(Formerly Known as Canaan International InfoTech Limited) HYDERABAD.
1. We have audited the attached Balance Sheet of MEGLON INFRA-REAL
(INDIA) LIMITED, (formerly known as CANAAN INTERNATIONAL INFOTECH
LIMITED), as at March 31, 2011 and the Profit and Loss account for the
year ended on that date annexed thereof. 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 then 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
3. As required by the Companies (Auditor''s 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
4. Further to our comments in the Annexure referred to in paragraph
(3) 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
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
(in) The Balance Sheet and Profit and Loss Account dealt with b\ this
report are in agreement with the books of account;
(iv) In our opinion, the Balance Sheet and Profit and 1 oss Account
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, as on March 31. 2011 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31s1 March 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956; and
(vi) In our opinion and to the best of our information and according to
the explanations given to us. the said accounts together with the 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 subject to
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
(b) In the case of the Profit and Loss Account, of the Profit for the
year ended on that date.
(c) In the case of cash flow statement of the cash flows the year.
Annexure to the Auditors'' Report (referred to in paragraph 3 of our
Report of even date to the Members of MEGLON INFRA-REAL (INDIA)
LIMITED, (formerly known as CANAAN
INTERNATIONAL INFOTECH LIMITED) for the year ended March 31, 2011)
I. (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 in a
phased manner and, in our opinion, the verification is reasonable
having regard to the size of the company and the nature of its assets.
No discrepancies were noticed on such verification.
(c). No substantial part of fixed assets has been disposed off during
II According to the information to the information and explanation
given to us, and having regard to the nature of business carried on by
the company, the question of reporting on clauses 4 (ii) (a), 4 (ii)
(c). (relating to Inventory) of the Companies (Auditor Reports) Order,
2003, and amendment thereto by the Companies (Auditors Report)
Amendment. 2004 are not applicable.
Ill The company has neither granted not taken any loans, secured or
unsecured to and from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956
Accordingly, clause 4 (III) (b) to (d) of the Order not applicable.
IV. On the basis of checks carried out during the course of audit and
as per explanation given to us, we are of the opinion that there are
adequate internal control procedures commensurate with the size of the
company nature of its business; with regard to the purchase of
inventory and fixed assets and for the sale of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in the internal controls system.
V (a) According to the information and explanations given to us, we are
of the opinion that there are no contracts or arrangements that need to
be entered into the register maintained under sections 301 of the
Companies Act, 1956. accordingly, the question or reporting on clause
4 (V) (b) does not arise.
VI. In our opinion and according to the information and explanation
given to us, the company has not accepted any deposits within the
meaning of Sections 58A and 58 A A of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposit accepted from the public
VII. In our opinion, the company does not have any Internal Audit
system commensurate with the size and nature of its business
VIII. The Central Government has not prescribed maintenance of cost
records under Section 209 (i)
(d) of the Companies Act, 1956 in respect of the Company''s nature of
IX. According to the records of the company, the company is regular in
depositing undisputed statutory dues including provident fund
employees'' state insurance, income-tax, sales-tax, custom duty, excise
duty, cess and other statutory dues with appropriate authorities.
X. The company''s accumulated losses as at the end of the financial
year had exceeded fifty percent of its net worth and the company has
not incurred cash losses during the current financial year covered by
our audit but, the company had incurred cash loss in the immediately
preceding financial year.
XI. According to the information and expiations 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 securities.
XII. The Company is not a chit or a nidhi/mutual benefit fund /
XIII. As informed and explanations given to us the company has not
dealt/traded in securities pr debentures during the years. In our
opinion and according to the information explanation given to us proper
records have been maintained for the investments by the company and
timely entries have been made therein, the investments have been held
by the company in its own name
XIV, The company has not given any guarantee for loans taken b> others
from banks or financial institutions.
XV, The company has not obtained any term loans. Accordingly the
question of reporting on its application does not arise.
XVI. According to the information and explanation given to us and on
an overall examination of the balance sheet the company has not raised
any short term funds. Accordingly the question of reporting in its
application does not arise.
XVII. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956.
XVIII. The company has not issued any debentures; accordingly the
question of creating security or charge for such debentures does not
XIX. The company has not raised any money through the public issue
during the year. Accordingly the question of disclosure of end use of
such monies docs not arise.
XX. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
For Ramasamy Koteswara Rao & Co.,
Place: Mumbai C.V. Koteshwara Rao, Partner
Date : 10th August, 2011 (Membership No. 28353)