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Auditor Report of BGIL Films & Technologies Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of BGIL FILMS & TECHNOLOGIES LIMITED ("the Company" which comprise of the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended as on that date annexed thereto, a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the Financial Statements

The Company''s 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 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. 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 subject to confirmation and reconciliation of some of the accounts as further detailed in note no. 25 of the notes on account, non-provision for retirement- benefits amounting to Rs. 2.40 lacs as further detailed in note no. 35, classification of Investments as detailed in note no. 36 and non-provision for diminution in value of quoted investments amounting to Rs. 186.35 lacs as further detailed in note no. 37:

i) In the case of Balance Sheet, of the state of affairs of the company as at 31st March, 2014 and;

ii) In the case of the Statement of Profit and Loss, of the profit 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.

Report on other Legal & Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the company, as we considered appropriate, we enclose in the annexure a statement on the matters specified in the said Order.

2. As required by section 227(3) of the Act, 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 purpose of our 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, the Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the 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 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;

(e) 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 THE AUDITORS'' REPORT Referred to in paragraph 3 of our report of even date,

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

(b) The Fixed Assets are physically verified by the management according to regular programme of periodical verification in phased manner, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off any substantial part of its Fixed Assets.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, 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) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) As per information and explanation provided to us by the management of the company, the Company has not granted loan to any body corporate listed in the register maintained under section 301 of the Companies Act, 1956.

(b) As per information and explanation provided to us by the management of the company, 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.

(c) As per information and explanation provided to us by the management of the company, the loan granted to the subsidiary company covered in the register maintained under section 301 of the Act is interest free.

(d) As per information and explanation provided to us by the management of the company, no specific terms of repayment has been specified in the case of loan taken/granted to any body corporate listed in the register maintained under section 301 of the Act, and repayment shall be made on demand.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in internal controls.

(v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

(vi) The company has not accepted any deposits as defined under sections 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, maintenance of cost records have not been prescribed by the Central Govt. under section 209 (1) (d) of the Companies Act, 1956.

(ix) (a) According to the records of the company, in our opinion the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no undisputed amount payable in respect of provident fund, income tax, sales tax, customs duty, excise duty, wealth tax, Service Tax and other material statutory dues which were in arrears for more than six months from the date they become payable except the following.

Name of the Statute Nature of Dues Amount Period to which amount relates (in Rs.)

Income Tax Act, 1961 Interest on late payment of TDS 58,045 01.04.09 to 31.03.14 Income Tax Act, 1961 Late filing of TDS Returns 77,700 01.07.2012 to 31.03.14

(c) Detail of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and cess which have not been deposited as on 31st March 2014 on account of disputes are given below:

Name of the Statute Nature of Amount Period to which Forum where the Dues (in lacs) amount relates dispute is pending

Income Tax Act, 1961 Tax / Interest 14.99 AY 2010-11 DCIT, New Delhi

(x) The company has no accumulated losses as on 31st March 2014 and it has not incurred any cash losses during the financial period ended on that date or in the immediately preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society.

(xiv) The company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others, from banks or financial institutions during the year.

(xvi) The Company has not obtained any term loans during the current year.

(xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment and vice-versa.

(xviii) According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

(xx) The company has not raised money by way of public issues during the year.

(xxi) Based on the audit procedures performed and information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For SNMG & Co.

Chartered Accountants Firm No. 004921N

NEERAJ GUPTA

Place : New Delhi Partner

Date : 29.05.2014 M. No. 087004


Mar 31, 2013

We have audited the attached Balance Sheet of BGIL FILMS & TECHNOLOGIES LIMITED as at 31st March, 2013 and the statement of Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. 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.

1. 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 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 our opinion and report thereto:

2. As required by the Companies (Auditor''s Report) Order, 2003 (amendment order 2004) issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the company, as we considered appropriate, and in terms of the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable to the company.

3. Further to our comments in annexure referred to in paragraph (3) 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 purpose of our audit.

