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Auditor Report of Diligent Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Diligent Industries Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow statement for the year ended and summary of significant accounting policies and other explanatory information.

Management Responsibility for the Financial Statements

The company's board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013, ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with 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 the maintenance of adequate records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing standards and matters which are required to be included in audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing Specified under sec 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 control over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as at 31st March, 2015, its Loss and its cash flows for the year ended on the date.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies(Auditor's Report) Order, 2015 (the Order) issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act, we give in the annexure a statement on the matters specified in the paragraph 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement 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.

f. With respect to the other matters 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 does not have any long term contracts including derivatives contracts for which there were any material foreseeable losses.

iii. There were no amounts which are required to be transferred to the Investor Education and protection fund by the company

The Annexure referred to in our Independent Auditor's Report to the members of the company on the financial statements for the year ended March 31, 2015, we report that:

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

b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies have been noticed on such verification. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the company and nature of its assets.

ii) (a) As explained to us, inventories have been physically verified by the Management at regular intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has maintained proper records of inventories. As explained to us there were no material discrepancies noticed on physical verification of inventories as compared to book records.

iii) 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 other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Therefore, requirements of clauses (a), (b), of paragraph 3(iii) of the order are not applicable.

iv) 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, with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of the audit we have not observed any major weaknesses in the internal control system.

v) According to the explanations given to us, the company has not accepted any deposits from Public.

vi) We have broadly reviewed the books of account relating to material, labour and other items of cost maintained by the Company prescribed by the Central Government for the maintenance of cost records under section 148 (1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained However, we have not made a detailed examination of the records.

vii) (a) According to the records of the company and explanations given to us and on the basis of our examination of the records of the company, undisputed statutory dues including provident fund, Income - tax, Value Added Tax, and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities.

Further, as explained to us, no undisputed statutory dues were in arrears as at 31st March 2015 for a period of more than 6 months from the date they become payable.

(b) According to the information and explanation given to us, there are no dues of income-tax, sales-tax and cess which have not been deposited on account of any dispute.

(c) According to the information and explanation given to us there were no amount transferred to investor education and protection fund.

viii) The company has accumulated losses as at the end of the financial year and it accumulated losses are less than fifty percent of its net worth and the company has not incurred any cash losses during the current financial year covered by our audit and in the immediately preceding financial year.

ix) Based on our audit procedures and on the information and explanation given to us, we are of the opinion the company has not defaulted in repayment of dues to bank during the year.

x) According to the information and explanations given to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

xi) According to the information and explanations given to us, no term loans were raised during the year.

xii) Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Ramasamy Koteswara Rao & Co.

Chartered Accountants

Firm Reg No 010396S

Date: 13-05-2015

Place: Hyderabad Sd/-

CA Murali Krishna Reddy Telluri

Partner

M.No.223022


Mar 31, 2014

We have audited the accompanying financial statements of Diligent Industries Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash flow statement for the year ended, and a summary of the significant accounting policies and other explanatory information.

Management 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 Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act")which shall continue to apply in respect of section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September15/2013 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal controls 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 company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 Balance Sheet, of the state affairs of the Company as at March 31, 2014

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

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we 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 sub-section (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.

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

f. Since the central Government has not issued any notification as to the rate at which cess is to be paid under section 441A of 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 the Auditors'' Report (referred to in paragraph 1 of our Report of even date to the Members of Diligent Industries Limited for the year ended March 31, 2014)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that,

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

(b) The fixed assets of the company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

(c) In our opinion, and according to the information and explanation given to us, the company has not disposed of any fixed Assets during the year.

(ii) (a) As explained to us, inventories have been physically verified by the Management at regular intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has maintained proper records of inventories. As explained to us there were no material discrepancies noticed on physical verification of inventories as compared to book records.

(iii) (a) According to the information and explanations given to us, the company didn''t grantany loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, requirements of clauses (iii-b),(iii- c), (iii-d),of paragraph 4 of the order are not applicable.

(e) According to the information and explanations given to us, the company has taken loans from two parties covered in the register maintained under section 301 of the Companies Act 1956. The Maximum amount involved during the year is Rs. 3,56,66,826/-.

(f) In our opinion, the rate of interest and other terms and conditions on which the loan has been taken from parties covered in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company

(g) In our opinion and according to the information and explanations given to us there is no stipulation as to the repayment of the principle amount. Hence, we have not commented on whether the company is regular in repayment of principle amount in respect of the said loan.

(iv) On the basis of checks carried out during the course of the audit and as per the explanations given to us, we are of the opinion that there are adequate internal control systems commensurate with the size of the company and the nature of its business, with regard to payment of expenses. During the course of audit no major weaknesses in the internal controls are noticed.

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

(vi) In our opinion and according to the explanations given to us, the company has not accepted any deposits within the meaning of Sections 58A and 58AA of the Companies Act and Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of the clause 4(vi) of the Order are not applicable to the Company.

(vii) In our opinion and as per information and explanations given to us, the company has an internal audit system commensurate with its size and nature of its business.

(viii) We have reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for the maintenance of cost records under Section 209(1)(d) of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the records of the company, the company is regular in depositing undisputed statutory dues including income-tax, cess and other statutory dues with the appropriate authorities.

(b) According to the information and explanation given to us, there are no dues of income-tax, wealth- tax, sales-tax and cess which have not been deposited on account of any dispute.

(x) The company has accumulated losses as at the end of the financial year and which are less than fifty percent of its net worth and it has not incurred any cash losses during the current financial year covered by our audit and in the immediately preceding financial year.

