1.  We have audited the attached Balance Sheet of M/s Everonn Education
 Limited as at 31st March 2012, the Statement of Profit and Loss and the
 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 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 Section 227(4A) of the
 Companies Act, 1956, we enclose in the annexure a statement on the
 matters specified in paragraphs 4 of the said order to the extent they
 are applicable to the company.
 
 4.  Further to our comments in the annexure referred to in Paragraph 3
 above, 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 it appears from our examination of such
 books.
 
 c) The Balance Sheet, the Statement of Profit and loss and the Cash
 Flow statement referred to in this report are in agreement with the
 books of accounts of the Company.
 
 d) In our opinion, the Balance Sheet, the Statement of Profit and loss
 and the 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 with the exception of Accounting Standard 28 on
 Impairment of Assets, Accounting Standard -13 on Investments.
 
 e) Attention is invited to the following:
 
 i) Note No.2.41 of Financial Statements regarding non Provision of
 Diminution in Value of Investments in Subsidiaries which have incurred
 losses and whose Networth has been partially eroded, for the reasons
 stated therein.
 
 ii) Note No.2.48 of Financial Statements regarding non ascertaining
 complete particulars (including interest payable) on dues to Micro,
 Small and Medium Enterprises if any under MSMED Act, 2006, provision if
 any to be made is not ascertainable at this stage.
 
 iii) Note No.2.49 of Financial Statements with regard to non receipt of
 Confirmation of Balance from Debtors including Dues from Government
 Companies, Creditors, Loans and Advances and Other Liabilities. These
 amounts are subject to adjustments if any, after reconciliation and
 identification of doubtful debts / advances, which are not
 ascertainable at this stage.
 
 iv) Note No.2.50 of Financial Statements with regard to non provision
 of impairment loss pending completion of assessment. The impact if any
 on the financial statements is not ascertainable at this stage.
 
 In all the cases referred to above, effect on financial statements is
 not ascertainable.  We do not express independent opinion on these
 matters.
 
 f) On the basis of written representations received from the directors,
 as on 31st March 2012 and taken on record by the Board of Directors, we
 report that none of the director is disqualified as on 31st march 2012
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Companies Act 1956.
 
 5.  Subject to our comments vide para 4(e) above, in our opinion and to
 the best of our information and according to the explanations given to
 us, the said financial statements, read together with the notes thereon
 and schedules attached thereto, give the information required by the
 Companies Act 1956, in the manner so required and present a true and
 fair view, in conformity with the 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 2012;
 
 ii) in the case of the Statement of Profit and Loss, 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 THE AUDITORS'' REPORT
 
 (Referred to in paragraph 3 of our report of even date)
 
 i.  (a) The Company is maintaining records showing full particulars,
 including quantitative details and situation of fixed assets. However
 comprehensive description of assets, their current location and
 accumulated depreciation needs to be updated in the asset records.
 
 (b) The Company has not carried out physical verification of fixed
 assets during the year. The company does not have a regular program of
 physical verification of its fixed assets. In our opinion the
 periodicity of physical verification is not reasonable. Fixed Assets
 lying with third parties are also subject to confirmation.
 
 (c) The management has also represented that no substantial part of
 fixed assets have been disposed off during the year, to affect the
 going concern.
 
 ii.  Having regard to the nature of the Company''s business /
 activities, clause 4(ii) of CARO is not applicable to the Company.
 There is no inventory being held by the company.
 
 iii. (a) According to the information and explanations given to us,
 during the period under review, the company has availed loans from
 subsidiaries listed in the Register maintained under section 301 of the
 Companies Act, 1956, the Outstanding Balance as on 31st March 2012 is
 Rs.17,84,170 (''000) and the maximum amount involved during the period
 is Rs.20,33,652 (''000). There are no written terms and conditions for
 repayment and interest on loans. Hence the availment of loan is prima
 facie not prejudicial to the interest of the company. In respect of the
 said loans, the same are repayable on demand and there are no overdue
 amounts.
 
 (b) According to the information and explanations given to us, during
 the period under review, the company has granted loan to Subsidiaries
 listed in the Register maintained under Section 301 of the Companies
 Act, 1956. The outstanding balance as on 31st March 2012 is
 Rs.17,12,407 (''000) and the maximum amount involved during the period
 is Rs.19,49,917 (''000.) There are no stipulated terms and condition on
 either the interest rate or the repayment schedule. However the rate of
 interest and the interest free nature where applicable and other terms
 and conditions of such loans are not, prima facie, prejudicial to the
 interest of the company. The interest rate charged by the company is
 lesser than the Standard Rate as specified by the Reserve Bank of
 India.
 
