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Auditor Report of Sylph Technologies Ltd.

Mar 31, 2014

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Sylph Technologies limited (the Company), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s 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 notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

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

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

(c) In the case of the Cash Flow Statement, of the cash flows of the Company 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 Section 227(4A) 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

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

(Referred to in paragraph 1 of our report of even date on the accounts for the year ended 31st March 2014 of Sylph Technologies Limited.)

I. In the respect of Fixed Assets :

* The Company is maintaining fixed Asset register showing full particulars, including quantitative details and situation of Fixed Assets.

* The management has physically verified the fixed assets

* The Company has not disposed off any of its fixed assets during the year.

II Inventory :

During the year company does not maintain any Inventory.

III a. The company has granted unsecured loans to three companies covered in the register maintained under

section 301 of the Companies Act, 1956. The maximum amount involving during the year is Rs. 375.20/- lacs and the year end balance of loans given to such parties is Nil.

b. According to the information and explanation given to us, we are of the opinion that the rate of interest & terms and conditions of loan given by the company to parties cover under section 301 of the companies act, 1956 are prima facie not prejudicial to the interest of the company.

c. No stipulation has been made for the repayment of loans given by the company to the parties cover under section 301 of the companies act, 1956.

d. There is Nil overdue amount of loans granted to companies listed in the register maintained under section 301 of the companies act,1956.

e. The company has taken unsecured loan from one party covered in the register maintained under section 301 of the companies act, 1956. The maximum amount involved during the year is Rs. 145.70/- lacs and the year end balance of loan taken from such party were Rs. 145.70/- lacs.

f. In our opinion and according to information & explanations given to us, the loan taken by company is interest free & other terms & conditions of loan taken by the company, are not prima facie prejudicial to the interest of the company.

g. No stipulation has been made for the repayment of loans taken by the company covered in the register maintained under section 301 of Companies Act, 1956; therefore we are unable to comment on regularity of repayment of loan & interest thereon on

IV In our opinion and according to information & explanations given to us, there is adequate internal control system commensurate with the size of the company & nature of its business with regard to the purchase of inventory & fixed assets & for the sale of goods. Further on the basis of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have been informed of any instances of major weaknesses in the internal control system.

V a. Based on audit procedures applied by us, to the best of our knowledge & belief and according to the information & explanations given to us. We are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b. In our opinion and according to information & explanations given to us, transactions made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

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

VIII As informed to us and in our opinion the maintenance of cost records has not been prescribed by the Central Government U/s 209(1)(d) of the Companies Act, 1956 for any product of the company.

IX a. According to the records of the company examined by us and the information & explanations given to us, in our opinion the company is, generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors Education & Protection Fund, Employees State Insurance, Income Tax, Sales Tax, service tax Excise Duty, Wealth Tax, Custom Duty, cess and other statutory dues applicable to it. No undisputed amount payable as at 31st March 2014 for a year of more than 6 month from the date they became payable.

b. According to records of the company examined by us and the information & explanations given to us, there are no statutory dues which have not been deposited on account of dispute.

X The accumulated losses of company are not more than 50% of its net worth as at 31.03.2014. The company has not incurred any cash losses in the current year and in the immediately preceding financial year.

XI Based on our audit procedure & on the basis of information & explanations given by the management, we are of the opinion that the company has not defaulted in payment of dues to the financial institution or bank during the year. The company does not have any borrowing by way of debentures.

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

XIII In our opinion and according to the information & explanations given to us, the company is not a chit fund and nidhi / mutual benefit fund / society. Therefore, provisions of this clause is not applicable to the company.

XIV Based on our examination of records and the information & explanations given to us, the company has maintained proper records of the transactions & contracts in respect of dealing & trading in shares, securities, debentures and other investments and timely entries have been made. All the investments have been held by the company in its own name.

XV According to the information & explanations given to us, the company has not given any guarantee for loans taken by others from the banks and financial institutions during the year.

XVI According to the records of the company, examined by us and the information & explanations given to us, the company has not raised term loans during the year.

XVII According to the information & explanations given to us and on the basis of an overall examination of balance sheet of the company, in our opinion no funds raised by company on short term basis, have been used for long term investments.

