Ergon Power Corporation Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2015

We have audited the accompanying financial statements of ERGON POWER CORPORATION LIMITED, ("the Company"), which comprise the Balance sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. '

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts ) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the zz~zz of the Company and for preventing and detecting frauds and othe; irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair and free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We have conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal financial control relevant to the Company's preparation of the financial statements that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act 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, 2015;

(b) in the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereafter referred to the "order") 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 give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and 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 for as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account maintained.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company does not have any pending litigations which would impact its financial positions in its financial statements.

(ii) The Company has not entered into any long-term contracts including derivatives contracts requiring provision under applicable laws or accounting standards, for material foreseeable losses and

(iii) There has been no delay in transferring amounts, required to be transferred if any, to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 2013.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements, of our report of even date)

1. According to the information and explanation given to us, the company do not hold any fixed assets during the financial year, hence maintenance and physical verification of fixed assets do not arise.

2. The company has not carried any manufacturing activity. Accordingly, the provisions of paragraph 3 Clause (ii) of the Companies (Auditor's Report) Order, 2015 are not applicable to this company.

3. The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. Accordingly, the sub-clauses (a) and (b) are not applicable to the company.

4. In our opinion and according to information and explanations given to us, there is 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.

5. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under are applicable.

6. The maintenance of cost records has not been prescribed by the Central Government under subsection (1) of the section 148 of the Companies Act.

7. (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues as applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2015 for a period of more than six months from the date they became payable except the remittance of TDS amounting to Rs.1,66,040/-

b) According to the information and explanations given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute.

(c) According to information and explanations given to us, there were no amounts which were required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act.

8. The company has accumulated losses as on 31.03.2015 of Rs.1033.05 lakhs and has incurred cash losses of Rs.2.61 lakhs during the financial year ended on that date and Rs.2.40 lakhs in the immediately preceding financial year.

9. According to the information and explanation given to us, the company has not obtained any term loans from financial institution or banks thereby default in repayment of dues to any financial institution or banks does not arise.

10. According to the information and explanation given to us, the company has not given any guarantees for the loans taken by others from banks or financial institutions.

11. In our opinion and according to the information and explanations given to us and on an overall examination, the company has not availed any term loan during the year.

12. To the best of our knowledge and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

for RAMANA REDDY & ASSOCIATES CHARTERED ACCOUNTANTS Firm Regn. No. 003246S

Sd /- (CA. RAMANA REDDY A.V.) PARTNER Membership No.024329

PLACE: HYDERABAD DATE : 31-08-2015 .

---

Mar 31, 2014

We have audited the accompanying financial statements of M/s. ERGON POWER COR- PORATION LIMITED ("the Company"), which comprise the Balance Sheet as at 31 st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial state- ments that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"), read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility include the design, implementation and main- tenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of account- ing policies used and the reasonableness of the accounting estimates made by the Man- agement, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to pro- vide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so re- quired 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, 2014,

(b) in the case of the Statement of Profit and Loss, of the Loss of the Company for the year ended on that date and

(c) in the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we report that in the annexure on the matters specified in paragraphs 4 and 5 of the said order.

2. As required by Section 227(3) of the Act, 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 it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss & Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss & Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act, read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

(e) On the basis of the written representations received from the directors as on 31 st March, 2014 taken on record by the Board of Directors, none of the direc- tors is disqualified as on 31st March, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph (3) of our report of even date)

1. The company does not have any fixed assets thereby the maintenance of proper records, physical verification and revaluation thereof does not arise.

2. The company has not carried any manufacturing activity thereby the physical verifi- cation of stocks, procedures, discrepancies and maintenance of records does not arise.

3. (a) 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) The company has taken unsecured loans from companies, firms or other par- ties covered in the Register maintained under Section 301 of the Companies Act. 1956. The closing balance of such loan is Rs.9.14 lakhs and the opening balance is Rs.8.70 lakhs.

(c) According to the information and explanation given to us, the terms and condi- tions of such loans are not prima facie prejudicial to the interest of the company.

(d) Since the loans taken are repayable on demand, the provisions of clause 4(iii)(g) of the Companies (Auditor''s Report) Order, 2003, as amended, is not applicable to the company.

4. The company has not carried any business activity during the year under report, therefore the adequacy of internal control system commensurate with the size of the company and nature of its business does not arise.

