Aptech

1.  We have audited the attached Balance Sheet of APTECH LIMITED
 (herein after referred to as the Company), as at 31st December, 2007
 and also the Profit and Loss Account and Cash Flow Statement 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 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 the 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) (herein after referred to as the Order) issued by the
 Central Government of India in terms of sub-section (4A) of section 227
 of the Companies Act, 1956 (herein after referred to as the Act), 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 above, we
 report that:
 
 I.  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;
 
 II.  The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 III.  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
 
 IV.  In our opinion, the Balance Sheet, Profit and Loss Account and
 Cash Flow Statement dealt with by this report comply with the
 Accounting Standards (AS) referred to in sub-section (3C) of section
 211 of the Act, except that the disclosure pertaining to Company’s
 shares in assets, liabilities, revenue of Joint Venture are made for
 the year under AS-27 Financial Reporting of Interest in Joint
 Ventures for the reasons stated in Note No. B-25 of Schedule 15;
 
 V.  On the basis of written representations received from the
 directors, as on 31st December, 2007, and taken on record by the Board
 of Directors, we report that none of the directors is disqualified as
 on 31st December, 2007 from being appointed as a director in terms of
 section 274(1) (g) of the Act;
 
 VI.  Refer Note no. B-18 of Schedule 15 regarding the payment of
 remuneration in excess of sum payable under Schedule XIII of the Act to
 Managing Director and Executive Director aggregating to Rs 63,14,138,
 for which approval of Central Government has not been obtained.
 
 VII.  Subject to ‘VI’ above 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 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 December, 2007;
 
 (b) in the case of the Profit and Loss Account, of the ‘profit’ of the
 Company for the year ended on that date; and
 
 (c) in the case of Cash Flow statement of the cash flow of the company
 for the year ended on that date.
 
 ANNEXURE TO THE AUDITORS’ REPORT
 
 Annexure referred to in our Auditor’s Report to the Members of APTECH
 LIMITED of even date
 
 i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) During the year the Company has carried out physical verification
 of Fixed Assets. We are informed that no material discrepancies were
 noticed on such verification.
 
 (c) The company has not disposed of a substantial part of its fixed
 assets during the year.
 
 ii) (a) The management has conducted physical verification of inventory
 at reasonable intervals during the year.
 
 (b) 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) The Company is maintaining proper records of inventory and no
 material discrepancies were noticed on physical verification.
 
 iii) (a) During the year, the Company has not given any loans, secured
 or unsecured, to the companies, firms or other parties covered in the
 register maintained under section 301 of the Act. Hence, Clauses (iii)
 (b), (c), & (d) of the Order, 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 Act. Hence clauses (iii) (f) & (g) 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, for the
 purchase of inventory and fixed assets and for the sale of goods.
 During the course of our audit, no major weakness has been noticed in
 the internal control system in respect of these areas. In respect of
 internal control system for the sale of services, improvements have
 been observed compared to earlier years; however, the same needs to be
 further strengthened to make it fully commensurate with the size of the
 company and the nature of its business.
 
 v) Based on the audit procedures applied by us and according to the
 information and explanations given to us, there were no transactions
 exceeding Rs. 5 Lacs with any party covered under section 301 of the
 Act that need to be entered into the register maintained under the said
 section. Hence clause (v) (b) of the order is not applicable.
 
 vi) In our opinion and according to information and explanation given,
 the company has not accepted any deposit from the public and hence
 directives issued by the Reserve Bank of India and the provisions of
 sections 58A, 58AA or any other relevant provisions of the Act and the
 Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from public are not applicable to company.
 
 vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 viii) The company is not required to maintain accounts or records
 pursuant to the rules made by the Central Government for the
 maintenance of cost records under section 209(1) (d) of the act.
 
 ix) a) The Company is generally regular in depositing with appropriate
 authorities undisputed statutory dues including Provident Fund,
 Investor Education and Protection Fund, Employees’ State Insurance,
 Income-Tax, Sales-Tax, Wealth-Tax, Service Tax, Custom Duty, Excise
 Duty, Cess, and other material statutory dues applicable to it. There
 were no arrears as at 31st December, 2007 for a period of more than six
 months from the date they became payable.
 
 b) According to the information and explanations given to us,
 particulars of outstanding dues of Sales Tax and Income Tax have not
 been deposited on account of any disputes are given below;
 
 Name of Statute       Nature of the Dues      Period
 
                                               A.Y. 2000 - 2001
 Sales Tax Act         Sales Tax               A.Y. 2001 - 2002
                                               A.Y. 2002 - 2003
 
 Amount (Rs.)       Forum where dispute is pending
 
 52,02,773              Tribunal
 
 We are informed that there are no outstanding dues of Income- Tax,
 Wealth Tax, Service Tax, Excise Duty and Cess not deposited on account
 of any dispute.
 
 x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current year or in the
 immediately preceding financial year.
 
 xi) Based on our audit procedures and as per the information and
 explanations given to us, we are of the opinion that the Company has
 not defaulted in repayment of dues to a financial institution or bank.
 
 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) 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 Order, are not applicable to the
 Company.
 
 xv) According to the information and explanations given to us, the
 Company has given guarantee for loans taken by a subsidiary from banks
 or financial institutions, the terms and conditions whereof, in our
 opinion, are prima-facie, not prejudicial to the interest of the
 Company.
 
 xvi) According to the information and explanations given to us, the
 term loans were applied for the purpose for which they were obtained.
 
 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.
 
 xviii) The Company has made Preferential Allotment of shares to parties
 and Companies covered in the Register maintained under Section 301 of
 the Act. The price at which the shares have been issued has been
 determined as per SEBI (Disclosure & Investor Protection Guidelines),
 2000, which in our opinion it is not prejudicial to the interests of
 the company.
 
 xix) The company has not issued any debentures during the year.
 
 xx) The company has not raised any money through a public issue during
 the year.
 
 xxi) Based upon the audit procedures performed and information and
 explanations given to us, we report that no fraud on or by the Company
 has been noticed or reported during the course of our audit.
 
                              For and on behalf of KHIMJI KUNVERJI & CO.
                                                   Chartered Accountants
 
                                                      Shivji K. Vikamsey
                                                                 Partner
                                                     Membership No. 2242
 
 Place : Mumbai
 Date  : 31st March, 2008