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Auditor Report of Elnet Technologies Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Elnet Technologies Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the 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 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 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 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 Statement of Profit and Loss, of the profit for the year ended on that date

(c) 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 Companies [Auditors Report] Order 2003, issued by the Government of India in terms of Sub 4(a) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to information and explanations given to us we set out in the annexure a statement on the matters specified in paragraph 4 & 5 as applicable, of the said 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 the 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 ;

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

f. 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 THE AUDITORS'' REPORT

[Referred to in Paragraph 1- Report on Other Legal and Regulatory Requirements of the Auditors'' Report of even date to the members of Elnet Technologies Limited on the financial statements for the year ended March 31, 2014]

1. FIXED ASSETS

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 all fixed assets are verified in a phased manner. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c. There was no substantial disposal of fixed assets during the year.

2. INVENTORIES

The Company does not hold any inventories. Consequently physical verification and maintenance of records for inventory by the management does not arise.

3. LOANS

a. The Company has unsecured loans of Rs. 4,26,33,883/- from parties listed in the register maintained u/s. 301 of the Companies Act, 1956, The rate of interest and other terms and conditions are not prima-facie prejudicial to the interest of the company.

b. The company has not granted any loan to parties covered in the register maintained u/s. 301 of the Act.

4. INTERNAL CONTROL

a. 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 nature of its business.

b. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

5. CONTRACTS & ARRANGEMENTS

a. In respect of transaction entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956; and based on the audit procedures applied by us and according to the information and explanations given to us, transactions that need to be entered in the register, have been so entered.

b. According to the information and explanations given to us, where each such transactions is in excess of Rs. 5 lakhs in respect of any party, the transactions made in pursuance of such contracts or arrangements have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

6. PUBLIC DEPOSITS

The Company has not accepted deposits from the Public within the meaning of Section 58A and 58AA of the Companies Act, 1956, and the Rules framed there under.

7. INTERNAL AUDIT SYSTEM

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

8. COST RECORDS

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, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

9. STATUTORY DUES

a. As per the records of the Company, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues such as Income Tax, Sales Tax, Service Tax and Wealth Tax. The provisions relating to excise and customs duty are not applicable to the company.

b. According to the records and information and explanations given to us, there are no undisputed dues in respect of sales tax, service tax, income tax and wealth tax which have not been deposited with the appropriate authorities The following are the particulars of service tax and income tax dues that have not been deposited with appropriate authorities on account of disputes as on March 31, 2014:

Nature of the Amount Forum where (In Rs). dispute is Name Of the Statute dues Period [A.Y] pending

Income-tax Act,1961 Income Tax 1996-1997 11,96,191 The Madras High Court has Income-tax Act,1961 Income Tax 1998-1999 12,21,223 ruled the case in favour of

Income-tax Act,1961 Income Tax 2000-2001 5,24,847 the assesses However the

Income-tax Act,1961 Income Tax 2001-2002 1,35,15,737 Income Tax Department has preferred a Special Leave Income-tax Act,1961 Income Tax 2003-2004 2,54,07,618 Petition with the Supreme Court.

Commissioner of Income Tax Income-tax Act,1961 Income Tax 2007-2008 11,30,593 (Appeals)

Commissioner of Income Tax Income-tax Act,1961 Income Tax 2009-2010 47,475 (Appeals)

Service tax on Notice 276/2011 Office of the Commissioner of 22,71,949 Finance Act,1994 Electri- city dtd 19.07.2011 Service Tax, Chennai

Service tax on Notice 758/2010 Office of the Commissioner of Finance Act,1994 20,45,540 Electri- city dtd 23.11.2010 Service Tax, Chennai

Service tax on Notice 342/2010 Office of the Commissioner of Finance Act,1994 27,66,385 Electri- city dtd 20.05.2010 Service Tax, Chennai

Service tax on Notice 202/2010 Office of the Commissioner of Finance Act,1994 47,38,839 Electri- city dtd 15.04.2010 Service Tax, Chennai Service Tax on Notice 88/2009 Office of the Commissioner of Finance Act,1994 1,21,40,756 Electri- city dtd 27.03.2009 Service Tax, Chennai

Service Tax on Notice 75/2013 Office of the Commissioner of Finance Act,1994 43,01,070 Electri- city dtd 09.04.2013 Service Tax, Chennai

10. ACCUMULATED LOSSES

The Company has no accumulated losses as at 31.03.2014 and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year

11. LIABILITY TO BANKS & FINANCIAL INSTITUTIONS

Based on our audit procedures and as per the information and explanations given by the management, the Company did not have any dues to bank or financial institutions during the year.

