Auditor Report of Avance Technologies Ltd.

Mar 31, 2016

To The Members,

Avance Technologies Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying (standalone) financial statements of Avance Technologies Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the (Standalone) Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these (standalone) financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid (standalone) financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit/loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor''s Report) Order, 2016 (the Order) issued by the Central Government in terms of Section 143(11) of the Act, we enclose in the "Annexure A" a statement on matters specified in paragraph 3 & 4 of the said order.

10. As required by Section 143(3) of the Act, we report that:

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

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

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

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

e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2016 from being appointed as a director in terms of Section 164 (2)of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

In terms of the information and explanations sought by us and given by the company and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that: -

1 (i) the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(ii) As explained to us, all the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(iii) the company does not have any immoveable property.

2 (i) As explained to us, the inventory has been physically verified at reasonable intervals during the year by the management. In our opinion, the frequency of verification is reasonable.

(ii)There is no discrepancy found on verification between the physical stocks and the book records.

3. As explained to us, the company had not granted any loans, secured or unsecured, to any companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act., or

4. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security.

5. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

6. It has been explained to us that the maintenance of cost records has not been prescribed under section 148(1) of the Act.

7 (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at 31st March, 2016 for a period of more than six months from the date on when they become payable.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute except as follows:

8. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion, company had not borrowed from financial institution or bank or issued debentures during the year under audit and there were no loan outstanding at the beginning of the year. Therefore, this clause of the CARO is not applicable to company.

9. The company has not raised moneys by way of initial public offer or further public offer (including debt instrument) and term loans

10.Based upon the audit procedures performed and according to the information and explanations given to us, no fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the course of our audit, that causes the financial statements to be materially misstated.

11. No Managerial remuneration has been paid or provided during the year under audit.

12. The company is not a Nidhi Company hence this clause is not applicable.

13. Based upon the audit procedures performed and according to the information and explanations given to us, All transactions with related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial statements etc. as required by the applicable accounting standards.

14. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

15. The company has not entered into any non-cash transactions with directors or persons connected with him.

16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Referred to in paragraph 10(f) of the Independent''s Auditor''s Report of even date to the members of Avance

Technologies Limited on the standalone financial statements for the year ended 31^st March, 2016.

Report on the Internal Financial Controls under Clause (i) of sub - section 143 of the Act

1. We have audited the internal financial controls over financial reporting of Avance Technologies Limited ("the Company") as of 31^st March, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Control

2. The Company''s management is responsible for establishing and maintaining internal financial controls based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the standards on auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those standards and Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all materials respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial controls over financial reporting includes those policies and procedures that,

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March,2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Tejas Nadkarni and Associates

Chartered Accountants

(Firm''s Registration no. 135197W)

Sd/-

Tejas Nadkarni

(Proprietor)

(Membership No. 122993)

Place of Signature: Mumbai

Date: 26/05/2016

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Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's board of directors is responsible for the matter stated in section 134(5) of the Companies Act, 2013 ("Act") with respect to the preparation of these financial statements that give a true and fair view of financial position, financial performance and cash flows of the company in accordance with the Accounting Principle generally accepted in India including Accounting Standards Specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 Accounts 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 assessment, 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 the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements gives the information required by the Act in the manner so required and give a true and fair view in conformity with the according 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 2015; (ii) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and (iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure hereto a statement on the matters specified in paragraphs 3 and 4 of the said order, to the extent applicable.

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 specified in section 133 of the Act read with rule 7 of the Companies (Accounts) Rules,2014;

e. On the basis of written representations received from the directors of the company, as on 31st March 2015, and taken on record by the Board of Directors, none of the directors are disqualified as on 31st March 2015, from being appointed as a director in terms of section 164(2) of the Act.

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements.

(ii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For Tejas Nadkarni & Associates

Chartered Accountants

Firm.Reg.No.135197W

Sd/-

(Tejas Nadkarni)

Proprietor Place: Mumbai,

M. No: 122993 Date: 28th May 2015

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Mar 31, 2014

We have audited the accompanying financial statement of Avance Technologies Limited ("the Company") which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and the 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 Management is responsible for the preparation of these financial statements that give a true and fair view of financial position, financial performance and cash flows of the company in according with the Accounting Standards referred to in sub- section (3C) of Section 211 of the Company Act, 1956 ("the Act") read with General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act,2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and 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 Accounts 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 assessment, 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 the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements gives the information required by the Act in the manner so required and give a true and fair view in conformity with the according 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 2014;

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

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, 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 said order.

