ఆడిటర్ నివేదిక Infraquest International Ltd.

Mar 31, 2013

Report on the Financial Statement

We have audited the accompanying financial statements of M/s INFRAQUEST INTERNATIONAL LIMITED, Indore which comprises the Balance sheet as at March 31st, 2013, and the statement of Profit and Loss for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessment, the auditor considers internal control relevant to Company''s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstance. An audit also includes evaluating the appropriateness of accounting policies used and 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 basis of 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 March 31, 2013, and

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

port on Other Legal and Regulatory Requirements

As the company is a private company and falls within the exemption specified under paragraph 2(iv) of 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. Hence the matters specified in paragraphs 4 and 5 of the said Order are not enclosed.

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

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

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.

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

In our opinion, the Balance Sheet, & Statement of Profit and Loss comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

Du ring the course of our audit we did not come across any matter which may have adverse effect on the functioning of the company.

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

Required by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Company Law rd in terms of Section 227(4A) of Companies Act, 1956 we further report that-

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

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

c) During the year, Company has not disposed of any substantial/major part of fixed assets.

As explained to us, the Company did not have any inventory during the year and thereof there is no question of commenting on frequency of verification, procedure of physical verification of inventory and on records of inventory.

According to the information and explanation given to us, the company has not taken or granted loan from to the parties listed in the Register maintained u/s 301 of the Companies Act, 1956.

In our opinion & according to information & explanation given to us, there are adequate internal control system commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods and services.

During the course of regard to the sale of goods and services.

During the course of correct major weakness in the internal controls system, a) In our opinion and according to the information and explanations given to us, there is no particulars of Contracts or Arrangements which is required to be entered into the Register maintained under section 301 of Act

In our opinion and according to the information and explanations given to us, the provisions of section 58A,58AA or any other relevant provisions of the Act and Rules framed there under, not applicable for the company.

In our opinion, the Company has an internal audit system commensurate with the size and the nature of its Business.

As the Company did not carry on any manufacturing activity during the year, the requirement as to maintenance of cost records u/s 209(c)(d) Companies Act, 1956 and rules made there under is not applicable.

a) According to the records of the Company and information and explanations given to us, the company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, income-tax, Sales-tax, Wealth-tax, Service Tax, Customs Duty, Excess Duty, cess and other statutory dues with the appropriate authorities during the year, wherever applicable.

k) According to the records of the Company and information and explanations given to us ,dues of sales tax, income tax Wealth- tax Service Tax customs, excise duty which have not been deposited on account of disputes and the forum where dispute is pending is NIL

The Company is having accumulated losses of Rs. 2,07,021,543.38 as at the end of the year. Company is having cash loss of Rs.5,88,964.18 during the current year and no cash loss during the immediately preceding financial year.

Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institutions bank and debenture Holders.

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

The provisions of any special statute applicable to chit fund, Nidhi or mutual Benefit fund/societies are not applicable to the company.

Based on the records examined by us and according to the information and explanations given to us, we are of the opinion that the company has not entered in to transactions and contracts of dealing in shares, securities, debentures & other Investments.

According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

According to the information and explanation given to us, the company did not avail any term loan during the year.

According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for loan term investment by the company.

The Company has not made any preferential allotment to parties and companies Act,1956 during the year and the and companies covered under register maintained under section 301 of the companies act. 1956 during the year and the question of whether the price at which the shares have been issued is prejudicial to the interest of the Company does not arise.

According to the information and explanations given to us and the records examined by us, the company did not issue any debentures and therefore there is no question of creation of security or charges in that respect.

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

To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the company was noticed or reported during the year.

As Per Audit Report Of Even Date

B S KEDA & CO

(Chartered Accountants)

Firm Reg. No.: 317159E

sd/-

place VIKASH KEDIA

Indore

Date : 28/05/2013 (Partner)

Membership No.: 066852

---

Mar 31, 2012

1. We have audited the attached BALANCE SHEET of M/S CITY HOSPITALITIES INDIA LIMITED as at 31st March, 2012 and also the Profit & Loss Account for the year ended on that date annexed thereto. 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 accounting standard generally accepted in India. Those standards required 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 disclosure 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)(Amendment)Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of Companies Act, 1956, we hereby 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 :-

We have obtained all the information & explanation which to the best of our knowledges belief were necessary for the purpose of our audit. 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.