12. LOANS ON PLEDGING OF SHARES ETC.

Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not taken any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. APPLICABILITY OF PROVISIONS OF SPECIAL STATUTE OF CHIT FUNDS

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 (as amended) are not applicable to the Company.

14. DEALING IN SHARES & SECURITIES

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 (as amended) are not applicable to the Company. However, investments are made out of Surplus funds available with the company as part of its Treasury operations from time to time.

15. GUARANTEE

Based on our audit procedures and as per the information and explanations given by the management, the Company has not given any guarantee for loans taken by others, from banks or financial institutions during the year.

16. LONG TERM LOANS

The company has not taken any long term loans during the year ended 31st March, 2014.

17. FUNDS UTILISATION

According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the Company has not raised any short term funds which have been used for long-term investment.

18. PREFERENTIAL ALLOTMENT OF SHARES

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.

19. DEBENTURES

The Company has not issued any debentures during the year

20. PUBLIC ISSUE

The Company has not made any public issue of shares during the year.

21. FRAUDS

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit

Place : Chennai As per our report attached

Date : 30.05.2014 For S.H. Bhandari & Co. Chartered Accountants

Sreedhar Sreekakulam

Partner

M. No. 026474 FRN:000438S


Mar 31, 2013

We have audited the accompanying financial statements of Elnet Technologies Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year ended 31st March, 2013 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 and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

(c) 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 Companies [Auditors Report] Order 2003, issued by the Government of India in terms of Sub (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to information and explanations given to us we set out in the annexure a statement on the matters specified in paragraph 4 & 5 as applicable, of the said 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 and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account;

d. In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

f. 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 THE AUDITORS'' REPORT

[Referred to in Paragraph 1- Report on Other Legal and Regulatory Requirements of the Auditors'' Report of even date to the members of Elnet Technologies Limited on the financial statements for the year ended March 31, 2013]

1. FIXED ASSETS

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 all fixed assets are verified in a phased manner. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c. There was no substantial disposal of fixed assets during the year.

2. INVENTORIES

The Company does not hold any inventories. Consequently physical verification and maintenance of records for inventory by the management does not arise.

3. LOANS

a. The Company has unsecured loans of Rs. 4,26,33,883/- from parties listed in the register maintained u/s. 301 of the Companies Act, 1956, The rate of interest and other terms and conditions are not prima-facie prejudicial to the interest of the company.

b. The company has not granted any loan to parties covered in the register maintained u/s. 301 of the Act.

4. INTERNAL CONTROL

a. 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 nature of its business.

b. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

5. CONTRACTS & ARRANGEMENTS

a. In respect of transaction entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956; and based on the audit procedures applied by us and according to the information and explanations given to us, transactions that need to be entered in the register, have been so entered.

According to the information and explanations given to us, where each such transactions is in excess of Rs. 5 lakhs in respect of any party, the transactions made in pursuance of such contracts or arrangements have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

6. PUBLIC DEPOSITS

The Company has not accepted deposits from the Public within the meaning of Section 58A and 58AA of the Companies Act, 1956, and the Rules framed there under.

7. INTERNAL AUDIT SYSTEM

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

8. COST RECORDS

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, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

9. STATUTORY DUES

a. As per the records of the Company, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues such as Income Tax, Sales Tax, Service Tax and Wealth Tax. The provisions relating to excise and customs duty are not applicable to the company.

b. According to the records and information and explanations given to us, there are no undisputed dues in respect of sales tax, service tax, income tax and wealth tax which have not been deposited with the appropriate authorities .The following are the particulars of service tax and income tax dues that have not been deposited with appropriate authorities on account of disputes as on March 31, 2013:

