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Auditor Report of Anar Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Anar Industries Ltd. ("the Company"), which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of 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 the assets of the Company and for preventing and detecting frauds and other 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 view and are 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 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 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 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 internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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, of the state of affairs of the Company as at March 31, 2015, and its loss and its 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 ("the Order") issued by the Central Government of India in terms of sub – section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 purpose of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as 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.

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 March, 31, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The company has not any pending litigations on its financial position in its financial statements.

ii. The company does not require any provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any.

iii. The Company does not require to transfer to any amount to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 of the Independent Auditor's report of even date to the members of Anar Industries Limited on the financial statements for the year ended March 31, 2015, we report that:

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

b) Physical verification of major assets was conducted by the Management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification as with the book of record.

2)a) The inventory excluding stocks in transit has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventories as compared to book records were not material.

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, 2013. Therefore the requirements of sub-clause (a) and (b) of clause (iii) are not applicable to the Company.

4) In our opinion, and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanation given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weakness in the aforesaid internal controls.

5) The Company has not accepted any deposits from the public within the meaning of section 73 to 76 of the Companies Act, 2013, and rules framed there under.

6) The maintenance of cost records under section 148(1) of the Companies Act, 2013, is not applicable to the Company.

7)a. 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 undisputed statutory dues in respect of profession tax, service tax, TDS, excise duty, provident fund, custom duty, investor education protection fund, employees' state insurance, income tax, sales tax, wealth tax, purchase tax, entry tax, municipal tax and other material statutory dues applicable, with the appropriate authorities.

b. According to the information and explanation given to us, and the records of the Company examined by us, there is no disputed tax or statutory dues as on 31.03.2015.

c. According to the information and explanation given to us, there is no declaration of dividend during the financial year 2014-15 by the Company; hence the question of transferring amount to investor education and protection fund does not arise.

8) The Company have accumulated loss of Rs. 1,17,92,071/- as per the Balance Sheet as at the end of the financial year. The Company has incurred cash loss of Rs. 62,97,213/- during the financial year and has also incurred cash loss of Rs. 19,26,168/- during the immediately preceding financial year.

9) According to the records of the Company examined by us and the information and explanation given to us, the Company has no dues to financial institution or banks or debentures holders as at balance sheet date. According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

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

11) The Company has not taken any term loan from banks or financial institutions.

12) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For J. K. Parmar & Co.

Chartered Accountants

Sd/-

Firm No. 107599W

PLACE: AHMEDABAD

DATE: 30.05.2015


Mar 31, 2014

We have audited the accompanying financial statements of ANAR INDUSTRIES LIMITED ("the Company") which comprise the balance sheet as at March 31, 2014, and the statement of profit and loss and the cash flow statement for the year ended, and a summary of 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 statements that give a true and fair view of the financial position, financial performance and cash flow of the company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of general circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance 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.

Auditor''s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We concluded our audit in accordance with the standards on auditing issued by the institute of chartered accountant of India. Those standards require that we comply with 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 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 statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedure that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

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 subject to note no. 21 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 March 31,2014;

(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.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditors Report) Order, 2003 ("the order") issued by the central government in terms of section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

C. The balance sheet, statement of profit and loss and 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, and cash flow statement comply with the Accounting Standers referred to in sub-section (3C) of section 211 of the Companies Act, 1956, read with the general circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e. On the basis of written representations received from the directors as on March 31, 2014, taken on record by the board of directors, none of the director is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO IN INDEPENDENT AUDITOR''S REPORT RE: ANAR INDUSTRIES LIMITED ("THE COMPANY")

[Referred to in paragraph (1) under the heading ("Report on other Legal and Regulatory Requirements") of our report of even date]

1 (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) As explained to us, all the fixed assets have been physically verified by the management, interval of verification which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. As informed to us, no material discrepancies were noticed on such physical verification;

(c) In our opinion, the Company has not disposed off substantial part of its fixed assets during the period and the going concern status of the Company is not affected.

