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Auditor Report of Mega Fin (India) Ltd.

Mar 31, 2011

We have audited the attached Balance Sheet of the MEGA FIN (INDIA) LIMITED as at 31st March, 2011 and also the Profit and Loss Account 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 the financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in ' India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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.

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

2) In our opinion, proper books of accounts as required by law have been kept by the company as far as appears from our examination of the books.

3) The Balance Sheet and Profit and Loss account dealt with by this report are in agreement with the books of account.

4) In our opinion, the Balance Sheet and the Profit and Loss account dealt with by the report are in compliance in all material aspect with the accounting standard referred to in Section 211 (3C) of the Companies Act, 1956.

5) On the basis of written representation received from the directors as at 31.03.2011 and taken on record by the board of directors, we report that none of the directors of the Company are disqualified as on 31.03.2011 from being appointed as director under Sec. 274 (1) (g) of the Companies Act, 1956.

6) The financial statements have been prepared by the management on a going concern basis even though the company has substantial accumulated losses, its activity is stand still and has eroded its net worth as explained in Note No. "B (9)" in respect of which we are unable to express an opinion wither the Company can now operate as a going concern

7) With respect to Loans Advances of Rs. 145.31 Lacs and Sundry Debtors of Rs. 188.86 Lacs which are outstanding for a long period, where there are no repayments/ interest recovery as explained in Note No. "B (3)", we are unable to formulate an opinion on the recoverability/ity of the amount due.

8) Attention is drawn to Note No. "B (5)" regarding non confirmation of balances of loans and advances, sundry debtors, Assets given on lease.

9) Attention is invited to Note No. "S (6)" regarding the shares, which are neither transferred in the name of the Company nor the Company is holding the shares with valid transfer deed and as such we are unable to formulate an opinion on the veracity of the said shares..

10) Attention is invited to Note No. "B (8)" regarding non appointment of Company Secretary and Managing Director as required by Section 383A and Section 269 respectively of Companies Act, 1956.

11) We further report that resultant impact of observation made by us in paragraph 6,to 10 above on the loss for the year and current assets, Investments, liabilities and balance in profit & loss account at the year end, on the cash flow statement are unascertainable and accordingly cannot be commented upon by us.

12) Subject to whatever stated or observed in paragraph no.(6) to (11) above, in our opinion, and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

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

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

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

13) As required by the Companies (Auditor's Report) Order, 2003(as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (hereinafter referred to as the 'said Order')and in our opinion and on the basis of such checks as we considered appropriate we further report that :

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

b) As all the fixed assets has been disposed off during the year However, as noted in paragraph 6 of our report we are unable to form an opinion whether the going concern assumption used in the preparation of financial statement is appropriate.

ii) According to the information and explanations given to us, and having regard to the Company's business, the reporting on clause 4(ii) (a), 4(ii)(b) and 4(ii)(c) of the said Order are not applicable.

iii) a) The Company has not taken -secured/unsecured loan from parties covered in the register maintained u/s 301 of the Companies Act, 1956. The Company has granted interest free loan to parties covered in register maintained U/s 301 of the Companies Act, ._1956_. There are three Companies covered in the register maintained u/s 301 of the Companies Act, 1956 to which Company has granted loans out of which loan given to Mega Safe Deposit Values Ltd and Mega Custodial Ltd is squared off. And the maximum amount involved during the year for loan given to Mega Capital Broking Pvt Ltd was Rs.12,700/- and the year end balance of loans granted to such party was Rs 7,100/-.

b) As the above loans are given interest free & there are no stipulations as to repayment of loans, clause (b), (c) & (d) are not commented upon.

iv) According to the information and explanations given to us there are generally adequate internal control procedures commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls.

v) a) In our opinion and according to the information and explanations given to us, there are no contracts and arrangements the particulars of which need to be entered in the register maintained under section 301 of the Companies Act, 1956.

b) Sub-clause (b) is not applicable.

vi) In our opinion and according to explanations given to us, the company has not accepted deposits from public during the year.

vii) During the year review, due to absence of business operations there was no formal internal audit systems. However Company's control procedure ensures reasonable internal checking of its financial and other records.

viii) According to the information and explanation given to us, maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies Act,1956, hence the question of reporting under clause 4(viii) of the said Order does not arises.

ix) a) According to the records of the Company, the Company is regular in depositing with the appropriate authorities undisputed statutory dues including Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess & other material statutory dues applicable to it. As there are no employees on pay roll of the Company, Provision of Provident Fund, and Employees State Insurance Scheme are not applicable and also provisions of Investor Education & Protection Fund are not applicable.

