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Auditor Report of Everonn Education Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of EVERONN EDUCATION LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information for the year then ended.

Management's Responsibility for the Standalone 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 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

i) We draw attention to Note No 2.27 - Deferred tax asset has been carried over as at year end 31st March, 2015, as the company is of the view that there is virtual certainty and has ability to continue as a going concern depends on the successful outcome of the management plans. However on a prudent basis the company has not made any additional provision in the current year towards deferred tax asset.

ii) We draw attention to Note No 2.36 towards Non-provision for Leave Encashment as specified under Accounting Standard 15 issued by ICAI. In the absence of Actuarial Valuation, we are unable to ascertain the effect of such non-provisioning.

iii) We draw attention to Note No. 2.42 wherein the company has indicated that it is assessing the carrying value of investment in subsidiaries and advances to subsidiaries, after taking into account the future operational plans and cash flows and accordingly no impairment loss has been recognized at this stage.

iv) We draw attention to Note No.2.43 - Lease Charges amounting to Rs.23,43,35('000) for the year ended March 2015 has not been provided in the books for some parties as required by the contractual terms. The overall non-provisioning of lease rental as at 31st March 2015 amounts to Rs.46,29,56('000). Had this been considered in the audited results for the period ended March, 2015 the loss would have been Rs. 107,82,35('000) as against reported loss of Rs 84,39,00('000) and retained earning would have been Rs. 62,23,27(000) as against reported balance of Rs. 108,52,83(000)

v) We draw attention to Note No.2.47 regarding non ascertaining of complete particulars of dues to Micro, Small and Medium Enterprises, if any, under MSMED Act, 2006, and provision towards interest, if any, is not ascertained at this stage.

vi) We draw attention to Note No.2.49 of Financial Statements with regard to non-receipt of Confirmation of balances from Debitors including dues from Government Companies, Creditors, Loans and Advances, Investments, banks and Other Liabilities. These amounts are subject to adjustments, if any, after reconciliation and for identification of doubtful debts/advances, which are not ascertainable at this stage.

vii) We draw attention to Note No 2.50, wherein the company has stated that provision towards impairment/ loss under AS 28 has not been ascertained.

viii) We draw attention to Note No. 2.51 wherein the company has indicated the receipt of income tax demand notices for various assessment years commencing from AY 06-07 amounting to Rs. 97,83,39(000) and appeals filed against the orders. The Company has sought the stay of demand of tax inclusive of interest for which no provision has been made beneficial .

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects/ possible effects of the matter described in the Basis for Qualified Opinion paragraph to the audited financials which are not ascertainable, had the observations in the note number 2.43 of the financial statement with regards to the lease charges had been considered the loss for the year ended March,31,2015 would have been a loss of Rs 107,82,35('000) as against reported loss of Rs 84,39,00('000) and retained earning would have been Rs 62,23,27(000) as against reported balance of Rs. 108,52,83(000), subject to paragraphs above 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, of the state of affairs of the Company as at 31st March, 2015, and its Loss and its cash flows for the year ended on that date.

Emphasis of Matter

a) Without qualifying our opinion, attention is drawn to accounting policy no. 2.1 of wherein, in the opinion of the management, despite incurring of substantial losses during the current financial year, erosion of net worth and existence of certain liabilities including banks, and other commitments, which are due for payment during the subsequent financial year the financial statements have been prepared on a going concern basis in view of the matters more fully explained in the said note.. The company's ability to continue as a going concern is dependent on the successful outcome of the management plans.

b) We draw attention to Note no: 2.56 The company in accordance with the order of Hon'ble High Court of Madras had utilised an amount of Rs. 65,66,64(000) from the Business Restructuring Reserve created in the earlier year.

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 purposes of our audit.

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

c. The Balance Sheet and the Statement of Profit and Loss and the cash flow statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

a. On the basis of the written representations received from the directors as on 31st March, 2015 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.

b. 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) Based on the information and explanation given to us, the Company has disclosed the impact of pending litigations on its financial position in its financial statements in Note no. 2.41 & 2.54.

