Auditor Report of Meglon Infra-Real (India) Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of MEGLON INFRA-REAL (INDIA) LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow statement for the year then ended and summary of significant accounting policies and other explanatory information.

Management 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 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 the maintenance of adequate records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 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

Our 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 audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing Specified under Sec 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 appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial control over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 financial 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 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, 2015, and its Loss and its cash flows for the year ended on the 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 sub-section(11) of section 143 of the Act, we give in the annexure a statement on the matters specified in the paragraph 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 purpose of our audit;

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

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

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with 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 written representations received from the directors as on 31st March 2015 and taken on record by the Board of Directors, none of the directors is 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 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 does not have any pending litigations which would impact its financial position.

ii. The Company does not have any long term contracts including derivatives contracts for which there were any material foreseeable losses.

iii. There were no amounts which required to be transferred to the Investor Education and protection fund by the company

The Annexure referred to in our Independent Auditor's Report to the members of the Company on the financial statements for the year ended March 31, 2015, we report that:

i) The Company does not have any fixed assets. The company has neither acquired nor disposed any fixed assets. Accordingly provisions of clauses of (a), (b), of paragraph 3(i) of the order are not applicable to the company.

ii) The Company is a service company, primarily rendering software and brokerage services. Accordingly, it does not hold any physical inventories. Thus, paragraph 3 (ii) of the Order is not applicable.

iii) In our opinion and according to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Therefore, requirements of clauses (a), (b), of paragraph 3(iii) of the order are not applicable.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, with regard to purchase of fixed assets and the sale of services. During the course of the audit we have not observed any major weaknesses in the internal control system.

v) In our opinion and according to the explanations given to us, the company has not accepted any deposits from Public.

vi) The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Companies Act 2013.

vii) a) According to the records of the company and explanations given to us and on the basis of our examination of the records of the company, undisputed statutory dues including provident fund, Income - tax, Value Added Tax, and other material statutory dues applicable to it have been regularly deposited with the appropriate authorities. Further, as explained to us, no undisputed statutory dues were in arrears as at 31st March 2015 for a period of more than 6 months from the date they become payable.

(b) According to the information and explanation given to us, there are no dues of income-tax, sales-tax and cess which have not been deposited on account of any dispute.

(c) According to the information and explanation given to us there were no amount transferred to investor education and protection fund.

viii) The company has accumulated losses as at the end of the financial year and it accumulated losses are not less than fifty percent of its net worth and the company has incurred cash losses during the current financial year covered by our audit and in the immediately preceding financial year.

ix) Based on our audit procedures and on the information and explanation given to us, we are of the opinion the company has not taken any loans from bank or financial institutions. Accordingly clause 3(ix) of the order is not applicable to the company.

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

xi) According to the information and explanations given to us, no term loans were raised during the year.

xii) Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Ramasamy Koteswara Rao & Co, Chartered Accountants Firm Registration Number: 010396S

(C V Koteswara Rao) Place: Hyderabad Partner Date: 22nd May, 2015 Membership No.028353

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Mar 31, 2014

We have audited the accompanying financial statements of MEGLON INFRA- REAL (INDIA )LIMITED ("the Company"), which comprises the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year ended, and summary of significant accounting policies and other explanatory information.

Management 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 Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act")which shall continue to apply in respect of section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated Septemberl5/2013 issued by the Ministry of Corporate Affairs.. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 Balance Sheet, of the state affairs of the Company as at March 31, 2014

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

(c) In the case of Cash Flow statement, the cash flows for the year ended on that date

Report on Other Legal and Regulatory Requirements:

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

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

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting standards referred to in sub-section (3c) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

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

f. Since the central Government has not issued any notification as to the rate at which cess is to be paid under section 441A of companies act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

Annexure to the Auditors'' Report (referred to in paragraph 1 of our Report of even date to the Members ofMEGLON INFRA- REAL (INDIA)LIMITED for the year ended March 31, 2014)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that,

(i) (a) The Company does not have any fixed assets so the question of reporting on

Clause 4(i)(a), (b), (c), is not applicable.

(ii) According to the information and explanations given to us, and having regard to the nature of business carried on by the company, the company does not have any inventory at the yearend so the question of reporting on clauses 4(ii)(a),4(ii)(b),4(ii)(c), (relating to Inventory) of the Companies (Auditors Report) Order ,2003, and amendment thereto by the Companies (Auditors Report) Amendment,2004 are not applicable.

(iii) (a) According to the information and explanations given to us, the company neithergranted nor takenany loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, requirements of clauses 4(iii)(b) to 4(iii)(g)of the order are not applicable.

(iv) On the basis of checks carried out during the course of the audit and as per the explanations given to us, we are of the opinion that there are adequate internal control systems commensurate with the size of the company and the nature of its business, with regard to the nature of business and payment of expenses. During the course of audit no major weaknesses in the internal controls are noticed.

(v) (a) According to the information and explanations given to us, we are of the opinion that thetransactions which are required to be entered in the register maintained under section 301 of the Companies Act. 1956 have been so entered

(vi) In our opinion and according to the explanations given to us, the company has not accepted any deposits within the meaning of Sections 58A and 58AA of the Companies Act and Companies (Acceptance of Deposits) Rules, 1975.

