Infinite Computer Solutions, Inc. Auditors Report and Financial Statements for the year ended 31st March 2010

Infinite Computer Solutions, Inc. Auditors Report and Financial Statements for the year ended 31st March 2010

REPORT OF THE INDEPENDENT AUDITORS To the Board of Directors of Infinite Computer Solutions, Inc. 1. We have audited the attached Balance Sheet of Infinite Computer Solutions, Inc. (a wholly owned subsidiary of Infinite Computer Solutions (India) Limited) (the Company ) as of March 31, 2010, the Profit and Loss Account and the Cash Flow statement of the Company for the period 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 have 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(s) about whether the financial statements are free of material mis-statement(s). An audit inter alia, includes examining, on a test basis, evidence(s) supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. This report does not contain a statement on the matters specified in paragraphs 4) and 5) of the Companies (Auditor s Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) of the Indian Companies Act, 1956 (herein referred to as the Act ) since in our opinion and according to the information and explanations given to us, the said order is not applicable to the Company. 4. Further to our comments in the paragraphs 1), 2) & 3) 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 have been kept by the Company so far as appears from our examination of the books of the Company; c) The Balance Sheet, the Profit and Loss Account and the Cash Flow statement referred to in this report are in agreement with the books of account of the Company;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow statement of the Company complies with the accounting standards referred to in sub-section (3C) of Section 211 of the Indian Companies Act, 1956 to the extent applicable; and e) On the basis of such checks of the extracts of the books and vouchers made available and as we considered appropriate and also on the basis of information and explanations given to us, during the course of our audit, we state that, in our opinion, such financial statements present fairly, in all material respects, the financial position of Infinite Computer Solutions, Inc. as at March 31, 2010, the results of its operations and of its cash flows for the period ended March 31, 2010 in conformity with accounting principles generally accepted in India. For LAWRENCE TELLIS & ASSOCIATES Chartered Accountants (ROHAN MIRANDA) Partner (ICAI M. NO.200/22772) Bangalore May 07, 2010

BALANCE SHEET AS AT MARCH 31,2010 SCH As at March 31, 2010 As at March 31, 2009 I. SOURCES OF FUNDS US Dollars INR (Rs) US Dollars INR (Rs) 1. Shareholdersʹ Funds (a) Share Capital 1 50,000 2,257,000 50,000 2,547,500 (b) Reserves and Surplus -Balance in Profit and Loss Account 8,049,668 363,361,967 6,393,813 325,764,716 8,099,668 365,618,967 6,443,813 328,312,216 2. Loan Funds (a) Secured Loans 2 3,275,000 147,833,500 1,680,000 85,596,000 (b) Unsecured Loans 3 5,250,000 236,985,000 5,250,000 267,487,500 8,525,000 384,818,500 6,930,000 353,083,500 TOTAL 16,624,668 750,437,467 13,373,813 681,395,716 II. APPLICATION OF FUNDS 1. Fixed Assets 4 (a) Gross Block 762,194 34,405,436 798,907 40,704,311 (b) Less : Depreciation (475,706) (21,473,369) (456,925) (23,280,378) (c) Net Block 286,488 12,932,067 341,982 17,423,933 2. Investments 5 15,653,096 706,580,753 14,153,096 721,100,241 3. Deferred Tax Assets 2,565,658 115,813,801 1,831,734 93,326,847 4. Current Assets, Loans & Advances (a) Sundry Debtors 6 49,833,421 2,249,480,607 38,494,290 1,961,284,056 (b) Cash & Bank Balances 7 454,394 20,511,345 477,379 24,322,460 (c) Other Current Assets 8 16,045 724,271 5,723 291,587 (d) Loans & Advances 9 3,902,463 176,157,173 1,726,600 87,970,267 54,206,323 2,446,873,396 40,703,992 2,073,868,370 Less:Current Liabilities & Provisions (a) Current Liabilities 10 51,784,859 2,337,568,510 41,152,403 2,096,714,916 (b) Provisions 11 4,302,039 194,194,040 2,504,588 127,608,759 56,086,898 2,531,762,550 43,656,991 2,224,323,675 Net Current Assets (1,880,575) (84,889,154) (2,952,999) (150,455,305) 5. Miscellaneous expenditure (To the extent not written off or adjusted) - - - - TOTAL 16,624,668 750,437,467 13,373,813 681,395,716 0 (0) 0 0 0 (0) 0 0 Schedules referred to above and Notes to the accounts (Schedule No 16) form an integral part of this Balance Sheet. ʺSubject to our report of even dateʺ For LAWRENCE TELLIS & ASSOCIATES Chartered Accountants For INFINITE COMPUTER SOLUTIONS, INC. (ROHAN MIRANDA) Partner (ICAI.M.NO.22772) (SANJAY GOVIL) Director Bangalore, India May 7, 2010 New Delhi, India May 7, 2010

