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Auditor Report of Avantel Ltd.

Mar 31, 2015

We have audited the revised financial statements of the AVANTEL 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 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 and presentation 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 effectively design, implementation and maintenance of adequate internal financial controls, that were operating 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 revised 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 hereunder.

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. An audit also includes system over financial reporting and the operating effectiveness of such controls 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 revised financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the revised 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 31st March, 2015 and its Profit and its cash flows for the year ended on that date.

Other Matter

We further would like to report that we have submitted our Audit Report to the Company on the Financial Statements on 29th April, 2015 and the Board of Directors of the Company in its meeting held on 29th April, 2015, considered and approved the audited financial statement for the financial year 2014-15.

Subsequently, in the Board Meeting held on 29th July, 2015, the Board of Directors of the Company reconsidered the audited financial statement for the financial year 2014- 15 and approved the audited financial statements for the financial year 2014-15 by recommending a dividend of Rs. 1.50 (Rupee One and Fifty Paisa only) per equity share of Rs. 10/- (Rupees Te n only) each. In accordance with the decision of the Board of Directors of the Company and Note No. 2.41 of the reconsidered financial statements, we state that the financial statement approved by the Board of Directors at its meeting held on 29th April, 2015 and the reconsidered financial statements approved by the Board of Directors at its meeting held on 29th July, 2015, remain unchanged except for the provision for dividend and corporate dividend tax thereon reflected in the reconsidered statements for the financial year 2014-15. Our opinion is not qualified in respect of this matter.

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 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 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 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; and

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 give to us:

(i) The Company does not have any pending litigations which would impact its financial position;

(ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the revised financial statements for the year ended 31st March, 2015, we report that:

1.1 The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

1.2 The fixed assets have been physically verified by the management. The Company has a regular programmed of verification of fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification.

2.1 The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

2.2 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.

2.3 The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3.1 In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 189 of the Companies Act, 2013 ('the Act'). Accordingly, clauses (iii)(a) and (iii)(b) of the Order are not applicable to the Company.

4.1 In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

5.1 The Company has not accepted any deposits from the public.

6.1 We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section 148 of the Act in respect of the Company's products to which the said rules are made applicable, and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records since the same will be carried out by the cost auditors with a view to determine whether they are accurate.

7.1 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, value added tax, cess and any other statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, value added tax and cess were in arrears, as at 31st March, 2015, for a period of more than six months from the date they became payable.

7.2 According to the information and explanation given to us, the Company does not have disputed liability in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty, value added tax and cess.

7.3 According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

8.1 The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

9.1 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. There is no overdue amount at the end of the year.

10.1 According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

11.1 In our opinion, the term loans have been applied for the purpose for which they were obtained.

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

for RAMANATHAM & RAO

Chartered Accountants

Firm Registration No.002934S



(CA K. SREENIVASAN)

Place : Hyderabad Partner

Date : 29th July, 2015 ICAI Membership No. 206421


Mar 31, 2014

We have audited the accompanying fi nancial statements of the AVANTEL LIMITED (the Company ) which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows 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 includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial 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 fi nancial 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 ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, 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 fi nancial statements in order to design audit procedures 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 fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient 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 fi nancial 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

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

(iii) in the case of the Cash Flow Statement, of the cash fl ows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor s Report) Order, 2003 ("the Order"), as amended, 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 specifi ed in paragraphs 4 and 5 of the 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 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 subsection (3C) of section 211 of the Companies Act, 1956 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 written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the directors is disqualifi ed 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 Companies Act, 1956.

Annexure to the Auditors'' Report

The Annexure referred to in paragraph 1 of our report to the members of Avantel Limited for the year ended 31st March, 2014:

1.1 The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

1.2 The fixed assets have been physically verifi ed by the management. There is a regular programme of verifi cation of fixed assets, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies have been noticed on such verifi cation.

1.3 There was no substantial disposal of fixed assets during the year, which would affect the going concern status of the company.

2.1 The inventory has been physically verifi ed during the year by the management. In our opinion, the frequency of the verifi cation is reasonable.

2.2 The procedures of physical verifi cation of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

2.3 The company is maintaining proper records of inventory. The discrepancies noticed on verifi cation between the physical stocks and the book records were not material.

