received from the
 Directors, as on 31st March, 2011 and taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March, 2011 from being appointed as Director in terms of Clause
 (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
 
 g) In our opinion and to the best of our information
 
 and according to the explanations given to us, the said accounts read
 together 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 :
 
 i. In so far as it related to the Consolidated Balance Sheet, of the
 State of Affairs of the company as at 31st March, 2011 and
 
 ii. In so far as it relates to the Consolidated Profit & Loss Account,
 of the profit for the year ending on 31st March 2011.
 
 In so far as it relates to the Cash Flow Statement, of the cash flow of
 the Company for the year ended on that date.  As the Cash flow
 statements of the Subsidiaries are not available, Cash Flow Statement
 is standalone.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 Referred to in paragraph 3 thereof of our Report of even date on the
 statements of Account of SPECTACLE INFOTEK LIMITED ( Formerly known as
 Spectacle Industries Limited), as on 31st March 2011.
 
 As Required by the Companies (Auditors Report) Order, 2003 as Amended
 by the Companies (Auditors report) (Amended) Order, 2004 and on the
 basis of such checks as we considered appropriate, we further report
 that:
 
 1.  a) The Company has maintained proper records
 
 showing full particulars, including quantitative details and situation
 of fixed assets.
 
 b) All fixed assets of the company have been physically verified by the
 management during the year. We have been informed that no material
 discrepancies were noticed on such verification.
 
 c) The construction equipment, the book value of which is Rs.
 60,19,875/-has been sold for Rs.  28,00,000 on 14th February 2011. The
 loss on sale of asset amounting to Rs. 11,92,320/- has been debited to
 profit & loss account. There is no change in the value of the other
 assets of the company.
 
 2.  a) The inventory has been physically verified by the management
 during the year. In our opinion, the frequency of such verification is
 reasonable.
 
 b) The Procedure of Physical verification of inventories followed by
 the management is reasonable and adequate in relation to the size of
 the company and the nature of its business.
 
 c) The Company is maintaining proper records of inventory and no
 material discrepancies were noticed on such physical verification of
 inventories as compared to book records and hence the question of
 whether the same have been properly dealt with the books of accounts
 does not arise.
 
 d) The opening stock of Rs. 8,85,400 has been found to be obsolete and
 their net realizable value is zero. Hence the same has been written off
 during the year.
 
 3.  a) The Company has granted an loan of Rs 77,01,000/- to Abhibus
 Services (India) Private Limited where Mr Tejesh Kumar was a Director.
 An amount of Rs.63,00,000/- has been granted as a loan to 3K
 Technologies in which one of the directors Mr.Tejesh Kumar is a
 director of the other company.
 
 b) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions of the
 loan taken by the company, are not prejudicial to the interest of the
 company
 
 c) During the year the company has taken loan from a Company named
 Balaji Synthetics & Sacks Private Limited where Mr. Shaikh Fazal
 Mehmood and Mr. Kodali Tejesh Kumar were directors. In respect of said
 loans, the maximum amount outstanding at any time during the year and
 the year end balance is Rs. 4,40,049 and Rs.  4,18, 033 /-
 respectively. During the year the company has also taken loan from
 Cambridge Global Enterprise Solutions Private Limited in which Mr
 Kodali Tejesh Kumar was a Director and the maximum outstanding at the
 year end balance is Rs. 1,42,56,935/-.
 
 d) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions of the
 loan taken by the company, are not prejudicial to the interest of the
 company.
 
 e) The Principal amounts are repayable on demand and there is no
 repayment schedule. The interest is also repayable on demand. So, the
 question of overdue amounts does not arise in respect of Principal and
 interest.
 
 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, for the
 purchase of inventory and fixed assets and for the sale of goods and
 services. Further, on the basis of our examination and explanations
 given to us, we have neither come across nor have we been informed of
 any instance of major weakness in the aforesaid internal control
 procedures.
 
 5. a) In our opinion and according to the information
 
 and explanation given to us the particulars of contracts or
 arrangements referred to in Section 301 of the act have been entered in
 the register required to be maintained under that section.
 
 b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of rupees five lakhs in respect of
 each party during the year have been made at arms length.
 
 6.  As informed by the management during the year, the company has not
 accepted any deposit from the public within the purview of Section 58A,
 58AA or any other relevant provisions of the companies Act, 1956.
 
 7.  The Company does not have any formal internal audit system.
 
 8.  The Central Government has not prescribed maintenance of cost
 records, Under section 209 (1)(d) of the companies Act, 1956 for any of
 the products of the company.
 
 9.  a) According to the information and explanations
 
 given to us, the following dues of income tax, professional tax, have
 not been deposited by the company.
 
 Name of the  Nature         Amount          Period to
 Statue       of the Due     unpaid          which the
                                             amounts
                                             relates
                                            (Assessment year)
 
 Income Tax   Income Tax     Rs.29,68,447/-  AY 2010-2011
 Act, 1961    payment 
             (incl. of 
              Interest)
 
 AP Profess   Professional   Rs.   16,500/-  AY 2010-2011
 Tax Act,     Tax 
 1987
 
 10.  In our Opinion, the company does not have accumulated losses as at
 the end of the financial year and has not incurred cash losses in the
 current financial year and immediately preceding financial year.
 
 11.  According to the records of the company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in the repayment of dues to financial institutions or banks or
 debentures holders.
 
 12.  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.
 
 13.  In our opinion and according to the information and explanations
 given to us, the nature of the activities, the Company is engaged in,
 does not attract any special statue applicable to chit fund and nidhi /
 mutual benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended)
 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 (as amended) are not applicable to the Company.
 
 15.  According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions during the year and hence the question of
 whether the terms and condition of the Guarantee given are prejudicial
 to the interest of the company does not arise.
 
 16.  The company did not have any term loan outstanding during the
 year.
 
 17.  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, the Company has not raised any funds on short term- basis
 for long term investment.
 
 18.  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. Hence question of issue price of shares
 prejudicial to interest of the company does not arise.
 
 19.  During the year covered by our audit report, the Company has not
 issued secured debentures. Hence, the creation of security in respect
 of debentures is not applicable.
 
 20.  The Company has not raised any money through a public issue during
 the year.
 
 21.  During the Course of our examination of the books and records of
 the company, carried in accordance with the generally accepted Auditing
 practices in India, and according to the information and explanations
 given to us, we have neither come across any instance of fraud on or by
 the company, noticed or reported during the year, nor have we been
 informed of such case by the management.
 
                                        For P. JITENDER REDDY & Co., 
 
                                               Chartered Accountants
 
                                                 (P. Jitender Reddy)
 
                                                         Proprietor
                                                       M.No. 200708
 
 Place : Hyderabad 
 Date  : 30-5-11