Kiev Finance Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2008

1. We have audited the attached Balance Sheet of KIEV FINANCE LIMITED, Koikatta as on 31st March 2008, the Profit & Loss Account and also 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 ,as amended by the Companies (Auditors Report)(Amendment) Order 2004, issued by the Central Government of India in terms of Section 227 (4-A) of the Companies Act, 1956, and on the basis of such test checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, during the course of Audit, we enclose in the Annexure hereto 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 explanation, which to the best of our knowledge and belief were necessary for the purpose 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 accounts maintained.

iv) In our opinion, Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report generally comply with the Accounting Standard referred to in section 211 (3C) of the Companies Act, 1956 to the extent applicable except AS - 6 relating to Depreciation Accounting, AS -10 relating to Accounting for Fixed Assets and AS - 28- relating to Impairment of Assets and also subject to what is stated in para 4 (vi):

v) On the basis of written representations received from the Directors of the Company as on 31st March 2008 and taken on record by the Board of Directors, none of the director is disqualified as on 31st March 2008 from being appointed as Director of the Company under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi) Attention of the members is invited to the following:-:

- Non -Provision of Interest including pens! interest, liquidated damages , other costs, if any, accrued and due on Secured Loan and Fixed Deposit taken from public for the Current year as well as for earlier years.

- Depreciation provision on Fixed Assets for the Current year as well as for ea that Fixed Assets are over stated and accumulated losses are still understate

- Provision far diminution in value of Quoted and Unquoted Investments as on 01.03.2008

- Provision far diminution in value of Quoted and Unquoted Investments as on01.03.2008

- Recognition of diminution in value of Shares held as Stock -in trade as on 31.03.2008

- Write -off of bad and doubtful Sundry Debtors and Loans & Advances which are long over due,

- Write -Back of Current Liabilities which are not required to be paid, won -Forfeiture of Calls in arrear,

- All Debit and Credit balances which are taken as per book value . are subject to confirmation and consequential adjustments, if any, on reconciliation of the accounts,

- Won- recognition of impairment of Assets even though the conditions for the same exist

vii) In our opinion and to the best of our information and according to the explanation given to us ,the financial statements .subject to our observations as stated in para 4(vi) above, having consequential impact (presently unascertainable)on the loss for the year, accumulated loss (including loss of earlier years un-provided for), Secured Loans , Unsecured Loans, Fixed Assets , Investments , Current Assets and Current Liabilities , earning per share etc , read together with the Significant Accounting Policies and Notes thereon, give the information as 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 :: -

(a) in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2008 and

(b) In the case of the Profit & Loss Account, 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;

ANNEXURE TO THE AUDITORS REPORT

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

1. In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) As explained to us, the fixed assets have not been physically verified by the management during the year, discrepancies between book record and physical verification, if any, will be determined only after the verification is carried out

(c) The Company has not disposed off substantial part of Fixed Assets during the year, which could affect the going concern status of the Company.

2. In respect of its Inventories:

(a) As explained to us, inventories represents shares held as stock in trade, No Physical verification of Inventories have been carried out by the management ,as such discrepancies between book recordand physical verification, if any, will be determined only after the verification is carried out.

(b) The Company is maintaining proper records of Inventory.

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 Act.

(b) The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. The internal control system needs to be strengthened further to commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5.(a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register 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 any party during the year have been made at prices which are reasonable having regard to the prevailingmarket prices at the relevant time.

6. The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under and also under guidelines issued by RBI. As informed the management will continue to make its best efforts to repay the outstanding fixed deposits.

7. The company does not have any internal audit system, since the business activities are not carried out since June 1997.

8. We are informed that the Centra! Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956.

9. According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. . According to the information and piXpliltefJSfcjsaiven to us, no undisputed amounts payable in respect of aforesaid dues were outstanding asoYi , for a period of more than six months from the date they become payable

10. The company has accumulated losses as at 31st March 20GS and it has incurred cash losses in the financial year ended on that date and also in the immediately preceding financial years.

11. The Company has defaulted in repayment of its Cash Credit facilities obtained from the bank in earlier years.

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. The provisions of any special statute applicable to chit fund /nidni / mutual benefit fund/societies are not applicable to the company.

14. The company has maintained proper records of transactions and contracts in respect of dealing in or trading in shares, securities, debentures and other investments and timely entries have been made therein .All shares debentures and other investments have been held by the Company in its own name

15. As informed to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16 The Company has not obtained any term loans from Bank.

17. On an overall examination, of the balance sheet of the Company, we are of the opinion that no short-term funds have been used for long-term investments.

18. 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 during the year.

19. The Company has not issued any debentures during the period under review. Accordingly Clause 4(xix) of Companies (Auditors Report) Order, 2003 is not applicable.

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

21. During the course of our examination of the books and records of the company, carried out 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 S.R.Ghedia & Associates (Chartered Accountants)

For S.R.Ghedia & Associates (Chartered Accountants)

Place : Mumbai (Sunit Jain)

Date : 30m July, 2005 Partner M. No. 059181