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

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

(xiii) The company is not a chit fund or nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the said Order are not applicable to the company.

(xiv) According to the information given to us, the company is not dealing in or trading in shares, securities, debentures and other instruments, accordingly the provisions of clause 4 (xiv) of the order is not applicable.

(xv) According to the information and explanations given to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, no term loans were raised during the year.

(xvii) According to the information and explanation given to us, and on an overall examination of the balance sheet, we report that no funds raised on short term basis have been used for long term investment by the company.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

(xix) The company has not issued any debentures during the year. Accordingly, no securities have been created.

(xx) The company has not raised any money by public issue during the year.

(xxi) Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Ramasamy Koteswara Rao & Co, Chartered Accountants Firm Regn No: 010396S

Sd/- Place: Hyderabad (C V Koteswara Rao) Date : 30-05-2014. Membership No.028353


Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. Yatish Securities Limited as at 31st March, 2011, the Profit and Loss account and the cash flow statement of the company 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 managements, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for my opinion.

3. As required by the Companies (Auditors Report) Order, 2003, issued by the central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we give in the annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(a) We have obtained all the information and explanation, which to the best or our knowledge and belief were necessary for the purpose of our audit 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.

(b) The balance sheet, profit & loss account and cash flow statement dealt with by this report are in agreement with the book of account.

(c) 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.

(d) On the basis of the written representation received from the directors as on 31st March 2011 and taken on record by board of directors, we report that none of the directors is disqualified as on 31 st 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. As regards government - nominee directors, they are exempted from the provision of section 274 (1) (g) in view of general circular issued by the department of company affairs.

5. In our opinion and to the best of our information and according to the explanation given to us, the said accounts read with significant accounting policies and the other note thereon, 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 case of the balance sheet of the state of affairs of the company as at 31st March, 2011;

ii. in case of profit & loss account of the loss for the year ended on that date, and

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

ANNEXURE TO THE AUDITOR'S REPORT (Referred to in Paragraph 3 of our Report of even date)

I. In respect of its Fixed Assets

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

b. All the fixed assets have been physically verified by the management at the reasonable interval. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. In our opinion and according to information and explanations given to us, the Company has not disposed off substantial part of fixed assets during the year.

II. The Company is a Broking services company, therefore physical verification and maintenance of adequate record of inventory is not applicable to the company.

III. In our opinion the company has neither granted nor taken any loans secured or unsecured, from companies, firms and other parties covered in the register maintained under section 301 of the Act. As 14 of the Company has not granted/taken any loans secured or unsecured, to 1 from parties listed in the registers maintained under section 301 of the Companies act, 1956 clause iii (b) iii(c) and ii-(d) of paragraph 4 of the order are not applicable

IV. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the Company.

V. In our opinion and according to the information and explanations given to us, we are of the opinion, that the transaction that need to be entered in the register maintained under section 301 of the companies act, 1956 have been so entered and they have been made at price which are reasonable having regard to the prevailing market price at the relevant time.

VI. a) In our opinion and according to the information and explanations given to us, we are

of the opinion, that the transaction that need to be entered in the register maintained under section 301 of the companies act, 1956 have been so entered and they have been made at price which are reasonable having regard to the prevailing market price at the relevant time

b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies act, 1956 and exceeding the values of rupees five lakhs in respect of any party during the year

VII. In our opinion and according to the information and explanations given to us, the company has not accepted deposits from public and therefore, the provision of Section 58A and 58AA of the Companies Act, 1956 and rules there under are not applicable to the company.

VIII. In our opinion, there is internal audit system commensurate with the size of business.

IX. The Central Government has not prescribed maintenance of cost records by the Company under section 209(1) (d) of the Act.

X. The company has been regular in depositing 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 statutory dues with the appropriate authorities. According to the information and explanation given to me, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding, at the year-end for a period of more than six months from the date they became payable.

XI. The Company have accumulated losses at the end of the year of Rs. 14,064,491,.98/-

XII. In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

XIII. According to the information and explanations given to me, the company has not given loans and advances on the basis of security by way of Promotes, post dated instruments, pledge of shares, debentures and other securities.

XIV. 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' reports) order 2003 are not applicable to the Company

XV. In my opinion the company has maintained proper records of transaction and contracts, In respect of trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, Debentures and other investment have been held by the company in its own name

XVI. According to the information and explanations given to our, the company has not given any guarantee for loans taken by others from bank or financial institutions.

XVII. In our opinion, the company has not taken any term loans during the year. Accordingly the provisions of clause 4(xiv) of the Companies (Auditor s Report) Order, 2003 are not applicable to the company.

XVIII. There were no term loans obtained by the company during the year.

XIX. According to the cash flow statement and other records examined by us and the information and explanations given to us, on overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa, other than temporary deployment pending application.

XX. According to the information and explanations given to us the company has not made any preferential allotment during the year nor does the company have any outstanding debentures during the year.

XXI. According to the information and explanations given to us, the company has not issued any debentures and no securities and charges are required to be created.

XXII. According to the information and explanations given to us, the company has not raised any money by public issue during the year.

XXIII. To the best of our knowledge and belief and according to the information explanation given to us, no fraud on or by the company was noticed or reported during the year.

For KAPOOR & KAPOOR Chartered Accountants

Sd/- SANJAY KAPOOR Partner Place : Delhi Membership No.086847

Date : 25..8.2011

 
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