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

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

ANNEXURE TO AUDITORS' REPORT

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

Based on the audit procedures performed for the purpose of reporting, true and fair view of the financial statements of the company and taking into consideration, the informations and explanations given to us, and the books of accounts and other records examined by us, in the normal course of audit, we report that;

i. (a) The Company has not maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has not carried out physical verification of fixed assets during the year. The company does not have a regular program of physical verification of its fixed assets. In our opinion the frequency of physical verification is not reasonable having regard to the size of the company and nature of its assets. Fixed Assets lying with third parties are also subject to confirmation. We are therefore unable to comment on the discrepancies, if any, which could have arisen on such verification.

(c) The management has also represented that no substantial part of fixed assets have been disposed off during the year, to affect the going concern.

ii. The company did not held any inventory during the year accordingly this clause is not applicable.

iii. The company has granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act an amount of Rs 150,40,15( '000) is outstanding as on 31st March 2015.

(a) In respect of loans given as there is no written repayment schedule we are unable to comment as to whether the payment of principal amount is regular.

(b) As there is no written repayment schedule and based on the information and explanation provided to us no amount has been demanded accordingly there is no amount overdue for more than Rs one Lakh.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are customized and are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations. Additional strengthening of the internal control procedures with regard to purchase of fixed assets is recommended so as to be commensurate with the current size of the Company and nature of its business. However, the management has represented that it is taking reasonable steps to correct the said weaknesses and in our opinion, there is a continuing failure to correct major weaknesses in internal control system relating to purchase of fixed assets.

v. As per the information and explanation provided to us the Company has not accepted any deposits from the public. However, temporary loans have been taken from employee welfare trust without adequate records.

vi. As per the information and explanations given to us the maintenance of cost records has not been prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

vii. The company is generally regular in depositing, undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues, wherever applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2015 for a period of more than six months from the date they became payable except following:-

Particulars Amount

Professional Tax 16,85 ('000)

Details of dues of Income-Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax and Cess which have not been deposited as on March 31,2015 on account of disputes are given below:

Statute Nature of Dues Forum where Dispute is pending

Income Tax Act,1961 Income Tax Dues CIT Appeals

Statute Period to which the Amount amount relates (Rs. '000)

Income Tax Act,1961 AY 2005-06 to AY 2011-12 97,83,39

The Company has been generally regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under within time.

viii. The company had accumulated losses at the end of the financial year and has incurred cash losses in the current and in the immediately preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the Company had restructured its loans with various banks and in accordance to the revised repayment schedule the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders subject to borrowing Standard Chartered Bank, which is currently under the DRT.

x. According to the information and explanations given to us, the Company has given guarantee towards loans taken by others from banks and financial institutions, for which no counter guarantee has been obtained from the parties.

xi. According to the information and explanations given to us, the Company has used the Term Loan availed during the current year for the purpose for which it was availed.

xii. During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India and based on information and explanation given to us, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

For M/s. P CHANDRASEKAR Chartered Accountants Firm Registration No.000580S

P Chandrasekaran Partner Membership No.026037

Place : Chennai Date: 18th August, 2015


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Everonn Education Limited, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended on that date 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.

Auditors'' 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 auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

i) We draw attention to Note No. 2.41 the company has assessed the carrying value of investment in subsidiaries and advances to subsidiaries taking into account the future operational plans and cash flows as prepared and represented by the management and accordingly no impairment loss has been recognized at this stage.

ii) We draw attention to Note No.2.48 of Financial Statements regarding non ascertaining complete particulars (including interest payable) of dues to micro, small and medium enterprises if any under MSMEDAct, 2006, provision if any to be made is not ascertainable at this stage.

Hi) We draw attention to Note No.2.50 of Financial Statements with regard to non receipt of Confirmation of balances from Debtors including dues from Government Companies, Creditors, Loans and Advances, Investments and Other Liabilities. These amounts are subject to adjustments, if any, after reconciliation and for identification of doubtful debts/advances, which are not ascertainable at this stage.

iv) We draw attention to Note No 2.51, with regard to review of usefulness of the assets under AS 28, for which provision towards impairment/loss has not been ascertained.

v) We draw attention to Note No. 2.52 the company has received various demand notices of income tax and interest thereon in respect of Assessment Years 2007-08 to 2010-11. The matter pertains to various additions made by the department. The company has disputed the issue and has filed appeal against the above demand by the tax authorities including the stay of demand amounting to Rs. 4,13,174 (WO). The company has received various show cause notices in respect of service tax matters also. The management is of the view that the appropriate adjustments/provisions will be made on the final outcome of these matters and hence no provision has been made for the taxes, penalties, and interests for non/delayed payments of these dues as these amounts are not determined.