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2010 SCH Year ended March 31, 2010 Year ended March 31, 2009 US Dollars INR (Rs) US Dollars INR (Rs) I II INCOME Consulting and Project Revenue - 92,650,667 4,182,251,154 77,880,324 3,968,002,509 Other Income 12 52,287 2,360,235 522,114 26,601,708 92,702,954 4,184,611,389 78,402,438 3,994,604,217 EXPENDITURE Employees Remuneration & Benefits 13 41,805,230 1,887,088,082 34,367,526 1,751,025,450 Administrative & Other Expenses 14 47,582,054 2,147,854,042 41,578,917 2,118,445,878 Interest & Financial Charges 15 513,508 23,179,751 588,932 30,006,086 Depreciation 4 82,780 3,736,657 87,053 4,435,350 89,983,572 4,061,858,532 76,622,428 3,903,912,764 III PROFIT BEFORE TAX 2,719,382 122,752,857 1,780,010 90,691,453 Less/ (Add): Tax Expenses Provision for Current Tax 1,797,451 81,136,938 1,160,587 59,131,908 Deferred Tax (733,924) (33,129,329) (685,351) (34,918,633) 1,063,527 48,007,609 475,236 24,213,275 IV PROFIT AFTER TAX 1,655,855 74,745,248 1,304,774 66,478,178 Add: Prior Period Adjustments Prior Period Tax Expenses - - 14,831 755,639 Balance brought forward from Previous period/year 6,393,813 288,616,719 5,103,870 260,042,177 V PROFIT AVAILABLE FOR APPROPRIATION 8,049,668 363,361,967 6,393,813 325,764,716 VI APPROPRIATIONS Proposed Dividend Balance carried to Balance Sheet 8,049,668 363,361,967 6,393,813 325,764,716 8,049,668 363,361,967 6,393,813 325,764,716 Basic and Diluted Earnings Per Share 33.12 1,494.90 25.80 1,314.45 Face Value Per Share 1 45.14 1 50.95 Number of Shares for calculating EPS 50000 50000 50000 50000 Schedules referred to above and Notes to the accounts (Schedule No 16) form an integral part of this Profit and loss account. ʺSubject to our report of even dateʺ For LAWRENCE TELLIS & ASSOCIATES Chartered Accountants For INFINITE COMPUTER SOLUTIONS, INC. (ROHAN MIRANDA) Partner (ICAI.M.NO.22772) (SANJAY GOVIL) Director Bangalore, India May 7, 2010 New Delhi, India May 7, 2010

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2010 Year ended March 31, 2010 Year ended March 31, 2009 A] CASH FLOWS FROM OPERATING ACTIVITIES US Dollars INR (Rs) US Dollars INR (Rs) Net Income before Taxation and Extraordinary items 2,719,382 122,752,857 1,780,010 90,691,453 Add/(Less) : Adjustments for :- Depreciation and amortization 82,780 3,736,657 87,053 4,435,350 Dividend received - - (500,000) (25,475,000) Interest paid 480,102 21,671,804 558,204 28,440,551 Interest on Deposits (2,287) (103,235) (2,373) (120,904) Loss on impairment of assets 6,468 291,966 - - OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 3,286,445 148,350,049 1,922,894 97,971,450 Add/(Less) : Movements in working capital (Increase)/Decrease in Sundry Debtors (11,339,132) (511,848,343) (9,023,883) (459,766,839) (Increase)/Decrease in Loans & Advances (75,337) (3,400,707) (122,584) (6,245,657) (Increase)/Decrease in other Current assets (10,322) (465,935) (543) (27,666) Increase/(Decrease) in Current liabilities and provisions 10,632,456 479,949,053 11,137,072 567,433,820 Cash generated from operations 2,494,110 112,584,117 3,912,956 199,365,108 Less : Income Tax (paid)/refund (2,100,526) (94,817,744) (400,582) (20,409,653) NET CASH PROVIDED FROM / (USED IN) OPERATING ACTIVITIES A) 393,584 17,766,373 3,512,374 178,955,455 B] CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES Purchase of property, plant and equipment (33,754) (1,523,654) (87,958) (4,481,467) Interest on Deposits 2,287 103,235 2,373 120,904 Investment in Subsidiary (1,500,000) (67,710,000) (4,309,617) (219,575,001) NET CASH PROVIDED FROM / (USED IN ) INVESTING ACTIVITIES B) (1,531,467) (69,130,419) (4,395,202) (223,935,564) C] CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES Instalment of Term Loan paid - - (250,000) (12,737,500) Interest paid (480,102) (21,671,804) (558,204) (28,440,551) Dividend received - - 500,000 25,475,000 Loan from/(repayment to ) United Bank 1,595,000 71,998,300 830,000 42,288,557 NET CASH PROVIDED FROM / (USED IN) FINANCING ACTIVITIES C) 1,114,898 50,326,496 521,796 26,585,506 D] NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS A] +B] +C] (22,985) (1,037,550) (361,032) (18,394,603) Cash and Cash Equivalents at beginning of quarter /year 477,379 21,548,895 838,411 42,717,063 Cash and Cash Equivalents at end of quarter /year 454,394 20,511,345 477,379 24,322,460 ʺSubject to our report of even dateʺ For LAWRENCE TELLIS & ASSOCIATES Chartered Accountants 454394 477379 24322460 0 0 0 For INFINITE COMPUTER SOLUTIONS, INC. (ROHAN MIRANDA) Partner (ICAI.M.NO.22772) (SANJAY GOVIL) Director Bangalore, India May 7, 2010 New Delhi, India May 7, 2010