5. (a) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in the Register maintained in pursuance of Sec. 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the company has not made any contracts or arrangements that need to be entered in the register maintained under section 301 of the Act, and exceeding the value of five lakh rupees in respect of any party during the year.

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public to which the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder are applicable.

7. The company has no internal audit system.

8. The maintenance of cost records has not been prescribed by the Central Govern- ment under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

9. (a) We were informed that the provisions of Provident Fund Act and Employees State Insurance Act are not applicable to this company. However, the company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to it except remittance of TDS.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31 st March, 2014 for a period of more than six months from the date they became payable except remittance of TDS of Rs. 1,66,040/-.

(c) According to the information and explanations given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute.

10. The company has accumulated losses as on 31.03.2014 of Rs. 1030.44 lakhs and has incurred cash losses of Rs.2.40 lakhs during the financial year ended on that date and Rs.3.26 lakhs in the immediately preceding financial year.

11. The company has not defaulted in repayment of dues to any bank or financial insti- tutions.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. 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 (Auditor''s Report) Or- der, 2003 are not applicable to this company.

14. In our opinion, the company is not dealing in or trading in shares, securities, de- bentures, and other investments. Accordingly, the provisions of clause 4(xiv) of the companies (Auditor''s Report) Order, 2003 are not applicable to this company.

15. The company has not given any guarantees for loans taken by others, from banks or financial institutions, the terms and conditions, whereof, in our opinion, are prima facie prejudicial to the interest of the company..

16. During the year under report, the company has not availed any term loan from banks or financial institutions.

17. According to the information and explanations given to us, during the year under report, the company has not availed any long-term funds or short term funds.

18. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act, 1956.

19. According to the information and explanations given to us, during the period cov- ered by our audit report, the company has not issued any debentures.

20. The company has not raised any money by public issue, during the year.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For RAMANA REDDY & ASSOCIATES CHARTERED ACCOUNTANTS. FIRM REGN. NO. 003246S

Sd/- (CA A.V. RAMANA REDDY) Partner. Membership No. 024329 PLACE: HYDERABAD DATE : 18TH AUG. 2014

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s.ERGON POWER CORPORATION LIMITED as at 31st March, 2012, the Profit and Loss Statement and the Cash Flow Statement 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 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out 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 in paragraph 3 above, we report that:

(i) 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;

(ii) 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;

(iii) The Balance Sheet, Profit and Loss Statement and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance sheet, Profit and Loss Statement 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;

(v) On the basis of written representations received from the directors, as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon and attached thereto give in the prescribed manner the information required by the Companies Act, 1956 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 2012;

(b) In the case of the Profit and Loss Statement, of the Loss for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

( Referred to in paragraph (3) of our report of even date )

1. The company does not have any fixed assets thereby the maintenance of proper records, physical verification and revaluation thereof does not arise.

2. The company has not carried any manufacturing activity thereby the physical verification of stocks, procedures, discrepancies and maintenance of records does not arise.

3. (a) 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) The company has taken unsecured loans from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act. 1956. The closing balance of such loan is Rs.7.02 lakhs and the opening balance is Rs.5.72 lakhs.

(c) According to the information and explanation given to us, the terms and conditions of such loans are not prima facie prejudicial to the interest of the company.

(d) Since the loans taken are repayable on demand, the provisions of clause 4(iii)(g) of the Companies (Auditor's Report) Order, 2003, as amended, is not applicable to the company.

4. The company has not carried any business activity during the year under report, therefore the adequacy of internal control system commensurate with the size of the company and nature of its business does not arise.

5. (a) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in the Register maintained in pursuance of Sec. 301 of the Companies Act, 1956.

(b) In our opinion, and according to the information and explanations given to us, the company has not made any contracts or arrangements that need to be entered in the register maintained under section 301 of the Act, and exceeding the value of five lakh rupees in respect of any party during the year.

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public to which the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder are applicable.

7. The company has no internal audit system.

8. The maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

9. (a) We were informed that the provisions of Provident Fund Act and Employees State Insurance Act are not applicable to this company. However, the company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2012 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 dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute.

10. The company has accumulated losses as on 31.03.2012 of Rs. 1024.78 lakhs and has incurred cash losses of Rs.2.96 lakhs during the financial year ended on that date and Rs.2.84 lakhs in the immediately preceding financial year.