We are not aware of the any material adjustments which may arise qn account of adjustments relating to issues set out above and subsequent to receipt of such confirmation / reconciliation.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Emphasis of Matter

a) Without qualifying our opinion, attention is drawn to accounting policy no. 2.1 of the financials statement on the existence of certain liabilities including banks, and other commitments, which are due for payment during the subsequent financial year and the management plan /action for meeting the same. The company''s ability to continue as a going concern is dependent on the successful outcome of the management plans.

b) We draw attention to Note No: 2.19 Deferred tax asset has been recognized for the year ended 31s'' March,2013, as the company is of the view that there is virtual certainty and has ability to continue as a going concern depends on the successful outcome of the management plans.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' 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 except for the matter described in the Basis for Qualified Opinion paragraph;

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. except for the effects / possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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 Act;

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.

ANNEXURE TO AUDITORS REPORT

Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in the

Independent Auditors'' Report of even date to the members of Everonn Education Limited on the financial statements for the year ended March,31,2013

Based on the audit procedures performed for the purpose of reporting, true and fair view of the financial statements of the company and taking into consideration, the informations and explanations given to us, and the books of accounts and other records examined by us, in the normal course of audit, we report that;

i. (a) The Company has not maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has not carried out physical verification of fixed assets during the year. The company does not have a regular program of physical verification of its fixed assets. In our opinion the frequency of physical verification is not reasonable having regard to the size of the company and nature of its assets. Fixed Assets lying with third parties are also subject to confirmation. We are therefore unable to comment on the discrepancies, if any, which could have arisen on such verification.

(c) The management has also represented that no substantial part of fixed assets have been disposed off during the year, to affect the going concern.

ii. Having regard to the nature of the Company''s business / activities, clause 4(H) of CARO is not applicable to the Company as there is no inventory being held by the company.

iii. (a) According to the information and explanations given to us, during the period under review, the company has availed loans from subsidiaries listed in the Register maintained under section 301 of the Companies Act, 1956, the Outstanding Balance as on 31st March 2013 is Rs.2,47,20,91(''000) and the maximum amount involved during the period is Rs.2,60,71,89(''000). There are no written terms and conditions for repayment and interest on loans. Hence the availment of loan is prima facie not prejudicial to the interest of the company. In respect of the said loans, the same are repayable on demand and there are no overdue amounts.

(b) According to the information and explanations given to us, during the period under review, the company has granted loan to Subsidiaries listed in the Register maintained under Section 301 of the Companies Act, 1956. The outstanding balance as on 31st March 2013 is Rs.1,88,18,68(''000) and the maximum amount involved during the period is Rs. 1,88,23,68 (WO.) There are no stipulated terms and condition on either the interest rate or the repayment schedule. However the rate of interest and the interest free nature where applicable and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the company. As there is no written repayment schedule we are unable to comment as to whether the payment of principal amount is regular.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are customized and are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations. Additional strengthening of the internal control procedures with regard to purchase of fixed assets is recommended so as to be commensurate with the current size of the Company and nature of its business. However, the management has represented that it is taking reasonable steps to correct the said weaknesses and in our opinion, there is a continuing failure to correct major weaknesses in internal control system relating to purchase of fixed assets.