2 As explained to us, there is no inventory; hence this clause is not applicable with respect to inventory.

3 In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

(a) The Company has granted unsecured loans to one party. In respect of the said loans, the maximum amount outstanding at any time during the period is Rs. 87.91 lacs and the yearend balance is Rs. 87.91 lacs;

(b) In our opinion and according to information and explanations given to us, the rate of interest, where applicable and the other terms and conditions of the loans given are not prescribed by the Company hence we are unable to give any comment.

(c) In respect of said loans, the terms of repayment and interest are not prescribed hence we are unable to give comment on overdue.

(d) The Company has not taken any loan during the period from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable.

4 In our opinion and according to the 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. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5 To the best of our knowledge and belief and according to the information and explanation given to us, there are no contracts or arrangements that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

6 The Company has not accepted any deposit from the public during the year under Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. According to information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or the Reserve Bank of India or any Court or any Court or any other Tribunal.

7 In our opinion, the company has an internal audit system commensurate with the size and the nature of its business.

8 The Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Act for the Company.

9 In respect of statutory dues:

(a) According to the records of the Company, the company has been generally regular in depositing with statutory authorities, undisputed statutory dues, including provident fund, income tax, sales tax, wealth tax, service tax, custom duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding, as at March 31, 2014 for a period of more than six months from the date they became payable except service tax payable Rs. 187460 for the year 2010-11 and TDS payable of Rs. 92,202 for the AY 2014-15.

10 The Company has accumulated losses at the end of the financial period, which are less than fifty percent of its net worth. The Company has incurred cash losses during the period covered under the audit, and also has incurred cash losses in the immediately preceding financial year.

11 Based on the information and explanations given by the management, we are of opinion that the Company has not defaulted in repayment of dues to any financial institutions and banks. The Company has not issued debentures.

12 The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debenture 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 paragraph 4 of the Order are not applicable.

14 In our opinion and according to information and explanation given to us, the company is not a dealer or trader in securities. The company has not invested surplus funds in marketable securities and mutual funds.

15 In our opinion and according to information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions, hence the question of terms and condition of that guarantee is not arise.

16 Based on the information and explanation given to us by the management, the term loans were applied for the purpose for which the loans were raised.

17 According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

18 The Company has not made during the period any preferential allotment of shares to companies, firms, parties covered in the register maintained under section 301 of the Companies Act 1956.

19 In our opinion and according to the information and explanations given to us, the Company has not issued any secured debentures during the period covered by our report. Accordingly, provisions of clause (xix) of paragraph 4 of the Order are not applicable.

20 The Company has not raised any money by public issues during the period.

21 Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we have not come across any instance of material fraud on or by the Company, noticed or reported during the period, nor have been informed of such case by the management.

For and on behalf of J. K. PARMAR & CO. Chartered Accountants Firm Registration No. 105799W

J. K. Parmar Proprietor Membership No. 34138 Place: Ahmedabad Date: 30-05-2014


Mar 31, 2013

Report on financial statements

We have audited the accompanying financial statements of ANAR INDUSTRIES LIMITED which comprise the Balance Sheet as at March 31, 2013, and the statement of Profit & Loss and Cgsh Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flow of the company in accordance with the Accounting Standards referred to in sub-section 211 of the companies Act, 1956 .This responsibility includes the design, implementation and maintenance 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.

Auditor''s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We concluded 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 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 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 statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

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 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 March 31,2013;

(b) in the case of the statement of profit and loss, of the LOSS for the year ended on that date; and © 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 (Auditors Report) Order, 2003 issued by the central government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the balance sheet, statement of profit and loss and 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, and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the companies Act, 1956;and

e. On the basis of written representations received from the directors as on March 31,2013, and taken on record by the board of directors, none of the director is disqualified as on March 31,2013, from being appointed as a director in terms of clause (g) ofsub-section(1)ofsection274ofthecompaniesAct, 1956.

1 (a) The Company is maintaining proper record to show full particulars including quantitative detail and situation of all fixed assets.

