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Auditor Report of B2B Software Technologies Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of M/s B2B Software Technologies Limited ("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 ended 31st March 2015, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

Management is responsible for the preparation of these standalone 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 section 133 of Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.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 standalone 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 but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of 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 standalone 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, 2015;

(b) in the case of the Profit and Loss Account, of the profit for the year ended on March 31, 2015;

(c) in the case of Cash Flow Statement, of the cash flows for the year ended March 31, 2015.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditors' Report) Order, 2015 issued by the Central Government of India in terms

of sub-section (11) of Section 143 of the Companies Act, 2013, we enclose in the Annexure statement on the

matters specified in paragraphs 3 and 4 of the said order.

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

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

ii. In our opinion, proper books of account as required by law, have been kept by the company, in so far as appears from our examination of such books of the company;

iii. The Balance Sheet , Statement of Profit & Loss Account and Cash Flow Statements dealt with by this report are in agreement with the books of accounts of the Company;

iv. In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash flow statement dealt with by this report comply with the Accounting standards referred to in section 133 of Companies Act 2013, read with Rule 7 of Companies (Accounts) Rules, 2014;

v. 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, are disqualified as on 31st March, 2015 from being appointed as a director in terms of sub-section (2) of Sec. 164 of the Companies Act, 2013;

vi. 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 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to Auditors' Report

Referred to in paragraph 1 of "Report on Other Legal and Regulatory Requirements "in our report of even date:

In our opinion and according to the information and explanations given to us:

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

(b) The Company has a fixed programme of Physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Management has physically verified the fixed assets during the year. No material discrepancies were noticed on such verification.

2. The Clause relating to Inventories is not applicable to the company, as the Company has not carried out any manufacturing activity.

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 during the year.

4. In our opinion and according to the information and explanations 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 fixed assets and for the sale of services. During the course of our audit, no major weakness has been noticed in the internal control system.

5. The Company has not accepted any Deposits from the public and consequently the directives issued by Reserve Bank of India; the provisions of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under are not applicable.

6. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 148 of the Companies Act,2013 in respect of activity carried out by the company.

7. a) According to the information and explanations given to us and on the basis of examination of books of accounts, the Company has been regular in depositing Provident Fund, Employees State Insurance Dues, Service tax, VAT, Income tax and Sales tax with appropriate authorities. According to the information and explanations given to us, no undisputed dues payable in respect of Provident fund, Employees State Insurance, Income Tax, sales tax, VAT customs duty, service tax and Cess were outstanding as at 31st March 2015 for a period of more than six months from the date they became payable.

b) According to the records of the company examined, there were no dues in respect of Provident Fund, Employees State Insurance Dues, Service tax, VAT.

c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

8. The accumulated losses of the company are more than fifty percent of its Net worth. The company has not incurred cash losses during the Current financial year as well as in the immediately preceding year.

9. The Clause relating to payment of dues to any financial institution/Bank/Debenture holders is not applicable, as the company has not borrowed any loans from any financial institution/Bank/Debenture holders.

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

11. The company did not have any term loans outstanding during the year and as such clause (xiii) of the Order is not applicable.

12. During the year no frauds have been noticed or reported on/by the company.

For Umamaheswara Rao & Co., Chartered Accountants

Place: Hyderabad Date: 18.05.2015

R R Dakshinamurthy Partner Membership No: 211639




Mar 31, 2014

We have audited the accompanying financial statements of M/s B2B Software Technologies Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash flow statement for the year ended 31st March 2014, 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") read with General Circular 15/2013 dated 13 September, 2013 of Ministry of corporate affairs in respect of section 133 of companies act 2013. 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 but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of 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 31,2014;

(b) in the case of the Profit and Loss Account, of the profit for the year ended on March 31,2014;

(c) in the case of Cash Flow Statement, of the cash flows for the year ended March 31,2014.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditors'' Report) Order, 2003 and amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 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. As required by section 227(3) of the Act, we report that:

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

ii. In our opinion, proper books of account as required by law, have been kept by the company, in so far as appears from our examination of such books of the company;

iii. The Balance Sheet and the Profit & Loss Account dealt with by this report are in agreement with the books of account of the Company;

iv. In our opinion, the Balance Sheet and the Profit & Loss Account dealt with by this report comply with the Accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, read with General Circular 15/2013 dated 13 September, 2013 of Ministry of corporate affairs in respect of section 133 of companies act 2013 to the extent appl icable;

v. On the basis of written representations received from the directors, as on 31 st March, 2014, and taken on record by the Board of Directors,, we report that subject to above, none of the directors, are disqualified as on 31st March, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of Sec. 274 of the Companies Act, 1956;

vi. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Annexure to Auditors'' Report Referred to in paragraph 1 of our report of even date:

In our opinion and according to the information and explanations given to us:

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

As explained to us, the management has physically verified some of the fixed assets during the year. As reported to us, there were no discrepancies found during such verification.