2. As required by Section 227 (3) of the Act, we report that:

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

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

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

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

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

(i) FIXED ASSETS

a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) Assets have been physically verified by the management during the year. According to the information and explanations given to us, there is regular programme of verification which, in our opinion is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c) The Company has not disposed off substantial part of its fixed assets during the year.

(ii) INVENTORIES

a) Inventories have been physically verified during the year by the management at reasonable intervals.

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

c) The Company has maintained proper records of Inventories and no material discrepancy noticed on physical verification.

(iii) LOANS AND ADVANCES

The company has neither taken nor granted any loans or advances in nature of loans to parties covered under register maintained under section 301of the Companies Act, 1956.

(iv) INTERNAL CONTROL

There is an adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control except as stated above.

(v) TRANSACTIONS WITH RELATED PARTIES AS PER REGISTER OF CONTRACTS UNDER SECTION 301 OF THE COMPANIES ACT, 1956

(a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, there is one transaction made with related parties in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating the value of rupees five lakhs or more in respect of any party during the year.

(vi) DEPOSITS FROM PUBLIC

The Company, during the year under review has not accepted deposits from the public to which the provisions of Section 58A and 58AA of the companies (Acceptance of deposit) Rules; 1975 apply .

(vii) INTERNAL AUDIT SYSTEM

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

(viii) COST RECORDS

As informed to us, The Company is not required to maintain cost records under section 209 (1) (d) of the Companies Act,1956.

(ix) STATUTORY DUES

(a) No undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at the balance sheet date for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us details of disputed Income tax which have not been deposited as on 31st March, 2014 on account of any dispute are given below. Otherwise there are no disputed Liabilities on account of Sales Tax, Custom Duty, Wealth Tax, Service Tax, Excise duty and Cess as on 31st March, 2014.

Name of Nature of Amount Rs. Period for Forum Where Statute Disputes Which Amount Dispute is Related Pending

Income Tax U/s 143 (3) 1,73,27,357/- A.Y.2001-02 I.T.Appellate r.w.s. 147 tribunalr of u/s 154

Income Tax U/s 271(l)(c) 47,56,416/- A.Y.2002-03 I.T. Appellate Tribunal

Income Tax U/s 154 1,94,905/- A.Y.2002-03 ITO Appeal effect

(x) SICK INDUSTRY

The Company has accumulated losses at the end of the year which is less than 50% of its net worth. Company has incurred cash losses Rs. 3,30,01,859/- during the financial year 2013-14 covered by the audit further, the company has cash loss Rs. 40,00,515/- in the immediately preceding financial year.

(xi) DUES TO FINANCIAL INSTITUTIONS

The Company has not taken any financial facilities from any financial institute, bank or debenture holder during the year.

(xii) SECURED LOANS AND ADVANCES GRANTED

In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) CHIT FUND, NIDHI OR MUTUAL BENEFIT COMPANY

In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of the Companies (Auditor Report) Order, 2003 are not applicable to the Company.

(xiv) INVESTMENT COMPANY

The Company has maintained proper records of transactions and contracts in respect of investments in shares, debentures and other securities and those timely entries have been made therein. The shares, debentures and other securities have been held by the Company in its own name except to the exemption granted under Section 49(4) of the Companies Act, 1956.

(xv) GUARANTEES GIVEN BY COMPANY

The Company has not given any guarantees for loans taken by other companies from banks or financial institutions. There is no guarantee given by the Company to third party.

(xvi) TERM LOANS

In our opinion and according to the information and explanation given to us, the company has not taken any term loan during the year, hence no question of reporting arise to that extent.

(xvii) SOURCE OF FUNDS AND ITS APPLICATION

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.

(xviii) PUBLIC ISSUE/PREFERENTIAL ISSUE/DEBENTURES

The Company has not made any preferential allotment of shares to parties and companies covered in the registered maintained u/s 301 of the Act during the year.

(xix) The Company has not issued any debentures during the year and does not have any debentures outstanding as at beginning of the year and year end.

(xx) The company has not raised any money by public issue during the year.

