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Auditor Report of Algoquant Fintech Ltd.

Mar 31, 2023

Algoquant Fintech Limited [formerly known as Hindustan Everest Tools Limited]

Report on the Audit of the Financial statements Opinion

We have audited the accompanying financial statements of Algoquant Fintech Limited [formerly known as Hindustan Everest Tools Limited]("the Company"), which comprise the Balance Sheet as at 31-March-2023, the Statement of Profit and Loss (including other comprehensive income), the Statement of changes in equity and the Cash Flow Statement for the year then ended, notes to the financial statements, and a summary of the significant accounting policies and other explanatory information ("here in after referred to as the financial statements").

In our opinion and to the best of our information and according to the explanations given to usthe aforesaid financial statements give the information required by the Companies Act, 2013 (''the Act'') in the manner so required and give a true and fair view, in conformity with the Accounting Standards specified under section 133 of the Act, read with (the Companies (Indian Accounting Standards) Rules, 2015)and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31-March-2023, its profit(including other comprehensive income), the changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (''ICAI'') together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statement.

Key Audit Matter(s)

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How our audit addressed the key audit matter

Revenue recognition

The Company has majority of its income from trading in financial instruments through brokers, custodian, and stock exchanges.

Our audit approach was a combination of test of internal controls and substantive procedures which included the following:

â¢ Obtained an understanding of internal controls put in place to execute, record, measure, present and disclose revenue transactions in accordance with the

underlying contract notes and accounting standards.

â¢ Tested the operating effectiveness of those controls.

â¢ Obtained an understanding of the Company''s IT environment and conducted risk assessment and identified IT applications, databases and operating systems that are relevant to our audit.

â¢ Tested the design and operating effectiveness of the Company''s IT controls over IT applications as identified above.

â¢ Tested the access and application controls pertaining to recording which prevents unauthorized changes to recording of transactions incurred.

â¢ Selected a sample of contracts and through inspection of evidence of performance of these controls, tested the substantive occurrence of revenue transactions during the year.

â¢ Performed analytical procedures and test of details for reasonableness.

Information other than the Financial Statements and Auditor''s Report thereon

The Company''s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report but does not include the financial statements and our auditor''s report thereon. The Annual Report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there''re is a material misstatement therein,we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Financial statements

The accompanying financial statements have been approved by the Company''s Board of Directors. The Company''s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India. 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.

In preparing the financial statements, the Board of Directorsare responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process. Auditor''s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Standards on Auditing specified under section 143(10) of the Act, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls;

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

â¢ Conclude on the appropriateness of Board of Directors'' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern;

â¢ Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control

that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended 31-March-2023 and are therefore, the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by section 197(16) of the Act, based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

2. As required by the Companies (Auditor''s Report) Order, 2020 (''the Order'') issued by the Central Government of India in terms of section 143(11) of the Act, we give in the "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

3. Further to our comments in Annexure 1, as required by section 143(3) of the Act, based on our audit,we report, to the extent applicable, 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 purpose of our audit of the accompanying financial statements;

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 financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31-March-2023 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 with reference to financial statements of the Company as on 31-March-2023 and operating effectiveness of such controls, refer to our separate Report in "Annexure 2"wherein we have expressed an unmodified opinion; and

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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company, as detailed in note 26(iii)to the financial statements, has disclosed the impact of pending litigation(s) on its financial position as at 31-March-2023;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31-March-2023;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31-March-2023;

iv. a) The management has represented that, to the best of its knowledge and belief, on the

date of this audit report, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (''the intermediaries''), with

the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (''the Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief,no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (''the Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (''Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended

31-March-2023.

For O P Bagla & Co. LLP

Chartered Accountants

Firm''s Registration No.: 000018N/N500091

Deepanshu saini

Partner

Membership No.: 510573

UDIN: 23510573BGXPLP7559

Place: New Delhi

Date: 30-May-2023

Mar 31, 2021

To the Members of Hindustan Everest Tools Limited

Report on the Audit of the Standalone Financial StatementsOpinion

We have audited the accompanying Standalone financial statements of Hindustan Everest Tools Limited (âthe Companyâ), which comprise the Balance sheet as at 31-March-2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us the aforesaid Ind AS financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) 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 31-March-2021, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing (SAS),as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent Auditor of the Company in accordance with the âCode of Ethicsâ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Annual financial statements of the current year. These matters were addressed in the context of our audit of the financial statement as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matters

How our audit addressed the key audit matter

(a) Accounting and Valuation of Financial Instruments

The Companyâs net trading positions as on 31-March-2021 amount to Rs. 502.06 lakh which includes net trading positions in equity shares. This comprises 19.83 % of total assets of the Company. Considering the high value of this item of asset it has been considered as a key audit matter.

