2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the 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 as amended, issued by the Central Government in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in paragraph 4 & 5 of the said Order.

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

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose 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 such books.

iii. The Balance Sheet, Profit & loss account and Cash flow statement referred to in this report are in the agreement with the books of account.

iv. The Balance Sheet, Profit & loss account and Cash Flow Statement 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 representation received from the directors and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31st March 2014 from being appointed as a Director in term of clause (g) of sub section (1) to section 274 of the Companies Act, 1956.

vi. We draw attention to the Note No.2 in the Notes on accounts relating to preparation of financial statements on a going concern basis. The company has discontinued its business. The accumulated losses as at 31st March, 2014 have eroded the net worth of the company. These factors along with the other matters set forth in Note No.2 raise substantial doubt that the company will be able to continue as a going concern.

5. Subject to Para (vi) above, in our opinion, and to the best of our information and according to the explanations given to us, the said accounts read with notes on accounts and the significant accounting policies, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the State of affairs of the Company as at 31st March, 2014.

ii) In the case of the Profit & Loss Account, of the loss for the year ended on that date; and

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

ANNEXURE TO AUDITOR'S REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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

(b) According to the information and explanations given to us, the management have physically verified the fixed assets during the year and no material discrepancies were noticed on such verification.

(c) The company has not disposed off substantial part of fixed assets during the Year.

ii. Clause (a), (b) & (C) not applicable since the company does not have inventory.

iii. (a) The company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956 and therefore clauses (b),(c) and (d) of Para (iii) of the companies (Auditor's Report) Order,2003 are not applicable.

(b) The company has not taken any loans secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956,therefore, clauses (f) and (g) of para (iii) of the companies (Auditor's Report) Order, 2003 are not applicable.

iv. In our opinion and according to the information and explanations given to us, the internal control systems for purchase of inventory and fixed assets and for the sale of services are commensurate with size of the company and nature of its business. During the course of audit we have not observed any continuing failure to correct major weaknesses in internal controls.

v. As there was no transaction requiring entries in Register in pursuance of Section 301 of the Act and accordingly clauses

(a) and (b) are not applicable to the Company.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public and therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules there under are not applicable to the company.

vii. There is no internal Audit system in vogue for the period covered by the Audit.

viii. In respect of this company, maintenance of cost records has not been prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956.

ix. According to the information and explanations given to us, the company is regular in depositing undisputed statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at 31st March, 2014 for a period of more than six months from the date on which they became payable.

x. The company has accumulated losses eroding its net worth as at 31st March 2014 and it has incurred cash losses in the financial year.

xi. According to the information and explanations given to us, the company has not availed any loans from the Financial Institutions and Banks. The Company has not issued any debentures.

xii. Based on the verification of records and 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.

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 (Auditor's Report) Order 2003 are not applicable to the company.

xiv. In our opinion, the Company is not dealing in or trading in Shares, Securities, debentures and other investments, accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order 2003 are not applicable to the company.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

xvi. To the best of our knowledge and belief and according to the information and explanations given to us, no term loans are availed during the year.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment. No long term funds have been used to short term asset. Therefore the provisions of clause 4(xvi) of Companies (auditors report) order, 2003 are not applicable to the Company.

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

xix. According to the information and explanations given to us and the records examined by us, no debentures were issued by the company.

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

xxi. To the best of our knowledge and belief 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 M. BHASKARA RAO & CO.  
                                        Chartered Accountants

Place: Visakhapatnam                    K. Krishna Murty
Date: 29.05.2014                        PARTNER
                                        M.No: 019693