b) As per records of the Company and according to the information and explanation given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty Excise Duty & Cess as at 31.03.2011 for a period more than six months from the date they become payable .

c) As per records of the Company and according to the information and explanation given to us, there are no dues of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty Excise Duty and cess which have not been deposited on account of any dispute.

x) In our Opinion, the accumulated losses of the company are more than fifty percent of the Net worth. The Company has incurred cash losses during the financial year covered by our audit as well as in the immediately preceding financial year.

xi) The Company has not borrowed from a financial institution or a bank and has not issued any debentures. Therefore clause 4

(xi) of the said Order is not applicable.

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

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

xiv) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures, and other investments. The shares are held by the Company in its own name, except where the company is not holding the share certificates along with valid transfer deeds (Refer Note No. "B (6)").and also our qualification in Para 9of the report.

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

xvi) The Company has not obtained term loans during the year and no amounts are outstanding.

xvii) On the basis of information and explanation given thus and as on overall examination of the Balance Sheet & the cash flow statement of the Company, We report that no funds raised on short term basis have been used during the year for the long term investment.

xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the question of reporting on whether the price at which such shares have been issued is prejudicial to the interest of the company does not arise.

xix) The Company has not issued any debentures during the year and no amounts are outstanding. Accordingly question of creating a security for such debentures does not arise.

xx) The Company has not raised any money by public issues during the year. Accordingly, the question of disclosure of end use of such monies does not arise.



xxi) According to the information-aphid explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our Audit.

For S. K SHETH & CO.

CHARTERED ACCOUNTANTS Firm Registration

No.:110074W

Sd/- Place : Mumbai (SHARAD K. SHETH)

Date : August 26, 2011 PROPRIETOR

M.No. : 34061


Mar 31, 2010

We have audited the attached Balance Sheet of the MEGA FIN (INDIA) LIMITED as at 31st March, 2010 and also the Profit and Loss Account and the 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 the financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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.

1) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit except as mentioned in Note No "B(18)".

2) 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 the books.

3) The Balance Sheet and Profit and Loss account dealt with by this report are in agreement with the books of account.

4) In our opinion, the Balance Sheet and the Profit and Loss account dealt with by the report are in compliance in all material aspect with the accounting standard referred to in Section 211 (3C) of the Companies Act, 1956.

5) On the basis of written representation received from the directors as at 31.03.2010 and taken on record by the board of directors, we report that none of the directors of the Company are disqualified as on 31.03.2010 from being appointed as director under Sec. 274 (1) (g) of the Companies Act, 1956.

6) The financial statements have been prepared by the management on a going concern basis even though the company has substantial accumulated losses, its activity is stand still and has eroded its net worth as explained in Note No. "B (9) " in respect of which we are unable to express an opinion wither the Company can now operate as a going concern

7) With respect to Loans & Advances of Rs. 145.31 Lacs and Sundry Debtors of Rs. 188.86 Lacs which are outstanding for a long period, where there are no repayments/ interest recovery as explained in Note No. "B (3)", we are unable to formulate an opinion on the recoverability of the amount due.

8) Attention is drawn to Note No. "B (5)" regarding non confirmation of balances of loans and advances, sundry debtors, Assets given on lease.

9) Attention is invited to Note No. "B (6)" regarding the shares, which are neither transferred in the name of the Company nor the Company is holding the shares with valid transfer deed and as such we are unable to formulate an opinion on the veracity of the said shares.

10) Attention is invited to Note No. "B (18)" regarding non availability of balance confirmation and statement of account from Union Bank of India Ahmedabad , this balances is subject to confirmation and reconciliation and adjustment/ entries to these account would be made on receipt of statement of account and confirmation and completion of reconciliation.

11) Attention is invited to Note No. "B (8)" regarding non appointment of Company Secretary and Managing Director as required by Section 383A and Section 269 respectively of Companies Act, 1956.

12) We further report that resultant impact of observation made by us in paragraph 6 to l0 above on the loss for the year and current assets, Investments, liabilities and balance in profit & loss account at the year end, on the cash flow statement are unascertainable and accordingly cannot be commented upon by us.