(b) We are informed that the Company has formulated a programme of physical verification of all the fixed assets over a period of three years which, on our opinion, is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the physical verification of the fixed assets has been carried out by management during the year and no material discrepancies were noticed on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

2 (a) As explain to us, there was no inventory hence the same have not been physically verified by management at reasonable intervals during the year.

(b) As per the information given to us, the procedures of physical verification of inventory followed by management are, in our opinion, reasonable and adequate in relation to the size of the company and the nature of the business.

(c) The Company is maintaining proper record of inventory. There was no discrepancies noticed on verification between the physical stocks and the book records.

3 (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act,1965. Accordingly, paragraphs 4(iii)(b), (c) and (d) of the Order are not applicable.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firm and other parties covered in the register maintained under section 301 of the Companies Act, 1965. Accordingly, paragraphs 4(iii) (f) and (g) of the Order are not applicable.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanation given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

5 According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956; accordingly paragraph 4(v) (b) of the Order is not applicable.

6 The Company has not accepted deposits from the public and in our opinion and according to the information and explanation given to us, the directives issued by the Reserve bank of India and the provisions of section 58A and 58AA and the relevant provision of Companies Act, 1956 and rules framed there under are not applicable.

7 In our opinion, the company has an internal audit system commensurate with its size and the nature of business.

8 The maintenance of cost records pursuant to the Companies (Cost Accounting Records) rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 is not applicable to the Company. Therefore the provisions of clause(VIII)of paragraph 4 of the Companies Auditor Report Order, 2003 is not applicable to the Company.

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 un disputed statutory dues including provident fund, investor education and protection fund, employee state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

According to the information and explanations given to us, there were no undisputed amounts payable in respect of provident fund, investor education and protection fund, employee state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues outstanding as at March 31,2013 for a period of more than six months from the date they become payable except service tax payable Rs. 1,87,460 for the year 2010-11.

10 The Company has accumulated loss of Rs. 28,09,196/- as at March 31, 2013 and it has incurred cash losses of Rs.7,60,900/-in the financial year ended on that date.

11 According to the records of the Company examined by us and to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

12 According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

13 The provisions of any statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

14 In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities. The Company has not invested surplus funds in marketable securities and mutual funds.

15 In our opinion and according to the information and explanations given to us, No guarantee is given by the Company for loan taken by subsidiary or associates companies from banks or financial institutions.

16 In our opinion and according to the information and explanations given to us, no bank term loan is applied during the year.

17 According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on shortterm basis have been used for long term purpose.

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 Companies Act 1956 during the year.

19 During the year the Company has not issued any debentures.

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 practice in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by management.

PLACE: AHMEDABAD for J K PARMAR & Co.

DATE: 21/05/2013 Chartered Accountants

Firm No. 107599W



(J K PARMAR)

Proprietor

M.NO.34138


Mar 31, 2010

We have audited the attached Balance sheet of ENRICH INDUSTIRES LIMITED {after restructuring arrangement made as per order of Honorable Gujarat High Court Dt. 17.06,2010) on 31st March 2010 and the Profit & Loss account for the year ended on that date annexed thereto and cash flow statement for the period ended on that date. 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.

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 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.

1) 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, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2) Further to our comments in the annexure referred to above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of the books;

c) The balance sheet, profit & loss account and cash flow statement dealt by this report are in agreement with the books of account;

d) In our opinion, the balance sheet and profit & loss account dealt by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the companies act, 1956.

e) On the basis of written representations received from the directors, and taken on record by the board of directors, we report that none of the director is disqualified as at 31st March, 2010 from being appointed as a director in terms of clause (q) of sub-section (1) of section 274 of the companies act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the companies act, 1956 in the manner so required and subject to we have relied on audited accounts of Softcom Division of Anar Softcom Pvt. Ltd. in preparing the final accounts and notes no. 2(1),(II),(III) & (VI) give a true and fair view in conformity with the accounting principles generally accepted in India;

i. In the case of the Balance Sheet, of the State of Affairs of the company as at March 31, 2009; and

ii. In the case of the Profit & Loss account, of the Profit for the year ended on that date; and

iii. In the case of cash flow statement, of the cash flow for the year ended on that date.