XVIII During the year company has not made any preferential allotment of shares to parties and companies covered under register maintained under Section 301 of the Companies Act, 1956.

XIX As explained to us, during the year covered by our audit, the company has not issued any debentures.

XX The company has not raised any money through public issue during the year.

XXI According to the information & explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For M/s M.S. DAHIYA & CO. CHARTERED ACCOUNTANTS FRN 013855C

Harsh Firoda Place : Indore (Partner) Date : 17/05/2014 M. No. 409391


Mar 31, 2013

We have audited the accompanying financial statements of Sylph Technologies limited (‘the company), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement fo r the year then ended, and a summary of significant accounting policies and other explanatory information.

Management is responsible fo r 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.

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 su ficient and appropriate to provide a basis fo r our audit opinion. In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the Profit and Loss Account, of the profit fo r the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows fo r the year ended on that date.

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 fo r the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the Company so fa r 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 ofaccount.

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;

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.

A NNEXUR E TO THE A UDITOR S'' R EPORT

(Referred to in paragraph 1 of our report of even date on the accounts fo r the year ended 31st

March 2013 of Sylp h Technolo gie s Lim ited.

I. In the respect of Fixed Assets :

-The Company is maintaining fixed Asset register showing full particulars, including quantitative details and situation of Fixed Assets.

- The management has physically verified the fixed assets

- The Company has not disposed o f any of its fixed assets during the year.

II Inventory :

During the year company does not maintain any Inventory.

III a. The company has not granted any loan secured or unsecured to companies, firms or other

parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence clause (a,b,c and d) is not applicable to the company.

b. The company has not taken any unsecured loan from parties covered in the register maintained under section 301.hence clause (e,f and g) is not applicable to the company.

IV In our opinion and according to information & explanations given to us, there is adequate internal control system commensurate with the size of the company & nature of its business with regard to the purchase of inventory & fixed assets & fo r the sale of goods. Further on the basis of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have been informed of any instances of major weaknesses in the internal control system.

V a. Based on audit procedures applied by us, to the best of our knowledge & belief and according to the information & explanations given to us. We are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b. In our opinion and according to information & explanations given to us, transactions made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

VI In our opinion and according to the information & explanations given to us, the company has not accepted deposit from public, within the meaning of provisions of section 58A & 58AA of Companies Act, 1956 & Rules framed there under.

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

VIII As informed to us and in our opinion the maintenance of cost records has not been prescribed by the Central Government U/s 209(1)(d) of the Companies Act, 1956 fo r any product of the company.

IX a. According to the records of the company examined by us and the information & explanations

given to us, in our opinion the company is, generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors Education & Protection Fund, Employees State Insurance, Income Tax, Sales Tax, service tax Excise Duty, Wealth Tax, Custom Duty, cess and other statutory dues applicable to it. No undisputed amount payable as at 31st March 2013 fo r a year of more than 6 month from the date they became payable.

b. According to records of the company examined by us and the information & explanations given to us, there are no statutory dues which have not been deposited on account of dispute.

X The Company does not have accumulated losses at the end of the financial year and it has not incurred any cash losses in the current year and immediately preceding financial year.

XI Based on our audit procedure & on the basis of information & explanations given by the management, we are of the opinion that the company has not defaulted in payment of dues to the financial institution or bank during the year. The company does not have any borrowing by way of debentures.

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

XIII In our opinion and according to the information & explanations given to us, the company is not a chit fund and nidhi / mutual benefit fund / society. Therefore, provisions of this clause is not applicable to the company.

XIV Based on our examination of records and the information & explanations given to us, the company has maintained proper records of the transactions & contracts in respect of dealing & trading in shares, securities, debentures and other investments and timely entries have been made. All the investments have been held by the company in its own name.

XV According to the information & explanations given to us, the company has not given any guarantee fo r loans taken by others from the banks and financial institutions during the year.

XVI According to the records of the company, examined by us and the information & explanations given to us, the company has not raised term loans during the year.

XVII According to the information & explanations given to us and on the basis of an overall examination of balance sheet of the company, in our opinion no funds raised by company on short term basis, have been used fo r long term investments.