Nature of the Name Of the Statute Period [A.Y] dues

Income-tax Act,1961 Income Tax 1996-1997

Income-tax Act,1961 Income Tax 1998-1999

Income-tax Act,1961 Income Tax 2000-2001

Income-tax Act,1961 Income Tax 2001-2002

Income-tax Act,1961 Income Tax 2003-2004

Income-tax Act,1961 Income Tax 2007-2008

Income-tax Act,1961 Income Tax 2009-2010

Service tax on Notice 276/2011 Finance Act,1994 Electricity dtd 19.07.2011

Service tax on Notice 758/2010 Finance Act,1994 Electricity dtd 23.11.2010

Service tax on Notice 342/2010 Finance Act,1994 Electricity dtd 20.05.2010

Service tax on Notice 202/2010 Finance Act,1994 Electricity dtd 15.04.2010

Service Tax Notice 88/2009 Finance Act,1994 on Electricity dtd 27.03.2009

Service Tax Notice 75/2013 Finance Act,1994 on Electricity dtd 09.04.2013

Name of the Statute Amount Forum where dispute is (In Rs.) pending

Income-tax Act,1961 11,96,191 The Madras High Court has

Income-tax Act,1961 12,21,223 ruled the case in favor of the

Income-tax Act,1961 5,24,847 assesse. However, it is not

Income-tax Act,1961 1,35,15,737 known whether the Income Tax Department has preferred Income-tax Act,1961 2,54,07,618 a Special Leave Petition with the Supreme Court.

Income-tax Act,1961 Commissioner of Income Tax 11,30,593 (Appeals)

Income-tax Act,1961 Commissioner of Income Tax 47,475 (Appeals)

Finance Act,1994 Office of the Commissioner of 22,71,949 Service Tax, Chennai

Finance Act,1994 Office of the Commissioner of 20,45,540 Service Tax, Chennai

Finance Act,1994 Office of the Commissioner of 27,66,385 Service Tax, Chennai

Finance Act,1994 Office of the Commissioner of 47,38,839 Service Tax, Chennai

Finance Act,1994 Office of the Commissioner of 1,21,40,756 Service Tax, Chennai

Finance Act,1994 Office of the Commissioner of 43,01,070 Service Tax, Chennai

10. ACCUMULATED LOSSES

The Company has no accumulated losses as at 31.03.2013 and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. LIABILITY TO BANKS & FINANCIAL INSTITUTIONS

Based on our audit procedures and as per the information and explanations given by the management, the Company did not have any dues to bank or financial institutions during the year.

12. LOANS ON PLEDGING OF SHARES ETC.

Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not taken any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. APPLICABILITY OF PROVISIONS OF SPECIAL STATUTE OF CHIT FUNDS

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 (as amended) are not applicable to the Company.

14. DEALING IN SHARES & SECURITIES

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 (as amended) are not applicable to the Company. However, investments are made out of Surplus funds available with the company as part of its Treasury operations from time to time.

15. GUARANTEE

Based on our audit procedures and as per the information and explanations given by the management, the Company has not given any guarantee for loans taken by others, from banks or financial institutions during the year.

16. LONG TERM LOANS

The company has not taken any long term loans during the year ended 31st March, 2013.

17. FUNDS UTILISATION

According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the Company has not raised any short term funds which have been used for long-term investment.

18. PREFERENTIAL ALLOTMENT OF SHARES

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.

19. DEBENTURES

The Company has not issued any debentures during the year.

20. PUBLIC ISSUE

The company has not made any public issue of shares during the year.

21. FRAUDS

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

Place : Chennai As per our report attached

Date : 03.05.2013 For S.H.Bhandari & Co.

Chartered Accountants

Sreedhar Sreekakulam

Partner

M. No. 026474 FRN: 000438S


Mar 31, 2012

1. We have audited the attached Balance Sheet of Elnet Technologies Limited ('the Company') as at 31st March, 2012 and also the Statement of Profit and Loss, 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 (as amended) 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 purposes 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 and the Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet and the Statement of Profit and Loss dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

v. On the basis of the written representations received from the Directors, as on March 31st, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31st, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) 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 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;

a) in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st, March 2012;

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

c) in the case of the Cash Flow Statement, of the Cash Flows for the year ended 31st, March 2012.