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

vi. The company has not accepted deposits from the public, under the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed there under. However, temporary loans have been taken from employee welfare trust without adequate records.

vii. The company did not have an internal audit system during the year.

viii. The maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

ix. (a) According to the information and explanations given to us, the company has been generally depositing undisputed statutory dues with few delays including Employees Provident Fund, Employees'' State Insurance, Investor Protection fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Income Tax, TDS, Professional Tax and any other statutory dues with the appropriate authorities during the year. There have been significant delays in large number of cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, service tax etc were in arrears as at 31.03.2013 for a period of more than six months from the date they became payable excepting;

Particulars Amount (Rs. in ''000) Period to which it relates

Income Tax 26,02 AY-08-09

Income Tax 16,07,70 AY: 11-12

Service Tax 59,07 YE: March 13

Professional Tax 13,24 YE: March 13

Employee State Insurance 15 YE: March 13

(c) According to the information and explanations made available to us and on the basis of examination of records of the Company, the dues of Excise Duty, Sales Tax and Income Tax as at 31st March 2013 which have not been deposited on account of any dispute are as follows.

Name of the Statute Forum where matter Amount (Nature of the Dues) is pending (Rs. in ''000)

Income Tax AY : 2007-08 CIT(A) 5,23,68

Income Tax AY : 2008-09 CIT(A) 12,27,62

Income Tax AY: 2010-11 CIT(A) 17,17,25

Income Tax AY : 2009-10 CIT(A) 6,63,19

Service Tax Since AY2006-07 DGCEI 9,42,69

x. In our opinion, the Company did not have accumulated losses at the beginning of the year but has sustained cash losses during the current financial year covered under our audit.

xi. As per the information and explanations made available to us, the company has been generally regular in repayment of dues to financial institutions or banks for the period ending 31st March, 13.

xii. According to the information and explanations given to us, the company has not granted any loan or advance on the basis of Security by way of pledge of shares, Debentures and other securities.

xiii. The provisions of Clause 4(xiii) of the Order relating to Chit Funds / Nidhi are not applicable to the company.

xiv. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has given guarantee towards loans taken by others from banks and financial institutions, for which no counter guarantee has been obtained from the parties.

xvi. According to the information and explanations given to us, the Company has used the Term Loan availed during the current year for the purpose for which it was availed.

xvii. According to the Cash flow statement and other records examined by us and based on the information and explanations given to us, on an overall basis, funds raised on short term basis have not been used for Long term Investment.

xviii. According to the information and explanation given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix. The Company has not issued debentures during the year and therefore the question of creating security or charge in respect thereof does not arise.

xx. The Company has not raised any funds by means of public issue during the current year and hence the question of disclosing the end-use of money raised by way of public issue does not arise.

xxi. Based on the audit procedures performed and on the basis of representation obtained from the management, we report that no instance of fraud on or by the company have been noted or reported by the management during the year.

For M/S.P.CHANDRASEKAR

Chartered Accountants

Firm Registration No.000580S

P.Chandrasekaran

Partner

Membership No.026037

Chennai Date:30th May,2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s Everonn Education Limited as at 31st March 2012, the Statement of Profit and Loss and the 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 (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 of the said order to the extent they are applicable to the company.

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 were necessary for the purpose of our audit.

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

c) The Balance Sheet, the Statement of Profit and loss and the Cash Flow statement referred to in this report are in agreement with the books of accounts of the Company.

d) In our opinion, the Balance Sheet, the Statement of Profit and loss and the 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 with the exception of Accounting Standard 28 on Impairment of Assets, Accounting Standard -13 on Investments.

e) Attention is invited to the following:

i) Note No.2.41 of Financial Statements regarding non Provision of Diminution in Value of Investments in Subsidiaries which have incurred losses and whose Networth has been partially eroded, for the reasons stated therein.

ii) Note No.2.48 of Financial Statements regarding non ascertaining complete particulars (including interest payable) on dues to Micro, Small and Medium Enterprises if any under MSMED Act, 2006, provision if any to be made is not ascertainable at this stage.

iii) Note No.2.49 of Financial Statements with regard to non receipt of Confirmation of Balance from Debtors including Dues from Government Companies, Creditors, Loans and Advances and Other Liabilities. These amounts are subject to adjustments if any, after reconciliation and identification of doubtful debts / advances, which are not ascertainable at this stage.

iv) Note No.2.50 of Financial Statements with regard to non provision of impairment loss pending completion of assessment. The impact if any on the financial statements is not ascertainable at this stage.

In all the cases referred to above, effect on financial statements is not ascertainable. We do not express independent opinion on these matters.

f) On the basis of written representations received from the directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the director is disqualified as on 31st march 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.