 iv.  In our opinion and according to the information and explanations
 given to us, having regard to the explanations that some of the items
 purchased are customized and are of special nature and suitable
 alternative sources are not readily available for obtaining comparable
 quotations. Additional strengthening of the internal control procedures
 with regard to purchase of fixed assets is recommended so as to be
 commensurate with the current size of the Company and nature of its
 business. However, the management has represented that it is taking
 reasonable steps to correct the said weaknesses and we have not
 observed any other continuing failure to correct major weaknesses in
 internal controls.
 
 v.  According to the informations and explanations given to us, we are
 of the opinion that transactions that need to be entered in the
 register maintained under Section 301 of the Companies Act, 1956 have
 been generally so entered.
 
 vi.  The company has not accepted deposits from the public, under the
 directives issued by the Reserve Bank of India and the provisions of
 sections 58A and 58AA of the Act and the rules framed there under.
 
 vii. According to the informations and explanations given to us the
 company has Internal audit system commensurate with the size and nature
 of the business. The Scope of Internal Audit needs to be enhanced
 considering the risk assessments carriedout by the Company. The
 Internal Audit System same needs to be adequately strengthened with
 regard to scope and coverage and the volume of transactions.
 
 viii.  The maintenance of cost records has not been prescribed by the
 Central Government under clause (d) of sub-section (1) of section 209
 of the Act.
 
 ix.  (a) According to the information and explanations given to us, the
 company has been depositing undisputed statutory dues with few delays
 including Employees Provident Fund, Employees'' State Insurance,
 Investor Protection fund, Income Tax, Sales Tax, Wealth Tax, Service
 Tax, Customs Duty, Income Tax, TDS, Professional Tax and any other
 statutory dues with the appropriate authorities during the year.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, service tax etc
 were in arrears as at 31.03.2012 for a period of more than six months
 from the date they became payable excepting;
 
 Particulars                            Amount (Rs. in ''000)
 
 Income Tax for the AY 2010-11                7845.26
 
 Income Tax for the AY 2011-12           1,61,042.50
 
 Professional Tax for the Earlier Years      1018.93
 
 Professional Tax for the Half Year 
 Ended 30.09.2011                            221.14
 
 Service Tax Interest for the 
 FY 2009-10                               10,314.15
 
 Service Tax Interest for the FY 2010-11   1,579.58
 
 Service Tax Interest for the FY 2011-12      67.12
 
 (c) According to the information and explanations made available to us
 and on the basis of examination of records of the Company, the dues of
 Excise Duty, Sales Tax and Income Tax as at 31st March 2012 which have
 not been deposited on account of any dispute are as follows.  
 
 Name of the 
 Statute            Period to 
                    which             Forum where         Amount
 (Nature of 
 the Dues)          the amount 
                    relates           matter is 
                                      pending          (Rs. in ''000)
 
 Income Tax 
 for AY 2009-10    FY 2008-09         CIT(A)             2,13,046
 
 Service Tax 
 Since FY 2006-07  Since FY 2005-06   DGCEI                 9,400
 
 x.  The Company has no accumulated losses at the end of the year and
 has not sustained cash losses during the current financial year covered
 under our audit, and also in the immediately preceding financial year.
 
 xi.  As per the information and explanations made available to us, the
 company has not defaulted in repayment of dues to financial
 institutions or banks.
 
 xii. According to the information and explanations given to us, the
 company has not granted any loan or advance on the basis of Security by
 way of pledge of shares, Debentures and other securities.
 
 xiii.  The provisions of Clause 4(xiii) of the Order relating to Chit
 Funds / Nidhi 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.
 
 xv.  According to the information and explanations given to us, the
 Company has given guarantee towards loans taken by others from banks
 and financial institutions for which no counter guarantee has been
 obtained from the parties.
 
 xvi. According to the information and explanations given to us, the
 Company has used the Term Loan availed during the current year for the
 purpose for which it was availed.
 
 xvii.  According to the Cash flow statement and other records examined
 by us and based on the information and explanations given to us, on an
 overall basis, funds raised on short term basis have not been used for
 Long term Investment.
 
 xviii.  According to the information and explanations given to us, the
 Company has during the year made allotment of shares to Debenture
 holders and other parties on preferential basis. The issue price of
 shares so allotted has been determined in accordance to SEBI (Issue of
 Capital and Disclosure Requirements) Regulations, 2009. Hence, it is
 not prejudicial to the interests of the company.
 
 xix. The Company has not issued debentures during the year and
 therefore the question of creating security or charge in respect
 thereof does not arise.
 
 xx.  The Company has not raised any funds by means of public issue
 during the current year and hence the question of disclosing the
 end-use of money raised by way of public issue does not arise.
 
 xxi. Based on the audit procedures performed and on the basis of
 representation obtained from the management, we report that no instance
 of fraud on or by the company have been noted or reported by the
 management during the year.
 
                                      For M/s. P. Chandrasekar
 
                                         Chartered Accountants
 
                                                  (FRN 000580S)
 
                                             P. Chandrasekaran
 
 Place : Bangalore                                     Partner
 
 Date  : 13th August 2012               Membership No.: 026037