Our procedures included:

â¢ We obtained an understanding of the internal controls designed by the management for net trading positions accounting and valuation and tested the operating effectiveness these controls.

â¢ We undertook substantive audit procedures like inspection, recalculation and reperformance.

â¢ We performed procedures to identify encumbrances on these net trading positions and verified sufficiency and appropriateness of disclosures regarding the same.

â¢ We performed procedures to verify adherence to IND AS.

(b) Valuation of Financial Instruments

The derivative financial assets amount to Rs. 65.22 lakhs. We focused on this because of the number of contracts, their measurement and the complexity related to fair value estimation.

Our procedures included:

â¢ We obtained an understanding of managementâs process and evaluated design and tested operating effectiveness of controls around existence and measurement of derivative financial instruments.

â¢ Reconciling derivative financial instruments data with data received from independent third parties.

â¢ Considering the appropriateness of disclosures in relation to financial risk management and derivative financial instruments.

The company has majority of its income from trading in financial instruments through brokers, custodian, and stock exchanges.

â¢ Prime revenue generating source was the Companyâs trading activities. Hence, our prime focus was on the trading activities.

â¢ Accordingly, in our audit process we focused over the internal control set up by the management and had to check the policies set up by the management for accuracy of financial reporting.

The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditorâs report thereon. The Annual Report is expected to be made available to us after the date of this auditorâs report

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the Annual Report If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact to those charged with governance.

Responsibilities of Management for the Standalone Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of 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(including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are also responsible for overseeing the Companyâs financial reporting process.

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

â¢ Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended 31-March-2021 and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1âa statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss(including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity 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 Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on 31-March-2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31-March-2021 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 with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;

(g) In our opinion, the managerial remuneration for the year ended 31-March-2021 has been paid by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 - Refer note to 20 the financial statements;

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

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

For SSRA & Co.

Chartered Accountants

Firm Registration Number: 014266N

Sd/-

Suresh Goyal

Partner

Membership Number: 093711 UDIN:21093711AAAACP4481

Place: New Delhi Date:30-June-2021

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these 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 provision of the Act for safeguarding 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, imple- mentation 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 mis- statement, whether due to fraud or error .

Auditor's Responsibility

ur responsibility is to express an opinion on these financial statements based on our audit.

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 appro- priate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate inter- nal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

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 Companies Act, 2013 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 31 March, 2015 and its Loss and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a. Trade Receivables and Trade payables are subject to reconciliation and confirmations. Adjustments in carrying amount, if any, shall be made on completion of reconciliation and confirmation thereof. In the opinion of the management, there shall not be any material impact on carrying amount of these accounts. (Refer note 28.2 to the financial statements)

b. Inventories except work-in-progress have not been physically verified during the year and same has been considered as per quantity appearing in the books of accounts .Adjustments for variances, if any, shall be made on completion of physical verification ofthe inventories In the opinion of the management there shall not be any material impact on carrying value of inventories. (Refer note 13 to the financial statements).

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ('the Order '),issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act,2013 we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our exami- nation 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, 2013.

(e) Pending reconciliation and confirmation of Trade Receivables and Trade Payables and consideration of inventories as per quan- tity appearing in books of account as described in sub- paragraph (a) and (b) under the emphasis of matters paragraph above, in our opinion, shall have no adverse effect on the functioning of the Company.

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

(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 no pending litigation having material impact on its financial position.

ii. There is no long term contract including derivative contract having material foreseeable losses.

iii. There is no amount required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 1 of our report of even date on the other legal and regulatory requirements (Re: HINDU- STAN EVEREST TOOLS LIMITED)

(i) a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets ,however same is under updation.

b. Fixed Assets of the Company have not been physically verified by the management during the year. In our opinion, the frequency of physical verification is need to be on yearly basis having regard to the size of the Company and nature of its assets.