(vii) As per information and explanations given by the management, the company has an internal audit system commensurate with its size and nature of its business.

(viii) According to the information and explanations given to us, maintenance of cost records has not been prescribed by the central government under the clause (d) of sub-section (1) to Section 209 of the Act.

(ix) (a) According to the records of the company, the company is regular in depositing undisputed statutory dues including income-tax, cess and other statutory dues with the appropriate authorities.

(b) According to the information and explanation given to us, there are no dues of income-tax, wealth- tax, sales-tax and cess which have not been deposited on account of any dispute.

(x) The company has accumulated losses at the end of the financial year and its accumulated losses are not less than fifty percent of its net worth and the company has incurred cash losses during the current financial year covered by our audit and it has not incurred any cash losses in the immediately preceding financial year.

(xi) According to the records of the company and as per the explanations given to us the company has not taken any loans from a financial institution or bank and the company was not raised any debentures during the year. Accordingly, clause 4 (xi) of the order is not applicable.

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

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

(xiv) According to the information given to us, the company is not dealing in or trading in shares, securities, debentures and other instruments, accordingly the provisions of clause 4 (xiv) of the order is not applicable.

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

(xvi) The company has not obtained any term loans. Accordingly the question of reporting on its application does not arise.

(xvii) According to the information and explanation given to us, and on an overall examination of the balance sheet, we report that no funds raised on short term basis have been used for long term purpose by the company.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

(xix) The company has not issued any debentures during the year. Accordingly, no securities have been created.

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

(xxi) Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Ramasamy Koteswara Rao & Co, Chartered Accountants FirmRegnNo: 010396S

Place: Hyderabad (C.V. Koteswara Rao) Date: 29-05-2014 Partner (Membership No.028353)

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Mar 31, 2012

1. We have audited the attached Balance Sheet of MEGLON INFRA-REAL (INDIA) LIMITED, (formerly known as CANAAN INTERNATIONAL INFOTECH LIMITED), as at March 31, 2012 and the Profit and Loss account for the year ended on that date annexed thereof. 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 then 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.

3. As required by the Companies (Auditor's Report) Order, 2003 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.

4. Further to our comments in the Annexure referred to in paragraph (3) 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 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 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 March 31, 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; and

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India subject to

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

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

(c) In the case of cash flow statement of the cash flows the year.

Annexure to the Auditors' Report (referred to in paragraph 3 of our Report of even date to the Members of MEGLON INFRA-REAL (INDIA) LIMITED, (formerly known as CANAAN INTERNATIONAL INFOTECH LIMITED) for the year ended March 31, 2012)

(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 in a phased manner and, in our opinion, the verification is reasonable having regard to the size of the company and the nature of its assets. No discrepancies were noticed on such verification.

(c) No substantial part of fixed assets has been disposed off during this year.

I. According to the information to the information and explanation given to us, and having regard to the nature of business carried on by the company, the question of reporting on clauses 4 (ii) (a), 4 (ii) (c), (relating to Inventory) of the Companies (Auditor Reports) Order, 2003, and amendment thereto by the Companies (Auditors Report) Amendment, 2004 are not applicable.

II. The company has neither granted not taken any loans, secured or unsecured to and from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4 (III) (b) to (d) of the Order not applicable.

III. On the basis of checks carried out during the course of audit and as per explanation given to us, we are of the opinion that there are adequate internal control procedures commensurate with the size of the company nature of its business; with regard to the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal controls system.

IV. (a) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under sections 301 of the Companies Act. 1956. accordingly, the question or reporting on clause 4 (V) (b) does not arise.

V. In our opinion and according to the information and explanation given to us, the company has not accepted any deposits within the meaning of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposit accepted from the public.

VI. In our opinion, the company does not have any Internal Audit system commensurate with the size and nature of its business

VII. The Central Government has not prescribed maintenance of cost records under Section 209 (i) (d) of the Companies Act, 1956 in respect of the Company's nature of business.

VIII. (A) According to the records of the company, the company is regular in depositing undisputed statutory dues including provident fund employees' state insurance, income-tax, sales-tax, custom duty, excise duty, cess and other statutory dues with appropriate authorities except, the Income Tax Liability of Rs. 23,26,720/- & 3,61,206/- has been Outstanding since Financial Year 1994-95 & 1995-96 respectively.

(B) According to the information and explanations given to us there are wealth tax, sales tax, customs duty and excise duty, which have not been deposited on account of any dispute.

IX. The company's accumulated losses as at the end of the financial year had exceeded fifty percent of its net worth and the company has not incurred cash losses during the current financial year covered by our audit but the company had incurred cash loss in the immediately preceding financial year.

X. Based on our audit procedures and on information and explanation given by the management, we are of the opinion that the company did not have any outstanding dues to Financial Institutions, Bank or Debenture holders.