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 As at March 31, 2010 As at March 31, 2009 US Dollars INR (Rs) US Dollars INR (Rs) SCHEDULE 1 : SHARE CAPITAL Authorised 50,000 Equity shares at USD 1/- each. 50,000 2,257,000 50,000 2,547,500 50,000 2,257,000 50,000 2,547,500 Issued, Subscribed and Paid up 50,000 Equity shares of USD 1/- each fully paid. (Previous year-50,000 Equity shares of USD 1/- each fully paid) 50,000 2,257,000 50,000 2,547,500 Note: The above 50,000 Equity shares (Previous year - 50,000) of USD 1/- each (Previous year - USD 1/-) fully paid up are held by Infinite Computer Solutions (India) Ltd., the holding Company. 50,000 2,257,000 50,000 2,547,500 SCHEDULE 2 : SECURED LOANS Line of Credit facility with United Bank 3,275,000 147,833,500 1,680,000 85,596,000 (Secured by lien on all properties and fixtures including but not limited to all of the receivables, present and future clients, payments, contract rights,chattel papers including tangible and electronic papers, commercial tort claims, health care insurance receivables, all goods and equipments, all deposit accounts, other obligations and indebtedness, inventories, all intellectual properties, domain name, media documents, computer tapes, domestic and foreign copyrights, eligible government accounts and government sub-contract accounts) 3,275,000 147,833,500 1,680,000 85,596,000 SCHEDULE 3 : UNSECURED LOANS Infinite Computer Solutions (India) Ltd 5,250,000 236,985,000 5,250,000 267,487,500 5,250,000 236,985,000 5,250,000 267,487,500 SCHEDULE 6 : SUNDRY DEBTORS ( UNSECURED ) Considered Good - Outstanding for a period exceeding six months 1,130,407 51,026,573 1,361,166 69,351,405 - Other debts 48,703,014 2,198,454,033 37,133,124 1,891,932,651 Considered Doubtful 174,232 7,864,832 258,030 13,146,629 50,007,653 2,257,345,439 38,752,320 1,974,430,685 Note: Sundry Debtors includes an amount of USD 144,630/- (INR 6,528,598/-) due from the Holding Company and an amount of USD 18,819/- (INR 849,490/-) due from a concern in which a director is the proprietor. Less : Provision for doubtful debts 174,232 7,864,832 258,030 13,146,629 49,833,421 2,249,480,607 38,494,290 1,961,284,056 SCHEDULE 7 : CASH & BANK BALANCES Cash on hand Balances with Banks - Others - - - - - In Current Accounts 454,394 20,511,345 477,379 24,322,460 454,394 20,511,345 477,379 24,322,460 SCHEDULE 8 : OTHER CURRENT ASSETS Other Receivables 16,045 724,271 5,723 291,587 16,045 724,271 5,723 291,587 SCHEDULE 9 : LOANS & ADVANCES (Unsecured, considered good unless otherwise stated) Advances recoverable in cash or in kind or for value to be received or pending adjustments 409,266 18,474,260 338,906 17,267,258 Deposits 33,890 1,529,795 28,913 1,473,117 Advance Income Tax 3,459,307 156,153,118 1,358,781 69,229,892 3,902,463 176,157,173 1,726,600 87,970,267

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 SCHEDULE 4 : FIXED ASSETS ( all in US Dollars ) - IN US DOLLARS GROSS BLOCK AT COST DEPRECIATION NET BLOCK Sl. No. Particulars As at April 1, 2009 Additions during the year Adjustments/ Sold during the year As at March 31, 2010 Upto April 1, Provided 2009 during the year Adjustments during the year Upto March 31, 2010 As at March 31, 2010 As at April 1, 2009 1 Computer Equipments 445,459 22,293 57,516 410,236 302,812 57,852 54,206 306,458 103,778 142,647-2 Office Equipment 106,734 3,670 819 109,585 18,700 5,215 311 23,604 85,981 88,034 3 Furniture & Fixtures 92,226 5,588 4,256 93,558 22,400 6,040 1,691 26,749 66,809 69,826 4 Software 99,488 2,203 7,876 93,815 90,410 2,673 7,790 85,292 8,523 9,078 5 Intangible Assets 55,000 - - 55,000 22,603 11,000-33,603 21,397 32,397 TOTAL 798,907 33,754 70,467 762,194 456,925 82,780 63,998 475,706 286,488 341,982 PREVIOUS YEAR 710,949 87,958-798,907 369,872 87,053-456,925 341,982 - - IN INDIAN RUPEES ( all in INR ) GROSS BLOCK AT COST DEPRECIATION NET BLOCK Sl. No. Particulars As at April 1, 2009 Additions during the year Adjustments/ Sold during the year As at March 31, 2010 Upto April 1, Provided 2009 during the year Adjustments during the year Upto March 31, 2010 As at March 31, 2010 As at April 1, 2009 1 Computer Equipments 20,108,019 1,006,306 2,596,272 18,518,053 13,668,934 2,611,439 2,446,859 13,833,514 4,684,539 6,439,086 2 Office Equipment 4,817,973 165,663 36,970 4,946,666 844,118 235,405 14,039 1,065,484 3,881,183 3,973,855 3 Furniture & Fixtures 4,163,082 252,242 192,116 4,223,208 1,011,136 272,646 76,332 1,207,450 3,015,758 3,151,946 4 Software 4,490,888 99,443 355,523 4,234,808 4,081,107 120,615 351,641 3,850,081 384,727 409,781 5 Intangible Assets 2,482,700 - - 2,482,700 1,020,288 496,552-1,516,840 965,860 1,462,412 TOTAL 36,062,662 1,523,654 3,180,881 34,405,436 20,625,582 3,736,657 2,888,871 21,473,369 12,932,067 15,437,080 PREVIOUS YEAR 36,222,817 4,481,494-40,704,311 18,845,027 4,435,350-23,280,378 17,423,933 -

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 SCHEDULE 5 : INVESTMENTS ( NON TRADE - VALUED AT COST ) Balance as on Sold / Balance at April 1, 2009 redeemed the end of Particulars As at March 31, 2010 As at March 31, 2009 during the period period Nos. Nos. Nos. US Dollars INR (Rs) US Dollars INR (Rs) LONG TERM INVESTMENTS 1. Shares (a) Unquoted: In Subsidiary Company Comnet International Company 40,000 (Nil) 40,000 Shares aggregating to a total par value of USD 1,000 15,653,096 706,580,753 14,153,096 721,100,241 Aggregate cost of Unquoted Investments 15,653,096 706,580,753 14,153,096 721,100,241

