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Auditor Report of Nivyah Infrastructure & Telecom Services Ltd.

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Nivyah Infrastructure & Telecom Services Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2013 and the Statement of Profit and Loss and Cash Flow Statement for the year ended, 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 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 subject to certain exceptions mentioned in the following paragraph to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

The company''s trade receivables are carried at the balance sheet date at 26,76,55,55. Management has not provided appropriate audit evidence regarding the recoverability ofthe said amount. In the opinion of the management there are remote chances of recoverability of certain amounts, which they are unable to quantify. Further, in the absence of sufficient details, we are unable to quantify the interest and penalty that may arise on the long outstanding statutory dues payable by the company. Hence the liabilities of the company are understated by an amount due to non-provision of statutory liabilities which is not ascertainable by the management as per note no 32. Further, as per note no. 31 balances of Trade Payables, Trade Receivables, Loans & Advances and Deposit are subject to Confirmation.

Qualified Opinion

In our opinion, except for the matters described in the Basis for Qualified Opinion paragraph, and to the best of our information and according to the explanations given to us, the financial statements present fairly, in all material aspects :

(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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 2. As required by section 227(3) of the Act, we report that:

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

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

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 except for Accounting Standard 15 " Employee Benefits" where Retirement benefits and leave encashment are charged on the basis of valuation certified by the management instead of the Actuarial Valuation;

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 AUDITOR’S REPORT

[Referred to in paragraph 3 of the Auditor’s Report to the members of Nivyah Infrastructure & Telecom Services Limited]

As required by the Companies (Auditor’s Report) Order, 2003, issued by the Company Law Board in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and as per the information and explanations given to us during the course of audit, we further state that:

(i) In respect of fixed assets:

a) The Company has maintained a fixed assets register including quantitative details and situation of fixed assets.

b) As explained to us, the company has taken physical verification of fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) The company has not disposed off any fixed assets during the year which could affect the going concern status of the Company.

(ii) The company does not have any inventories, so requirement of the clause 4(ii) of the order are not applicable to the Company.

(iii) a) The Company had granted unsecured demand loans to 18 Parties covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year was Rs.1.08,39,677/- and the year end balance of loan granted to said parties was Rs.98,74,053/-.

b) In our opinion, the rates of interest and other terms & conditions of loans granted by the company are not prima facie prejudicial to the interests of the company.

c) The stipulations regarding payment of Principal amount and interest have not been specified.

d) The company has taken unsecured demand loans from 4 parties covered in the register maintained under section 301 of the Act. The maximum amount involved during the year was Rs.2, 53, 76,772/- and the yearend balance of loan taken from the said parties was Rs.2,51,51,617/-.

e) The loans are interest free and there are no stipulations with respect to the interest, which can prima facie be prejudicial to the interest of the share holder.

f) In respect of loans taken, the principal amount is repayable on demand.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weaknesses has been noticed in the internal control system or continuing failure to correct major weaknesses in internal control system of the company in respect of these areas, except for the cash sales of services.

In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into the Register maintained under Section 301 of the Companies Act, 1956.

(vi) The company has not accepted any deposits from the public. Hence the directives issued by the Reserve Bank of India and the provision sections 58A & 58AA of the Act, & rules framed there under are not applicable to the company.

(vii) In our opinion, the Company does not have an internal audit system commensurate with its size and nature of its business.

(viii) We have been informed that the maintenance of cost records, prescribed by Central Government u/s 209(1) (d) of the Companies Act, 1956 are not applicable to the company.

(ix) According to information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, the Company is not regular in depositing with appropriate authorities undisputed statutory dues ncluding provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales tax, wealth tax, customs duty, Service tax, excise duty and cess as applicable to it. The total undisputed statutory liability is Rs.4,36,37,625/-.

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

According to the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

(xii) The Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, therefore clause 4 (xii) of the order is not applicable to the company.

(xiii) The provision of any special statute applicable to chit fund/mutual benefit fund/societies are not applicable to the Company, therefore clause 4 (xiii) of the order is not applicable.

(xiv) The Company is not trading in shares & securities, so requirement of clause 4 (xiv) does not applicable to the Company.

(xv) In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institution during the year, so the clause 4(xv) of the order is not applicable.

(xvi) The Company has not taken any term loan from bank. So, requirement of clause 4(xvi) of the order is not applicable.

(xvii) In our opinion and according to the information and explanation given to us, there are no funds raised on short – term basis which have been used for long term investment or vice–a- versa.

(xviii) The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company had no debentures, therefore the clause 4 (xix) of the order is not applicable to the Company.

(xx) The Company has not raised money by public issues during the year under audit, therefore clause 4 (xx) of the order is not applicable to the Company.