3.1 In our opinion and according to the information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured, from companies, fi rms or parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(a) to (iii)(g) of the Order is not applicable.

4.1 In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company.

5.1 According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

5.2 In our opinion and according to the information and explanations given to us, there were no transactions exceeding the value of rupees fi ve lakhs made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956.

6.1 The Company has not accepted any deposits from the public. Hence the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, do not apply to this Company.

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

8.1 We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the company''s products to which the said rules are made applicable, and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records since the same will be carried out by the cost auditors with a view to determine whether they are accurate.

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

9.2 According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, Investor Education protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty and excise duty were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

9.3 According to the information and explanation given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom duty and excise duty which have not been deposited on account of any dispute.

10.1 In our opinion, the company does not have accumulated losses at the end of the fi nancial year and has not incurred cash losses during the fi nancial year covered by our audit and the immediately preceding fi nancial year.

11.1 In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to fi nancial institutions or banks. There is no overdue amount at the end of the year.

12.1 According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13.1 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 Order are not applicable to the company.

14.1 According to the information and explanations given to us, the company is not dealing in or trading in shares, securities debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the company.

15.1 According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or fi nancial institutions.

16.1 The Company did not have any term loans outstanding during the year.

17.1 On the basis of information received from the management and on an overall examination of the balance sheet of the company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment.

18.1 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 Companies Act,1956.

19.1 According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures. Accordingly, the provisions of clause 4(xix) of the Order are not applicable to the company.

20.1 According to the information and explanations given to us, during the period covered by our audit report, the company had not raised money by public issue. Accordingly, the provisions of clause 4(xx) of the Order are not applicable to the company.

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

For RAMANATHAM & RAO Chartered Accountants Firm Registration No.002934S

(CA K SREENIVASAN) Place : Hyderabad Partner Date : 14th May, 2014 ICAI Membership No. 206421


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of the AVANTEL LIMITED (the Company) which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the 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

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 flows 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"). 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 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 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 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. 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

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

(iii) 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, 2003 ("the Order"), as amended, 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 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 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 subsection (3C) of section 211 of the Companies Act, 1956; and

e) on the basis of written representations received from the directors as on 31st March, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in paragraph 1 of our report to the members of Avantel Limited for the year ended 31st March, 2013:

1.1 The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

1.2 The fixed assets have been physically verified by the management. There is a regular programme of verification of fixed assets, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies have been noticed on such verification.

1.3 There was no substantial disposal of fixed assets during the year, which would affect the going concern status of the company.

2.1 The inventory has been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

2.2 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.

2.3 The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3.1 In our opinion and according to the information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured, from companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(a) to (iii)(g) of the Order is not applicable.

4.1 In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company.

5.1 According to the information and explanations given to us, we are of the opinion that the particulars of all

contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

5.2 In our opinion and according to the information and explanations given to us, there were no transactions exceeding the value of rupees five lakhs made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956.

6.1 The Company has not accepted any deposits from the public. Hence the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, do not apply to this Company.

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

8.1 We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the company''s products to which the said rules are made applicable, and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records since the same will be carried out by the cost auditors with a view to determine whether they are accurate.

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

9.2 According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, Investor Education protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty and excise duty were in arrears, as at 31st March, 2013 for a period of more than six months from the date they became payable.

9.3 According to the information and explanation given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom duty and excise duty which have not been deposited on account of any dispute.

10.1 In our opinion, the company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11.1 In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions or banks. There is no overdue amount at the end of the year.

12.1 According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13.1 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 Order are not applicable to the company.

14.1 According to the information and explanations given to us, the company is not dealing in or trading in shares, securities debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the company.

15.1 According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16.1 The Company did not have any term loans outstanding during the year.

17.1 On the basis of information received from the management and on an overall examination of the balance sheet of the company as at 31st March, 2012, we report that no funds raised on short-term basis have been used for long-term investment.

18.1 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 Companies Act,1956.

19.1 According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures. Accordingly, the provisions of clause 4(xix) of the Order are not applicable to the company.

20.1 According to the information and explanations given to us, during the period covered by our audit report, the company had not raised money by public issue. Accordingly, the provisions of clause 4(xx) of the Order are not applicable to the company.