(ii) a. Inventories except work in progress were not physically verified during the year.

b. In our opinion, the procedures of physical verification of inventories are not reasonable and adequate in relation to the size of the company and the nature of its business as the company has not conducted any physical verification of inventories except work in progress during the year .

c. In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of inventory.

(iii) The Company has not granted any loan to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system com- mensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assets and sale of goods . During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas except strengthening the procedure of the physical verification of inventories and fixed assets at regular intervals.

(v) The Company has not accepted any deposit from the public. Therefore clause 3(v) of the Order is not applicable.

(vi) The Central Government has not prescribed maintenance of cost records u/s 148(1) of the Companies Act, 2013.

(vii) a. According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees' state insurance ,income tax .sales tax, wealth tax, service tax, duty of customs, duty of ex- cise ,value added tax. cess and any other statutory dues accrued in the books of accounts , with the appropriate authorities though there have been some delays. There was no undisputed outstanding statutory dues as at the year-end for a period of more than six months from the date they became payable.

b. According to the records of the Company, there are no dues outstanding of income tax , sales tax, wealth tax, duty of cus- toms, duty of excise, value added tax, service tax and cess on account of any dispute .

c. There is no amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act ,1956 (1 of 1956) and rules made there under..

(viii) The Company has accumulated losses at the end of the financial year less than fifty percent of its net worth and it has incurred cash loss in the current financial year, but not in immediately preceding financial year.

(ix) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks and it has no dues payable to financial institutions and debenture holders

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) According to the information and explanations given to us, the company has not obtained any term loan during the year.

(xii) Based on our examination of the books and records of the Company, carried out in accordance with the generally accepted au- diting practice in India and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

FOR SINGHI & CO. Chartered Accountants Firm Reg. No. 302049E

B.K.Sipani Partner Membership No. 088926 Place :New Delhi Date: 3rd June, 2015

Mar 31, 2014

We have audited the accompanying financial statements of Hindustan Everest Tools Limited, ("the company") which comprise the Balance Sheet as at 31st March, 2014 and 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies'' Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conduct 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 entity''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 to 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 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 31st March, 2014;

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

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

Report on the other legal and regulatory requirements

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

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

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

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

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

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

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 is 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 referred to in paragraph 1 of our report of even date on the other legal and regulatory requirements (Re: Hindustan Everest Tools Limited)

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

b. As per information given to us, the process of physical verification of fixed assets by the management was initiated but not completed during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size of the company and nature of its assets. Discrepancy in physical and book quantity if any shall be reconciled and adjusted on completion of physical verification.

c. The company has not disposed off substantial part of fixed assets during the year.

(ii) a. As explained to us inventories were physically verified during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion and according to the information and explanation given to us, the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) a. According to the information and explanations given to us, the company has taken interest free unsecured loans including in previous year from four parties (Maximum balance Rs. 4,97,05,466 and year end balance was Rs. 4,35,13,404) listed in the register maintained under section 301of the Companies Act'' 1956.

b. Other terms & condition of such loan are prima facie not prejudicial to the interest of the company.

c. As informed to us, the company has not granted any loan to parties covered in the register maintained under section 301 of the Companies'' Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not noticed any continuing failure to correct major weakness in internal control system.

(v) a. In our opinion and according to the information and explanations provided by the management, we are of the opinion that the particulars of contract or arrangements 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 of purchase and sale of goods, materials and services made exceeding the value of Rs. five lakhs from any party covered under section 301 of the Companies'' Act 1956.

(vi) In our opinion and according to the information and explanations given to us, the company has not received any public deposit during the year.

(vii) In our opinion the company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules 2011 prescribed by the Central Government under section 209 (1)(d) of the Companies Act 1956 and are of the opinion that prima facie ,the prescribed cost records have been made and maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) a. According to the records of the company, the company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, services tax, wealth tax, custom duty, excise duty, cess and other statutory dues applicable to it with the appropriate authorities though there have been some delays. There are no significant undisputed outstanding statutory dues as at the yearend for a period of more than six months from the date they became payable except service tax Rs.43,878.

b. According to the records of the company , there are no dues outstanding of sales tax, income tax, service tax, custom tax, wealth tax, excise duty and cess on account of any dispute.

(x) The company has no accumulated loss at the end of the financial year and has not incurred any cash loss during the year. However, it has incurred cash loss in immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to financial institution and banks. We have been informed that the company has not issued any debenture during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) 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 Order are not applicable to the company.