The Balance Sheet and Profit & Loss Account dealt with by this report is in agreement with the books of account. ix In our opinion, the Balance Sheet and Profit & Loss Account complies with the accounting standards as referred to in sub section (3C) of Section 211 of the Companies Act, 1956.

During the course of our audit, we did not come across any matter which may have adverse effect on the functioning of the company.

x On the basis of confirmation received from the companies in which Directors' of the company are directors, and the information and explanations given to us as taken on record by the Board of Directors of the Company, we report that none of the directors of the company are disqualified as on 31st March, 2012 from being appointed as Director, in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanations given to us, the 9 said accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i). In case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2012; and

(ii). In the case of the Profit and Loss Account, of Profit for the year ended on 31st March, 2012.

As required by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Company Law Board in terms of Section 227(4A) of Companies Act, 1956 we further report that -

1 a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of avalable InfrmaSon.

b) Al the assets have not been physically verified by the management during the year but there Is a regular programme verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. m ate rial discrepencies were noticed on such verification.

c) During the year, Company has not disposed of any substantial/ major part of fixed assets. 2. As explained to us, the Company did not have any inventory during the year and thereore there Is no question of of commenting on frequency of verification, procedure of physical verification of inventory and on records of Inventory. 3_ According to the information and explanation given to us, the company has not taken or granted loan from to the parties listed in the Register maintained u/s 301 of the Companies Act, 1956.

4. In our opinion & according to information & explanation given to us, there are adequate internal control system commensurate with the size of the Company and nature of its business with regard to the purchase of Inventory and fixed assets, and with of Inventory and fixed assets, and with of inventory and fixed assets, and with regard to the sale of goods and services. During the course of regard to the sale of goods and services.

During and services. During the course of correct major weakness In the internal controls -system. 5_ a) In our opinion and according to the information and explanations given to us, there is no Particulars of Contracts or Arrangments whth is required to be entered Into the Register maintained under section 301 of Act.

6 In our opinion and according to the information and explanations given to us.the provisions of section 58A.58AA or any other relevant provisions of the Act and Rules framed there under, not applicable for the company 7_ In our opinion, the Company has an internal audit system commensurate with the size and the nature of its Business. 8 As the Company did not carry on any manufacturing activity during the year, the requirement as to maintainance of cost records u/s 209(c)(d) Companies Act, 1956 and rules made there under is not appicable. a) According to the records of the Company and information and explanations given to us, the company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, income-tax, Sales-tax, Wealth-tax,Service Tax, Customs Duty, Excise Duty, cess and other statutory dues with the appropriate authorities during the year, wherever appicable. b) According to the records of the Company and information and explanations given to us ,dues of sales tax,lncome tax Wealth- tax.Service Tax, customs, excise duty which have not been deposited on account of disputes and the forum where dispute is pending is NIL.

10 The Company is having accumulated losses of Rs. 20,64,76,797/- as at the end of the year. Company is not having any cash loss during the current year and cash loss of Rs. 94,7 l,202/-during the immediately preceding financialyear.

11 Based on our audit procedures and on the basis of information and explanations given by the m anagement, we are of the opinion that the company has not defaulted in the repayment of dues to financial institutions bank and debenture Holders.

12 According to the inform a Hon and expalnatlons given to us,the com pany has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to chit fund.Nidhi or mutual Benefit fund/societies are not applicable to the company. -

14 Based on the records examined by us and according to the information and explanations given to us,we are of the opinion that the company has not entered in to transactions and contracts of dealng In shares,securlties,debentures & otherlnvestments.

15 According to the information and explanation given to us, the company has not given any guarantee for bans taken by others from Banks or Financial Institutions.

16 According to the informatbn and explanation given to us, the company did not avail any term ban during the year.

17.According to the information and explanations given to us and on an overall examination of the balance sheet of the company,we report that no funds reised on short-term basis have been used for loan term investment by the company.

18.The Company has not made any preferential allotment to parties and companies Act,1956 during the year and the and companies covered under register maintained under section 301 of the companies act.1956 during the year and the question of whether the price at which the shares have been Issued is prejudicial to the Interest of the Com pany does not arise.

19 According to the Information and explanations given to us and the recoreds examined by us, the company did not issue any debentures and therefore these is no question of creatbn of security or charges in that respect.