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 As at March 31, 2010 As at March 31, 2009 US Dollars INR (Rs) US Dollars INR (Rs) SCHEDULE 10 : CURRENT LIABILITIES Sundry Creditors other than Micro, Small and Medium Enterprises (refer note 10) 13,307,138 600,684,202 18,869,698 961,411,111 Other Liabilities 34,265,022 1,546,723,093 17,499,915 891,620,674 Advance from customers 299,618 13,524,739 270,308 13,772,174 Bank Overdraft balances with United Bank (Book overdaft balances) 2,859,130 129,061,128 2,703,531 137,744,904 Advance received from a Subsidiary 1,053,951 47,575,348 1,808,951 92,166,053 Note: Sundry Creditors includes an amount of USD 2,301,145/- 1,03,873,685/-) due to the Holding Company (INR 51,784,859 2,337,568,510 41,152,403 2,096,714,916 SCHEDULE 11 : PROVISIONS Provision for Income Tax 3,852,039 173,881,040 2,054,588 104,681,259 Warranty Provision 450,000 20,313,000 450,000 22,927,500 4,302,039 194,194,040 2,504,588 127,608,759 Year ended March 31, 2010 Year ended March 31, 2009 US Dollars INR (Rs) US Dollars INR (Rs) SCHEDULE 12 : OTHER INCOME Interest 2,287 103,235 2,373 120,904 Miscellaneous receipts 11,367 513,106 19,741 1,005,804 Dividend - - 500,000 25,475,000 Exchange gain 3,335 150,542 - - Provision for Bad debts reversed during the period/year 35,268 1,591,998 - - Sub Total 1) 52,257 2,358,881 522,114 26,601,708 Reimbursement of expenses received from customers 3,327,056 150,183,308 4,005,332 204,071,665 Less : Expenses reimbursed to Vendors / Suppliers of service 3,327,026 150,181,954 4,005,332 204,071,665 Sub Total 2) 30 1,354 - - Total 1 ) + 2) 52,287 2,360,235 522,114 26,601,708 SCHEDULE 13 : EMPLOYEES REMUNERATION & BENEFITS Salaries, Wages and Bonus 39,040,560 1,762,290,878 32,948,221 1,678,711,860 Incentive/Commission paid to employees 2,002,400 90,388,336 777,643 39,620,911 Employee Welfare Expenses 762,270 34,408,868 641,662 32,692,679 41,805,230 1,887,088,082 34,367,526 1,751,025,450

SCHEDULES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2010 Year ended March 31, 2010 Year ended March 31, 2009 US Dollars INR (Rs) US Dollars INR (Rs) SCHEDULE 14 : ADMINISTRATIVE & OTHER EXPENSES Payroll Expenses 68,194 3,078,277 55,632 2,834,455 Rent and Hire Charges 332,519 15,009,908 194,561 9,912,883 Repairs and Maintenance 32,484 1,466,328 43,259 2,204,046 Membership & Subscription Charges 83,419 3,765,534 86,541 4,409,254 Insurance 138,768 6,263,988 145,168 7,396,310 Communication Expenses 188,981 8,530,602 242,475 12,354,101 Recruitment Expenses 158,862 7,171,031 223,826 11,403,935 Advertisement Expenses 10,600 478,484 21,921 1,116,875 Selling & Marketing Expenses 264,051 11,919,262 458,263 23,348,500 Business Promotion 105,631 4,768,183 46,519 2,370,143 Legal and Professional Charges 541,337 24,435,952 132,965 6,774,567 Contractual Services / Manpower Outside Services 43,516,564 1,964,337,699 37,195,127 1,895,091,697 Software Expenses 21,646 977,100 3,036 154,684 Auditors` Remuneration 13,500 609,390 18,000 917,100 Travelling & Conveyance 864,745 39,034,589 568,274 28,953,560 Printing & Stationery 39,463 1,781,360 37,659 1,918,726 Seminar & Training Expenses 3,840 173,338 2,720 138,584 Bad debt written off 37,362 1,686,521 791,113 40,307,207 Rates & Taxes 40,914 1,846,858 42,425 2,161,554 NTS Rebate Fees 1,038,947 46,898,068 1,180,466 60,144,726 Service Charges 27,000 1,218,780 36,000 1,834,200 Miscellaneous Expenses 46,759 2,110,824 19,177 977,170 Exchange Loss on account of fluctuations in Foreign currency rates - - 33,790 1,721,601 Loss on impairment of assets 6,468 291,966 - - 47,582,054 2,147,854,042 41,578,917 2,118,445,878 SCHEDULE 15 : INTEREST & FINANCE CHARGES Bank Charges/ Other charges 33,406 1,507,947 30,728 1,565,592 Interest 480,102 21,671,804 558,204 28,440,494 513,508 23,179,751 588,932 30,006,086 ʺSubject to our report of even dateʺ For LAWRENCE TELLIS & ASSOCIATES Chartered Accountants For INFINITE COMPUTER SOLUTIONS, INC. (ROHAN MIRANDA) Partner (ICAI.M.NO.22772) (SANJAY GOVIL) Director Bangalore, India New Delhi, India May 7, 2010 May 7, 2010