ANNEXURE TO THE AUDITORS' REPORT

[Referred to in Paragraph 3 of the Auditors' Report of even date to the members of Elnet Technologies Limited on the financial statements for the year ended March 31, 2012]

1. FIXED ASSETS

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 all fixed assets are verified in a phased manner. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c. There was no substantial disposal of fixed assets during the year.

2. INvENTORIES

The Company does not hold any inventories. Consequently physical verification and maintenance of records for inventory by the management does not arise.

3. LOANS

a. According to the information and explanation given to us, the Company closed its secured loan with State Bank of India, Industrial Finance Branch on 8.3.2012 and filed Form 17 on the MCA portal was approved on 25.4.2012. The Company has an unsecured loan of Rs 3,66,24,742/- from a party listed in the register maintained u/s. 301 of the Companies Act, 1956. In pursuance of a joint venture agreement as Promoter's contribution for the company's project. The rate of interest and other terms and conditions are not prima-facie prejudicial to the interest of the company.

b. The company has not granted any loan to parties covered in the register maintained u/s. 301 of the Companies Act, 1956.

4. INTERNAL CONTROL

a. 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 nature of its business.

b. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

5. CONTRACTS & ARRANGEMENTS

a. In respect of transaction entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 ; and based on the audit procedures applied by us and according to the information and explanations given to us, transactions that need to be entered in the register, have been so entered.,

b. According to the information and explanations given to us, where each such transactions is in excess of Rs 5 lakhs in respect of any party, the transactions made in pursuance of such contracts or arrangements have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

6. PUBLIC DEPOSITS

The Company has not accepted deposits from the Public within the meaning of Section 58A and 58AA of the Companies Act, 1956, and the Rules framed there under.

7. INTERNAL AUDIT SYSTEM

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

8. COST RECORDS

To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products / services of the Company.

9. STATUTORY DUES

a. As per the records of the company, the company is generally regular in depositing with the appropriate authorities undisputed statutory dues such as Income Tax, Sales Tax, Service Tax and Wealth Tax. The provisions relating to excise and customs duty are not applicable to the company.

B. According to the records and information and explanations given to us, there are no undisputed dues in respect of sales tax, service tax, income tax and wealth tax, which have not been deposited with the appropriate authorities. The following are the particulars of Service Tax and Income Tax dues that have not been deposited with the appropriate authorities on account of disputes as at March 31, 2012:

Nature of Period Amount Forum where Name of the statute the dues [A.Y] (In Rs) dispute is pending

Income-tax Act,1961 Income Tax 1996-1997* 11,96,191 Madras High Court

Income-tax Act,1961 Income Tax 1998-1999* 12,21,223 Madras High Court

Income-tax Act,1961 Income Tax 2000-2001* 5,24,847 Madras High Court

Income-tax Act,1961 Income Tax 2001-2002* 1,35,15,737 Madras High Court

Income-tax Act,1961 Income Tax 2003-2004* 2,54,07,618 Madras High Court

Income-tax Act,1961 Income Tax 2007-2008 11,30,593 Commissioner of Income Tax (Appeals)

Income-tax Act,1961 Income Tax 2009-2010 47,475 Commissioner of Income Tax (Appeals)

Finance Act,1994 Service tax Notice dtd 1,49,07,141 Office of the Commissioner on Electricity 31.03.2010 of Service Tax, Chennai

Finance Act,1994 Service tax Notice dtd 20,45,540 Office of the Commissioner on Electricity 30.09.2010 of Service Tax, Chennai.

Finance Act,1994 Service tax Notice dtd 22,71,949 Office of the Commissioner on Electricity 19.07.2011 of Service Tax, Chennai

Finance Act,1994 Service tax Notice dtd 21,10,178 Office of the Commissioner on Electricity 13.02.2012 of Service Tax, Chennai.

Note:

* For these assessment years, the issues have been decided in favour of the company, however the Income Tax Department has preferred appeal at higher levels.

10. accumulated losses

The Company has no accumulated losses as at 31.03.2012 and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. LIABILITY TO BANKs & FINANCIAL INsTITuTIONs

Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. loans on pledging of shares etc.

Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not taken any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. APPLICABILITY OF PROVISIONS OF SPECIAL STATUTE OF CHIT FUNDS

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 (as amended) are not applicable to the Company.

14. DEALING IN SHARES & SECURITIES

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 (as amended) are not applicable to the Company. However, investments are made out of Surplus funds available with the company as part of its Treasury operations from time to time.

15. GUARANTEE

Based on our audit procedures and as per the information and explanations given by the management, the Company has not given any guarantee for loans taken by others, from banks or financial institutions during the year.

16. LONG TERM LOANS

The company has not taken any long term loans during the year ended 31st March, 2012.

17. FUNDS UTILISATION

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

18. PREFERENTIAL ALLOTMENT OF SHARES

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. DEBENTURES

The Company has not issued any debentures during the year.

20. PUBLIC ISSUE

The company has not made any public issue of shares during the year.

21. FRAUDS

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.



Place : Chennai As per our report attached

Date : 17.05.2012 For S.H.Bhandari & Co.

Chartered Accountants

Sreedhar Sreekakulam

Partner

M. No.026474

FRN:000438S


Mar 31, 2011

1. We have audited the attached balance sheet of Elnet Technologies Limited (the Company) as at 31st March, 2011 and also the profit and loss account, Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in theAnnexure, 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 purposes 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 and profit and loss account dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet and profit and 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.

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31st, 2011;

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

c) In the case of the Cash Flow Statement, of the Cash Flows for the year ended 31st March, 2011.

ANNEXURE TO THE AUDITORS REPORT

[Referred to in Paragraph 3 of the Auditors Report of even date to the members of Elnet Technologies Limited on the financial statements for the year ended March 31, 2011]

1. FIXED ASSETS

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 all fixed assets are verified in a phased manner. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c. There was no substantial disposal of fixed assets during the year.

2. INVENTORIES

The Company does not hold any inventories. Consequently physical verification and maintenance of records for inventory by the management does not arise.

3. LOANS

a. According to the information and explanation given to us, the company has an unsecured loan of Rs. 60,09,141/- from a company listed in the register maintained u/s. 301 of the Companies Act, 1956 and an unsecured loan of Rs.3,66,24,742/- from a party listed in the register maintained u/s. 301 of the Companies Act, 1956. In pursuance of a joint venture agreement as Promoters contribution for the companys project. The rate of interest and other terms and conditions are not prima-facie prejudicial to the interest of the company.

b. The company has not granted any loan to parties covered in the register maintained u/s. 301 of the Act.

4. INTERNAL CONTROL

a. 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 nature of its business.

b. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

5. CONTRACTS & ARRANGEMENTS

a. In respect of transaction entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 ; and based on the audit procedures applied by us and according to the information and explanations given to us, transactions that need to be entered in the register, have been so entered.,

According to the information and explanations given to us, where each such transactions is in excess of Rs. 5 lakhs in respect of any party, the transactions made in pursuance of such contracts or arrangements have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

6. PUBLIC DEPOSITS

The Company has not accepted deposits from the Public within the meaning of Section 58A and 58Aa of the Companies Act, 1956, and the Rules framed there under.

7. INTERNAL AUDIT SYSTEM

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

8. COST RECORDS

To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products / services of the Company.

9. STATUTORY DUES

a. As per the records of the company, the company is generally regular in depositing with the appropriate authorities undisputed statutory dues such as Income Tax, Sales Tax, Service Tax and Wealth Tax. The provisions relating to excise and customs duty are not applicable to the company.

b. According to the records and information and explanations given to us, there are no dues in respect of, sales tax, service tax, custom duty, excise duty, cess and wealth tax that have not been deposited with the appropriate authorities on account of dispute and the dues in respect of income tax that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below:-

Nature of the Name of the Statute dues Period [A.Y]