(xxi) FRAUD

Based upon our audit procedures performed and on the information and explanations given by the management we are of the opinion that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Ramesh Batham & Co. Chartered Accountants Firm. Reg. No.l23638W Sd/- (Ramesh Batham) Proprietor Place: Mumbai M. No: 114178 Date : 27/05/2014

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statement of AVANCE TECHNOLOGIES LIMITED ("the Company") which comprise of Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the 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 Management is responsible for the preparation of these financial statements that give a true and fair view of financial position, financial performance and cash flows of the company in according with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Company 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 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 Accounts 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 assessment, 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 the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements gives the information required by the Act in the manner so required and give a true and fair view in conformity with the according 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 2013;

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

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, 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 said order.

2. As required by Section 227 (3) of the Act, we report that:

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement Comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; and

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 1 under the headings of "Report on Other Legal and Regulatory Requirements" of our report of even date.

(i) FIXED ASSETS

(a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Assets have been physically verified by the management during the year. According to the information and explanations given to us, there is regular programme of verification which, in our opinion is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c )The Company has not disposed off substantial part of its fixed assets during the year.

(ii) INVENTORIES

(a) Inventories have been physically verified during the year by the management at reasonable intervals.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of Inventories and no material discrepancy noticed on physical verification.

(iii) LOANS AND ADVANCES

The Company has neither taken for granted any loans or advances in nature of loans to parties covered under register maintained under section 301of the Companies Act, 1956.

(iv) INTERNAL CONTROL

There are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control except as stated above.

(v) TRANSACTIONS WITH RELATED PARTIES AS PER REGISTER OF CONTRACTS UNDER SECTION 301 OF THE COMPANIES ACT, 1956

(a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, there is one transaction made with related parties in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating the value of rupees five lakhs or more in respect of any party during the year.

(vi) DEPOSITS FROM PUBLIC

The Company has not accepted deposits from the public to which the provisions of Section 58A

and 58AA of the companies (Acceptance of deposit) Rules; 1975 apply.

(vii) INTERNAL AUDIT SYSTEM

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

(viii)COST RECORDS

As informed to us, the Company is not required to maintain cost records under section 209 (1)

(d) of the Companies Act, 1956.

(ix) STATUTORY DUES

(a) No undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at the balance sheet date for a period of more than six months from the date they became payable except Income Tax for A.Y.2002-2003, Rs.20000/- A.Y. 2003-2004, Rs.100083/-

(b) According to the information and explanation given to us details of disputed Income tax which have not been deposited as on 31st March, 2013 on account of any dispute are given below. Otherwise there are no disputed Liabilities on account of Sales Tax, Custom Duty, Wealth Tax, Service Tax, Excise duty and Cess as on 31st March, 2013.

Name of Nature of Amoount Rs. period for Forum Where statute Disputes Amount Dispute is ] Related pending

Income Tax U/s 143 (3) r.w.s. 1,73,27,357/- A.Y.2001-02 I.T.Appellate 147 of u/s 154 Tribunal

Income Tax U/s 271(1) (c) 47,56,416/- A.Y.2002-03 I.T.Appellate

Tribunal

Income Tax U/s 154 1,94,905/- A.Y.2002-03 ITO Appeal

effect

(x) SICK INDUSTRY

The Company has accumulated losses of Rs.1,16,63,860/- as at March 31''2013 and has incurred cash losses Rs.40,00,515/- during the financial year 2012-2013 covered by the audit further, the company has cash loss Rs.1,06,47,434/-in the immediately preceding financial year.

(xi) DUES TO FINANCIAL INSTITUTIONS

The Company has not taken any financial facilities from any financial institute, bank or debenture holder during the year.

(xii) SECURED LOANS AND ADVANCES GRANTED

In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) CHIT FUND, NIDHI OR MUTUAL BENEFIT COMPANY

In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of the Companies (Auditor Report) Order, 2003 are not applicable to the Company.

(xiv) INVESTMENT COMPANY

The Company has maintained proper records of transactions and contracts in respect of investments in shares, debentures and other securities and those timely entries have been made therein. The shares, debentures and other securities have been held by the Company in its own name except to the exemption granted under Section 49(4) of the Companies Act, 1956.

(xv) GUARANTEES GIVEN BY COMPANY

The Company has not given any guarantees for loans taken by other from banks or financial institutions. There is no guarantee given by the Company to third party.

(xvi) TERM LOANS

In our opinion and according to the information and explanation given to us, the Company has not taken any term loan during the year, hence no question of reporting arise to that extent.

(xvii) SOURCE OF FUNDS AND ITS APPLICATION

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.