XVIII During the year company has converted 1395800 convertible warrants into equal number of fully paid equity shares of Rs.10/- each on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

XIX As explained to us, during the year covered by our audit, the company has not issued any debentures.

XX The company has not raised any money through public issue during the year.

XXI According to the information & explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For M /s M.S. DAHIYA & CO.

CHARTERED ACCOUNTANTS

Harsh Firoda

Place : Indore

(Partner)

Date : 27th April'' 2013

M. No. 409391

FRN 013855C


Mar 31, 2012

We have audited the attached Balance Sheet of Sylph Technologies limited as at 31st March 2012 and also the Profit and Loss Account and the Cash Flow Statement for the period ended on that date annexed there to. 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.

We conducted our audit in accordance with standards on auditing 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 from 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.

1. As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditor's Report) Amendment Order, 2004 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we give in the annexure, a statement on the matters specified in the paragraph 4 & 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph 1 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 appears from our examination of the books.

(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement have been prepared in compliance with the Accounting standards referred to in sub-section 3C of section 211 of the Companies Act, 1956, to the extent applicable and mandatory in nature.

(e) In our opinion and on the basis of information obtained and taken on record by the Board of Directors, we report that none of the directors of the company is disqualified as on 31.03.2012 from being appointed as the director of the company in terms of clause (g) of subsection (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 Significant Accounting Policies and other 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012.

(b) In the case of the Profit and Loss Account, of the LOSS for the Period ended on that date.

(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the period ended on that date.



ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 1 of our report of even date on the accounts for the period ended 31st March 2012 of Sylph Technologies Limited.

I. In the respect of Fixed Assets :

During the year company does not maintain any fixed asset.

II. Inventory :

During the year company does not maintain any Inventory.

III a. The company has not granted any loan secured or unsecured to companies,firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence clause (a,b,c and d) is not applicable to the company.

b. The company has not taken any unsecured loan from parties covered in the register maintained under section 301.hence clause (e,f and g) is not applicable to the company.

IV. In our opinion and according to information & explanations given to us, there is adequate internal control system commensurate with the size of the company & nature of its business with regard to the purchase of inventory & fixed assets & for the sale of goods. Further on the basis of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have been informed of any instances of major weaknesses in the internal control system.

V a. Based on audit procedures applied by us, to the best of our knowledge & belief and according

to the information & explanations given to us. We are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b. In our opinion and according to information & explanations given to us, transactions made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

VI In our opinion and according to the information & explanations given to us, the company has not accepted deposit from public, within the meaning of provisions of section 58A & 58AA of Companies Act, 1956 & Rules framed there under.

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

VIII As informed to us and in our opinion the maintenance of cost records has not been prescribed by the Central Government U/s 209(1)(d) of the Companies Act, 1956 for any product of the company.

IX a. According to the records of the company examined by us and the information & explanations

given to us, in our opinion the company is, generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors Education & Protection Fund, Employees State Insurance, Income Tax, Sales Tax, service tax Excise Duty, Wealth Tax, Custom Duty, cess and other statutory dues applicable to it. No undisputed amount payable as at 31st March 2012 for a period of more than 6 month from the date they became payable.

b. According to records of the company examined by us and the information & explanations given to us, there are no statutory dues which have not been deposited on account of dispute.

X The Company does not have accumulated losses at the end of the financial year and it has not incurred any cash losses in the current year and immediately preceding financial year.

XI Based on our audit procedure & on the basis of information & explanations given by the management, we are of the opinion that the company has not defaulted in payment of dues to the financial institution or bank during the year. The company does not have any borrowing by way of debentures.

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

XIII In our opinion and according to the information & explanations given to us, the company is not a chit fund and nidhi / mutual benefit fund / society. Therefore, provisions of this clause is not applicable to the company.

XIV Based on our examination of records and the information & explanations given to us, the company has maintained proper records of the transactions & contracts in respect of dealing & trading in shares, securities, debentures and other investments and timely entries have been made. All the investments have been held by the company in its own name.

XV According to the information & explanations given to us, the company has not given any guarantee for loans taken by others from the banks and financial institutions during the year.

XVI According to the records of the company, examined by us and the information & explanations given to us, the company has not raised term loans during the year.