SCHEDULE 16 THE YEAR ENDED MARCH 31, 2010 1. BACKGROUND Infinite Computer Solutions, Inc., ( ICS or the Company ) was incorporated in United States of America on January 10, 2001 as a Delaware corporation pursuant to the laws of the State of Delaware as a wholly owned subsidiary of Infinite Computer Solutions (India) Ltd, ( Infinite ). The Company provides information technology services to its clients using both its own employees and sub-contractors. The Company is a closely held Company with 50,000 common shares held wholly by Infinite Computer Solutions (India) Ltd. (formerly known as Infinite Computer Solutions (India) Pvt. Ltd). On January 10, 2001, the Company had executed an Assignment and Assumption Agreement with INSTOS Inc, USA ( INSTOS ) (earlier known as International Computer Solutions, Inc), which is wholly owned by the majority shareholders of Infinite Computer Solutions (India) Ltd, for normal consideration. Pursuant to the Assignment and Assumption Agreement, the Company has been assigned the economic benefits and has assumed the related costs of the customers, customer agreements and related costs of INSTOS. As a result, all such revenue and related costs have been transferred from INSTOS to the Company in the accompanying financial statements as in the earlier years. The Assignment and Assumption Agreement provides for the direct transfer of customer agreements from INSTOS to the Company as practicable and until such time as all contracts are transferred, INSTOS will provide billing services to such customers for the services performed by the Company at a specified fee, subject to a maximum fee of USD 120,000 (Rs. 5,416,800/-) per year. No other assets of INSTOS, including cash, accounts receivable and other amounts owing to, earned by or accruing to INSTOS were assigned or transferred to the Company. However, the Company is allowed to utilize the Computers and other office equipments of INSTOS which were not transferred to the Company, without any cost. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Overall The Company being incorporated in the United States of America is not formed and registered under the Indian Companies Act, 1956 or any of the previous Indian Companies laws as listed in Section 3(1) of the Companies Act, 1956. Further, the Company has not established a place of business in India within the meaning of Section 591 of the Indian Companies Act, 1956. Consequently, the provisions of the Companies Act, 1956 are not applicable to the Company. However, the requirements of Parts I & II of Schedule VI to the Companies Act, 1956 relating to disclosure of accounting information are complied with, to the extent applicable, in the preparation of these financial statements. Page 1

The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles in India and the accounting standards issued by the Institute of Chartered Accountants of India, as adopted consistently by the Company. The Company follows the mercantile system of accounting and recognizes items of income and expenditure on accrual basis. The accompanying financial statements reflect the results of the activities undertaken by the Company during the year ended March 31, 2010. b) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses for the year/period presented. Actual results could differ from those estimates. c) Revenue Recognition Revenue from software development contracts are priced on a time and material basis and is recognized on the basis of billable time spent by the resources deployed and working on the project priced at the contracted rate. Revenue in respect of services on fixed price contracts is recognized pro-rata over the life of the contract using percentage of completion method. Losses are recognized when probable. All revenues are recognized only when collectability of the receivable is reasonably assured. d) Note on disclosure in accounts regarding presentation of certain items of consultant labour expenditure The following expenses incurred during the period/year have not been separately shown as forming part of Consultant Labour Expense but have been netted off and reduced from the Consulting and Project Revenue in the Profit and Loss Account. The netting-off of expenses as aforesaid is primarily in respect of revenue yielding transactions with clients where the Company (ICS) is a Core Vendor and where under other sub-tier vendors who provide services to such clients are also required to route their billing and collection transactions through the Company (ICS) as per the internal policies of such clients. The Company does not expend any marketing effort nor does it exercise any direct control or supervision on the subsidiary vendor resources. The Company charges and Page 2

retains an agreed margin in the nature of a fee from such clients where the Company (ICS) is a core vendor for allowing the subsidiary vendors to route their business through the Company (ICS). Considering the nature of the abovereferred business, the Company (ICS) is of the opinion that only the margin from these transactions should be recognized as the turnover of the Company (ICS) and not the gross revenue from these transactions for more appropriate presentation of the financial statements. Accordingly, the expenses incurred by the subsidiary vendors are not separately shown but netted-off from the Consulting and Project Revenues. The particulars of such billing services transactions along with balances in debtors and creditors relating thereto are as follows :- Year ended 31 st March 2010 Year ended 31 st March 2009 USD INR USD INR Billing Services Revenue 69,129,550 31,20,507,887 55,319,695 28,18,538,460 Cost of Billing Services Revenue Labour Cost 63,061,812 28,46,610,194 50,502,653 25,73,110,170 NTS Fees 3,240,553 1,46,278,562 2,437,717 1,24,201,681 CSA Fees 241,567 10,904,334 259,756 13,234,568 Total 66,543,932 30,03,793,090 53,200,126 27,10,546,420 Margin of Billing Services Revenue 2,585,618 1,16,714,797 2,119,569 1,07,992,041 Debtors Pertaining to Billing Services Revenue 15,647,801 706,341,737 12,441,756 6,33,907,468 Creditors Pertaining to Billing Services Revenue 4,545,438 205,181,071 7,869,672 4,00,959,788 (Note: NTS fees refer to North American Technical Services Fees and CSA fees refer to Contractor Sourcing Application Fees.) e) Fixed Assets Fixed Assets are stated at cost less accumulated depreciation. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation. f) Depreciation The Company has provided for depreciation at the rates specified in Schedule XIV to the Companies Act, 1956 i.e., using the straight Line Method. Fixed assets individually costing Rs. 5,000/- (USD 110.77) or less are fully depreciated at 100%. g) Leases Lease rentals are expensed with reference to Contractual lease terms. Page 3

h) Impairment of Assets Whenever events or changes in circumstances indicate that the carrying value of long lived assets may be impaired, the assets are subject to the test of recoverability based on estimates of future cash flows arising from continuing use of such assets and arising from its ultimate disposal. A provision for impairment loss is recognized where it is probable that the carrying value of an asset exceeds the amount to be recovered through use or sale of the asset. No such probability of carrying value of the assets exceeding the amounts to be recorded through use or sale of the assets is expected presently and hence no provision for impairment loss is required in the opinion of the management. i) Retirement Benefits Accrued leave benefits payable to employees is accounted for on accrual basis on the last salary drawn by the employees. Effective January 10, 2001, the Company has adopted the qualified defined contribution plan established under Section 401 (K) of the (U.S) Internal Revenue code by INSTOS. Both employees of INSTOS and Infinite Computer Solutions Inc. contribute to this retirement plan. Employees may enter the plan on the first day of the month after attaining the age of twenty-one years. The Company may elect to provide matching contributions up to 6% (six percent) of employee compensation as determined annually. During the year ended March 31, 2010, the Company did not elect to contribute matching funds. Employer matching contributions vest over a six-year period beginning after the first year of completed service. j) Foreign Currency Transactions: In respect of foreign currency transactions identified as integral to the operations of the Company, the said transactions are recorded in the reporting currency (USD), by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency as at the date of the transaction(s). Foreign currency monetary items are reported using the closing rate as on 31 st March 2010. Exchange differences arising on the settlement of monetary items or on reporting monetary items of the company at rates different from those at which they were initially recorded during the year or which were reported in previous financial statements, are recognized as income or expense in the year in which they arise. k) Earnings per Share Basic and diluted earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Page 4