(xiv) The company does not deal or trade in shares, securities, debentures and other securities.

(xv) According to the information and explanations given to us, the company has not given any guarantees in favour of banks / financial institution for loans taken by others.

(xvi) According to the information and explanations given to us, term loan taken by the company during the year has been utilized for the purpose for which loan was obtained.

(xvii) According to the information and explanation given to us, on an overall basis, fund raised on short term during the year has not been used for long term investment.

(xviii) The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies'' Act, 1956.

(xix) The company did not have any outstanding debentures during the year. Accordingly clause 4(xix) of the Order is not applicable.

(xx) The company has not raised any money through a public issue during the year. Accordingly clause 4(xx) of the Order is not applicable.

(xxi) Based on our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practice in India and according to the information and explanations given to us, no fraud on or by the company, was noticed or reported during the year.

For SINGHI & CO. Chartered Accountants Firm Reg. No.302049E

B.K. Sipani Partner Membership No.088926

Place: New Delhi Date: 29th May, 2014

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of HINDUSTAN EVEREST TOOLS LIMITED, ("the company") which comprise the Balance Sheet as at 31st March, 2013 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these finan- cial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies'' Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in ac- cordance with the Standards on Auditing issued by the Insti- tute of Chartered Accountants of India. Those Standards re- quire 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 evi- dence about the amounts and disclosures in the financial state- ments. The procedures selected depend on the auditor''s judg- ment, including the assessment of the risks of material mis- statement 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 au- dit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of account- ing policies used and the reasonableness of the accounting estimates made by management, as well as evaluating to overall presentation of the financial statements.

We believe that the audit evidence we have obtained is suffi- cient 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 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 31st March, 2013;

b. In the case of Statement of Profit and Loss, of the loss for the year ended on that date; and

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

Report on the other legal and regulatory requirements

1. As required by the companies ( Auditor''s Report) or- der, 2003 ("the Order") issued by the Central Govern- ment of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statements on the matters specified in the 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 ap- pears 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;

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 is 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 REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE ON THE OTHER LEGAL AND REGULA TORY REQUIREMENTS (RE: HINDUSTAN EVEREST TOOLS LIMITED)

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

b. Fixed Assets have been physically verified by the management during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification.

c. The company has not disposed off substantial part of fixed assets during the year.

(ii) a. As explained to us inventories were physically verified during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion and according to the information and explanation given to us, the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) a. According to the information and explanations given to us, the company has taken unsecured loan including in previous year from four parties (Maximum balance Rs. 5,31, 51,862 and year end balance Rs. 4,97,05,466) listed in the register maintained under section 301of the Companies Act'' 1956.

b. The rate of interest and other terms & condition of such loan are prima facie not prejudicial to the interest of the company.

c. As informed to us, the company has not granted any loan to parties covered in the register maintained under section 301 of the Companies'' Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not noticed any continuing failure to correct major weakness in internal control system.

(v) a. In our opinion and according to the information and explanations provided by the management, we are of the opinion that the particulars of contract or arrangements 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 of purchase and sale of goods, materials and services made exceeding the value of Rs. five lakhs from any party covered under section 301 of the Companies'' Act 1956.

(vi) In our opinion and according to the information and explanations given to us, the company has not received any public deposit during the year.

(vii) The company has no internal audit system during the year..

(viii) This company is not maintaining cost records for the company''s products under section 209(1)(d) of the Companies'' Act 1956, .

(ix) a. According to the records of the company, the company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, services tax, wealth tax, custom duty, excise duty, cess and other statutory dues applicable to it with the appropriate authorities though there have been some delays.

There are no significant undisputed outstanding statutory dues as at the yearend for a period of more than six months from the date they became payable.

b. According to the records of the company, there are no dues outstanding of sales tax, income tax, service tax, custom tax, wealth tax, excise duty and cess on account of any dispute.

(x) The company has no accumulated loss at the end of the financial year. However, the company has incurred cash loss during the current year ,but not in immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to financial institution and banks. We have been informed that the company has not issued any debenture during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) 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 Order are not applicable to the company.

(xiv) The company does not deal or trade in shares, securities, debentures and other securities.

(xv) According to the information and explanations given to us, the company has not given any guarantees in favour of banks / financial institution for loans taken by others.