11. The company has not defaulted in repayment of dues to any bank or financial institutions.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. 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 (Auditor's Report) Order, 2003 are not applicable to this 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 are not applicable to this company.

15. The company has not given any guarantees for loans taken by others, from banks or financial institutions, the terms and conditions, whereof, in our opinion, are prima facie prejudicial to the interest of the company..

16. During the year under report, the company has not availed any term loan from banks or financial institutions.

17. According to the information and explanations given to us, during the year under report, the company has not availed any long-term funds or short term funds.

18. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act, 1956.

19. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

10. The company has not raised any money by public issue, during the year.

11. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For RAMANA REDDY & ASSOCIATES

CHARTERED ACCOUNTANTS.

FIRM REGN. NO. 003246S

Sd/-

Place: Hyderabad (CA A.V. RAMANA REDDY)

Date: 27th August, 2012 Partner.

Membership No. 024329

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s.NAGARJUNA INSTITUTE OF SOFTWARE TECHNOLOGY LIMITED as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement 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 the Companies Act, 1956 of India (the Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out 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 in paragraph 3 above, we report that

(i) 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;

(ii) 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;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) 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;

(v) On the basis of written representations received from the directors, as on 31* March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act 1956;

(vi) In our opinion to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon and attached thereto give in the prescribed manner the information required by the Companies Act 1956 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 2010;

(b) In the case of the Profit and Loss account, of the Loss for the year ended on that date;

(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph (3) of our report of even date)

1. The company does not have any fixed assets thereby the maintenance of proper records, physical verification and revaluation thereof does not arise.

2. The company has not carried any manufacturing activity thereby the physical verification of stocks, procedures, discrepancies and maintenance of records does not arise.

3. (a) 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 CompaniesAct 1956.

(b) The company has taken unsecured loans from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act. 1956. The closing balance of such loan is Rs. 4.52 lakhs and the opening balance is Rs.2.35 lakhs.

(c) According to the information and explanation given to us, the terms and conditions of such loans are not prima facie prejudicial to the interest of the company.

(d) Since the loans taken are repayable on demand, the provisions of clause 4(iii)(g) of the Companies (Auditors Report) Order, 2003, as amended, is not applicable to the company.

4. The company has not carried any business activity during the year under report, therefore the adequacy of internal control system commensurate with the size of the company and nature of its business does not arise.

5. (a) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in the Register maintained in pursuance of Sec. 301 of the CompaniesAct, 1956.

(b) In our opinion, and according to the information and explanations given to us, the company has not made any contracts or arrangements that need to be entered in the register maintained under section 301 of the Act, and exceeding the value of five lakh rupees in respect of any party during the year.

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public to which the provisions of section 58A, 58AAor any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder are applicable.

7. The company has no intemalaudit system.

8. The maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the CompaniesAct, 1956.

9. (a) We were informed that the provisions of Provident Fund Act and Cnjpjoyees State

Insurance Act are not applicable to this company. However, the company is regular in depositing with appropriate authorities undisputed statutory dues including income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to K.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31* Inarch, 2010 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 dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute.

10. The company has accumulated losses as on 31.03.2010 of Rs.1018.99 lakhs and has incurred cash losses of Rs.3.07 lakhs during the financial year ended on that date and Rs.2.79 lakhs in the immediately preceding financial year.

11. The company has not defaulted in repayment of dues to any bank or financial institutions.

12. The company has not granted any loans and advances on the basis ptsecurity by way of pledgeof shares, debenturesandothersecurities.

13. In our opinion, the company is not a chit fund or a ntdhi mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to this 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 (Auditors Report) Order, 2003 are hot applicable to this company.

15. The company has not given any guarantees for loans taken by others, from banks or financial institutions, the terms and conditions, whereof, in ogr opinion, are prima facie prejudicial to the interest of the company.

16. During the year under report, the company has not availed any term loan from banks or financial institutions.

17. According to the information and explanations given to us, during the year under report, the company has not availed any long-term funds or shortterm funds.

18. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained undersection 301 oftheAct, 1956.

19. According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

20. The company has not raised any money by public issue, during the year.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit

for Ramana Reddy & Associates

Chartered Accountants

Sd/- Place: Hyderabad (CA. RAMANA REDDY A. V.)

Date : 31.08.2010 PARTNER

Membership No. 024329