Income-tax Act, 1961 Income Tax 1996-1997

Income-tax Act, 1961 Income Tax 1998-1999

Income-tax Act, 1961 Income Tax 1999-2000

Income-tax Act, 1961 Income Tax 2000-2001

Income-tax Act, 1961 Income Tax 2003-2004

Income-tax Act, 1961 Income Tax 2004-2005

Income-tax Act, 1961 Income Tax 2005-2006

lncome-tax Act, 1961 Income Tax 2007-2008

Finance Act, 1994 Service tax Notice dtd on Electricity 31.03.2010

Finance Act, 1994 Service tax Notice dtd on Electricity 30.09.2010

Amount Name of the Statute (In Rs.) Forum where dispute is pending

Income-tax Act, 1961 13,15,839 Madras High Court

Income-tax Act, 1961 12,16,086 Madras High Court

Income-tax Act, 1961 24,36,476 Madras High Court

Income-tax Act, 1961 5,24,847 Madras High Court

Income-tax Act, 1961 1,94,26,689 Madras High Court

Income-tax Act, 1961 2,32,348 Madras High Court

Income-tax Act, 1961 1,40,072 Madras High Court

Income-tax Act, 1961 11,30,593 Madras High Court

Finance Act, 1994 1,49,07,141 Office of the Commissioner of Service Tax, Chennai Finance Act, 1994 20,45,540 Office of the Commissioner of Service Tax, Chennai.

10. ACCUMULATED LOSSES

The Company has no accumulated losses as at 31.03.2011 and it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. LIABILITY TO BANKS & FINANCIAL INSTITUTIONS

Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. LOANS ON PLEDGING OF SHARES ETC.

Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not taken any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. APPLICABILITY OF PROVISIONS OF SPECIAL STATUTE OF CHIT FUNDS

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 (as amended) are not applicable to the Company.

14. DEALING IN SHARES & SECURITIES

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 (as amended) are not applicable to the Company. However, investments are made out of Surplus funds available with the company as part of its Treasury operations from time to time.

15. GUARANTEE

Based on our audit procedures and as per the information and explanations given by the management, the Company has not given any guarantee for loans taken by others, from banks or financial institutions during the year.

16. LONG TERM LOANS

The company has not taken any long term loans during the year ended 31st March, 2011.

17. FUNDS UTILISATION

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

18. PREFERENTIAL ALLOTMENT OF SHARES

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.

19. DEBENTURES

The Company has not issued any debentures during the year.

20. PUBLIC ISSUE

The company has not made any public issue of shares during the year.

21. FRAUDS

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For S.H. BHANDARI & Co., Chartered Accountants

K. Sekhar Partner M.No: 200/21660 Firm Reg.No. 000438S

Place: Chennai Date : 12.05.2011


Mar 31, 2010

We have audited the attached Balance Sheet of M/s. ELNET TECHNOLOGIES LTD., as at 31 st March 2010, Profit and Loss Account and Cash Flow Statement for the year ended on that date, annexed hereto. 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.

1. 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 examining, 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.

2. As required by the Companies (Auditors Report) Order, 2003 as amended 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 and according to information and explanation given to us, we enclose in the Annexure a statement on the matters specified in Paragraph 4&5 of the said Order.

3. Further to our comments in the annexure referred to in paragraph 2 and 3 above we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956, to the extent applicable.

e) As per the information and explanations given to us, the Central Government has till date, not prescribed any cess payable u/s. 441A of the Companies Act, 1956.

f) On the basis of written declaration received from the directors of the Company as at 31.03.2010 and taken on record by the Board of Directors, we report that none of the director 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.

g) In our opinion and to the best of our information and according to the explanations given to us the said Balance Sheet, Profit and Loss Account and Cash Flow Statement read together with schedules and notes thereon, give the information required by the Companies Act 1956, in the manner so required and gives a true and fair view.

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

ii] in the case of the Profit and Loss Account, of the profit for the year ended 31st March 2010.

iii] in the case of the Cash Flow Statement, of the Cash Flows for the year ended 31st March 2010.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in Paragraph 2 of our attached report of even date) 1] Fixed Assets :

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

b) These assets have been physically verified by the management at the end of the financial year, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) Fixed Assets disposed off during the year were not substantial and therefore could not affect the going concern status of the company.