20 the company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such m oney does not arise.

21 To the best of our knowledge and belief and accroding to the information and expalnation given to us, tno fraud on or by the company was noticed or reported durhg the year.



As Per Audit Report Of Even Date

B S KEDIA & CO

(Chartered Accountants)

Firm Reg. No. : 317159E

Place: Indore VIKASH KEDIA

Date : 14/08/2012 (Partner)

Membership No. : 066852

---

Mar 31, 2011

1. We have audited the attached BALANCE SHEET of M/s CITY HOSPITALITIES (I) LIMITED (formerly known as M/s Info quest Software Exports Limited) as on 31st March, 2011 and also the Profit & Loss Account for the year ended on that date annexed thereto. 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 accounting standards generally accepted in India. Those standards required 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 disclosure 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)(Amendment)Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of Companies Act, 1956, we hereby 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 :-

a) We have obtained all the information & explanation which to the best of our knowledge & 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 and Profit & Loss Account dealt with by this report is in agreement with the books of account.

d) In our opinion, the Balance Sheet and Profit & Loss Account complies with the accounting standards as referred to in sub section (3C) of Section 211 of the Companies Act, 1956.

e) During the course of our audit, we did not come across any matter which may have adverse effect on the functioning of the company.

f) On the basis of confirmation received from the companies in which Directors' of the company are directors, and the information and explanations given to us as taken on record by the Board of Directors of the Company, we report that none of the directors of the company are disqualified as on 31st March, 2011 from being appointed as Director, in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

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

(i). In case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2011; and (ii). In the case of the Profit and Loss Account, of the Loss for the year ended on 31st March, 2011.

ANNEXURE TO THE AUDITORS'REPORT (Referred to in Para 3 of our Report of even date)

As required by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Company Law Board in terms of Section 227(4A) of Companies Act, 1956 we further report that -

1. a) The Company has maintained proper records showing the full particulars including quantitative details and the situation of fixed assets on the basis of available information.

b) All the assets have not been physically verified by the management during the year and there is a regular programmed of verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, the company has not disposed of any substantial / major part of fixed assets.

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

b) In our opinion & according to the information and explanation 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 explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and the same have been properly dealt with in the books of account.

3. a) As per the information and explanation given to us the Company has not granted or taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. b) As the Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956, sub-clauses (b), (c), (d), (f), and (g) of Clause (iii) of paragraph 4 of the Order are not applicable.

4. a) In our opinion & according to the information & explanation given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods and services. During course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls systems.

5 a) Based on the audit procedures applied by us and according to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956 have been entered in the register required to be maintained under that section. b) Also the transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act 1956 are made at price which are reasonable having regard to the prevailing market prices at th e relevant time.

6. The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A & 58AA or any other relevant provision of the Companies Act, 1956 & rules made there under.

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

8. The requirement as to maintenance of cost records u/s 209(c)(d) of the Companies Act, 1956 and rules made there under are not applicable to the Company.

9. a) According to the records of the Company examined by us and the information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty Excise Duty, Cess and other statutory dues with the appropriate authorities during the year, wherever applicable.

b) According to the records of the Company and information and explanations given to us, dues of Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs, Excise Duty which have not been deposited on account of the disputes and the forum where dispute is pending is NIL.

10. The Company has accumulated losses worth Rs. 20,64,80,948/- as at 31st March, 2011. The Company has incurred cash losses of Rs. 94,66,622/- during the year covered by our audit and cash loss of Rs. 3,57,231/- during the immediately preceding previous year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

12. Based on our examination of records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a Chit fund Company or nidhi/ mutual benefit fund/ society. Therefore the clause (xiii) of Para 4 of the Order is not applicable to the Company.

14. Based on the records examined by us and according to the information and explanations given to us, we are of the opinion that the Company has not entered in to transactions and contracts of dealing in shares, securities, debentures & other Investments.

15. According to the information & explanation given to us, the Company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

16. According to the information and explanation given to us, Company did not avail any term loan during the year.

17. As per the information & explanations given to us & on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. The Company has made a preferential allotment to parties covered under register maintained under Section 301 of the Companies Act, 1956, during the year.

19. As per the records examined by us, the Company did not issue any debentures and therefore these is no question of creation of security or charges in that respect.

