1.  We have audited the attached Balance Sheet of THE SANDESH LIMITED
 (''the Company'') as at 31st March, 2012, 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 (Auditor''s Report) Order, 2003, as
 amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
 (''the Order''), 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.
 
 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 purposes of our
 audit;
 
 b.  In our opinion, proper books of accounts as required by law, have
 been kept by the Company so far as appears from our examination of
 those books;
 
 c.  The Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with books of
 account of the Company;
 
 d.  In our opinion, the Balance Sheet, Profit and 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;
 
 e.  On the basis of written representations received from the
 directors, as on March 31, 2012 and taken on record by the Board of
 Directors, we report that none of directors is disqualified as on March
 31, 2012 from being appointed as a director in terms of Clause (g) of
 sub Section (1) of Section 274 of the Companies Act, 1956;
 
 f.  In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with the
 Significant Accounting Policies and other 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:
 
 i.  in the case of the Balance Sheet, of the state of affairs of the
 company as at March 31, 2012;
 
 ii.  in the case of the statement of Profit and Loss, of the profit of
 the company for the year ended on that date: and
 
 iii. in case of the Cash Flow Statement, of cash flows for the year
 ended on that date.
 
 1.  a. The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b.  As explained us, the fixed assets have been physically verified by
 the management once in a year which we consider reasonable having
 regard to the size of the company and the nature of its assets.
 According to the information and explanations given to us, no material
 discrepancies were noticed on such verification.
 
 c.  In our opinion, the Company has not disposed of substantial part of
 fixed assets during the year.
 
 2.  a. As explained to us, the inventories have been physically
 verified by management at reasonable intervals.
 
 b.  In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the management were 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 has maintained proper records of its
 inventories. The discrepancies noticed on verification between the
 physical stocks and the book records were not material.
 
 3.  a. According to the information and the explanations given to us,
 the company has not granted any loans or advances in the nature of
 loans, secured or unsecured to companies, firms or other parties
 covered in the register maintained under section 301 of the Companies
 Act, 1956. Consequently, requirement of clauses {iii (a) to (d)} of the
 paragraph 4 of ''the Order'' are not applicable.
 
 b. i. The Company has taken loans from six parties listed in the
 register maintained under section 301 of the Companies Act, 1956. The
 aggregate maximum amount involved was Rs.7615.48 Lacs and year end
 balance was aggregating to Rs.2066.30 Lacs.
 
 ii.  In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions of the
 loans obtained are not prima facie prejudicial to the interest of the
 Company.
 
 iii. In respect of the loan taken by the Company, interest payments are
 regular and principal amount is repayable on demand.
 
 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 with regard to purchases of inventory, fixed assets and with
 regard to sale of goods and services. During the course of our audit,
 we have not observed any continuing failure to correct major weaknesses
 in internal control system.
 
 5.  a. According to the information and explanations given to us, we
 are of the opinion that the particulars of all contracts or
 arrangements that need to be entered into the register maintained under
 section 301 of the Companies Act, 1956 have been so entered.
 
 b.  In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of Rs. 5 Lacs in respect
 of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 6.  In our opinion and according to the information and explanations
 given to us, the Company has not accepted public deposit within the
 meaning of section 58A and the Companies (Acceptance of Deposits)
 Rules, 1975. We are informed that no order has been passed by Company
 Law Board or National Company Law Tribunal or any Court or other
 tribunal in this regard.
 
 7.  The Company has appointed a firm of Chartered Accountant as
 internal auditors. Based on the reports of internal auditors, in our
 opinion the internal audit System is commensurate with the size and
 nature of the Company''s business.
 
 8.  The Central Government has prescribed maintenance of cost records
 under section 209(1)(d) of the Companies Act, 1956 in respect of
 publication of newspapers and periodicals. We have broadly reviewed the
 accounts and records of the Company in this connection and are of the
 opinion, that prima facie, the prescribed accounts and records have
 been made and maintained. We have not, however, carried out a detailed
 examination of the same.
 
 9.  a. According to the records of the Company, the Company is regular
 in depositing with appropriate authorities undisputed statutory dues
 including provident fund, employees'' state insurance, income tax, sales
 tax, wealth tax, service tax, custom duty and other material statutory
 dues applicable to it.
 
 b.  According to the information and explanations given to us, no
 disputed amounts payable in respect of income tax, sales tax, wealth
 tax, service tax and customs duty were in arrears, as at March 31, 2012
 for a period of more than six months from the date they became payable.
 
 c.  According to the information and explanation given to us, there are
 no dues of wealth tax, service tax and customs duty which have not been
 deposited on account of any dispute. In respect of income tax, fringe
 benefit tax and sales tax, details of disputed dues which have not been
 deposited are given hereunder:
 
 Name of     Nature of     Amount     Period to which    Forum where
 the Statute the dues     (Rs. In
                           Lacs)      the amount relates dispute is  
                                                         pending
 
 Income Tax 
 Act         Income Tax      1.25     A.Y.2009-10        CIT(Appeal)
 
 Income Tax 
 Act         Income Tax    688.75     A.Y.2006-07        CIT(Appeal)
                          (Protective 
                           Demand)
 
 Income Tax 
 Act         Fringe 
             Benefit Tax   279.40     A.Y.2006-07        CIT(Appeal)
 
 Sales Tax 
 Act         Sales Tax       4.09     F.Y. 1995 - 96     VAT - Tribunal
 
 10.  The company does not have accumulated losses at the end of the
 financial year. The Company has not incurred cash losses during the
 financial year covered by audit and in the immediately preceding
 financial year.
 
 11.  Based on our audit procedure and the information and explanations
 given by the management, we are of the opinion that the Company has not
 defaulted in repayment of dues to bank.
 
 12.  We are of the opinion that company has maintained adequate record
 in respect of loans and advances granted on the basis of security by
 way of pledge of shares, debentures and other similar securities.
 
 13.  The Company is not a chit fund or a nidhi / mutual benefit fund /
 society. Therefore, the reporting requirement of clause 4(xiii) of ''the
 Order'' is not applicable to the Company.
 
 14.  In our opinion and according to the information and explanation
 given to us, the Company has maintained proper records of transactions
 and contracts in respect of trading in shares / units of mutual funds
 and timely entries have been made therein. All shares / units of mutual
 fund have been made by the Company in its own name.
 
 15.  According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from
 banks or financial institutions.
 
 16.  In our opinion the term loan was applied for the purpose for which
 it was obtained.
 
 17.  According to the information and explanations given to us and on
 an overall examination of the Balance Sheet of the Company, we are of
 the opinion that funds raised on short - term basis prima facie not
 been used for long term investment.
 
 18.  During the year, the Company has not made preferential allotment
 of shares to parties and Companies covered in the register maintained
 under Section 301 of the Companies Act, 1956.
 
 19.  The Company has not issued any debentures during the year.
 
 20.  The Company has not raised any money by way of public issue during
 the year.
 
 21.  According to the information and explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 course of our audit.
 
                                                 For, MANUBHAI & Co.
 
                                              Chartered Accountants 
 
                                      Firm registration no: 106041W
 
                                                       (K. C. PATEL)
 
 Place : Ahmedabad                                          Partner
 
 Date : May 24, 2012                           Membership No. 30083