Simplex Trading & Agencies Ltd

TO THE MEMBERS OF SIMPLEX TRADING AND AGENCIES LIMITED

1. We have audited the attached Balance Sheet of SIMPLEX TRADING AND AGENCIES LTDas at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow statementfor the year ended on that date annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basis ofour opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 issued by theCentral Government of India in terms of sub-section (4A) of section 227 of the CompaniesAct, 1956 and on the basis of such checks as we considered appropriate and according tothe information and explanations given to us we give in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the said Order.

4. 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 ourknowledge and belief were necessary for the purposes of our audit.

(ii) In our opinion, proper books of account as required by law have been kept by thecompany so far as appears from our examination of those books.

(iii) The Balance Sheet, the Profit and Loss Account and the Cash Flow statement dealtwith by this report are in agreement with the Books of Account.

(iv) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flowstatement dealt with by this report comply with the accounting standards referred to insub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable.

(v) On the basis of written representations received from the directors, as on 31stMarch, 2011, and taken on record by the Board of Directors, we report that none of thedirectors is disqualified as on 31st March, 2011 from being appointed as a director interms 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 theexplanations given to us, the said accounts read together with significant accountingpolicies and notes to accounts, particularly the note no. 11 regarding inter corporateinvestment and loans attached thereto give the information required by the Companies Act,1956, in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch, 2011,

(b) In the case of the Profit and Loss Account, of the Profit/ loss for the year endedon that date; and

(c) In the case of cash flow statement, of the cash flows for the year ended on thatdate.

(Referred to in Paragraph 3 of our Report of even date to the Members of SimplexTrading and Agencies Ltd as at and for the year ended 31st March, 2011)

1. (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of information available.

(b) As explained to us, all the assets have been physically verified by the managementat reasonable intervals during the year. According to the information and explanationsgiven to us, no material discrepancies have been noticed on such verification.

(c) In our opinion, the company has not disposed off substantial part of fixed assetsduring the year and the going concern status of the company is not affected.

2. The company has no inventory. Hence, clause (ii) (a), (b) & (c) are notapplicable to the Company.

3. (a ) As per information and explanation given to us, the company has not grantedloans to any party covered in the register maintained under section 301 of the CompaniesAct, 1956, hence, clause (iii) (b) , (iii) (c) and (iii) (d) are not applicable to thecompany.

(b) As per information and explanation given to us, the company has taken unsecuredinterest free loanof Rs 798300/- from one party covered in the register maintained undersection 301 of the Companies Act, 1956, Other terms and condition of the loan are notprejudicial to the interest of the company.

4. In our opinion and according to the information and explanation given to us, thereare adequate internal control procedures commensurate with the size of the Company andnature of its business. During the course of audit, we have not observed any continuingfailure to correct major weakness in internal controls.

5. As per information & according to the explanations given to us, the company hasnot entered into any transaction that needs to be entered into the register maintainedunder section 301 of the Act.

6. In our opinion and according to the information and explanations given to us, theCompany has not accepted any deposits from the public covered under NBFC Public DepositDirections, 1998.

7. In our opinion the Company has an internal audit system commensurate with the sizeand nature of its business.

8. We are informed that no Cost Records are required to be maintained by the Companyunder Section 209(1)(d) of the Companies Act 1956.

9. (a) According to the information and explanations given to us, and on the basis ofour examination of the books of accounts, the Company has been regular in depositing withappropriate authorities undisputed statutory dues including income-tax, wealth tax and anyother material statutory dues applicable to it. There were no arrears of such dues as at31st March, 2011 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, there are no dues inrespect of Sales tax, income tax, customs duty, wealth tax, excise duty, and cess thathave not been deposited with the appropriate authorities on account of any dispute.

10. The Company did not have any accumulated losses at the end of the financial year.It has incurred cash losses during the current financial year and also incurred inprevious financial year.

11. Based on our audit procedures and as per the information and explanations given bythe management, the Company did not default in the repayment of dues to a financialinstitution, bank or debenture holders.

12. The Company has not granted loans and advances on the basis of security by way ofpledge of shares, debentures and other securities.

13. The provisions of any special statue applicable to chit fund/ nidhi/ mutual benefitfund/ societies are not applicable to the company.

14. The Company has maintained records of transactions and contracts in respect ofinvestment in shares, mutual funds and other investments and timely entries have been madetherein. All the shares, mutual funds and other investments held by the companies are inits own name except to the extent of the exemption granted under section 49 of theCompanies Act, 1956.

15. According to the information and explanation given to us, the Company has not givenany guarantee for loans taken by others from Banks or financial institutions.

16. The Company has not taken term loans during the year.

17. According to the information and explanation given to us and on an overallexamination of the Balance sheet of the Company as on 31st March, 2011 we report that thecompany has not used funds raised on short term basis for long term investments and viceversa.

18. The Company has not made any preferential allotment of shares to parties andcompanies covered in the register maintained under section 301 of the Act.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issue during the year.

21. According to the information and explanation given to us, no fraud on or by theCompany has been noticed or reported during the course of our Audit.