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Auditor Report of Banaras Beads Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Banaras Beads Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act 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 31st March 2014.

(ii) In the case of the statement of profit and loss, of the profit for the year ended on that date; and

(iii) In the case of the cash flow statement, of the cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

As required by section 227(3) of the Act, we report that:

- 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;

- 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 those books

- the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this report are in agreement with the books of account.

- In our opinion, the balance sheet, statement of profit and loss and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

- On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

THE ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF BANARAS BEADS LIMITED. ON THE ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31ST MARCH, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

- (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, disposal of fixed asset during the year is not substantial so as to affect the going concern assumption.

- (a) As explained to us, inventories have been 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 procedures 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 on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. The discrepancy noticed on physical verification of stocks as compared to book records to the book records were not material and have been properly dealt with in the books of accounts.

- (a) According to the information and explanations given to us and on the basis of our examination of the books of account, 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. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the company.

- In our opinion and according to the information and explanations given to us, the internal control procedure with respect to the purchase of inventory and fixed assets and sale of goods and services need to be further improved to make it commensurate with the size of the company and the nature of its business. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

- a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As regards transaction exceeding value of Rupees five lakhs entered into during the financial year, we are unable to comment whether the transaction were made at prevailing market prices at the relevant time, because of the specialized nature of the items involved and absence of any comparable prices.

- The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

- The company has an internal audit system commensurate with the size and nature of the company''s business but in our opinion its scope and coverage require to be further strengthened.

- We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

- (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 for a period of more than six months from the date they became payable.

(b) Accounting to the information and explanation given to us, no material dues of tax and cess which have not been deposited on account of disputes.

- The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

- Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has taken only working capital loans from banks and has not defaulted in repayment of dues to the bank. The company does not have any borrowing from financial institution and has not issued debentures.

- The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

- According to information and explanations given to us, the Company is trading in Shares, Mutual funds & other Investments. Proper records & timely entries have been maintained in this regard & further investments specified are held in their own name.

- According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

- Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

- Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

- Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

- The Company has no debentures issued and outstanding during the period under audit.

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

- Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Kamal Kishore & Co.

Chartered Accountants

(Firm No 007424C)

Sd/-

Place: VARANASI (Kamal Kishore Srivastava)

Date : 29. 05. 2014 Partner, M. No. 71639


Mar 31, 2013

We have audited the accompanying financial statements of Banaras Beads Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

- in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

- in the case of the Profit and Loss Account, of the profit

- for the year ended on that date; and

- in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

As required by section 227(3) of the Act, we report that:

- 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;

- 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 those books

- the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this report are in agreement with the books of account.

- in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

- On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

THE ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE TO THE MEMBERS OF BANARAS BEADS LIMITED. ON THE ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31st MARCH, 2013.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

- (a) The company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, disposal of fixed asset during the year is not substantial so as to affect the going concern assumption.

(a) As explained to us, inventories have been 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 procedures 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 on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. The discrepancy noticed on physical verification of stocks as compared to book records to the book records were not material and have been properly dealt with in the books of accounts.

(a) According to the information and explanations given to us and on the basis of our examination of the books of account, 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. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the company.

- In our opinion and according to the information and explanations given to us, the internal control procedure with respect to the purchase of inventory and fixed assets and sale of goods and services need to be further improved to make it commensurate with the size of the company and the nature of its business. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

- a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As regards transaction exceeding value of Rupees five lakhs entered into during the financial year, we are unable to comment whether the transaction were made at prevailing market prices at the relevant time, because of the specialized nature of the items involved and absence of any comparable prices.

- The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

- The company has an internal audit system commensurate with the size and nature of the company''s business but in our opinion its scope and coverage require to be further strengthened.

- We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable.

(b) The disputed statutory dues aggregating Rs.43.77 lakhs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Particulars Liability Raised by Assessing Amount not paid Forum where dispute is Officer (Rs. lakhs) (Rs. in lakhs) pending

Income Tax for A. Y. 2001-2002 15.00 15.00 CIT (Appeals), Varanas

Income Tax for A. Y 2010-2011 76.02 24.58 CIT (Appeals), Varanas

Related to Custom duty 4.19 4.19 Commisioner of Customs

The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has taken only working capital loans from banks and has not defaulted in repayment of dues to the bank. The company does not have any borrowing from financial institution and has not issued debentures.

