We have audited the attached Balance Sheet of Sparc Systems Limited as
 at March 31, 2012, the Statement of Profit & Loss and the Cash Flow
 Statement of the Company 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.
 
 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 statement. 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 (Auditor’s Report) Order, 2003, as amended
 by companies (Auditor’s Report) (Amendment) Order, 2004 (together the
 “Order) issued by the Central Government of India in terms of sub
 section (4A) of section 227 of Companies Act, 1956, we give in the
 Annexure, a statement on the matter specified in paragraphs 4 & 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 purpose of our
 audit;
 
 ii. In our opinion, the Company has kept proper books of accounts as
 required by law so far as appears from our examination of those books.
 
 iii. The Balance Sheet, Statement of Profit & Loss and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account and returns.
 
 iv. In our opinion, the Balance Sheet, Statement of Profit & Loss 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 representations received from the Directors
 and taken on record by the Board of Directors, we report that none of
 the Directors is disqualified as on March 31, 2012 from being appointed
 as a Director in term of clause (g) of sub-section (1) of section 274
 of the Companies Act, 1956.
 
 vi. In our opinion and to the best of our information and according to
 the explanations given to us, subject to Note No.  4 in respect of
 interest payable to MSFC, the said accounts 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 March 31, 2012;
 
 b.  In the case of the Statement of Profit and Loss, of the Loss of the
 Company for the year ended on that date; and
 
 c.  In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 Annexure to Auditors'' Report
 
 Referred to in paragraph 3 of our report of even date on the Accounts
 for the year ended March 31, 2012 of Sparc Systems Limited
 
 i.  a.  As explained to us, the Company has maintained proper records
 showing full particulars including quantitative details and situation 
 of fixed assets.
 
 b.  All the assets have been physically verified by the Management at
 the end of the financial year, which in our opinion is 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.  As per the records and as explained to us, the Company has not
 disposed off any substantial or major portion of fixed assets during
 the year.
 
 ii.  a.  As explained to us, the inventories held by the Company were
 physically verified during the year by the
 
 Management at reasonable intervals.
 
 b.  In our opinion and according to the information and explanations
 given to us, the procedure of physical verification of inventories
 followed by the Management are 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.
 
 iii. a. According to the information and explanations given to us, the
 Company has not granted any loans, secured or unsecured , to companies,
 firms or other parties listed in the Register maintained under section
 301 of the Companies Act, 1956. Accordingly, the provisions of clauses
 4(iii) (b), (c) and (d) of the order are not applicable.
 
 b.  The Company has taken unsecured loan from one party covered in the
 register maintained under section 301 of the Companies Act 1956. The
 maximum amount involved during the year was Rs. 10,05,000/- and the
 year end balance of loan taken from such party was Rs. 10,05,000/-.
 
 c.  In our opinion and according to the information and explanation
 given to us such loan is interest free and other terms and conditions
 on which loan have been taken are not prima facie prejudicial to the
 interest of the Company.
 
 d.  The Company is regular in repaying the principal amounts as
 stipulated.
 
 iv. 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 the purchases of inventory, fixed assets and
 with regard to the sale of goods. During the course of our audit we
 have not observed any continuing failure to correct major weakness in
 internal controls.
 
 v.  In our opinion and according to the information and explanations
 given to us, there are no contracts or
 
 arrangement referred to in section 301 of the Companies Act, 1956 that
 need to be entered in the Register required to be maintained under that
 section. Hence, clause (v-b) of paragraph 4 of the Order is not
 applicable.
 
 vi. In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits from the public
 during the year to which the directive issued by the Reserve Bank of
 India and the provisions of sections 58A and 58AA of the Companies
 Act,1956 and the rules framed thereunder are applicable.
 
 vii. The Company has adequate internal check and audit procedures
 implemented in the Course of the day–to– day functioning. However, no
 internal audit as such has been conducted.
 
 viii. The Company is not covered under section 209(1)(d) of the
 Companies Act, 1956 in respect of maintenance of cost records.
 
 ix. a. According to the information and explanation given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, customs duty, excise duty and cess were in arrears, as at
 31.3.2012 for a period of more than six months from the date they
 became payable except Service tax Rs. 2,90,611/- and interest thereon.
 
 b. According to the information and explanation given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, customs duty, excise duty and cess were in arrears, as at
 31.3.2012 for a period of more then six months from the date they
 became payable.
 
 x.  The Company has accumulated losses at the end of the financial year
 March 31,2012, however it does not
 
 exceed fifty percent of its net worth. The Company has not incurred any
 cash losses in the financial year and in the immediately preceding
 financial year.
 
 xi. In our opinion and according to the information and explanations
 given to us, the Company has defaulted in repayment of dues to
 Maharashtra State Financial Corp. [MSFC] term loan amounting Rs.
 16,38,000/- & interest of Rs. 26,07,972/-.
 
 xii. In our opinion and according to the information and explanations
 given to us, the Company has not granted loans and advances on the
 basis of security by way of pledge of shares, debentures & other
 securities.
 
 xiii. In our opinion, the Company is not a chit fund or a niche 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. In our opinion and 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 during the year.
 
 xvi. In our opinion and according to the information and explanations
 given to us, the Company has not raised term loans during the year
 under audit.
 
 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 the no funds raised on short-term basis have been used for
 long-term investment.
 
 xviii. The Company has not made preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Act during the year.
 
 xix.  The Company had not issued any debentures, during the year.
 
 xx.  The Company has not raised any money from a public issue, during
 the year.
 
 xxi. On the basis of the audit procedure carried out by us and
 information and explanations given by the Management, we state that no
 fraud on or by the Company has been noticed or reported during the
 course of our audit.
 
                                        For R Soni & Co. 
 
                                        Chartered Accountants 
 
                                        FRN 130349W
 
                                        Rajesh Soni
 
                                        Partner
 
                                        M No 133240
 
 Mumbai, May 29, 2012