(xviii) PUBLIC ISSUE/PREFERENTIAL ISSUE/DEBENTURES

The Company has not made any preferential allotment of shares to parties and companies covered in the registered maintained u/s 301 of the Act during the year.

(xix) The Company has not issued any debentures during the year and does not have any debentures

outstanding as at beginning of the year and year end.

(xx) The Company has not raised any money by public issue during the year.

(xxi) FRAUD

Based upon our audit procedures performed and on the information and explanations given by the management we are of the opinion that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Ramesh Batham & Co.

Chartered Accountants

Firm.Reg.No.123638W

Sd/-

(Ramesh Batham)

Proprietor Place: Mumbai,

M. No: 114178 Date: 29th May, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of AVANCE TECHNOLOGIES LIMITED as at 31st March, 2012 and also the Statement of Profit and Loss for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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 evaluation the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Audit Report) order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks of books and records of the Company as were considered appropriate and the information and explanations given to us during the course of our audit, we enclosed in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief necessary for the purposes of our audit;

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

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

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

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

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes give the information required by the Companies Act, 1956, in the manner so required and accounting Policies included therein, give a true and fair view in conformity with the accounting principles generally accepted in India.

- In case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012

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

- In case of the Cash Flow Statement of the Company, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS'' REPORT

Referred to in paragraph 3 of our report of even date on the accounts for the year ended 31, 2012 of Avance Technologies Limited.

(i) FIXED ASSETS

(a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Assets have been physically verified by the management during the year. According to the information and explanations given to us, there is regular programme of verification which, in our opinion is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c ) The Company has not disposed off substantial part of its fixed assets during the year.

(ii) INVENTORIES

(a) Inventories have been physically verified during the year by the management at reasonable intervals.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of Inventories and no material discrepancy noticed on physical verification.

(iii) LOANS AND ADVANCES

The Company has neither taken nor granted any loans or advances in nature of loans to parties covered under register maintained under section 301 of the Companies Act, 1956.

(iv) INTERNAL CONTROL

There are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control except as stated above.

(v) TRANSACTIONS WITH RELATED PARTIES AS PER REGISTER OF CONTRACTS UNDER SECTION 301 OF THE COMPANIES ACT. 1956

(a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, there is one transaction made with related parties in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating the value of rupees five lakhs or more in respect of any party during the year.

(vi) DEPOSITS FROM PUBLIC

The Company has not accepted deposits from the public to which the provisions of Section 58A and 58AA of the companies (Acceptance of deposit) Rules; 1975 apply.

(vii) INTERNAL AUDIT SYSTEM

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

(viii)COST RECORDS

As informed to us, the Company is not required to maintain cost records under section 209 (1) (d) of the Companies Act, 1956.

(ix) STATUTORY DUES

(a) No undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess were in arrears, as at the balance sheet date for a period of more than six months from the date they became payable except Income Tax for A.Y.2002-2003, Rs.20000/- A.Y. 2003-2004, Rs.100083/-

(b) According to the information and explanation given to us details of disputed Income tax which have not been deposited as on 31st March, 2012 on account of any dispute are given below. Otherwise there are no disputed Liabilities on account of Sales Tax, Custom Duty, Wealth Tax, Service Tax, Excise duty and Cess as on 31st March, 2012.

Name of Nature of Amount Rs. Statute Disputes

Income Tax U/s 143 (3) 1,73,27,357/- r.w.s. 147 of u/s 154

Income Tax U/s 271(1)(c) 47,56,416/-

Income Tax U/s 154 1,94,905/-

Name of Statute Period for Which Forum Where Amount Related Dispute is Pending

Income Tax A.Y.2001-02 I.T. Appellate Tribunal

Income Tax A.Y.2002-03 I.T. Appellate Tribunal

Income Tax A.Y.2002-03 ITO Appeal effect

(x) SICK INDUSTRY

The Company does not have any accumulated losses as at March 31,2012 and has incurred Rs.1,08,08,359/- cash losses during the financial year 2011-2012, covered by audit. Further, the Company does not have cash loss in the immediately preceding financial year.

(xi) DUES TO FINANCIAL INSTITUTIONS

The Company has not taken any financial facilities from any financial institute, bank or debenture holder during the year.

(xii) SECURED LOANS AND ADVANCES GRANTED

In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) CHIT FUND, NIDHI OR MUTUAL BENEFIT COMPANY

In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of the Companies (Auditor Report) Order, 2003 are not applicable to the Company.