The Company has not disposed off any substantial part of fixed assets during the year and hence no effect on the going concern.

2. The Clause relating to Inventories is not appl icable to the company, as the Company has not carried out any manufacturing activity.

3. The Company has neither granted nor taken any loans, secured or unsecured to or from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

4. 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, for the purchase of fixed assets and for the sale of services. During the course of ouraudit, no major weakness has been noticed in the internal control system.

5. In our opinion and according to the information and explanations given to us, that there were no transactions that needs to be entered in the registerin pursuance of Section 301 of the Companies Act, 1956.

6. The Company has not accepted any Deposits from the public and consequently the directives issued by Reserve Bank of India; the provisions of Section 58 A and 58AA of the Companies Act, 1956 and the 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 its business.

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of activity carried out by the company.

9. According to the information and explanations given to us and on the basis of examination of books of accounts, the Company has been generally regular in depositing Provident Fund and Employees State Insurance Dues with appropriate authorities.

According to the information and explanations given to us, no undisputed dues payable in respect of Income Tax, Wealth Tax, sales tax, customs duty and Cess were outstanding as at 31 st March 2014 for a period of more than six months from the date they became payable.

According to the records of the company examined, there were no dues in respect of excise duty, wealth tax, customs duty, except in case of Sales tax (i.e.APGST/CST) and Income tax, the details are given below:

Name of the Nature of Amount to the Period to which Statute Dues extent payable the amount relates (in Lacs) Financial Year Pending

APGST/CST Disputed Turnover 2.89 2004-05

Income Tax TDS on payment Nil 2007-08 Act, 1961 Made to travel agents

Forum where dispute is :

ADC (Appeals) Commissioner Of Income Tax(Appeals)

10. The accumulated losses of the company are more than fifty percent of its Net worth. The company has not incurred cash losses during the Current financial year and has incurred cash losses in the immediately preceding year.

11. The Clause relating to payment of dues to any financial institution/Bank is not applicable, as the company has not borrowed any loans from any financial institution/Bank.

12. Based on our examination and according to the information and explanations given to us, during the year the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a chit fund, nidhi, mutual benefit fund or a society and as such clause (xiii) of the Order is not applicable.

14. The Company is not dealing or trading in shares, securities, debentures and other investments and as such clause (xiv) of the Order is not applicable.

15. According to the information and explanations provided to us, the Company has not given any guarantee for loans taken by others from banks orfinancial institutions.

16. The company did not have any term loans outstanding during the year and as such clause (xvi) of the Order is not appl icable

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 utilized for long-term investment.

18. During the year the company has not allotted any shares on preferential basis to parties and companies covered in the register maintained under section 301 ofthe Companies Act.

19. During the year, the company has not issued any secured debentures.

20. During the period the Company has not raised money by public issue and accordingly the provisions of clause 4 (xx) of the Companies (Auditor''s Report) Order, 2003 are not appl icable to the company.

21. Based on the audit procedures adopted and information and explanations given to us by the management, no fraud on or by the company has beennoticedorreDorteddurinsthecourseofouraudit.

For Umamaheswara Rao & Co., Chartered Accountants Firm Registration No: 004453S

Place: Hyderabad Date: May 28, 2014 (R R Dakshinamurthy) Partner Membership No: 211639


Mar 31, 2012

1. We have audited the attached Balance Sheet of B2B Software Technologies Limited, as at 31st March, 2012 the Profit & Loss Account and the Cash Flow statement for the year ended on that date annexed there to. 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 are reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, We report that:

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

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

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statements dealt with by this report are in agreement with the books of accounts;

d) In our opinion the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the Directors of the Company, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Director is disqualified as at 31st March, 2012 from being appointed as a Director in terms of Clause (g) of the Sub-Section (1) 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 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, 2012;

ii. In the case of the Profit & Loss Account, of the Loss of the Company 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.