Annexure to the Auditors Report Referred to in paragraph 1 of our report of even date.

1. The company has maintained proper records of fixed assets showing full particulars including quantitative details and location. Regarding fixed assets of softcom division of Anar Softcom Pvt. Ltd. has been taken from the audited accounts submitted to the company.

2. As explained to us, as at 31.03.2010 there is no stock of trading goods. In our opinion and according to the information and explanations, given to us, the procedure of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of the busi- ness.

The company has maintained proper record of inventory. As explained to us, there were no material discrepan- cies noticed on physical verification of the having regard to the size of the operation of the company.

3. We are informed that the company has taken/granted loans-unsecured, from/to companies, firms or other parties listed in the register maintained under section 301 of the companies act, 1956. The closing balance on 31.03.2010 are NIL

The company has not taken/given interest on such loans. The terms & conditions of such loans are not prima facie prejudicial to the interest of the company.

The repayment of such loans has not been stipulated so we cannot offer any remarks on recovery/payment/ overdue of such loans.

4. In our opinion, and according to the information and explanation given it us, there are adequate internal control procedures commensurate with the inventory and fixed assets and for the sale of goods. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weak- ness in internal control.

5. In our opinion, and according to the information and explanation given to us, there are no transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies act, 1956 and aggregating during the year to Rs. 5,00,000 or more in respect of any party, made at price as available with the company.

6. In our opinion, and according to the information and explanation given to us, the company has complied with the provision of section 58A and 58AA.

7. in our opinion, the company has an internal audit system commensurate with the size of nature of its business.

8. The central Government has not prescribed maintenance of cost Records section 209(1) (d) of the companies act, 1956 in respect of activities of the company.

9. According to the information and explanations given to us, there are no undisputed statutory dues payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, sale-tax, wealth tax, custom duty, excise duty, cess which are outstanding as at 31/03/2010 for a period of more than six month from the date they became payable.

10. The company has accumulated losses at the end of the financial year, which is less than fifty percent of net worth. As per scheme of arrangement of restructuring as per order of Honorabie Gujarat High Court, the com- pany has written of unrealizable stock, debtors and loans and advances by reduction of paid up share capital.

11. The company has not defaulted in repayment of dues to bank.

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

13. The company under audit is not chit Fund/Nidhi etc. as specified paragraph 13 of CARO-2003.

14. According to the information and explanation given to us, proper records have been maintained in respect of transactions and contracts, in shares, securities, debenture and other investments and timely entries have been made therein. The shares and other securities have been held by the company in its own name.

15. According to the information and explanation given to us, the company has not given any guarantee for loans taken by other form bank or financial institute.

16. The company has not taken any term loans and hence requirement of reporting regarding application of terms loans does not arise.

17. As informed to us, during the year the company has not raised short terms/long term funds.

18. We are informed that the company has not made any preferential allotment of shares to companies, firms or order parties listed in the register maintained under section 301 of the companies act, 1956. As per scheme of arrangement of restructuring as per order of Honorable Gujarat High Court and approval of stock exchange and shareholders of the company, the company has to issue equity shares to the promoters/ shareholders of Anar Softcom Pvt. Ltd. in consideration for transfer of business of softcom division with the company.

19. The company has not issued debentures and hence requirement of reporting regarding creation of securities in respect of debentures Issued does not arise.

20. The Company has not raised any money by way of Pubiic Issues during the year.

21. On the basis of records and information provided by the companys management, no fraud on or by the com- pany has been noticed or reported during the course of our Audit.

For J, K. PARMAR & Co.

Chartered Accountants

Place: Ahmedabad

Date: 14/09/2010. (J. K. PARMAR)

Proprietor

M. No. 34138.

 
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