(xiv) INVESTMENT COMPANY

The Company has maintained proper records of transactions and contracts in respect of investments in shares, debentures and other securities and those timely entries have been made therein. The shares, debentures and other securities have been held by the Company in its own name except to the exemption granted under Section 49(4) of the Companies Act, 1956.

(xv) GUARANTEES GIVEN BY COMPANY

The Company has not given any guarantees for loans taken by other from banks or financial institutions. There is no guarantee given by the Company to third party.

(xvi) TERM LOANS

In our opinion and according to the information and explanation given to us, the Company has not taken any term loan during the year, hence no question of reporting arise to that extent.

(xvii) SOURCE OF FUNDS AND ITS APPLICATION

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 permanent working capital.

(xviii) PUBLIC ISSUE/PREFERENTIAL ISSUE/DEBENTURES

The Company has not raised any money by public issue/ debenture issue during the year. However, during the year the Company has allotted 12,80,00,000 Convertible Equity warrants on Preferential Basis to various allotees, at an Issue Price of Rs.8.70/- each on receipt of application money i.e. 25% of the Issue price, amounting to Rs.279040000.

(xix) FRAUD

Based upon our audit procedures performed and on the information and explanations given by the management we are of the opinion that no fraud on or by the Company has been noticed or reported during the course of our audit.

For RAMESH BATHAM AND CO.

Chartered Accountants

Sd/-

Ramesh Batham

Proprietor

Date : 1st September, 2012

Place: Mumbai

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Avance Technologies Limited as at 31st March 2011 and also the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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 evaluation the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Audit Report) order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks of books and records of the Company as were considered appropriate and the information and explanations given to us during the course of our audit, we enclosed in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief necessary for the purposes of our audit;

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

iii. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts.

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

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

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes give the information required by the Companies Act, 1956, in the manner so required and subject to Note No.2, 4,,8 & 9 read with Significant Accounting Policies included therein, give a true and fair view in conformity with the accounting principles generally accepted in India.

* In case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011

* In the case of the Profit and Loss Account, of the Company, of the profit for the year ended on that date.

And

* In case of the Cash Flow Statement of the company , of the cash flows for the year ended on that date.

(i) Fixed Assets

(a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Assets have been physically verified by the management during the year. According to the information and explanations given to us, there is regular programmed of verification which, in our opinion is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Based on our scrutiny of the records of the company and the information and explanation received by us, we report that there was no sale of fixed assets. Hence, the question of reporting whether the sale of any substantial part of fixed assets has affected the going concern of the company does not arise.

(ii) Inventories

(a) The Inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of Inventories and no material discrepancy noticed on physical verification.

(iii) Loans And Advances

The company has neither taken for granted any loans or advances in nature of loans to parties covered under register maintained under section 301of the Companies Act, 1956. Hence, the question of reporting whether the terms and conditions of such loans are prejudicial to the interest of the Company, whether reasonable steps for the recovery / repayment of over dues of such loans are taken does not arise.

(iv) Internal Control

In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control except as stated above.

(v) Transactions With Related Parties As Per Register Of Contracts Under Section 301 of The Companies Act, 1956

(a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered

(b) In our opinion and according to the information and explanations given to us, there is no transaction made with related parties in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating the value of rupees five laths or more in respect of any party during the year.

(vi) Deposits From Public

In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. However, Inter corporate Loan outstanding to the extent of Rs.3,90,00,000/-.

(vii) Internal Audit System

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

(viii) Cost Records

As informed to us, The Company is not required to maintain cost records under section 209 (1)

(d) of the Companies Act, 1956.

(ix) Statutory Dues

(a) According to the records of the Company, undisputed statutory dues including provident fund, , sales tax, custom duty, excise duty, cuss and other statutory dues have been generally deposited with the appropriate authorizes, except Income Tax Rs.12,32,573/- for A.Y. 2010- 2011,Rs.2,38,062/-for A.Y.2008-2009.

(b) According to the information and explanation given to us details of disputed Income tax which have not been deposited as on 31st March, 2011 on account of any dispute are given below. Otherwise there are no disputed Liabilities on account of Sales Tax, Custom Duty, Wealth Tax, Service Tax, Excise duty and Cass as on 31st March, 2011.