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

for RAMANATHAM & RAO,

Chartered Accountants

Firm Registration No.002934S

(CA K SREENIVASAN)

Partner

ICAI Membership No. 206421

Place : Hyderabad

Date : 6th May, 2013


Mar 31, 2012

1. We have audited the attached balance sheet of M/S. AVANTEL LIMITED, as at 31st March, 2012, the statement of profit and loss and 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 (the Order) 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.

4. Further to our comments in the Annexure referred to 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 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, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account;

iv) In our opinion, the balance sheet, statement of profit and loss and cash flow statement dealt with by this report comply with the accounting standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956;

v) On the basis of written representation 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 31 st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (I) of Section 274 of the Companies Act, 1956.

vi) 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 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 balance sheet, of the state of affairs of the company as at 31st March, 2012;

b) in the case of statement of profit and loss of the profit of the company for the year ended on that date; and

c) in the case of cash flow statement, the cash flow of the company for the year ended on that date.

Annexure to the Auditors' Report

The Annexure referred to in paragraph 3 of our report to the members of Avantel Limited for the year ended 31st March, 2012

1. 1 The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

1.2 The fixed assets have been physically verified by the management. There is a regular programme of verification of fixed assets, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies have been noticed on such verification.

1.3 There was no substantial disposal of fixed assets during the year, which would affect the going concern of the company.

2.1 The inventory has been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

2.2 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.

2.3 The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3.1 In our opinion and according to the information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured, from companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (iii)(a) to (iii)(g) of the Order are not applicable.

4.1 In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company.

5.1 According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

5.2 In our opinion and according to the information and explanations given to us, there were no transactions exceeding the value of rupees five lakhs made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956.

6.1 The Company has not accepted any deposits from the public. Hence the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, do not apply to this Company.

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

8.1 We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 in respect of the company's products to which the said rules are made applicable, and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records since the same will be carried out by the cost auditors with a view to determine whether they are accurate.

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

9.2 According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, Investor Education protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess were in arrears, as at 31 st March, 2012 for a period of more than six months from the date they became payable.

9.3 According to the information and explanation given to us, there are no disputed dues in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess.

10.1 In our opinion, the company does not have accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11.1 In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, bank or debenture holders. There is no overdue amount at the end of the year.

12.1 According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13.1 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 Order are not applicable to the company.

14.1 According to the information and explanations given to us, the company is not dealing in or trading in shares, securities debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the company.

15.1 According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16.1 The Company did not have any term loans outstanding during the year.

17.1 On the basis of information received from the management and on an overall examination of the balance sheet of the company as at 31 st March, 2012, we report that no funds raised on short-term basis have been used for long-term investment.

18.1 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 Companies Act, 1956.

19.1 According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures. Accordingly, the provisions of clause 4(xix) of the Order are not applicable to the company.

20.1 According to the information and explanations given to us, during the period covered by our audit report, the company had not raised money by public issue. Accordingly, the provisions of clause 4(xx) of the Order are not applicable to the company.

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

for RAMANATHAM & RAO,

Chartered Accountants Firm Registration No.002934S

(CA K SREENIVASAN)

Partner

ICAI Membership No. 206421

Place : Hyderabad

Date : 30th April, 2012


Mar 31, 2011

We have audited the attached Balance sheet of M/S. AVANTEL LIMITED, as at 31st March, 2011, the Profit & Loss Account and 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.

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 an opinion and we report that:

1. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

2. 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 such books.

3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account.

4. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement are in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

5. On the basis of written representation received from the directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations furnished to us, the said accounts read together with the schedules and statement of accounting policies attached thereto give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2011,

ii. in the case of Profit and Loss Account of the Profit of the Company for the year ended on that date

and

iii. in the case of Cash Flow Statement, the cash flow for the year ended on that date.

7. 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 and on the basis of such checks, as we considered appropriate, we report hereunder on the matters specified in paragraphs 4 and 5 of the said order:

i. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) The fixed assets have been physically verified by the management. There is annual verification of fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification.

c) There was no substantial disposal of fixed assets during the year, which would affect the going concern of the Company.

ii. a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

b) The procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. As informed to us, the Company has neither granted nor taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act 1956 and as such Clauses (iii) (a) to (iii) (d) are not applicable.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v. a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, there were no transactions exceeding the value of rupees five lakhs made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956.

vi. The Company has not accepted any deposits from the public. Hence the provisions of sections 58A and 58AA of the companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, do not apply to this Company.