l) Income Taxes Income taxes consist of current taxes and charges in deferred tax liability and deferred tax asset chargeable under US tax laws as estimated by the management. Income taxes are accounted for on the basis of estimated taxes payable and adjusted for timing differences between the taxable income and accounting income as reported in the financial statements. Timing differences between the taxable income and the accounting income as at 31 st March 2010 that reverse in one or more subsequent years are recognized if they result in taxable amounts. Deferred tax assets or liabilities are established at the enacted tax rates. Changes in the enacted rates are recognized in the period of enactment. Deferred tax assets are recognized only if there is a reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. m) Material Events Material events occurring after the Balance Sheet date and upto the date of certification of the accounts is taken into cognizance, wherever applicable. However, there are no such material events that have occurred to be taken cognizance of, for the period presented. 3. WARRANTIES The Company warrants that their services will perform in all material respects in accordance with the Company s standard specifications for the warranty period. Accordingly, based on specific warranty claims and claim history, the Company provides for warranty claims. The Company has however not made any additional provision for warranty claims during the current period and in the previous year on the expectation that the existing provision of USD 450,000/- (INR 20,313,000/-) would be sufficient to cover all warranty claims in this respect. The activity in the provision for warranty costs is as follows: - Year ended 31 st Mar 2010 Year ended 31 st Mar 2009 USD INR USD INR Opening Balance 450,000 20,313,000 450,000 22,927,500 Additional provision during the - - - year Provision utilized during the - - - year Closing balance 450,000 20,313,000 450,000 22,927,500 Page 5

4. LEASES The Company is a lessee under various operating leases. Rental expenses for operating leases for the year ended March 31 st, 2010 are as follows: - Year ended 31 st Mar 2010 Year ended 31 st Mar 2009 USD INR USD INR Lease rent expenses 325,677 14,701,016 188,113 9,584,357 5. SEGMENT REPORTING The Company provides software consulting and information technology support services. The disclosures as required under Accounting Standard AS 17 on segment reporting have not been provided as the Company deals only in one business segment. As the Company also exports its products and services, the secondary segment for the Company is based on the location of its customers. Information on the geographic segment is as follows: - Year ended 31 st March 2010 Year ended 31 st March 2009 America Asia Total USD INR USD INR 89,287,167 40,30,422,764 75,583,524 38,50,980,549 3,363,500 1,51,828,390 2,296,800 1,17,021,960 92,650,667 41,82,251,154 77,880,324 39,68,002,509 Information on operating income, net income, assets and liabilities has not been provided by location of customers as such information is not realistically allocable and identifiable. 6. RELATED PARTY TRANSACTIONS In the normal course of business, the Company enters into transactions with affiliated Companies. The names of related parties of the Company as required to be disclosed under Accounting Standard 18 are as follows: - a) Holding Company Infinite Computer Solutions (India) Ltd., India b) Fellow subsidiaries and other companies which do not exercise control or significant influence over the company Infinite Computer Solutions Pte. Ltd., Singapore Infinite Computer Solutions Ltd., UK Infinite Infosoft Services Pvt. Ltd., Gurgoan Infinite Convergence Solutions, Inc Page 6

6. RELATED PARTY TRANSACTIONS (CONTD ) c) Enterprises over which key management INSTOS Inc., USA personnel is able to exercise significant Influence. d) Subsidiary Companies Comnet International Company, USA India Comnet International Pvt. Ltd., India e) Whole Time Director(s) of the Company Mr. Sanjay Govil Included in the financial Statements are the following amounts relating to transactions with related parties:- Sl. No. Year ended 31 st March 2010 Year ended 31 st March 2009 USD INR USD INR a) Revenue Holding Company Infinite Computer Solutions (India) Ltd -Consulting & Project Revenue 3,171,516 1,43,162,232 2,296,800 1,17,021,960 -Recovery of Expenses 36,970 1,668,826 37,862 1,929,069 Fellow subsidiaries and other companies which do not exercise control or significant influence over the Company Infinite Infosoft Services Pvt. Ltd, India -Consulting & Project Revenue 191,984 8,666,158 - - INSTOS Inc, USA -Consulting & Project Revenue 13, 584,766 6,13,216,337 35, 798,896 18,23,953,751 -Recovery of expenses 81,100 3,660,854 18,212 927,901 -Miscellaneous Receipts 1,208 54,529 - - Subsidiary Companies Comnet International Company, USA -Consulting & Project Revenue 729,600 32,934,144 - - -Dividend Income - - 500,000 25,475,000 Page 7