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

XII. The Company is not a chit or a nidhi/mutual benefit fund/society.

XIII. As informed and explanations given to us the company has not dealt/traded in securities pr debentures during the years. In our opinion and according to the information explanation given to us proper records have been maintained for the investments by the company and timely entries have been made therein, the investments have been held by the company in its own name.

XIV. The company has not given any guarantee for loans taken by others from banks or financial institutions.

XV. The company has not obtained any term loans. Accordingly the question of reporting on its application does not arise.

XVI. According to the information and explanation given to us and on an overall examination of the balance sheet the company has not raised any short term funds. Accordingly the question of reporting in its application does not arise.

XVII. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

XVIII. The company has not issued any debentures; accordingly the question of creating security or charge for such debentures does not arise.

XIX. The company has not raised any money through the public issue during the year. Accordingly the question of disclosure of end use of such monies does not arise.

XX. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

XXI. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



For Ramasamy Koteswara Rao & Co., Chartered Accountants FR NO. 010396S

C. V. Koteshwara Rao, Partner (Membership No. 28353)

Place: Mumbai Date: 14th August, 2012

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Mar 31, 2010

1. We have audited the attached Balance Sheet of CANAAN INTERNATIONAL INFOTECH LIMITED, as at March 31, 2010 and the Profit and Loss account for the year ended on that date annexed thereof. 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 then 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.

3. As required by the Companies (Auditors Report) Order, 2003 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.

4. Further to our comments in the Annexure referred to in paragraph (3) 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 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 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 March 31, 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;

AUDITORS REPORT

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India subject to

(vii) That, The company received a notice from BSNL in respect of telephone bills to the extent of Rs. 24,84,559 and the company has not provided this liability in its books of accounts

As a result of above Profit of the company is shown at Rs.76,701 as against loss of Rs.24,07,858 if the above liabilities are recognised in the books of account.

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2010;

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

(c) In the case of cash flow statement of the cash flows during the year.



ANNEXURE TO THE AUDITORS REPORT

Annexure to the Auditors Report (referred to in paragraph 3 of our Report of even date to the Members of CANAAN INTERNATIONAL INFOTECH LIMITED for the year ended March 31,2010)

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 in a phased manner and, in our opinion, the verification is reasonable having regard to the size of the company and the nature of its assets. No discrepancies were noticed on such verification.

(c) No substantial part of fixed assets has been disposed off during this year.

II. According to the information to the information and explanation given to us, and having regard to the nature of business carried on by the company, the question of reporting on clauses 4 (ii) (a), 4 (ii) (c), (relating to Inventory) of the Companies (Auditor Reports) Order, 2003, and amendment thereto by the Companies (Auditors Report) Amendment, 2004 are not applicable.

III. The company has neither granted not taken any loans, secured or unsecured to and from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4 (III) (b) to (d) of the Order not applicable.

IV) On the basis of checks carried out during the course of audit and as per explanation given to us, we are of the opinion that there are adequate internal control procedures commensurate with the size of the company nature of its business; with regard to the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal controls system.

V) (a) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under sections 301 of the Companies Act, 1956. accordingly, the question or reporting on clause 4 (V) (b) does not arise.

VI) In our opinion and according to the information and explanation given to us, the company has not accepted any deposits within the meaning of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposit accepted from the public



VII) In our opinion, the company does not have any Internal Audit system commensurate with the size and nature of its business

VIII) The Central Government has not prescribed maintenance of cost records under Section 209 (i) (d) of the of the Companies Act, 1956 in respect of the Companys nature of business.

IX) According to the records of the company, the company is regular in depositing undisputed statutory dues including provident fund employees state insurance, income-tax, sales-tax, custom duty, excise duty exercise tax, cess and other statutory dues with appropriate authorities.

X) The companys accumulated losses as at the end of the financial year had exceeded fifty percent of its net worth and the company has not incurred cash losses during the current financial year covered by our audit but, the company had incurred cash loss in the immediately preceding financial year.

XI) The Company had defaulted in repayment of dues to banks to the tune of Rs. 1988911/-for Four years.

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

XIII) The Company is not a chit or a nidhi/mutual benefit fund / society.

XVI) As informed and explanations given to us the company has not dealt/traded in securities pr debentures during the years. In our opinion and according to the information explanation given to us proper records have been maintained for the investments by the company and timely entries have been made therein the investments have been held by the company in its own name.

XV) The company has not given any guarantee for loans taken by others from banks or financial institutions.

XVI) The company has not obtained any term loans. Accordingly the question of reporting on its application does not arise.

XVII) According to the information and explanation given to us and on an overall examination of the balance sheet the company has not raised any short term funds. Accordingly the question of reporting in its application does not arise.

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

XIX) The company has not issued any debentures; accordingly the question of creating security or charge for such debentures does not arise.

XX) The company has not raised any money through the publicissue during the year. Accordingly the question of disclosure of end use of such monies doenot arises.

XXI) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For M. N. RAO & ASSOCIATES.

CHARTERED ACCOUNTANTS

GIRIKIPATI KAMLESH

PARTNER M.No.210739

Place : Hyderabad

Date : 04.09.2010