Annexure referred to in Paragraph 3 of Our Report of even date

1. a. The company has compiled the fixed assets register showing full particulars including quantitative details, location and value of fixed assets.

b. As explained to us, the management has physically verified some of the fixed assets during the year. As reported to us, there were no discrepancies found during such verification.

c. In our opinion, the company has not disposed of substantial part of the fixed assets during the year and the going concern status of the company is not affected.

2. The company is engaged in Information Technology and related services and does not hold any inventories for physical verification. Accordingly, Paragraph 4 (ii) (a), (b) and (c) of the order is not applicable.

3. a. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to Companies, firms or other parties covered in the registered maintained under section 301 of the Companies Act, 1956. Accordingly, Paragraph 4(iii) (f) and (g) of the Order is not applicable. b. According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, to Companies, firms or other parties covered in the registered maintained under section 301 of the Companies Act, 1956. Accordingly, Paragraph 4 (iii) (f) and (g) of the Order is not applicable. 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 for the purchase of inventory, fixed assets and also for the sale of goods. During the course of our audit we have not observed any major weaknesses in the internal controls.

4. 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, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding Rs. 5 Lakhs in value in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

5. The company has not accepted any deposits from the public within the meaning of Section 58A & 58AA of the Companies Act, 1956 and the Rules framed there under.

6. In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

7. According to the information and explanation given to us, the Company, being engaged in Information Technology and related services, Paragraph 4 (Viii) of the Order is not applicable.

8. In respect of statutory dues:

a. The Central Government has not described the maintenance of cost records under section 209 (1)(d) of the companies act 1956 for any of the services rendered by the company. Accordingly, Paragraph 4 (viii) of the order is not applicable.

9. In respect of Statutory dues:

a. According to the records of the Company, the undisputed statutory dues including Provident Fund, Employees State Insurance, Service tax, Excise duty, sales tax and cess have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2012 for a period of more than six months from the date they become payable.

b. According to the records of the company examined, there are no dues of Customs tax, Wealth tax, Excise duty/Cess, except in case of Sales tax (i.e., AP GST/CST), the details are given below:

Name of the Nature of Amount Period to Forum where Statute dues to the which the dispute is extent amount pending Not paid Financial (In Lacs) Year

APGST/CST Disputed 2.89 2004-05 ADC (Appeals) Income Tax Turnover NIL 2007-08 COMMISSIONER OF Act, 1961 TD Son INCOME TAX payment (Appeals) Made to Travel Agents 10. The accumulated losses of the company are more than Fifty Percent of its Net worth. The Company has incurred cash losses during the financial year covered by our audit and not incurred cash losses in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions & banks.

12. In our opinion and according to the information and explanations given to us, the company has maintained adequate documents and records in case of loans and advances granted on the basis of security by way of pledge of shares and other securities.

13. In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable to the company.

14. In our opinion and according to the information and explanations given to us, the company is not dealing 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.

15. In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

16. In our opinion and according to the information and explanations given to us, company has not raised new term loans during the year.

17. As per the information and explanations given to us, we are of the opinion that the Company has not utilized any short-term sources towards long-term investments.

18. During the year, the Company has not made any preferential allotment of shares to the parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not raised any money by way of issue of Debentures during the year; hence creation of securities on debentures issued is not applicable to the Company.

20. According to the information and explanations given to us during the year the company has not raised any funds on public issue and hence this clause is not applicable to the company.

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

For Niranjan & Narayan Chartered Accountants (Firm Regn. No. 005899S)

M. Niranjan Partner M. No. 029552

Place: Hyderabad Date: 6th April, 2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of B2B Software Technologies Limited, as at 31 st March, 2010 the Profit & Loss Account and the Cash Flow statement for the year ended on that date annexed there to. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 welI as evaluating the overalI financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in theannexure referred to in paragraph 3 above, We report that:

We are unable to comment on the extent of the recoverability of the loan amounting to Rs.4,91,03,406/- as at the end of the year extended to a related party in view of the irregularity in the repayments of principal and interest during the year. (Refer to Note1,ofSchedule16).

5. Subject to our observations in the annexure referred to in Paragraph (3) and our comments in Paragraph (4) above we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief are necessary for the purpose of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books.