XVII According to the information & explanations given to us and on the basis of an overall examination of balance sheet of the company, in our opinion no funds raised by company on short term basis, have been used for long term investments.

XVIII During the year company has converted 1839200 convertible warrants into equal number of fully paid equity shares of Rs.10/- each (Out of these 235000 number of share at a premium of Rs. 2.6/- per share) on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

XIX As explained to us, during the period covered by our audit, the company has not issued any debentures.

XX The company has not raised any money through public issue during the year.

XXI According to the information & explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For M/s M.S. DAHIYA & CO.

CHARTERED ACCOUNTANTS

Harsh Firoda

Place : Indore (Partner)

Date : 31st July, 2012 M. No. 409391


Jun 30, 2011

1. We have audited the attached Balance Sheet of SLYPH TECHNOLOGIES LIMITED at the year ended 30th JUNE 2011 and relative profit and loss account and the cash flow statement for the year ended on that date and signed by us under reference to this report. These financial statements are the responsibilities of the Company's Management; our responsibilities are 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 amount 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 the reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) order 2003 issued by the Central Government in term of sub-section (4A)of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement of the matters specified in paragraph 4 & 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 explanation which to the best of our knowledge and belief were necessary for the purpose of our audit,

b. In our opinion proper books of accounts as required by law have been kept by the company so far it appears our examinations of those books,

c. The Balance Sheet & Profit &Loss Account and Cash flow statement dealt with by this report are in agreement with the books of accounts,

d. In our opinion Balance Sheet & Profit & Loss Account & Cash Flow Statement dealt with by this report comply in all material respects with the applicable Accounting Standard issued by The Institute of Chartered Accountants of India referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956,

e. On the basis of written representation received from the directors, and taken on record by the Board of Directors, we record that none of the directors is prima facie disqualified as on 30th June, 2011 from being appointed as director in terms of clause (g) of Section 274 (1) of the Companies Act, 1956,

f. In our opinion and to the best of our information and according to the explanation given to us, the aforesaid financial statement read with the significant accounting policies and notes to the accounts give the information required by The Companies Act, 1956 in the manner so required and give true & fair view in conformity with the accounting principles generally accepted in India:-

i. in case of Balance Sheet, of the state of affairs of the Company as at 30th June 2011,

ii. in case of profit & Loss Account, of the Loss for the year ended 30th June 2011.

Annexure to the Auditors Report [Referred to in paragraph (3) of our report of even date]

On the basis of such checks as considered appropriate and in terms of the information / explanations given to us, we state as under:-

i. In the respect of Fixed Assets :

a. Company has Maintained proper records showing full particulars including quantitative details & situation of fixed Assets,

b. All the Assets of the Company have been physically verified by the management at the end of the year & we are informed no discrepancies between book records and the physical inventories have been noticed,

c. During the year the Company has disposed Fixed Assets (computers) and it will not affect company as going concern.

ii. Inventory :

a. The inventory has been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable,

b. The procedure of physical verification of inventories followed by the Management is reasonable & adequate in relation to the size of the Company and the nature of its business,

c. On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory, the discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. a. According to the information and explanation given to us, the company has not granted any loans secured or unsecured to Companies, firm of others parties covered in the register maintained under Section 301 of the Companies Act, 1956, The Company has taken unsecured loan from person covered in the Register maintained u/s 301 of the Companies Act, 1956.

b. In view of what has been stated above, clause (iii)(b) regarding terms and conditions of such loans, clause (iii)(c) regarding payment of principal amount and interest and clause (iii)(d) regarding stems for recovery of overdue amount of Para 4 of the order are not adverse to the Company for the year,

c. Not Applicable,

d. Not Applicable,

e. The Company has taken a loan from the person covered in the register maintained under Section 301 of the Companies Act, 1956. The balance of such loan amounted to ' .43,21,000,

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

g. In the case of loan taken from the person listed in the register maintained under Section 301, the company has been regular in the repayment of the interest as stipulated. The terms of arrangement do not stipulate any repayment schedule and payment of interest.

iv. According to the information & explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets & for sale of goods. And we have neither come across nor have been informed of any continuing failure to correct weaknesses in the aforesaid internal control procedure.