Name of Statute Nature of Amount Rs. Period for Forum Where Disputes Which Amount Dispute is Related Pending

Income Tax U/s 143 (3) row's. 1,73,27,357/- A.Y.2001-02 I.T Tribunal and

147 of u/s 154 CIT Appeal

Income Tax U/s 143 (3) 1,94,905/- A.Y.2002-03 I.T Tribunal

Income Tax Demand 20,000/- A.Y.2002-03 I.T.O

Income Tax U/s 271 (1)(c) 47,56,416/- A.Y.2002-03 CIT Appeal

Income Tax Proceeding U/s 271(1) 6,47,978/- A.Y.2006-07 I.T Tribunal

Income Tax Proceeding U/s 271(1)(c) 2,33,521/- A.Y.2003-04 I.T Tribunal

Income Tax 1,00,083/- A.Y.2003-04

Income Tax U/s 221 93,098/- A.Y.2009-10 I.T Tribunal

(x) Sick Industry

The Company has No accumulated losses and has not incurred any cash losses during the financial year 2010-2011, covered by audit. Further, the Company has no cash losses in the immediately preceding financial year.

(xi) Dues To Financial Institutions

Based on our audit procedures performed and on the information and explanation given by the management, the Company has yet to complete the processor and release the charge of bank with ROC for the securities offered to Allahabad bank for loan amount of Rs. 1,66,97,612/-.As informed by management, bank has agreed for one time settlement.

Further, The Company has neither taken any loans from debenture holder hence no question of reporting arises to that extent.

(xii) Secured Loans And Advances Granted

In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) Chit Fund, Niche Or Mutual Benefit Company

In our opinion, the Company is not a chit fund or a niche / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of the Companies (Auditor Report) Order, 2003 are not applicable to the Company.

(xiv) Investment Company

The Company has maintained proper records of transactions and contracts in respect of investments in shares, debentures and other securities and those timely entries have been made therein. The shares, debentures and other securities have been held by the Company in its own name except to the exemption granted under Section 49(4) of the Companies Act,1956.

(xv) Guarantees Given By Company

The Company has not given any guarantees for loans taken by other from banks or financial institutions. There is no guarantee given by the Company to third party.

(xvi) Term Loans

In our opinion and according to the information and explanation given to us, the company has not taken any term loan during the year, hence no question of reporting arise to that extent.

(xvii) Source Of Funds And Its Application

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 permanent working capital

(xviii) Public Issue/Preferential Issue/Debentures

The Company has not raised any money by public issue/debenture during the year. However, during the year the Company has come up with a offer of preferential allotment of Convertible Equity Warrants for which the Company has accepted application money to the extent of Rs.63,78,50,000/- from various parties.

(xix) Fraud

Based upon our audit procedures performed and on the information and explanations given by the management we are of the opinion that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Rajesh Balham And Co.

Chartered Accountants

Sd/-

Rajesh Balham

Proprietor

Firm Reg. No 123638W

Place : Mumbai M.No.114178

Date : 2nd September, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of AVANCE TECHNOLOGIES LIMITED as at 31st March 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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 evaluation the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Audit Report) order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks of books and records of the Company as were considered appropriate and the information and explanations given to us during the course of our audit, we enclosed in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

4 Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief necessary for the purposes of our audit;

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

iii. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accounts.

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

v. On the basis of 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 sub-section (1) of section 274 of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes give the information required by the Companies Act, 1956, in the manner so required and subject to Note No.2, 4„8,9 & 11 read with Significant Accounting Policies included therein, give a true and fair view in conformity with the accounting principles generally accepted in India.

- In case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010

- In the case of the Profit and Loss Account, of the profit for the year ended on that date.

And

- In case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Re:- Avance Technologies Limited - F.Y. 2009-10 Referred to in paragraph 3 of our report of even date,

(I) FIXED ASSETS

(a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Assets have been physically verified by the management during the year. According to the information and explanations given to us, there is regular programme of verification which, in our opinion is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Based on our scrutiny of the records of the company and the information and explanation received by us, we report that there was no sale of fixed assets. Hence, the question of reporting whether the sale of any substantial part of fixed assets has affected the going concern of the company does not arise.

(ii) INVENTORIES

(a) The Inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of Inventories and no material discrepancy noticed on physical verification.

(iii) LOANS AND ADVANCES

The company has neither taken nor granted any loans or advances in nature of loans to parties covered under register maintained under section 301 of the Companies Act, 1956. Hence, the question of reporting whether the terms and conditions of such loans are prejudicial to the interest of the Company, whether reasonable steps for the recovery / repayment of over dues of such loans are taken does not arise.