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statements dealt with by this report are in agreement with the books of accounts.

d) In our opinion the Profit &loss Account and Balance Sheet and Cash Flow Statements dealt with by this report comply with the accounting standards referred to in Sub-section (3C) of Section 211 of the Companies Act.

e) On the basis of written representations received from the Directors of the Company, as on 31st March, 2010 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 (g) of the Sub-Section (1 >Section 274 of the Companies Act, 1956.

f) We report that, considering the audit qualification made by us under Para 4, the

- Loss after Taxation for the year would have been Rs.5,30,96,959 as against Rs.39,93,553 reported.

-Profit and Loss Account Debit Balance would have been Rs.9,46,64,009 as against Rs.4,55,60,603 reported.

- Loans & Advances would have been Rs. 1,12,62,524 as against Rs.6,03,65,930 reported in Schedule 8

g) 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 our comments given in Para 4 and the consequent effect thereof on the accounts to the extent quantified, as stated in Para 5 (f) above 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 the Profit & Loss Account, of the Loss of the Company for the year ended on that date; and

iii. ln the case of the Cash Flow Statements, of the Cash Flows for they earended on that date.

Annexure referred to in Paragraph 3 of Our Report of even date

1. a. The company has compiled the fixed assets register showing full particulars including quantitative details, location and value of fixed assets.

b. As explained to us, the management has physically verified some of the fixed assets during the year. As reported to us, there were no discrepancies found during such verification.

c. In our opinion, the company has not disposed of substantial part of the fixed assets during the year and the going concern status of the company is not affected.

2. a. As referred in Note 1 of Schedule 16, the company has granted an unsecured loan to a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year is Rs.4,91,03,406/- and the closing balance is Rs.4,91,03,406/-as at the balance sheet date.

b. In our opinion and according to the information and explanations given to us, the rate of interest, wherever applicable and other terms and conditions are not prima-facie prejudicial to the interest of the company.

c. In respect of loans taken by the Company, the interest payments are regular and the principal amount is repayable on demand.

d. The company has taken reasonable steps for merecovery / payment of the principle and interest except as stated in Para4.

3. 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 for the purchase of inventory, fixed assets and also for the sale of goods. During the course of our audit we have not observed any major weaknesses in the internal controls.

4. 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, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding Rs.5 Lakhs in value in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

5. The company has not accepted any deposits from the public within the meaning of Section 58A & 58AA of the Companies Act, 1956 and the Rules framed there under.

6. In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

7. In respect of statutory dues:

a. According to the records of the Company, the undisputed statutory dues including Provident Fund, Employees State Insurance, service tax, excise duty, sales tax and cess have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31" March, 2010 for a period of more than six months from the date they become payable.

b. According to the records of the company examined, there are no dues of Customs tax, Wealth tax, Excise duty /Cess, except in case of Sales tax (i.e., AP GST/CST), the details are given below:

Name of the Nature of Amount Period to which the Forum where dispute Statute dues to the extent amount relates is pending Not paid (In Lacs)

APGST/CST Disputed Turnover 2.63 2004-05 ADC (Appeals)



8. The accumulated losses of the company are not more than Fifty Percent of its Net worth. The Company has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

9. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions & banks.

10. In our opinion and according to the information and explanations given to us, the company has maintained adequate documents and records in case of loans and advances granted on the basis of security by way of pledge of shares and other securities.

11. In our opinion, tbe company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, clause 4(xiii) of the Companies (Auditors Report) Order, 2003 w not applicable to the company.

12. In our opinion and according to the information and explanations given to us, the company is not dealing 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.

13. In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

14. In our opinion and according to the information and explanations given to us, company has hot raised new term loans during the year.

15. As per the information and explanations given to us, we are of the opinion that the Company has not utilized any short-term sources towards long- term investments.

16. During the year, the Company has not made any preferential allotment of shares to the parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

17. The Company has not raised any money by way of issue of Debentures during the year; hence creation of securities on debentures issued is not applicable to the Company.

18. According to the information and explanations given to us during the year the company has not raised any funds on public issue and hence this clause is not appl icable to the company.

19. 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 M.Anandam & Co., Chartered Accountants (FirmRegn.No.000125S)

B.V.Suresh Kumar

Place: Hyderabad Partner

Date: 11 August, 2010 M.No.212187



 
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