Mega Corporation

We have audited the attached Balance Sheet of Mega Corporation Limited,
 as at 31st March, 2008 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 Companys
 management.  Our responsibility is to express an opinion on these
 financial statements based on our audit.  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.
 
 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.
 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 purposes
 of our audit.
 
 ii.  In our opinion, the company has kept proper books of account as
 required by law so far as appears from our examination of those books.
 
 iii.  The Balance Sheet, Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account.
 
 iv.  In our opinion, the Balance Sheet, Profit and Loss Account and
 Cash Flow Statement dealt with by this report comply with the mandatory
 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 31st March, 2008, and taken on record by the Board of Directors,
 we report that none of the Directors is disqualified as on 31st March,
 2008 from being appointed as a Director in terms of clause (g) of
 sub-section (1) of Section274oftheCompaniesAct, 1956.
 
 vi. 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 accounting policies and 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:
 
 a) In the case of the Balance Sheet, of the State of Affairs of the
 Company as at 31st March, 2008
 
 b) In the case of the Profit and Loss Account, of the Profit for the
 year ended on that date; and.
 
 c) In the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR REPORT OF EVEN DATE TO THE
 MEMBERS OF MEGA CORPORATION LIMITED ON THE ACCOUNTS AS AT AND FOR THE
 YEAR ENDED 31st MARCH 2008.
 
 1.  (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) All the fixed assets have been physically verified by the
 management at reasonable intervals, which in our opinion is reasonable
 having regard to size of the Company and the nature of fixed assets. As
 informed, no material discrepancies were noticed on such verification.
 
 (c) The Company has not disposed off any substantial part of its fixed
 assets during the year except disposal of certain old commercials cars
 (taxis) in the normal course of its business.
 
 2.  (a) The inventory of spare parts & miscellaneous items has been
 physically verified by the management during the year. In our opinion
 the frequency of such verification is reasonable.
 
 (b) The procedures of physical verification of inventory followed by
 the management are, in our opinion, reasonable and adequate in relation
 to the size of the Company and the nature of its business.
 
 (c) In our opinion, the Company is maintaining proper records of
 inventory. No significant discrepancies were noticed on such
 verification as compared with the book records.
 
 3.  (a) The Company has granted unsecured loans to four parties listed
 in the register maintained under Section 301 of the Companies Act, 1956
 which included unsecured loan to a wholly owned Subsidiary Company. The
 total amount of loans granted to these parties was Rs. 250.50 Lacs.
 Loans given to subsidiary companies were interest free and were
 repayment on demand. The Maximum amount outstanding during the year was
 Rs. 647.19 Lacs and the year-end balance of loan given to such parties
 was Rs. 120.69 Lacs.
 
 (b) In our opinion, considering the time period for which the loans
 were outstanding the rate of interest and other terms and conditions of
 such loans are not prima facie prejudicial to the interest of the
 Company. As the loans are repayable on demand the paragraph 4 (iii) (g)
 of the order is not applicable.
 
 (c) In respect of the aforesaid loans, there is no overdue amount.
 
 (d) The Company has taken interest free loan from one party listed in
 the register maintained under Section 301 of the Companies Act, 1956.
 The total amount of loan taken during the year from such party was Rs.
 350 Lacs which was repaid in full during the year. Year end outstanding
 balance of said loan was NIL.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business. In our opinion and according to the information and
 explanations given to us, there is no continuing failure to correct
 major weaknesses in internal control.
 
 5.  In respect of transactions entered in the register maintained in
 pursuance of section 301 of the Companies Act, 1956.
 
 (a) Based on audit procedures applied by us, to the best of our
 knowledge and belief and according to the information and explanations
 given to us, we are of the opinion that the transactions that needed to
 be entered into the register maintained under Section 301 have been so
 entered.
 
 (b) According to the information and explanations given to us, the
 transactions with parties with whom transactions exceeding the value of
 Rs. 500,000 have been entered into during the financial year, are 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 section 58A & 58A A of the Companies Act, 1956 and the
 rules framed there under.
 
 7.  In our opinion and according to the information and explanations
 given to us, the Company has an internal audit system commensurate with
 the size of the company and the nature of its business.
 
 8.  As informed to us by the company, the maintenance of cost records
 has not been prescribed by the Central Government under section 209(1
 )(d>of the Companies Act, 1956.
 
 9.  (a) According to the information and explanations given to us and
 on the basis of examination of the records of the Company, amounts
 deducted/accrued in the books of accounts in respect of undisputed
 statutory dues including Provident Fund, Employees State Insurance,
 Income Tax, Wealth Tax, Service Tax and other material statutory dues
 have been generally regularly deposited during the year by the company
 with the {appropriate authorities except in certain instances where
 delays were noticed. As explained to us, the Company did not have any
 dues on account of Excise Duty, Sales Tax, Customs Duty & Cess.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Income Tax, Cess, other
 material statutory dues were outstanding at the year end for a period
 of more than six months from the date they became payable.
 
 (c) According to the information and explanations given to us, there
 are no dues of Income Tax, Provident fund and Cess, which have not been
 deposited on account of any dispute.
 
 10. The Company does not have accumulated losses at the end of the year
 and the company has not incurred cash losses during current and the
 immediately preceding financial 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 debentures & other securities.
 
 12. In our opinion 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
 similar securities during the year.
 
 13. In our opinion, the Company is not a Chit Fund, Nidhi or Mutual
 Benefit Society. Therefore, clause 4(xiii) of the Companies (Auditors
 Report) Order, 2003 is not applicable to the Company.
 
 14. During the period covered by our report the Company was not dealing
 in or trading in shares, securities, debentures and other investments.
 Accordingly, the provisions of clause 4(xiv) of the Companies
 (Auditors Report) Order, 2003 are not applicable to the Company.
 
 15. In our opinion, and according to the information and explanations
 given to us, the terms and conditions of the guarantee given by the
 Company, for loans taken by others from bank or financial institutions
 during the year, are not prima-facie prejudicial to the interest of the
 Company.
 
 16. In our opinion, According to the information and explanations given
 to us, the Term Loans raised during the year by the Company have been
 applied for the purpose for which they were obtained, where such end
 use has been stipulated by the lender.
 
 17. According to the information and explanations given to us and
 overall examination of the balance sheet of the Company, we report that
 the no funds raised on short-term basis have been used for long-term
 investments.
 
 18. The company has not issued any fresh share capital hence the
 question of neither the preferential allotment nor the end use thereof
 arises.
 
 19. The company has not issued any debentures and hence requirements of
 reporting regarding creation of securities in respect of debentures
 issued does not arise.
 
 20. The company has not raised any money by public issue during the
 year.
 
 21.  Based on our examination of the books and records of the Company
 and according to the information and explanations given by the
 management, no fraud on or by the Company has been noticed or reported
 during the year.
 
                                               For SIPANI & ASSOCIATES
                                                 Chartered Accountants
 
                                                         (VIJAY SIPANI)
 Place: Delhi                                                     Prop.
 Date: 30-06-2008                                         M. No. 83850