(xxi) In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For Rustagi & Co., Chartered Accountants

Firm Registration No.301094E

Place - Mumbai Sd/-

Date - August 17, 2013 Ms. Meenakshi Gupta

Partner

Membership No. 108097


Mar 31, 2010

We have audited the attached Balance Sheet of S V. Electricals Ltd. as at 31 st March 2010 and also the Profit & Loss account for the year ended on that date annexed there to These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based On our audit. 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. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4 A) of the Companies Act, 1956 (herein after referred to as The Act), we enclose In the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. Further to our comments in the Annexure referred to above, we report that

1. 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;

2. 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 these books;

3. The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of recounts.

4. In our opinion the Balance Sheet and Profit & Loss account dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act. 1956;

5. On the basis of written representations received from the directors, as on 31st March 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 section (1) of section 274 of the Companies Act. 1956.

6. 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 31 st March 2010,

b) In the case of the Profit & Loss Account, of the loss for the year ended on that date.

c) In the case of 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 the report of even date)

1. In terms of the Shareholders Resolution passed by ballot and a Board Resolution to that effect the Company has sold whole of its fixed assets in the previous year and hence the net block is appearing at zero in the Balance Sheet.

2. There are no stocks of finished goods, stores, spare parts or raw materials lying with third party.

3. The procedure of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory.

4. No material discrepancies have been noticed on physical verification of stocks as compared to book records.

5. On the basis of examination of stock records, we are of the opinion that the valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

6. The Company has not taken any secured/ unsecured loans, from Companies and firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956, from the Companies under the same Management or others in terms of the Companies Act, 1956. The Company has repaid the Commercial Tax deferment (Unsecured loan) to the extent of Rs. Nil during the year. (Previous year Rs. NIL)

7. The Company has not granted any loans, secured or unsecured to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act 1956, under the same management.

8. In respect of loans and advances in the nature of loans given by the Company, parties have repaid the principal amount as stipulated and have also been regular in the payment of interest. The Company has given interest free loans or advances in the nature of loans to employees, who are repaying the principal amount as stipulated. In our opinion and according to the information and explanations given to us, there are no transactions of purchase of goods and materials and of sale of goods, materials and services made in pursuance of contract or agreement entered In the register maintained u/s 301 of the Companies Act, 1956, and aggregating during the year to Rs. 50,000/- (Fifty thousand only) or more in respect of any party.

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 td purchases of stores, raw materials including components, plant and machinery, equipments and other assets and with regard to the sale ol goods. During the course of audit, no major weakness has been noticed in these internal controls.

10. The Company has a regular procedure for the determination of unserviceable or damaged stores, raw materials and finished goods. Adequate provision has been made in the accounts for the loss arising on the items so determined.

11. The Company has not accepted any deposit from the public during the year. Hence the provisions of Section 58-Aof the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules 1975 are not applicable.

12. Reasonable records have been maintained by the Company for the sale or disposal of realizable scrap. The Company has no bye-product.

13. The Company has an internal audit system commensurate with the size and nature of its business

14. According to explanations and information given to us by the Company, the Central Government has not prescribed for the Maintenance of Cost Records Rules under Section 209(1) (d) of the Companies Act, 1956 for the products of the Company.

15. The Company is generally regular in depositing with the appropriate authorities undisputed statutory • dues including Provident Fund, Employees State Insurance. Income Tax, Sales Tax, Customs, Central Excise Duty, Cess and other Statutory dues, applicable to it. There were no arrears as at 31st March2010 for a period of more than six months from the date they became payable in respect of such does.

16. According to the information and explanations given to us no personal expenses of employees or Directors have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practice.

17. The Company, has accumulated losses to the extent of Rs. 67803249/- as at the end of 31 st March 2009 and Rs. 69912652/- as at the end of 31st March 2010. The Company had incurred cash loss of Rs. NIL during the financial year 2008-2009 and Rs. 2109403/- during the financial year ended 31st March2010. However the provisions of Sick Industrial Companies (Special Provisions) Act, 1985, do not apply to the Company in view of sec. 3 (1) (f) (ii) thereof as the Company is a Small Scale industrial Unit fn terms of Micro. Small & Medium Enterprises Development Act, 2006 (MSMED Act, 2006)

18. There were no damaged items in the class of goods traded in by the Company.

21. 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. Bank or Debenture holders.

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

23. 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 are not applicable to the Company.

24. According to the information and explanations given to us, the Company is not dealing or trading in shares. securities, debentures and other investments. Accordingly, the provisions of clause

24 (xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

25. 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. No long term funds have been used to finance short-term assets except working capital.

26. According to the information given and explanations offered to us the Company, has not given any guarantee for the loans taken by others from Bank or Financial Institutions.

27. The Company has not raised any new term loan during the year.

28. The Company has not made preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Act.

29. The Company has not raised any money through a public issue of shares or debentures during the year.

30. Based on the audit procedures performed and information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the course of our audit that causes the financial statements to be materially misstated.

For, JAIN ANIL & ASSOCIATES CHARTERED ACCOUNTANTS

ANIL JAIN Place :Mumbai PROPRIETOR

Date : 29/05/2010 M.NO. 39803

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