5. Subject to our comments vide para 4(e) above, in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the notes thereon and schedules attached thereto, give the information required by the Companies Act 1956, in the manner so required and present a true and fair view, in conformity with the accounting principles generally accepted in India.

i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2012;

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

iii) in the case of the Cash flow statement, of the Cash flows for the year ended on that date;

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date)

i. (a) The Company is maintaining records showing full particulars, including quantitative details and situation of fixed assets. However comprehensive description of assets, their current location and accumulated depreciation needs to be updated in the asset records.

(b) The Company has not carried out physical verification of fixed assets during the year. The company does not have a regular program of physical verification of its fixed assets. In our opinion the periodicity of physical verification is not reasonable. Fixed Assets lying with third parties are also subject to confirmation.

(c) The management has also represented that no substantial part of fixed assets have been disposed off during the year, to affect the going concern.

ii. Having regard to the nature of the Company's business / activities, clause 4(ii) of CARO is not applicable to the Company. There is no inventory being held by the company.

iii. (a) According to the information and explanations given to us, during the period under review, the company has availed loans from subsidiaries listed in the Register maintained under section 301 of the Companies Act, 1956, the Outstanding Balance as on 31st March 2012 is Rs.17,84,170 ('000) and the maximum amount involved during the period is Rs.20,33,652 ('000). There are no written terms and conditions for repayment and interest on loans. Hence the availment of loan is prima facie not prejudicial to the interest of the company. In respect of the said loans, the same are repayable on demand and there are no overdue amounts.

(b) According to the information and explanations given to us, during the period under review, the company has granted loan to Subsidiaries listed in the Register maintained under Section 301 of the Companies Act, 1956. The outstanding balance as on 31st March 2012 is Rs.17,12,407 ('000) and the maximum amount involved during the period is Rs.19,49,917 ('000.) There are no stipulated terms and condition on either the interest rate or the repayment schedule. However the rate of interest and the interest free nature where applicable and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the company. The interest rate charged by the company is lesser than the Standard Rate as specified by the Reserve Bank of India.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are customized and are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations. Additional strengthening of the internal control procedures with regard to purchase of fixed assets is recommended so as to be commensurate with the current size of the Company and nature of its business. However, the management has represented that it is taking reasonable steps to correct the said weaknesses and we have not observed any other continuing failure to correct major weaknesses in internal controls.

v. According to the informations and explanations given to us, we are of the opinion that transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been generally so entered.

vi. The company has not accepted deposits from the public, under the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed there under.

vii. According to the informations and explanations given to us the company has Internal audit system commensurate with the size and nature of the business. The Scope of Internal Audit needs to be enhanced considering the risk assessments carriedout by the Company. The Internal Audit System same needs to be adequately strengthened with regard to scope and coverage and the volume of transactions.

viii. The maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

ix. (a) According to the information and explanations given to us, the company has been depositing undisputed statutory dues with few delays including Employees Provident Fund, Employees' State Insurance, Investor Protection fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Income Tax, TDS, Professional Tax and any other statutory dues with the appropriate authorities during the year.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, service tax etc were in arrears as at 31.03.2012 for a period of more than six months from the date they became payable excepting;

Particulars Amount (Rs. in '000)

Income Tax for the AY 2010-11 7845.26

Income Tax for the AY 2011-12 1,61,042.50

Professional Tax for the Earlier Years 1018.93

Professional Tax for the Half Year Ended 30.09.2011 221.14

Service Tax Interest for the FY 2009-10 10,314.15

Service Tax Interest for the FY 2010-11 1,579.58

Service Tax Interest for the FY 2011-12 67.12

(c) According to the information and explanations made available to us and on the basis of examination of records of the Company, the dues of Excise Duty, Sales Tax and Income Tax as at 31st March 2012 which have not been deposited on account of any dispute are as follows.