- 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 and other securities.

- The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

- According to information and explanations given to us, the Company is trading in Shares, Mutual funds & other Investments. Proper records & timely entries have been maintained in this regard & further investments specified are held in their own name.

- According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

- Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

- Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 3 1st March, 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

- Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

- The Company has no debentures issued and outstanding during the period under audit.

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

- Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Kamal Kishore & Co.

Chartered Accountants (Firm No 007424C)

Sd/-

Place: VARANASI (Kamal Kishore Srivastava)

Date : 30. 05. 2013 Partner, M. No. 71639


Mar 31, 2012

1. We have audited the attached Balance Sheet of BANARAS BEADS LIMITED, as at 31st March, 2012, the Statement of Profit & Loss and 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 on opinion of 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 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 Reports) Order, 2003 as amended, issued by the Central Government of India in term of section 227 (4A) of the Companies Act, 1956, and on the basis of checks of the books and records of the Company as we considered appropriate and the information and the explanations given to us during the course of audit, a statement on the matters specified in paragraphs 4 and 5 of the said order is annexed.

4. Further to our comments in the Annexure referred to 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 the audit;

(b) 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 these books;

(c) The Balance sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet and the Statement of Profit & Loss comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956.

(e) On the basis of written representations received from the directors as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of subsection (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 statements of 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.

(i) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; and

(ii) In the case of the Statement of Profit and Loss , of the Profit of the company for the year ended on that date.

(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 THE AUDITOR'S REPORT OF EVEN DATE ON THE ACCOUNTS OF BANARAS BEADS LIMITED FOR THE YEAR ENDED 31st MARCH, 2012

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

(b) As explained to us, all the fixed assets have been physically verified by the management at reasonable intervals. We are informed that no material discrepancies noticed on such verification.

(c) There was no disposal of a substantial part of fixed assets.

2. (a) As explained to us, the inventory has been physically verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanation given to us, and on the basis of our examination of records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of accounts.

3. (a) According to the information and explanations given to us, the Company had not granted any unsecured loans to the parties covered in the register maintained under Section 301 of the Companies act, 1956.

(b) Since no amount is due to the company, there is no need to comment upon the rate of interest and other terms & conditions of the loans.

(c) Since no amount is due to the company, there is no need to comment upon the terms of repayment of loans.

(d) Since no amount is due to the company, there is no need to express our opinion on whether there is any amount overdue above Rupees one Lakh and whether reasonable steps needs to be taken for recovery of principal and interest.

(e) The Company has taken following unsecured loans from parties covered in the register maintained under section 301 of the Companies act, 1956

No. of parties 1 Amount Involved 103.25 Lakhs

(f) The rate of interest and other terms and conditions of loans taken by the company are prima facie not prejudicial to the interest of the company

(g) The company has repaid the loan.

4. On the basis of our evaluation of internal control systems and according to the information and explanations given to us, we are of the opinion that internal control systems with respect to the purchase of inventory and fixed assets and sale of goods and services need to be further improved to make it commensurate with the size of the company and nature of its business.

5. In respect of the transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956,

(a) Based on audit procedures applied by us, the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under Section 301 have been so entered.

(b) As regards transactions exceeding value of Rupees five lakhs entered into during the financial year, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time, because of the specialized nature of the items involved and absence of any comparable prices.

6. The Company has not accepted any deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed there under.

7. The Company has an internal audit system commensurate with the size and nature of the Company's business but in our opinion its scope and coverage requires to be further strengthened.

8. Maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956. Therefore, the provisions of clause (viii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

9. (a) In our opinion and according to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, Employees' State Insurance, Income Tax, Sales Tax ( Trade Tax, VAT), Wealth tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues, where applicable with the appropriate authorities. Further the Central Government has till date not prescribed the amount of Cash payable under Section 441A of the Companies Act. We are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us there are no cases of non-deposit with the appropriate authorities of un disputed dues of sales tax/service tax/customs duty/ wealth tax/ excise duty/ Cess.