(b) In our opinion, the company as required by law has kept proper books of account as far as appears from our examination of such books.

(c) The Balance Sheet and statement of Profit & Loss Account dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the statement of Profit & Loss Account and Cash Flow Statement dealt with by this report, comply with the Accounting Standards referred in sub - section 3(C) of section 211 of the companies Act, 1956.

(e) On the basis of written representations received from the directors as on 31.03.2013 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2013 from being appointed as directors 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 statements of accounts together with the notes appearing in Schedule of Notes, 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 Balance Sheet, of the state of affairs of the company as at 31st March,2013;

ii) In the case of the statement 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.

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

(b) As explained to us, the Fixed Assets are physically verified by the management at reasonable intervals in a phased verification programme, which in our opinion is reasonable having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off any part of its Fixed Assets so as to affect its going concern.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, 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) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) According to the information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties, covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in internal controls.

(v) (a) On the basis of the audit procedures performed by us and according to the information, explanations and representations given to us, we are of the opinion that, the transactions in which directors were interested as contemplated under section 297 and sub-section (6) of section 299 of the Companies Act, 1956, and which were required to be entered in the register maintained under section 301 of the Companies Act, 1956, have so entered.

(b) According to the information and explanations given to us, transactions exceeding the value of Rs. 5,00,000/- have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted any deposits as defined under sections 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. (vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, maintenance of cost records have not been prescribed by the Central Govt. under section 209 (1) (d) of the Companies Act, 1956.

(ix) (a) According to the records of the company, in our opinion the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no undisputed amount payable in respect of income tax, sales tax, customs duty, wealth tax and excise duty were outstanding as on 31st March, 2013for a period of more than six months from the date.

(x) The company has no accumulated losses as at 31st March, 2013 and it has not incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society.

(xiv) In respect of shares, securities, debentures and other investments, dealt in or traded by the company, proper records have been maintained in respect of transactions and contracts, and timely entries have been made therein.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others, from banks or financial institutions during the year.

(xvi) The Company has not obtained any term loans during the current year.

(xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment and vice-versa.

(xviii) According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

(xix) The company has not raised money by way of public issues during the year.

(xx) Based on the audit procedures performed and information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



For Sunil K. Choudhary & Co.

Chartered Accountants

(Firm No. 021281N)

Sd/-

PLACE: NEW DELHI (Sunil Kumar Choudhary)

DATED: May 30, 2013 Proprietor

M. No. 5083808


Mar 31, 2012

We have audited the attached Balance Sheet of BGIL FILMS & TECHNOLOGIES LIMITED as at 31st March, 2012 and the statement of Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. 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.

1. 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 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 our opinion and report thereto:

2. As required by the Companies (Auditor's Report) Order, 2003 (amendment order 2004) issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the company, as we considered appropriate, and in terms of the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable to the company.

3. Further to our comments in annexure referred to in paragraph (3) 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 purpose of our audit.

(b) In our opinion, the company as required by law has kept proper books of account as far as appears from our examination of such books.

(c) The Balance Sheet and statement of Profit & Loss Account dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the statement of Profit & Loss Account and Cash Flow Statement dealt with by this report, comply with the Accounting Standards referred in sub - section 3(C) of section 211 of the companies Act, 1956.

(e) On the basis of written representations received from the directors as on 31.03.2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2012 from being appointed as directors 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 statements of accounts together with the notes appearing in Schedule of Notes subject to Non-provision of retirement benefits as detailed in Note no. 36 of Notes on 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 the case of Balance Sheet, of the state of affairs of the company as at 31st March,2012;

ii) In the case of the statement 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 TO THE AUDITORS' REPORT

Referred to in paragraph 3 of our report of even date,

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

(b) As explained to us, the Fixed Assets are physically verified by the management at reasonable intervals in a phased verification programme, which in our opinion is reasonable having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off any part of its Fixed Assets so as to affect its going concern.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, 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) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) According to the information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties, covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in internal controls.