(xvi) According to the information and explanations given to us, term loan taken by the company during the year has been utilized for the purpose for which loan was obtained.

(xvii) According to the information and explanation given to us, on an overall basis, fund raised on short term during the year has not been used for long term investment.

(xviii) The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies'' Act, 1956.

(xix) The company did not have any outstanding debentures during the year. Accordingly clause 4(xix) of the Order is not applicable.

(xx) The company has not raised any money through a public issue during the year. Accordingly clause 4(xx) of the Order is not applicable.

(xxi) Based on our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practice in India and according to the information and explanations given to us, no fraud on or by the company, was noticed or reported during the year.

For SINGHI & CO.

Chartered Accountants

Firm Reg No. 302049E

B.K.Sipani

Place: New Delhi Partner

Date: 30th May'' 2013 Membership No.088926

Mar 31, 2010

We have audited the attached Balance Sheet of HINDUSTAN EVEREST TOOLS LIMITED, as at 31st March, 2010, and also the Profit and Loss account and Cash Flow for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating, the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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 were 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, Profit and Loss account and Cash Flow dealt with by this report are in agreement with the books of account;

iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow 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 directors in terms of clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956.

vi a) Non-provision of diminution of Rs. 3,16,165, in value of long term investment which in the opinion of the management is temporary in nature.

b) Refer note no. 8(b) in schedule 22 regarding appointment and remuneration of Chairman & Managing Director and Vice Chairman & Managing Director, which is subject to approval of shareholders.

vii. Subject to paragraph (vi) above, In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with 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, 2010 and

b) In the case of the Profit and Loss account, of the loss of the company for the year ended on that date.

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

ANNEXURE TO THE AUDITORS REPORT

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

b. Fixed Assets have been physically verified by the Management during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification.

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

(ii) a. As explained to us inventories were physically verified during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) a. According to the information and explanations given to us, the Company has taken unsecured loan including in previous year from four parties (maximum and year end balance Rs. 5, 08, 26,000/-).

b. The rate of interest and other terms & condition of such loan are prima facie not prejudicial to the interest of the Company.

c. As informed to us, the Company has not granted any loan to parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control.

(v) a. In our opinion and according to the information and explanations provided by the management, we are of the opinion that the particulars of contract or arrangements that need to be entered into the register maintained under section 301 of the Companies Act1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, there is no transaction of purchase and sale of goods, materials and services made from the parties covered under section 301 of the Companies Act1956.

(vi) In our opinion and according to the information and explanations given to us, the Company has not received any public deposit during the year.

(vii) In our opinion, the Company has internal audit system commensurate with the size and nature of its business.

(viii) The Central Government has not prescribed maintenance of cost records for the Companys products under section 209(1 )(d) of the Companies Act, 1956.

(ix) a. According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, services tax, wealth tax, custom duty, excise duty, cess and other statutory dues applicable to it with the appropriate authorities though there have been delays. There are no undisputed outstanding statutory dues as at the year end for a period of more than six months from the date they became payable.

b. According to the records of the Company, there are no dues outstanding of sales tax, income tax, service tax, custom tax, wealth tax, excise duty and cess on account of any dispute.

(x) The Company has no accumulated loss at the end of the financial year and the Company has incurred cash loss during the current but not in the immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution and banks. We have been informed that the Company has not issued any debenture during the year.

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

(xiii) 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 (Auditors Report) Order, 2003 (as amended), are not applicable to the Company.

(xiv) The Company does not deal or trade in shares, securities, debentures and other securities.

(xv) According to the information and explanations given to us, the Company has not given any guarantees in favour of banks / financial institution for loans taken by others.

(xvi) According to the information and explanations given to us, term loan taken by the company has been applied for the purpose for which that was taken.

(xvii) According to the information and explanation given to us, on an overall basis, fund raised on short term basis has not been used during the year for long term investment.

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

(xix) The Company did not have any outstanding debentures during the year. Hence, question of creation of security or charge does not arise.

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

(xxi) Based on our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India and according to the information and explanations given to us, no fraud on or by the Company, was noticed or reported during the year.

For SINGHI & CO.

Chartered Accountants

Firm Reg No. 302049E

B.K. Sipani

Partner

Membership No. 88926

Place : New Delhi

Dated : 29th May, 2010

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