Sl. No. Year ended 31 st March 2010 Year ended 31 st March 2009 USD INR USD INR b) Expenses Holding Company Infinite Computer Solutions (India) Ltd., India - Purchased Services 10,851,345 4,89,829,713 9,113,083 4,64,311,579 -Reimbursement of Expenses - - 11,735 597,898 - Interest on loans 446,249 20,143,680 447,997 22,825,447 Fellow subsidiaries and other companies which do not exercise control or significant influence over the company Infinite Computer Solutions Ltd, UK -Purchased Services 69,836 3,152,397 244,857 12,475,464 Infinite Infosoft Services Pvt. Ltd, India -Purchased Services 2,891,400 1,30,517,796 - - Enterprises over which key management Personnel is able to exercise significant Influence INSTOS Inc, USA - Sales Discount - - 17,603 896,873 - Salaries & Wages 341,061 15,395,494 505,725 25,766,689 - Staff Welfare 12,408 560,097 18,108 922,603 - Insurance - - 2,211 112,650 -Travelling Conveyance 27,246 1,229,884 20,537 1,046,360 - Donation - - 12,150 619,043 - Business Promotion 12,480 563,347 3,211 163,600 -Membership/Subscription 32 1444 1,095 55790 -Legal & Professional Charges - - 207,678 10,581,194 -Lodging Expenses 59 2,663 - - -Printing & Stationery 94 4,243 347 17,680 -Communication Expenses 13,300 600,362 5,323 271,207 Page 8

Sl. No. Year ended 31 st March 2010 Year ended 31 st March 2009 USD INR USD INR -Utilities 954 43,064 414 21,093 -Bank Charges 614 27,716 155 7,897 -Marketing and selling - expenses - 51,990 2,648,891 -Miscellaneous Expenses - - 98 4,993 -Service Charges -Bad debts 27,000-1,218,780-36,000 17367 1,834,200 884,849 - Rent 87,500 3,949,750 Whole Time Directors - Salaries & Wages - - 99,000 5,044,050 - Rent 40,800 1,841,712 40,800 2,078,760 c) Loans Loan from Holding Company 5,500,000 280,225,000 Instalments paid to Holding Company - - (250,000) (1,273,7500) Advance from Subsidiaries: Comnet International 1,360,000 Company, USA 61,390,400 1,808,951 92,166,053 Advance from Fellow subsidiaries and other companies which do not exercise control or significant influence over the company - Infinite Convergence Solutions, Inc 533142 24,066,030 - - d) Advances Advance given/repaid to Subsidiaries: Comnet International Company, USA 2,115,000 95,471,100 -- - Advance given/repaid to Fellow subsidiaries and other companies which do not exercise control or significant influence over the company - Infinite Convergence Solutions, Inc 533142 24,066,030 - - e) Balance Outstanding as at the year/period end Receivables From Holding Company - Infinite Computer Solutions(India) Ltd, India 144,630 6,528,598 986,792 50,277,052 Page 9

Sl. No. Year ended 31 st March 2010 Year ended 31 st March 2009 USD INR USD INR From Subsidiary Company Comnet International Company, USA 729,600 32,934,144 - - Enterprises over which key management Personnel is able to exercise significant Influence -INSTOS Inc, USA 760,754 34,340,436 7,897,256 4,02,365,193 Fellow subsidiaries and other Companies which do not exercise control or significant influence over the Company - Infinite Computer Solutions Ltd, UK 137,940 6,226,612 137,940 7,028,043 - Infinite Infosoft Services Pvt. Ltd, India 56,921 2,569,414 - - Unbilled Receivables Holding Company Infinite Computer Solutions(India) Ltd, India - - - - Enterprises over which Key management Personnel is able to exercise significant Influence -INSTOS Inc, USA - - - - Payables Holding Company Infinite Computer Solutions (India) Ltd, India - Current Liabilities 2,301,145 1,03,873,685 2,512,018 1,27,987,317 - Interest Accrued 440,137 19,867,784 - - - Unsecured Loans 5,250,000 2,36,985,000 5,250,000 2,67,487,500 Subsidiary Company - Comnet International Company, USA 1,053,951 47,575,348 1,808,951 92,166,053 Fellow subsidiaries and other Companies which do not exercise control or significant influence over the Company - Infinite Computer Solutions Pte. Ltd., Singapore. 6,234 281,403 6,234 317,622 - Infinite Computer Solutions Ltd, UK 92,693 4,184,162 140,100 7,138,095 - Infinite Infosoft Services Pvt. Ltd., India 940,000 42,431,600 - - Page 10

Sl. No. Unearned Revenue Enterprises over which key management Personnel is able to exercise significant Influence Year ended 31 st March 2010 Year ended 31 st March 2009 USD INR USD INR -INSTOS Inc, USA - - 361,350 18,410,783 7. PROPERTY, PLANT & EQUIPMENT Sl. No. Year ended 31 st March 2010 Year ended 31 st March 2009 USD INR USD INR Property, Plant & Equipment comprises: Computer Equipment 410,236 18,518,053 445,459 22,696,137 Software 93,815 4,234,809 99,488 5,068,895 Furniture & fixtures 93,558 4,223,208 92,226 4,698,930 Office equipment 109,585 4,946,666 106,734 5,438,099 Intangible Assets 55,000 2,482,700 55,000 2,802,250 Property, plant and equipment, Cost 762,194 34,405,436 798,907 40,704,311 Less: Accumulated depreciation (475,706) (21,473,369) (456,925) (23,280,378) Property, plant and equipment, net 286,488 12,932,067 341,982 17,423,933 8. EARNINGS PER SHARE Following are the particulars relating to computation of earnings per share and of basic and diluted earnings per equity share:- Sl. NO. Year ended 31 st March 2010 Year ended 31 st March 2009 USD INR USD INR a) Net Profit / (Loss) for the period 1,655,855 74,745,248 1,304,774 66,478,178 Add: Prior period Adjustments -- -- (14,831) (755,639) Profit after tax wholly attributable to Equity Shareholders 1,655,855 74,745,248 1,289,943 65,722,539 Page 11