(iv) INTERNAL CONTROL

In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control except as stated above.

(V) TRANSACTIONS WITH RELATED PARTIES AS PER REGISTER OF CONTRACTS UNDER SECTION 301 OF THE COMPANIES ACT, 1956

(a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, there is no transaction made with related parties in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating the value of rupees five lakhs or more in respect of any party during the year.

(vi) DEPOSITS FROM PUBLIC

In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. However, unsecured loan outstanding to the extent of Rs.20, 00,000/- (Previous Year Rs.20, 00,000/-).

(vii) INTERNAL AUDIT SYSTEM

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

(viii) COST RECORDS

As informed to us, The Company is not required to maintain cost records under section 209 (1) (d) of the Companies Act, 1956.

(ix) STATUTORY DUES

(a) According to the records of the Company, undisputed statutory dues including providenj fund, sales tax, custom duty, excise duty, cess and other statutory dues have been regularly deposited with the appropriate authorizes.

(b) According to the information and explanation given to us details of disputed Income tax which have not been deposited as on 31st March, 2010 on account of any dispute are given below. Otherwise there are no disputed Liabilities on account of Sales Tax, Custom Duty, Wealth Tax, Service Tax, Excise duty and Cess as on 31st March, 2010.

Name of Nature of Disputes Amount Rs. Period for Which Forum Where Statute Amount Related Dispute is Pending

Income Tax U/s 143 (3) r.w.s. 147. 73,14,776/- A.Y.2001-02 I.T Tribunal

Income Tax Proceeding U/s 271(1) 6,47,978/- A.Y.2006-07 CIT Appeal

Income Tax Proceeding U/s 271 (1)(c) 2,33,521/- A.Y.2003-04 CIT Appeal

Income Tax Wealth tax 1,82,573/- A.Y.2002-03 CIT Appeal

(x) SICK INDUSTRY

The Company has No accumulated losses and has not incurred any cash losses during the financial year 2009-2010, covered by audit. Further, the Company has no cash losses in the immediately preceding financial year.

(xi) DUES TO FINANCIAL INSTITUTIONS

Based on our audit procedures performed and on the information and explanation given by the management, we are of the opinion that the Company has yet to repay to Allahabad Bank Rs.1,66,97,612/ -(Previous Year Rs. 2,22,97,612/-) for a period over 12 months.

Further, The Company has neither taken any loans from debenture holder hence no question of reporting arises to that extent.

(xii) SECURED LOANS AND ADVANCES GRANTED

In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) CHIT FUND, NIDHI OR MUTUAL BENEFIT COMPANY

In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of the Companies (Auditor Report) Order, 2003 are not applicable to the Company.

(xiv) INVESTMENT COMPANY

In our opinion, the Company is not dealing in or trading in shares, securities, debentures and ojher investment. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor Report) Order, 2003 are not applicable to the Company.

(xv) GUARANTEES GIVEN BY COMPANY

The Company has not given any guarantees for loans taken by other from banks or financial institutions. There is no guarantee given by the Company to third party.

(xvi) TERM LOANS

In our opinion and according to the information and explanation given to us, the company has not taken any term loan during the year, hence no question of reporting arise to that extent.

(xvii) SOURCE OF FUNDS AND ITS APPLICATION

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 permanent working capital.

(xviii)PREFERENTIAL ISSUE

According to the information and explanations given to us, The Company issued 40,00,00,000Nos. Convertible equity warrants each of Rs.3.50/- on preferential basis to individuals and Corporate belonging to non promoter category. Out of the said warrants 17725000 warrants converted into equity shares on 20th February, 2010 and 382275000 warrants converted into equity shares on 27th March, 2010. At face value of Re.1/- the balance amount of Rs.2.50 per warrant transfer to share premium account. The price charge is as determine as per SEBI guidelines. The price charge for preferential allotments are not prejudicial to the interest of the company.

(xix) DEBENTURES

According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any debentures.

(xx) PUBLIC ISSUE

The Company has not raised any money by the public issue during the year covered by our audit report.

(xxi) FRAUD

Based upon our audit procedures performed and on the information and explanations given by the management we are of the opinion that no fraud on or by the Company has been noticed or reported during the course of our audit.

For RAMESH BATHAM AND CO.

Chartered Accountants

Sd/-

RAMESH BATHAM

Proprietor

Place: Mumbai Membership No.114178

Date : 30th September, 2010 Rrm Reg No 123638W