13) Subject to whatever stated or observed in paragraph no.(6) to (11) above, in our opinion, and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in 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 Loss for the year ended on that date and

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

14) As required by the Companies (Auditors Report) Order, 2003(as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (hereinafter referred to as the said Order)and in our opinion and on the basis of such checks as we considered appropriate we further report that:

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

b) The Fixed Assets, except for assets given on lease and which are impaired, have been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of the business. No material discrepancies were noticed on such verification. As the impaired assets are not in good condition to use and as explained to us the said assets are in the process of scrap it out ,hence the impaired assets are not verified during the year. [Refer Note :5(b)] In respect of Leased assets, the Company has a procedure of collecting confirmation from lessees as to physical existence and working condition of leased assets. During the year, the Company has not sent confirmation to any of the lessee. In the absence of confirmations, we are unable to comment upon the existence and discrepancies if any, in respect of these leased assets.

c) A substantial part of the fixed assets has not been disposed off during the year However, as noted in paragraph 6 of our report we are unable to form an opinion whether the going concern assumption used in the preparation of financial statement is appropriate.

ii) According to the information and explanations given to us, and having regard to the Companys business, the reporting on clause 4(ii)(a), 4(ii)(b) and 4(iiXc) of the said Order are not applicable.

iii) a) The Company has not taken secured/unsecured loan from parties covered in the register maintained u/s 301 of the Companies Act, 1956. The Company has granted interest free loan to parties covered in register maintained U/s 301 of the Companies Act, 1956. There are three Companies covered in the register maintained u/s 301 of the Companies Act, 1956 to which Company has granted loans. The maximum amount involved during the year was Rs.3.52 lacs and the year end balance of loans granted to such parties was Rs.3.52 Lacs.

b) As the above loans are given interest free & there are no stipulations as to repayment of loans, clause (b), (c ) & (d) are not commented upon.

iv) According to the information and explanations given to us there are generally adequate internal control procedures commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls.

v) a) In our opinion and according to the information and explanations given to us, there are no contracts and arrangements the particulars of which need to be entered in the register maintained under section 301 of the Companies Act, 1956.

b) Sub-clause (b) is not applicable.

vi) In our opinion and according to explanations given to us, the company has not accepted deposits from public during the year.

vii) During the year review, due to absence of business operations there was no formal internal audit systems. However Companys control procedure ensures reasonable internal checking of its financial and other records.

viii) According to the information and explanation given to us, maintenance of cost records has not been prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956, hence the question of reporting under clause 4(viii) of the said Order does not arises.

ix) a) According to the records of the Company, the Company is regular in depositing with the appropriate authorities undisputed statutory dues including Income Tax Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess & other material statutory dues applicable to it. As there are no employees on pay roll of the Company, Provision of Provident Fund, Employees State Insurance Scheme are not applicable and also provisions of Investor Education & Protection Fund are not applicable.

b) As per records of the Company and according to the information and explanation given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty Excise Duty & Cess as at 31.03.2010 for a period more than six months from the date they become payable

c) As per records of the Company and according to the information and explanation given to us, there are no dues of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty Excise Duty and cess which have not been deposited on account of any dispute.

x) In our Opinion, the accumulated losses of the company are more than fifty percent of the Net worth. The Company has incurred cash losses during the financial year covered by our audit as well as in the immediately preceding financial year.

xi) The Company has not borrowed from a financial institution or a bank and has not issued any debentures. Therefore clause 4 (xi) of the said Order is not applicable.

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

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

xiv) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures, and other investments. The shares are held by the Company in its own name, except where the company is not holding the share certificates along with valid transfer deeds (Refer Note No. "B (6)"). and also our qualification in Para 9of the report.

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

xvi) The Company has not obtained term loans during the year and no amounts are outstanding.

xvii) On the basis of information and explanation given thus and as on overall examination of the Balance Sheet & the cash flow statement of the Company, We report that no funds raised on short term basis have been used during the year for the long term investment.

xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the question of reporting on whether the price at which such shares have been issued, is prejudicial to the interest of the. company does not arise.

xix) The Company has not issued any debentures during the year and no amounts are outstanding. Accordingly question of creating a security for such debentures does not arise.

xx) The Company has hot raised any .money by public issues during the year. Accordingly, the question of disclosure Of end use of such monies does not arise.

xxi) According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our Audit.

For S. K. SHETH & CO.

CHARTERED ACCOUNTANTS

Firm Registration No.:110074W

Sd/-

(SHARAD K. SHETH)

Place: Mumbai PROPRIETOR

Date : 23.08.2010 M.No.: 34061

 
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