v. Based on the audit procedure applied by us and according to information & explanation provided by the Management, we are of the opinion that the company has not entered into any transaction during the year except details given in para (iii) (e) above, which need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

In view of what has been stated above, clause (v) (b) regarding reasonability of price of such transaction is not applicable.

vi. During the year under review, the Company has not accepted any deposits from public.

vii. In our opinion, the Companies have an internal audit system commensurate with the size and nature of its business.

viii. Cost audit rules are not applicable to company as per Section 209(1) (d) of the Companies Act, 1956.

ix. a. According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Income Tax and other statutory dues. According to the information and explanation given to us, amount payable in respected of income tax is outstanding, as at 30th June 2011 for a period of more than six month from the date they became payable.

b. According to the records of the Company, there are no dues of income tax which have not been deposited on account of any dispute.

x. The Company does not have accumulated losses and has not incurred cash losses during the financial year covered by our audit, but the company has accumulated losses and has incurred cash losses during the immediately preceding financial year.

xi. Based on our audit procedure and on the basis of information and explanation given by the Management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution or bank.

xii. According to the information and explanation given to us, the Company has not granted any loans or advances on the basis of securities by the way of pledge of share, debenture or other securities.

xiii. The provision of special statute applicable to Chit Fund, Nidhi or Mutual Benefits Fund/ Securities are not applicable to the company.

xiv. The Company has maintained proper records of the transactions & contracts and has made timely entries in the records. The Company has held shares, securities, in its own name except to the extent of exemption granted u/s 49 of the Act.

xv. According to the information and explanation given to us and records made available to us. The company has not given any guarantee for loans to others.

xvi. The Company has not raised any term loans till date. xvii. According to the information and explanation given to us and on as over all examination of the Balance Sheet and Cash flow statement of the Company ,we report that no funds raised on short term basis have been used for long investment by the Company.

xviii. The Company has made preferential allotment of the warrants to the parties and companies covered in the register maintained under section 301of the Companies Act, 1956

xix. During the period covered by our audit report, the Company has not issued any debenture's requiring report under this clause.

xx. The company has not raised any money by way public issue during the year and hence the question of disclosure and verification of end use of such money does not arise.

xxi. Based upon the audit procedure performed and information and explanation given by the Management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For M/s M.S. DAHIYA & CO.

CHARTERED ACCOUNTANTS

Place : Indore Harsh Firoda

Date : October 31, 2011 (Partner)


Jun 30, 2010

1. We have audited the attached Balance Sheet of SLYPH TECHNOLOGIES LIMITED at the year ended 30th JUNE 2010 and relative profit and loss account and the cash flow statement for the year ended on that date and signed by us under reference to this report. These financial statements are the responsibilities of the Companys Management; our responsibilities are 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 amount 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 the reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) order 2003 issued by the Central Government in term of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement of the matters specified in paragraph 4 & 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 explanation which to the best of our knowledge and belief were necessary for the purpose of our audit,

b. In our opinion proper books of accounts as required by law have been kept by the company so far it appears our examinations of those books,

c. The Balance Sheet & Profit & Loss Account and Cash flow statement dealt with by this report are in agreement with the books of accounts,

d. In our opinion Balance Sheet & Profit & Loss Account & Cash Flow Statement dealt with by this report comply in all material respects with the applicable Accounting Standard issued by The Institute of Chartered Accountants of India referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956,

e. On the basis of written representation received from the directors, and taken on record by the Board of Directors, we record that none of the directors is prima facie disqualified as on 30* June, 2010 from being appointed as director in terms of clause (g) of Section 274 (1) of the Companies Act, 1956,

f. In our opinion and to the best of our information and according to the explanation given to us, the aforesaid financial statement read with the significant accounting policies and notes to the accounts give the information required by The Companies Act, 1956 in the manner so required and give true & fair view in conformity with the accounting principles generally accepted in India :-

i. in case of Balance Sheet, of the state of affairs of the Company as at 30th June 2010,

ii. in case of profit & Loss Account, of the Profit for the year ended 30th June 2010.