10. The company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. Accordingly, paragraph 4 (x) of the Order is not applicable.

11. In our opinion and according to the information and explanations given to us, the Company has taken only Working Capital Loans from bank repayable on demand and have not defaulted in repayment of dues to the bank. The company does not have any borrowing from financial institutions and has not issued debentures.

12. The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. provisions of clause (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

14. The company has maintained proper records for the transactions and contracts for dealing in or trading in shares, securities, debentures, or other investments and timely updation has been made in the records. All the investments have been held by the company in its own name.

15. As per information available to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

16. The Company has not taken any term loan from any financial institutions.

17. According to the records examined by us and according to information and explanations given to us, on an overall basis, no funds raised on short term basis have been used for long term investment.

18. The Company has not made during the year any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. There are no debentures issued and outstanding during the year and hence the question of creating securities in respect thereof does not arise.

20. The Company has not raised any monies by way of public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanation given to us no fraud on or by the Company has been noticed or Reported during the financial year.

For Kamal Kishore & Co.

Chartered Accountants

(Firm No 007424C)

Place: Varanasi (Kamal Kishore Srivastava)

Date : 30. 05. 2012 Partner, M. No. 71639


Mar 31, 2011

1. We have audited the attached Balance Sheet of BANARAS BEADS LIMITED, as at 31st March, 2011, the Profit & Loss Account and 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 on opinion of 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 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 Reports) Order, 2003 as amended, issued by the Central Government of India in term of section 227 (4A) of the Companies Act, 1956, and on the basis of checks of the books and records of the Company as we considered appropriate and the information and the explanations given to us during the course of audit, a statement on the matters specified in paragraphs 4 and 5 of the said order is annexed.

4. Further to our comments in the Annexure referred to 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 the audit;

(b) 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 these books;

(c) The Balance sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet and the Profit & Loss Account comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956.

(e) On the basis of written representations received from the directors as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of subsection (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 statements of 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.

(i) In case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011; and

(ii) In the case of the Profit and Loss Account, of the Profit of the company for the year ended on that date.

(iii) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

ANNEXURE REFERRED TO IN PARAGRAPH (3) OF THE AUDITOR'S REPORT OF EVEN DATE ON THE ACCOUNTS OF BANARAS BEADS LIMITED FOR THE YEAR ENDED 31st MARCH, 2011

1 (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All the fixed assets have been physically verified by the management at reasonable intervals. We are informed that discrepancies noticed on such verification will be dealt with in the books of accounts as and when records are updated.

(c) There was no disposal of a substantial part of fixed assets.

2. (a) As explained to us, the inventory has been physically verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanation given to us, and on the basis of out examination of records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of accounts.

3. (a) According to the information and explanations given to us, the Company had not granted any unsecured loans to the parties covered in the register maintained under Section 301 of me Companies act, 1956.

(b) Since no amount is due to the company, there is no need to comment upon the rate of interest and other terms & conditions of the loans.

(c) Since no amount is due to the company, there is no need to comment upon the terms of repayment of loans.

(d) Since no amount is due to the company, there is no need to express our opinion on whether there is any amount overdue above Rupees one Lakh and whether reasonable steps needs to be taken for recovery of principal and interest.

(e) The Company has not taken loans, secured or unsecured from parties covered in the register maintained under section 301 of the Companies act, 1956, hence sub clause (e), (f )and (g) of clause 4 (iii) of the Orders are not applicable.

4. On the basis of our evaluation of internal control systems and according to the information and explanations given to us, we are of the opinion that internal control systems with respect to the purchase of inventory and fixed assets and sale of goods and services need to be further improved to make it commensurate with the size of the company and nature of its business.

5. In respect of the transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956,

(a) Based on audit procedures applied by us, the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under Section 301 have been so entered.

(b) As regards transactions exceeding value of Rupees five lakhs entered into during the financial year, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time, because of the specialized nature of the items involved and absence of any comparable prices.

6. The Company has not accepted any deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed there under.

7. The Company has an internal audit system commensurate with the size and nature of the Company's business but in our opinion its scope and coverage requires to be further strengthened.

8. Maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956. Therefore, the provisions of clause (viii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

9. (a) In our opinion and according to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, Employees' State Insurance, Income Tax, Sales Tax (Trade Tax, VAT), Wealth tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues, where applicable with the appropriate authorities. Further the Central Government has till date not prescribed the amount of Cash payable under Section 441A of the Companies Act. We are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us there are no cases of non-deposit with the appropriate authorities of un disputed dues of sales tax/service tax/customs duty/ wealth tax/ excise duty/ Cess.

10. The company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. Accordingly, paragraph 4 (x) of the Order is not applicable.

11. In our opinion and according to the information and explanations given to us, the Company has taken only Working Capital Loans from bank repayable on demand and have not defaulted in repayment of dues to the bank. The company does not have any borrowing from financial institutions and has not issued debentures.

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

13. The provisions of any statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to Company, therefore, the provisions of clause (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

14. The company has maintained proper records for the transactions and contracts for dealing in or trading in shares, securities, debentures, or other investments and timely updation has been made in the records. All the investments have been held by the company in its own name.

15. As per information available to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

16. The Company has not taken any term loan from any financial institutions.

17. According to the records examined by us and according to information and explanations given to us, on an overall basis, no funds raised on short term basis have been used for long term investment.

18. The Company has not made during the year any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

1.9. There are no debentures issued and outstanding during the year and hence the question of creating securities in respect thereof does not arise.

20. The Company has not raised any monies by way of public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanation given to us no fraud on or by the Company has been noticed or Reported during the financial year.

For Kamal Kishore & Co. Chartered Accountants (Firm No 007424C)

(Kamal Kishore Srivastava) Partner M. No. 71639)

Place: Varanasi. Date : 01. 07. 2011




Mar 31, 2010

1. We have audited the attached Balance Sheet of BANARAS BEADS LIMITED, as at 31st March, 2010, the Profit & Loss Account and Cash Flow Statement of the company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express on opinion of 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 evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Reports) Order, 2003 as amended, issued by the Central Government of India in term of section 227 (4A) of the Companies Act, 1956, and on die basis of checks of the books and records of the Company as we considered appropriate and the information and the explanations given to us during the course of audit, a statement on the matters specified in paragraphs 4 and 5 of the said order is annexed.

4. Further to our comments in the Annexure referred to 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 the audit;

(b) 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 these books;

(c) The Balance sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet and the Profit & Loss Account comply with the Accounting Standards referred to in subsection (3C) of Section 211 of me Companies Act, 1956.

(e) On the basis of written representations received from the directors as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of subsection (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 statements of 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.

(i) In case of the Balance Sheet, of me state of affairs of the Company as at 31" March, 2010; and

(ii) In the case of the Profit and Loss Account, of the Profit of the company for die year ended on that date.

(iii) In the case of Cash Flow Statement, of the Cash Flows for the year ended on mat date.

ANNEXURE TO AUDITORS REPORT

ANNEXURE REFERRED TO IN PARAGRAPH (3) OF THE AUDITORS REPORT OF EVEN DATE ON THE ACCOUNTS OF KANAKAS BEADS LIMITED FOR THE YEAR ENDED 31st MARCH, 2010

1 (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All the fixed assets have been physically verified by the management at reasonable intervals. We are informed that discrepancies noticed on such verification will be dealt with in the books of accounts as and when records are updated.

(c) There was no disposal of a substantial part of fixed assets.

2. (a) As explained to us, the inventory has been physically verified by die management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion and according to the information and explanation given to us, and on the basts of our examination of records of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of accounts.

3. (a) According to the information and explanations given to us, the Company had not granted any unsecured loans to the parties covered in

the register maintained under Section 301 of the Companies act, 1956.

(b) Since no amount is due to the company, there is no need to comment upon the rate of interest and other terms & conditions of the loans.

(c) Since no amount is due to the company, there is no need to comment upon the terms of repayment of loans.

(d) Since no amount is due to the company, there is no need to express our opinion on whether there is any amount overdue above Rupees one Lakh and whether reasonable steps needs to be taken for recovery of principal and interest.