Sl. NO. Year ended 31 st March Year ended 31 st March 2009 2010 USD INR USD INR b) Weighted Average number of equity shares 50,000 50,000 50,000 50,000 outstanding c) Nominal Value of Equity Shares (INR) 1 45.14 1 50.95 d) Basic and Diluted Earnings per Share 33.12 1494.90 25.80 1,314.45 9. INCOME TAXES In accordance with Accounting Standard 22 relating to Accounting for Taxes on Income, the deferred tax credit as arising under US tax laws and as estimated by the management of USD 733,924/- (INR. 33,129,329/-) [Previous Year- USD 685,351/- (INR 34,918,633/-)] for the current period has been recognized in the statement of income. The tax effect of significant timing differences, that reverse in one or more subsequent years, gave rise to the net deferred tax assets as at March 31, 2010 as under: - Sl. No. Year ended 31 st March 2010 Year ended 31 st March 2009 USD INR USD INR a) Deferred Tax Assets Accrued Vacation 125,423 5,661,594 108,764 5,541,526 Allowance for Bad Debt 67,288 3,037,380 99,651 5,077,218 General provisions 173,790 7,844,881 173,790 8,854,601 Inter Company Balances 1,287,528 58,119,014 1,024,248 52,185,436 Accrued Compensation adjustments 769,030 34,714,014 320,840 16,346,798 Adjustments relating to recognition of revenue/ expense on percentage completion method 217,804 9,831,673 198,423 10,109,651 Other expenses 1668 75,292 -- -- Sub Total a) 2,642,531 1,19,283,848 1,925,716 98,115,230 b) Deferred Tax Liabilities Adjustments relating to recognition of revenue/ expense on percentage completion method -- -- -- -- Depreciation & Other Expenses 76,873 3,470,047 93,982 4,788,383 Sub Total b) 76,873 3,470,047 93,982 4,788,383 c) Net Deferred Tax Assets (a-b) 2,565,658 1,15,813,801 1,831,734 93,326,847 Page 12

10. INVESTMENT Pursuant to the Stock Purchase agreement dated 8 th August 2007 entered into with the Share holders of Comnet International Company for the acquisition of 100 % of the equity share capital of Comnet International Company, an additional consideration of USD 1,500,000/- (INR 67,710,000/-) has been paid during the year as final settlement and has been treated as the cost of investment. 11. There are no unpaid over-due amounts, as of March 31 st, 2010, due to Small scale and Medium Enterprises. This information has been compiled in respect of parties to the extent they could be identified as Micro, Small scale and Medium enterprises on the basis of the information available. This has been relied upon by the auditors. 12. STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES - a. Comnet International Company i. The Company (Infinite Computer Solutions, Inc.) holds 40,000 (previous year- 40,000) equity shares of USD 1,000/- [INR 45,140/-] (previous year USD 1,000/-[INR 50,950/-] in the aggregate constituting 100 % of the equity share capital of Comnet International Company as on the close of the period, i.e., as on March 31 st, 2010. Comnet International Company is consequently a subsidiary of the Company with effect from August 8, 2007 which position continues upto and as on March 31 st, 2010. [Note: Comnet International Company was incorporated on Sep 23, 1994 with Federal id No. 36-3988119 at Springfield and has its Registered Office situated at Oakbrook Terrace, Illinois, USA. The share capital of the said Company as at March 31 st, 2010, is USD 1,000/- (previous year USD 1,000/- in the aggregate comprising of 40,000 Equity Shares]. ii. iii. The subsidiary Company (Comnet International Company) has earned a net profit / (loss) after tax of USD 282,573/- [INR 12,755,345/-] for the year ended March 31 st, 2010 (previous year ended 31 st March 2009 - USD 881,023/- [INR 44,888,122/-]) as per the audited accounts of the Company, which has not been incorporated in the holding Company s books. Expenditure incurred by the said subsidiary, which amount, has not been dealt with in the books of account of the Company INR NIL b. India Commet International Pvt Ltd i. Comnet International Co., (the subsidiary of the Company) holds 100,000 equity shares of INR 10/- each (of which one share is held in the name of Mr. Upinder Zutshi, as nominee of the Company to fulfill the minimum number of share holders as per the provisions of Sections 45 and 49 of the Indian Companies Act, 1956) constituting 100 % of the equity share capital of India Comnet International Pvt. Ltd (an Indian Company) as on the close of the period, i.e., as on March 31 st, 2010. India Comnet International Pvt. Ltd is consequently also a subsidiary of the Company (by virtue of being a Page 13

subsidiary of the Company s subsidiary Company) with effect from August 8, 2007 which position continues up to and as on March 31 st, 2010. [Note: India Comnet International Pvt Ltd was incorporated on Sep 15 th, 1995, under Company No.18-32943 with its Registered Office situated at Chennai, Tamil Nadu State, India. The paid-up (equity) share capital as at March 31 st, 2010 is INR 1,000,000/- (previous year INR 1,000,000/- comprising of 100,000 Equity Shares of INR 10/- each]. ii The subsidiary Company (India Comnet International Pvt Ltd) has earned a net profit / (loss) after tax of (INR 3,623/-) [(USD 163,542/-)]for the year ended March 31 st, 2010 (previous year ended 31 st March 2009 - USD 1,29,923/- [INR 6,619,570/-] as per the audited accounts of the Company, which has not been incorporated in the holding Company s books. iii Expenditure incurred by the said subsidiary, which amount, has not been dealt with in the books of account of the Company INR NIL 13. Previous year s figures have been regrouped and/or re-arranged wherever necessary to conform to the current year s groupings and classifications. 14. The accounts are expressed in Indian Rupees (INR) by adopting standard exchange rate of 1 USD = Rs. 45.14 (Previous year 1 USD =Rs. 50.95) for disclosures in Indian Currencies. "Subject to our report of even date" For LAWRENCE TELLIS & ASSOCIATES Chartered Accountants For INFINITE COMPUTER SOLUTIONS, INC. (ROHAN MIRANDA) Partner (ICAI.M.NO. 22772) Bangalore, India May 07, 2010 (SANJAY GOVIL) Director New Delhi, India May 07, 2010 Page 14