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

viii. According to the information and explanations given to us, maintenance of cost records prescribed under Section 209 (1) (d) of the Companies Act, 1956 has not been prescribed by the Central Government for the company.

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

b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, Investor Education and protection fund, income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2011 for a period of more than six months from the date they became payable

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

x. In our opinion, the company has no accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, bank or debenture holders. There is no overdue amount at the end of the year.

xii. According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. 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 the company.

xiv. 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 the company.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by its associates or subsidiaries from banks or financial institutions.

xvi. In our opinion, the Company not taken any term loans during the year.

xvii. On the basis of information received from the management and on an overall examination of the balance sheet of the company as at 31st March, 2011, we report that the no funds raised on short- term basis have been used for long-term investment and vice versa.

xviii. 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 Companies Act,1956.

xix. According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor's Report) order, 2003 are not applicable to the company.

xx. According to the information and explanations given to us, during the period covered by our audit report, the company had not raised money by public issue. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor's Report) order, 2003 are not applicable to the company.

xxi. 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 A. MADHUSUDANA & Co., Chartered Accountants Firm Registration No.007405S

A. MADHUSUDANA RAO PARTNER Membership No.10433 Place: Hyderabad Date: 07-07-2011


Mar 31, 2010

We have audited the attached Balance sheet of M/S. AVANTEL LIMITED, as at 31st March, 2010, the Profit & Loss Account and 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.

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 an opinion and we report that:

1. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

2. 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 such books.

3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account.

4. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement are in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

5. On the basis of written representation received from the directors as on 31st 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.

6. In our opinion and to the best of our information and according to the explanations furnished to us, the said accounts read together with the schedules and statement of accounting policies attached thereto give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2010,

ii. in the case of Profit and Loss Account of the Profit of the Company for the year ended on that date and

iii. in the case of Cash Flow Statement, the cash flow for the year ended on that date.

7. 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 and on the basis of such checks, as we considered appropriate, we report hereunder on the matters specified in paragraphs 4 and 5 of the said order:

i. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) The fixed assets have been physically verified by the management. There is annual verification of fixed assets, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies have been noticed on such verification.

c) There was no substantial disposal of fixed assets during the year, which would affect the going concern of the Company.

ii. a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable.

b) The procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. As informed to us, the Company has neither granted nor taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act 1956 and as such Clauses (iii) (a) to (iii) (d) are not applicable.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v. a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, there were no transactions exceeding the value of rupees five lakhs made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956.

vi. The Company has not accepted any deposits from the public. Hence the provisions of sections 58A and 58AA of the companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, do not apply to this Company.

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

viii. According to the information and explanations given to us, maintenance of cost records prescribed under Section 209 (1) (d) of the Companies Act, 1956 has not been prescribed by the Central Government for the company.

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

b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, Investor Education and protection fund, income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2010 for a period of more than six months from the date they became payable

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

x. In our opinion, the company has no accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, bank or debenture holders. There is no overdue amount at the end of the year.

xii. According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. 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 (Auditors Report) Order, 2003 are not applicable to the company.

xiv. 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 not applicable to the company.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by its associates or subsidiaries from banks or financial institutions.

xvi. In our opinion, the Company not taken any term loans during the year.

xvii. On the basis of information received from the management and on an overall examination of the balance sheet of the company as at 31st March, 2010, we report that no funds raised on short- term basis have been used for long-term investment and vice versa.

xviii. 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 Companies Act,1956.

xix. According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures. Accordingly, the provisions of clause 4(xix) of the Companies (Auditors Report) order, 2003 are not applicable to the company.

xx. According to the information and explanations given to us, during the period covered by our audit report, the company had not raised money by public issue. Accordingly, the provisions of clause 4(xx) of the Companies (Auditors Report) order, 2003 are not applicable to the company.

xxi. 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 A. MADHUSUDANA & Co.,

Chartered Accountants

Firm Registration No.007405S



A. MADHUSUDANA RAO

Place: Hyderabad PARTNER

Date: 30-07-2010 Membership No.10433

 
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