(e) The Company has not taken loans, secured or unsecured from parties covered in the register maintained under section 301 of the Companies act, 1956, hence sub clause (e), (f )and (g) of clause 4 (iii) of the Orders are not applicable.

4. On the basis of our evaluation of interna! control systems and according to the information and explanations given to us, we are of the opinion that internal control systems with respect to the purchase of inventory and fixed assets and sale of goods and services need to be further improved to make it commensurate with the size of the company and nature of its business.

5. In respect of the transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956,

(a) based on audit procedures applied by us, the best of our knowledge and belief and according to the information and explanations given to

us, we are of the opinion that the transactions that needed to be entered into the register maintained under Section 301 have been so entered.

(b) as regards transactions exceeding value of Rupees five lakhs entered into during the financial year, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time, because of the specialized nature of the items

involved and absence of any comparable prices.

6. The Company has not accepted any deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed there under.

7. The Company has an internal audit system commensurate with the size and nature of the Companys business but in our opinion its scope and coverage requires to be further strengthened.

8. Maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956. Therefore, the provisions of clause (viii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

9. (a) In our opinion and according to the information and explanations given to us, the Company has been generally regular in depositing

undisputed statutory dues including provident fund, investor education and protection fund. Employees State Insurance, Income Tax, Sales Tax ( Trade Tax, VAT), Wealth tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues, where applicable with the appropriate authorities. Further the Central Government has till date not prescribed the amount of Cash payable under Section 441A of the Companies Act. We are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to me information and explanations given to us there are no cases of non-deposit with the appropriate authorities of un disputed dues of sales tax/service tax/customs duty/ wealth tax/ excise duty/ cess.

10. The company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in

the immediately preceding financial year. Accordingly, paragraph 4 (x) of the Order is not applicable.

11. In our opinion and according to the information and explanations given to us, the Company has taken only Working Capital Loans from bank repayable on demand and have not defaulted in repayment of dues to the bank. The company does not have any borrowing from financial institutions and has not issued debentures.

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

13. The provisions of any statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to Company, therefore, die provisions of clause (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

14. The company has maintained proper records for the transactions and contracts for dealing in or trading in shares, securities, debentures, or other investments and timely updation has been made in the records. All the investments have been held by the company in its own name.

15. As per information available to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

16. The Company has not taken any term loan from any financial institutions.

17. According to the records examined by us and according to information and explanations given to us, on an overall basis, no funds raised on short term basis have been used for long term investment.

18. The Company has not made during the year any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. There are no debentures issued and outstanding during the year and hence the question of creating securities in respect thereof does not arise.

20. The Company has not raised any monies by way of public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanation given to us no fraud on or by the Company has been noticed or Reported during the financial year.



For Kamal Kishore & Co.

Chartered Accountants

(Firm No 007424C)

Place: Varanasi. (Kamal Kishore Srivastava)

Date: 08.07. 2010 Partner

M. No. 71639


Mar 31, 2001

We have audited the attached Balance Sheet of Banaras Beads Limited, as at March, 31st 2001 and also the profit and Loss Account of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statement 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 statements, an audit also includes assessing the accounting principles used and significant estimates made by the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Manufacturing and other Companies (AuditorsvReport) Order, 1998 issued by the Central Government in terms of Sec. 227(4A) 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.

2. Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all the information and explanations which to the best our knowledge and belief were necessary for the purpose of audit.

b) 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 those books.

c) The Balance Sheet and Profit and Loss Account deals with by this report are in agreement with the books of account (in view of i) and ii) given in clause 2b above.

d) In our opinion, the Profit and Loss Account and Balance Sheet deals 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 written representations received from the directors as on 31st March, 2001, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2001, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) Subject to point Explained in item No. 1 2.3,4,5,6,7,9,11 & 18 of Notes of Accounts : In our opinion and to the best of our knowledge and according to the explanations given to us, the said accounts read together with 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 31st March, 2001 ; and

ii) in the case of the Profit and Loss Account, of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT BANARAS BEADS LTD.