Annexure to the Auditors Report

To the Members of

Sylph Technologies Limited

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

The Companies (Auditors Report) Order, 2003 (the order) was issued in June 2003 and came into force on 1st July, 2003. On the basis of such checks as considered appropriate and in terms of the information / explanations given to us, we state as under:-

i. In the respect of Fixed Assets :

a. Company has Maintained proper records showing full particulars including quantitative details & situation of fixed Assets,

b. All the Assets of the Company have been physically verified by the management at the end of the year & we are informed no discrepancies between book records and the physical inventories have been noticed,

c. During the year the Company has not disposed off any substantial part of Fixed Assets.

ii. Inventory :

a. The inventory has been physically verified during the year by the Management. In our opinion, the. frequency of verification is reasonable,

b. The procedure of physical verification of inventories followed by the Management is reasonable & adequate in relation to the size of the Company and the nature of its business,

c. On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory, the discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. a. According to the information and explanation given to us, the company has not granted any loans secured or unsecured to Companies, firm of others parties covered in the register maintained under Section 301 of the Companies Act, 1956, The Company has taken unsecured loan from person covered in the Register maintained u/s 301 of the Companies Act, 1956.

b. In view of what has been stated above, clause (iii)(b) regarding terms and conditions of such loans, clause (iii)(c) regarding payment of principal amount and interest and clause (iii)(d) regarding stems for recovery of overdue amount of Para 4 of the order are not adverse to the Company for the year,

c. Not Applicable,

d. Not Applicable,

e. The Company has taken a loan from the person covered in the register maintained under Section 301 of the Companies Act, 1956. The balance of such loan amounted to Rs. 43,21,000,

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

g. In the case of loan taken from the person listed in the register maintained under Section 301, the company has been regular in the repayment of the interest as stipulated. The terms of arrangement do not stipulate any repayment schedule and payment of interest.

iv. According to the information & explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets & for sale of goods. And we have neither come across nor have been informed of any continuing failure to correct weaknesses in the aforesaid internal control procedure.

v. Based on the audit procedure applied by us and according to information & explanation provided by the Management, we are of the opinion that the company has not entered into any transaction during the year except details given in para (iii) (e) above, which need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

In view of what has been stated above, clause (v) (b) regarding reasonability of price of such transaction is not applicable.

vi. During the year under review, the Company has not accepted any deposits from public.

vii. In our opinion, the Companies have an internal audit system commensurate with the size and nature tof its business.

viii. Cost audit rules are not applicable to company as per Section 209(1) (d) of the Companies Act, 1956.

ix. a. According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Income Tax and other statutory dues. According to the information and explanation given to us, amount payable in respected of income tax is outstanding, as at 30th June 2010 for a period of more than six month from the date they became payable.

b. According to the records of the Company, there are no dues of income tax which have not been deposited on account of any dispute.

x. The Company does not have accumulated losses and has not incurred cash losses during the financial year covered by our audit, but the company has accumulated losses and has incurred cash losses during the immediately preceding financial year.

xi. Based on our audit procedure and on the basis of information and explanation given by the Management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution or bank.

xii. According to the information and explanation given to us, the Company has not granted any loans or advances on the basis of securities by the way of pledge of share, debenture or other securities.

xiii. The provision of special statute applicable to Chit Fund, Nidhi or Mutual Benefits Fund/ Securities are not applicable to the company.

xiv. The Company has maintained proper records of the transactions & contracts and has made timely entries in the records. The Company has held shares, securities, in its own name except to the extent of exemption granted u/s 49 of the Act.

xv. According to the information and explanation given to us and records made available to us. The company has not given any guarantee for loans to others.

xvi. The Company has not raised any term loans till date.

xvii. According to the information and explanation given to us and on as over all examination of the Balance Sheet and Cash flow statement of the Company, we report that no funds raised on short term basis have been used for long investment by the Company.

xviii. The Company has made preferential allotment of the warrants to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956

xix. During the period covered by our audit report, the Company has not issued any debentures requiring report under this clause.

xx. The company has not raised any money by way public issue during the year and hence the question of disclosure and verification of end use of such money does not arise.

xxi. Based upon the audit procedure performed and information and explanation given by the Management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For M/s M.S. DAHIYA & CO.

CHARTERED ACCOUNTANTS

Place : Indore Harsh Firoda

Date : August 16,2010 (Partner)

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