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

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

As Per Audit Report Of Even Date

B S KEDIA & CO

(Chartered Accountants)

Firm Reg. No. : 317159E

sd/-

VIKASH KEDIA

Place : INDORE (Partner)

Date : 31/JULY/2011 Membership No. : 066852

---

Mar 31, 2010

1. We have audited the attached BALANCE SHEET of M/s CITY HOSPITALITIES (I) LIMITED (formerly known as M/s Infoquest Software Exports Limited) 31st March, 2010 and also the Profit & Loss Account for the year ended on that date annexed thereto. 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 accounting standard generally accepted in India. Those standards required 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 disclosure 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)(Amendment)Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of Companies Act, 1956, we hereby 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 :-

a) We have obtained all the information & explanation which to the best of our knowledge & 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 and Profit & Loss Account dealt with by this report is in agreement with the books of account.

d) In our opinion, the Balance Sheet and Profit & Loss Account complies with the accounting standards as referred to in sub section (3C) of Section 211 of the Companies Act, 1956.

e) During the course of our audit, we did not come across any matter which may have adverse effect on the functioning of the company.

f) On the basis of confirmation received from the companies in which Directors' of the company are directors, and the information and explanations given to us as taken on record by the Board of Directors of the Company, we report that none of the directors of the company are disqualified as on 31st March, 2010 from being appointed as Director, in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

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

(i). In case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2010; and

(ii). In the case of the Profit and Loss Account, of Loss for the year ended on 31st March, 2010.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in Para 3 of our Report of even date)

As required by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Company Law Board in terms of Section 227(4A) of Companies Act, 1956 we further report that -

1. a) The Company has maintained proper records showing the full particulars including quantitative details and the situation of fixed assets on the basis of available information.

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

c) During the year, the company has not disposed of any substantial / major part of fixed assets.

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

b) In our opinion & according to the information and explanation 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 explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and the same have been properly dealt with in the books of account.

3. a) As per the information and explanation given to us the Company has not granted or taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956.

b) As the Company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956, sub-clauses (b), (c), (d), (f). and (g) of Clause (iii) of paragraph 4 of the Order are not applicable.

4. a) In our opinion & according to the information & explanation given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods and services. During course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls systems.

5 a) Based on the audit procedures applied by us and according to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act 1956 have been entered in the register required to be maintained under that section.

b) Also the transactions made in pursuance of contracts or arrangements entered in the register maintained u/s 301 of the Companies Act 1956 are made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of the provisions of Section 58A & 58AA or any other relevant provision of the Companies Act, 1956 & rules made there under.

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

8. The requirement as to maintenance of cost records u/s 209(c)(d) of the Companies Act, 1956 and rules made there under are not applicable to the Company.

9. a) According to the records of the Company examined by us and the information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty Excise Duty, Cess and other statutory dues with the appropriate authorities during the year, wherever applicable.

b) According to the records of the Company and information and explanations given to us, dues of Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs, Excise Duty which have not been deposited on account of the disputes and the forum where dispute is pending is NIL.

10. The Company has accumulated losses worth Rs. 18,61,70,107/- as at 31st March, 2010. The Company has incurred cash losses of Rs. 3,57,231/- during the year covered by our audit and cash loss of Rs. 2,39,072/- during the immediately preceding previous year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

12. Based on our examination of records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a Chit fund Company or nidhi/ mutual benefit fund/ society. Therefore the clause (xiii) of Para 4 of the Order is not applicable to the Company.

14. Based on the records examined by us and according to the information and explanations given to us, we are of the opinion that the Company has not entered in to transactions and contracts of dealing in shares, securities, debentures & other Investments.

15. According to the information & explanation given to us, the Company has not given any guarantee for loans taken by others from Banks or Financial Institutions.

16. According to the information and explanation given to us. Company did not avail any term loan during the year.

17. As per the information & explanations given to us & on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. The Company has made a preferential allotment to parties covered under register maintained under Section 301 of the Companies Act, 1956, during the year.

19. As per the records examined by us, the Company did not issue any debentures and therefore there is no question of creation of security or charges in that respect.

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

21.To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

As Per Audit Report Of Even Date B S KEDIA & CO (Chartered Accountants) Firm Reg. No. : 317159E

sd/- VIKASH KEDIA (Partner) Membership No. : 066852

Place: Indore Date : 31/July/2010