Name of the Statute Period to which Forum where Amount (Nature of the Dues) the amount relates matter is pending (Rs. in '000)

Income Tax for AY 2009-10 FY 2008-09 CIT(A) 2,13,046

Service Tax Since FY 2006-07 Since FY 2005-06 DGCEI 9,400

x. The Company has no accumulated losses at the end of the year and has not sustained cash losses during the current financial year covered under our audit, and also in the immediately preceding financial year.

xi. As per the information and explanations made available to us, the company has not defaulted in repayment of dues to financial institutions or banks.

xii. According to the information and explanations given to us, the company has not granted any loan or advance on the basis of Security by way of pledge of shares, Debentures and other securities.

xiii. The provisions of Clause 4(xiii) of the Order relating to Chit Funds / Nidhi are not applicable to the company.

xiv. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has given guarantee towards loans taken by others from banks and financial institutions for which no counter guarantee has been obtained from the parties.

xvi. According to the information and explanations given to us, the Company has used the Term Loan availed during the current year for the purpose for which it was availed.

xvii. According to the Cash flow statement and other records examined by us and based on the information and explanations given to us, on an overall basis, funds raised on short term basis have not been used for Long term Investment.

xviii. According to the information and explanations given to us, the Company has during the year made allotment of shares to Debenture holders and other parties on preferential basis. The issue price of shares so allotted has been determined in accordance to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. Hence, it is not prejudicial to the interests of the company.

xix. The Company has not issued debentures during the year and therefore the question of creating security or charge in respect thereof does not arise.

xx. The Company has not raised any funds by means of public issue during the current year and hence the question of disclosing the end-use of money raised by way of public issue does not arise.

xxi. Based on the audit procedures performed and on the basis of representation obtained from the management, we report that no instance of fraud on or by the company have been noted or reported by the management during the year.

For M/s. P. Chandrasekar

Chartered Accountants

(FRN 000580S)

P. Chandrasekaran

Place : Bangalore Partner

Date : 13th August 2012 Membership No.: 026037


Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. Everonn Education Limited as at 31st March 2011 and the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed hereto. 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 (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) 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:

(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 it appears from our examination of those books.

(c) The Balance Sheet, Profit and Loss account and Cash flow statement referred to in 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 by this report comply with the Accounting Standards prescribed by the Institute of Chartered Accountants of India and referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

(e) On the basis of the written representations received from directors as on 31.03.2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Accounting policies and the notes there on give the information required by the Companies Act 1956, in the manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) in the case of Balance Sheet of the state of affairs of the company as at 31st March 2011.

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

(iii) in the case of 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. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

2. Fixed Assets have been physically verified by the Management during the year and there is regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. As reported to us no material discrepancies have been noticed on such verification.

3. Substantial parts of the Fixed Assets have not been sold during the year under review affecting going concern.

4. The Company has granted unsecured loans to Subsidiary Companies amounting to Rs.7800.90 Lakhs and the terms and conditions of loans taken by the Company, unsecured, are prima facie not prejudicial to the interest of the Company

5. The Company has not taken interest free unsecured loans from any Company, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

6. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of Inventory, fixed assets and with regard to rendering services. No major weaknesses in internal controls were observed.

7. According to the information and explanations given to us, and based on our verification, we are of the opinion that there are no transactions that were required to be entered in the register maintained under section 301 of the Companies Act, 1956.

8. 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 value of Rupees five lakhs in respect of any party during the year.

9. The Company has not accepted any deposits from the public during the year requiring the compliance of provisions of Section 58A and Section 58AA or any other relevant provisions of the Companies Act, 1956.

10. In our opinion, the Company has an Internal Audit system commensurate with the size and nature of its business.

11. The Central Government has not prescribed the Maintenance of cost records under Section 209 (1) (d) of the Companies Act,1956 for any of the products of the Company.

12. As per the information and explanations made available to us and also based on the records made available to us, in our opinion, the Company is regular in depositing the undisputed statutory dues including ESI, Income Tax, Sales Tax, Fringe Benefit Tax, Service Tax and other statutory dues. There are no outstanding dues in respect of the above items which are more than six months as at the balance sheet date.

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

14. The Company has not incurred cash losses during the year covered by our audit and also during the immediately preceding financial year.

15. As per the information and explanations made available to us, the Company has not defaulted in repayment of dues to any financial institutions, bank or debenture holder.

16. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

17. The Company is not a chit fund or a nidhi / mutual benefit fund / society and therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

18. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments and therefore, the provisions of

clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

19. In our opinion and according to the information and explanations given to us, the Company has given guarantee for loans taken by others from Banks and Financial Institutions.

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

21. 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.

22. The Company has made preferential allotment of shares to parties and companies. The allotments

and pricing of the shares have been made in accordance with the guidelines laid down in this regard by SEBI and hence prices at which shares have been issued are not prima facie, prejudicial to the interest of the Company.

23. According to the information and explanations given to us and based on the records examined by us, the Company has issued debentures during the year.

24. The Company has not raised any money during the year through public issue of any of its securities.

25. According to the information and explanations given to us, there were no cases of fraud on or by the Company noticed or reported during the year.

For M/s. P.CHANDRASEKAR Chartered Accountants FRN 000580S

Place:Chennai P. CHANDRASEKARAN Date :May 23, 2011 Partner M.No.26037


Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. Everonn Education Limited as at 31st March 2010 and the Profit and Loss Account and also the 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.

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 issued by the Central Government of India in terms of Section 227(4A) 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:

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 it appears from our examination of those books.

c) The Balance Sheet, Profit and Loss account and Cash flow statement referred to in 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 by this report comply with the Accounting Standards prescribed by the Institute of Chartered Accountants of India and referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of the written representations received from directors as on 31.03.2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Accounting policies and the notes there on give the information required by the Companies Act 1956, in the manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India:

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

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

iii) in the case of 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. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

2. Fixed Assets have been physically verified by the Management during the year and there is regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and nature of its assets. As reported to us no material discrepancies have been noticed on such verification.

3. Substantial part of the Fixed Assets have not been sold during the year under review affecting going concern.

4. The companys inventories are inspected periodically by the Companys Management.

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

6. The company has maintained proper records of Inventory. The discrepancies noticed on verification between the Physical stocks and the book records were not material and have been properly dealt with in the books of account.

7. The Company has granted, secured or unsecured loans to six companies, firms or other parties covered in the register maintained under section 301 of the Act. Act amounting to Rs. 748.47 Lakhs and the terms and conditions of loans taken by the company, unsecured, are prima facie not prejudicial to the interest of the company

8. The company has not taken interest free unsecured loans from any company, firms or other parties covered in the register maintained under section 301 of the Act .

9. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of Inventory, fixed assets and with regard to rendering services. No major weaknesses in internal controls were observed.

10. According to the information and explanations given to us, and based on our verification, we are of the opinion that there are no transactions that were required to be entered in the register maintained under section 301 of the companies Act 1956.

11. 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 value of Rupees five lakhs in respect of any party during the year.

12. The company has not accepted any deposits from the public during the year requiring the compliance of provisions of Section 58A and Section 58AA or any other relevant provisions of the companies act 1956.

13. In our opinion the company has an Internal Audit system commensurate with the size and nature of its business.

14. The Central Government has not prescribed the Maintenance of cost records under Section 209 (1) (d) of the Companies Act,1956 for any of the products of the company.

15. As per the information and explanations made available to us and also based on the records made available to us, in our opinion the Company is regular in depositing the undisputed statutory dues including ESI, Income Tax, Sales Tax, Fringe Benefit Tax, Service Tax and other statutory dues, excepting Provident Fund in few cases there were delays in remittance. There are no outstanding dues in respect of the above items which are more than six months as at the balance sheet date.

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

17. The company has not incurred cash losses during the year covered by our audit and also during the immediately preceding financial year.

18. As per the information and explanations made available to us the company has not defaulted in repayment of dues to any financial institutions, bank or debenture holder.

19. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

20. The company is not a chit fund or a nidhi / mutual benefit fund / society and therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

21. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

22. In our opinion and according to the information and explanations given to us, the company has given guarantee for loans taken by others from Banks and Financial Institutions.

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

24. 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.

25. The Company has not made preferential allotment of shares to parties and companies .

For M/s P.CHANDRASEKAR

Chartered Accountants

Place : Chennai P.CHANDRASEKARAN

Date : May 19, 2010 Partner

M.No.26037

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