1. We have audited the attached Balance Sheet of M/s. Everonn Systems
India Limited as at 31st March 2008 and the Profit and Loss Account and
also the Cash flow Statement for the year ended on that date annexed
hereto. 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 conducied our audit in accordance with auditing standards
generally accepted in india. Those Standrds require that we plan and
perfrom 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 indludes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presention. We believe that our audit provides a reasonable basis for
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 paragaphs 4 and 5 of the said order.
4. Further to our comments in the annexure referred to above, we report
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were nesessary for the purpose of our
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 those
c) The Balance Sheet, Profit and Cash flow statement referred to this
report are in agreement with the books account.
d) In our opinion, the Balance Sheet, Profit and Loss account and Cash
flow statement deait with by this report company with the Accounting
Standards prescribed by the Institute of Chartered Accountants of india
and referred to in sub-section (3C) of Section 211 of the Companies
e) On the basis of the written representations received from directors
as on 31.03.2008 and taken on record by the Board of Directors, we
report that none of the directors is disqaualified as on 31st March
2008 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
Accounting policies and the notes there on give the information
required and give a true and fair view, in conformity with the
accounting principles generally accepted in india:
i) In the case of Balance Sheet of the state of affairs of the company
as at 31st March 2008.
ii) In the case of Profit and Loss account, of the profit for the year
ended on that date, and
iii) In the case of Cash flow statement of the cash flows for the year
ended on that date.
Annexure Referred to in Paragraph 3 of our Report of Even Date
1.(a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) Fixed assets have been physically verified by the Management during
the year and there is regular programme of verification which in our
opinion, is reasonable having regard to the size of the company and
nature of its assets. As reported to us no material discrepancies have
been noticed on such verification.
(c) Substantial part of the Fixed Assets have not been sold during the
year under review affecting going concern.
2.(a) The Company`s inventories are inspected periodically by the
(b) The procedures of physical verification of inventory followed by
management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) The company has maintained proper records of inventory. The
discrepancies noticed on verification between the Physical stocks and
the book records were not material and have been properly dealt with in
the books of account.
3.(a) The company has availed loans from parties listed in the register
maintained under section 301 of the Companies Act 1956.
(b) The company has not granted loans to Companies, firms or other
parties lised in the Register maintained under Section 301 of the
companies Act 1956.
4. In our opinion and according to the information and explanations
given ot 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 rendering services, No major weaknesses in internal controls
5.(a) According to the information and explanations given to us, and
based on our verification, we are of the opinion that there are no
transactions that were required to be entered in the register
maintained under section 301 of the companies Act 1956.
(b) In our opinion and according to the information and explanations
given to us, there are no transactions made in pursuance of contracts
or arrangements entered in the register mainatained under Section 301
of the Companices Act 1956 and exceeding the value of Repees five lakhs
in respect of any party during the year.
6. The Company has not accepted any deposits from the public during the
year requiring the compliance of provisions of Section 58A and 58AA or
any other relevant provisions of the companies act 1956.
7. In our opinion the company has an internal Audit system commensurate
with the size and nature of its business.
8. The Central Government has not prescrilbed the Maintenance of cost
records under Section 209(1) (d) of the Companies Act, 1956 for any of
the products of the Company.
9.(a) As per the information and explantions made available to us and
also based on the records made available to us, in our opinion the
Company is regular in depositing the undisputed statutory dues
including ESI, income Tax, sales Tax, Fringe Benefit Tax, Service Tax
and other statutory dues, excepting Provident Fund in few cases there
were delays in remittance.
(b) There are no not standing dues in respect of the above items which
are more than six months as at the Balance Sheet date.
(c) According to the information and explanations given to us, there
are no dues of sales tax, income tax, customs duty wealth tax, excise
duty and cess which have not been deposited on account of any dispure.
10. The company has not incurred cash losses during the year covered by
our audit and also during the immediately preceding financial year.
11. As per the information and explanations made available to us the
company has not defauited in repayment of dues to any financial
institutions, bank or debenture holder.
12. The company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The company is not a chit fund or a nidhi/mutual benefit
fund/society and therefore, the provisions of clause 4(xiii) of the
Companies (Auditor`s Report) Order, 2003 are not applicable to the
14. In our opinion, the company is not dealing in or trading in shares,
securities, debentures and other investments and therefore, the
provisions of clause 4(xiv) of the Companies (Auditor`s Report) Order,
2003 are not applicable to the Company.
15. In our opinion, and according to the information and explanations
given to us, the company has not given any guarantes for any loans
taken by others from Banks and Financial Institutions.
16. In our opinion, the term loans have been applied for the purpose
for which they were raised.
17. According to the information and explanations given to us and on an
averall examination of the balance sheet of the company, we report that
no funds raised on short term basis have been used for long term
18. The Company has not made any preferential allotment durning the
19. According to the information and explanations given to us and based
on the Records examined by us, no Debentures have been issed during the
20. The Management has disclosed the end use of money raised by Public
issue and the same has been verified by us.
21. According to the information and explanations given to us, there
were no cases of fraud on or by the Company noticed or reported during
For M/s P. Chandrasekar
Place : Chennai Partner
Date : July 14, 2008 Membership No:26037