2] Inventories :

The Company does not hold any inventories. Consequently physical verification and maintenance of records for inventory by the management does not arise

3] Loans

a) According to the information and explanation given to us, the company has an unsecured loan of Rs. 60,09,141/- from a company listed in the register maintained u/s. 301 of the Companies Act, 1956 and an unsecured loan of Rs.3,66,24,742/- from a party listed in the register maintained u/s. 301 of the Companies Act, 1956. In pursuance of a joint venture agreement as Promoters contribution for the companys project. The rate of interest and other terms and conditions are not prima-facie prejudicial to the interest of the company.

b) The company has not granted any loan to parties covered in the registermaintained u/s. 301 of the Act.

4] Internal Control :

a) 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 nature of its business with regard to purchase of Fixed Assets and for the sale of goods and services.

b) In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

5] Contracts and Arrangements :

a] In respect of transaction entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 ; and based on the audit procedures applied by us and according to the information and explanations given to us, transactions that need to be entered in the register, have been so entered.

b] According to the information and explanations given to us, where each such transactions is in excess of Rs. 5 lakhs in respect of any party, the transactions made in pursuance of such contracts or arrangements have been made at prices which are, prima-facie, reasonable having regard to the prevailing market prices at the relevant time.

6] Public Deposits

As informed to us, the Company has not accepted any deposits from public within the meaning section 58A during the year under Report and hence the directives issued by Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Act and rules framed there under, are not applicable.

7] Internal Audit System :

In our opinion, and according to the information and explanation given to us, the company has proper internal audit system commensurate with its size.

8] Cost Records :

According to the information and explanation given to us the maintenance of cost records has not been prescribed by the Central Government u/s 209(1) (d) of the Companies Act 1956.

9] Statutory Dues :

a) According to the records of the Company, the Company is regular in depositing statutorydues including income tax, wealth tax, and any other statutory dues applicable to it, with the appropriate authorities during the year.

b) According to the records of the company and the information and explanations given to us there are no dues of wealth tax and sales tax / Vat which have not been paid on account of dispute except for the dues in respect of income tax for the assessment years 1995-1996, 1997-1998, 1998-1999, 1999-2000, 2000-2001, 2001-2002, 2003-2004, 2004-2005 and 2007 - 2008 aggregating to Rs.264.23 Lakhs [excluding interest thereon] where all the appeals are pending before Madras High Court except for the assesment year 2007-2008 which is pending before the Commissioner of Income Tax (Appeals).

c) The company has received a Show Cause Notice (dated 27.03.2009) on 01.04.2009 from Commissioner of Service Tax, Service Tax Commissionerate as to why the Service Tax (including cess), interest should not be demanded and penalty should not be imposed. This contingency if materialized will amount to an outflow of Rs.1,21,40,756/-.

10] Accumulated Losses :

The company does not have any 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] Liability to Banks and Financial Institutions :

Based on our audit procedures and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

12] Loans on Pledging of shares etc :

As per records maintained by the Company, no loans or advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13] Applicability of Provisions of Special Statute of Chit Funds

In our opinion, the company is not a Chit Fund, Nidhi or Mutual Benefit Society. Hence the requirements of clause (xiii) of paragraph 4 of the Order are not applicable to the company.

14] Dealing in Shares & Securities :

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of Paragraph 4 of the Order are not applicable to the Company.

15] Guarantee

According to the information and explanations given to us, the company not given guarantee for loan taken by another Company from banks.

16] Long Term Loan :

To the best of our knowledge and belief and according to the information and explanations given to us loans availed by the company were applied for the purpose for which the loans were obtained.

17] Funds Utilization :

According to the records examined by us and according to the information and explanations given to us, on an overall basis, funds raised on short term basis have prima-facie, not been used during the year for long term Investment.

18] Preferential Allotment of shares :

The Company has not made any preferential allotment of shares to the parties and companies covered under Section 301 of the Act.

19] Debentures :

The Company has not issued debenture during the year under report. Therefore, clause (xix) of paragraph 4 of the Order is not applicable to the Company.

20] Public Issue

The Company has not raised any money by public issue during the year under report.

21] Frauds

According to the information and explanations given to us, no fraud by the company and no significant fraud on the company has been noticed or reported by the management during the year that ultimately causes the financial statements to be materially misstated.

for S.H. BHANDARI & Co., Chartered Accountants

K.Sekhar

PLACE : CHENNAI [PARTNER]

DATE : 14.05.2010 M.No: 200/21660

FIRM REG. NO. 000438S

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