Statement referred to in paragraph (!) of our report of even date on the Accounts for the year ended 31st March, 2001.

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. As per the information and explanations given to us, the Company has a system of physical verification of all its fixed assets at reasonable intervals. Most of the fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management is reasonable having regard to the size of the Company and the nature of its business. As explained to us, no material discrepancies were noticed on such verification.

2. None of the fixed assets have been revalued during the year.

3. The stocks of finished goods, stores, spare parts and raw materials lying at its location have been physically verified by the Management at reasonable intervals. The stock is possession of third parties have been verified by the management at reasonable intervals.

4. The procedures for physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

5. The discrepancies noticed on verification between the physical stock and the book records were not materials and the same have been properly dealt with in the books of account.

6. On the basis of our examination of Stock records, we are of the opinion that the valuation of stock is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

7. The Company has not taken any loan from Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 or from the Companies under the same management as defined under Sec. 370(1B) of the Companies Act, 1956. In terms of sub-section (6) of Section 370 of the Companies Act, 1956, provision of the Section is not applicable to a company on or after 31st October, 1998.

8. The Company has granted loans to Companies, firms or other parties listed in the register maintained under 301 of the Companies Act, 1956 and to the Companies under the same management as defined under Section 370 of the Companies Act, 1956. The Company has not charged interest on such loans. However in terms of sub-section (6) of Section 370 of the Companies Act, 1956, provision of the Section is not applicable to a company on or after 31st October, 1998.

9. In respect of loans and advances in the nature of Loans given by the Company, parties have repaid the principal amount and interest subject to some stickly accounts.

10. In our opinion and according to the information and explanations given to us, there is need for improvement for adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods.

11. In our opinion and according to the information and explanations given to us, the transaction of purchase of goods and materials and sale of goods, material and service made in purchase of contracts of arrangements entered in the register maintained under 301 of the Companies Act, 1956 and agreegating during the year to Rs. 50,000 or more in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such goods material or services or the prices at which transaction for similar goods material or services have been made with other parties.

12. As explained to us the Company has a regular procedure for the determination of unserviceable or damaged store, raw materials and finished goods adequate provision have been made in the books of account in respect of the items so determined.

13. The Company has not accepted any deposit from the public to which the provisions of Section 58A of the Companies Act, 956 and the rules made there under would apply.

14. In our opinion reasonable records have been maintained by the Company for the sale and disposal of realizable by products and scrap.

15. In our opinion the Company requires improvement in internal audit system commensurate with the size and nature of its business.

16. We are informed that maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 in respect of Companys roducts.

17. According to the records of the Company, Provident Fund and Employees State Insurance dues, where applicable, have been regularly deposited during the year with the appreciate authorities.

18. According to the information and explanations given to us no personal expenses have been charged to revenue account other than those payable under Contractual obligation or in accordance with generally accepted business practices.

19. According to the information and explanations given to us there were no undisputed amount payable in respect of Income tax, Wealth tax, Sale tax, Customs duty and excise duty as at 31st March, 2001 which are outstanding for a period of more than six months from the date they become payable. Provision for Gratuity have been made looking into upto date liability.

20. The Company is not sick industrial Company within the meaning of Clause of (o) of sub- Section (1) of Section 3 of sick industrial Companies (Special provisions) Act, 1985.

21. In respect of the trading activities of the Company there were no damaged goods during the year.

For Kamal Kishore & Co. Chartered Accountants

Kamal Kishore Srivastava Partner

Place: Varanasi. Date : 10/03/2003


Mar 31, 2000

We have audited the attached Balance Sheet of Banaras Beads Limited, as at March, 31st 2000 and also the profit and Loss Account of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statement 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 statements, an audit also includes assessing the accounting principles used and significant estimates made by the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Manufacturing and other Companies (Auditors Report) Order, 1998 issued by the Central Government in terms of Sec. 227(4A) 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.

2. Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all the information and explanations which to the best our knowledge and belief were necessary for the purpose of audit.

b) 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 those books.

c) The Balance Sheet and Profit and Loss Account deals with by this report are in agreement with the books of account (in view of i) and ii) given in clause 2b above.

d) In our opinion, the Profit and Loss Account and Balance Sheet deals 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 written representations received from the directors as on 31st March, 2000, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2000, from being appointed as a director in terms of clause(g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) Subject to point Explained in item No. 1,2,3, 6, 7,9 & 17 of Notes of Accounts : In our opinionand to the best of our knowledge and according to the explanations given to us, the said accounts read together with 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 31st March,2000; and

ii) in the case of the Profit and Loss Account, of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT BANARAS BEADS LTD, Statement referred to in paragraph (1) of our report of even date on the Accounts for the year ended 31st March, 2000.

1. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. As per the information and explanations given to us, the Company has a system of physical verification of all its fixed assets at reasonable intervals. Most of the fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management is reasonable having regard to the size of the Company and the nature of its business. As explained to us, no material discrepancies were noticed on such verification.

2. None of the fixed assets have been revalued during the year.

3. The stocks of finished goods, stores, spare parts and raw materials lying at its location have been physically verified by the Management at reasonable intervals. The stock is possession of third parties have been verified by the management at reasonable intervals,

4. The procedures for physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

5. The discrepancies noticed on verification between the physical stock and the book records were not materials and the same have been properly dealt with in the books of account.

6. On the basis of our examination of Stock records, we are of the opinion that the valuation of stock is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

7. The Company has not taken any loan from Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 or from the Companies under the same management as defined under Sec. 370(1B) of the Companies Act. 1956. In terms of sub-section (6) of Section 370 of the Companies Act, 1956, provision of the Section is not applicable to a company on or after 31st October, 1998.

8. The Company has granted loans to Companies, firms or other parties listed in the register maintained under 301 of the Companies Act, 1956 and to tire Companies under the same management as defined under Section 370 of the Companies Act, 1956. The Company has not charged interest on such loans. However in terms of sub-section (6) of Section 370 of the Companies Act, 1956, provision of the Section is not applicable to a company on or after 31st October, 1998.

9. In respect of loans and advances in the nature of. Loans given by the Company, parties have repaid the principal amount and interest subject to some slickly accounts.

10. In our opinion and according to the information and explanations given to us, there is need for improvement for adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods.

11. In our opinion and according to the information and explanations given to us, the transaction of purchase of goods and materials and sale of goods, material and service made in purchase of contracts of arrangements entered in the register maintained under 301 of the Companies Act, 1956 and aggregating during the year to Rs. 50,000 or more in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such goods material or services or the prices at which transaction for similar goods material or services have been made with other parties.

12. As explained to us the Company has a regular procedure for the determination of unserviceable or damaged store, raw materials and finished goods adequate provision have been made in the books of account in respect of the items so determined.

13. The Company has not accepted any deposit from the public to which the provisions of Section 58A of the Companies Act, 956 and the rules made there under would apply.

14. In our opinion reasonable records have been maintained by the Company for the sale and disposal of realizable by products and scrap.

15. In our opinion the Company requires improvement in internal audit system commensurate with the size and nature of its business.

16. We are informed that maintenance of cost records has not been prescribed by the Central Government under Section 209(l)(d) of the Companies Act, 1956 in respect of Companys roducts.

17. According to the records of the Company, Provident Fund and Employees State Insurance dues, where applicable, have been regularly deposited during the year with the appreciate authorities.

18. According to the information and explanations given to us no personal expenses have been charged to revenue account other than those payable under Contractual obligation or in accordance with generally accepted business practices.

19. According to the information and explanations given to us there were no undisputed amount payable in respect of Income tax, Wealth tax, Sale tax, Customs duty and excise duty as at 31st March, 2000 which are outstanding for a period of more than six months from the date they become payable. Provision for Gratuity have been made looking into upto date liability.

20. The Company is not sick industrial Company within the meaning of Clause of (o) of sub-Section (1) of Section 3 of sick industrial Companies (Special provisions) Act, 1985.

21. In respect of the trading activities of the Company there were no damaged goods during the year.

For Kamal Kishore & Co. Chartered Accountants

(Kamal Kishore Srivastava) Partner

Place: Varanasi. Date : 10/03/2003

 
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