(v) (a) On the basis of the audit procedures performed by us and according to the information, explanations and representations given to us, we are of the opinion that, the transactions in which directors were interested as contemplated under section 297 and sub-section

(6) of section 299 of the Companies Act, 1956, and which were required to be entered in the register maintained under section 301 of the Companies Act, 1956, have so entered.

(b) According to the information and explanations given to us, transactions exceeding the value of Rs. 5,00,000/- have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted any deposits as defined under sections 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, maintenance of cost records have not been prescribed by the Central Govt. under section 209 (1) (d) of the Companies Act, 1956.

(ix) (a) According to the records of the company, in our opinion the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employee's state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no undisputed amount payable in respect of income tax, sales tax, customs duty, wealth tax and excise duty were outstanding as on 31st March, 2012 for a period of more than six months from the date becoming payable except the following:

Name of Nature of Dues Amount in Rs. Period to which Date of Payment the Statute the amount relates

Income Tax Act Tax Deducted at Source 91228 01.04.2011 30.7.2012 to 30.09.2011

(x) The company has no accumulated losses as at 31st March, 2012 and it has not incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society.

(xiv) In respect of shares, securities, debentures and other investments, dealt in or traded by the company, proper records have been maintained in respect of transactions and contracts, and timely entries have been made therein.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others, from banks or financial institutions during the year.

(xvi) The Company has not obtained any term loans during the current year.

(xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment and vice-versa.

(xviii) According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year. except Issue of 4920800 equity shares to shareholders of Kriti Communications (P) Limited on account of merger with Kriti Communications (P) Limited through the order of Hon'ble High Court, Delhi.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

(xx) The company has not raised money by way of public issues during the year.

(xxi) Based on the audit procedures performed and information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For SNMG & CO.

Chartered Accountants

(Firm No. 004921N)

Sd/-

PLACE: NEW DELHI (NEERAJ GUPTA)

DATED: 14.08.2012 Partner

M. No. 087004


Mar 31, 2010

We have audited the attached Balance Sheet of BGIL FILMS & TECHNOLOGIES LIMITED as at 31st March 2010 and the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. 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 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 our opinion and report thereto:

2. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the company, as we considered appropriate, and in terms of the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable to the company.

3. Further to our comments in annexure referred to in paragraph (3) 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 purpose of our audit.

(b) In our opinion, the company as required by law, has kept proper books of account so far as appears from our examination of such books.

(c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report, comply with the Accounting Standards referred in sub - section 3(C) of section 211 of the companies Act, 1956.

(e) On the basis of written representations received from the directors as on 31.03.2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31.03.2010 from being appointed as directors 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 statements of accounts together with the notes appearing in Schedule of Notes, 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 Balance Sheet, of the state of affairs of the company as at 31st March 2010;

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.

ANNEXURETOTHE AUDITORS REPORT Referred to in paragraph 3 of our report of even date,

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

(b) As explained to us, the Fixed Assets are physically verified by the management at reasonable intervals in a phased verification programme, which in our opinion, is reasonable having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off any part of its Fixed Assets so as to affect its going concern.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relationto the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintain- ing proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a)According to the information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured to/from companies, firms or other parties, covered in the register maintained under section 301 of the Companies Act, 1956 except Rs. 29,50,000/- taken from parties as unsecured loans. As there are no specific terms and conditions as to the repayment of these loans, we are unable to comment whether the same are prima facie prejudicial to the interest of the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness, has been noticed in internal controls.

(v) (a) On the basis of the audit procedures performed by us and according to the information, explanations and representations given to us, we are of the opinion that, the transactions in which directors were interested as contemplated under section 297 and sub-section (6) of section 299 of the Companies Act, 1956, and which were required to be entered in the register maintained under section 301 of the Companies Act, 1956, have so entered.

(b) According to the information and explanations given to us, transactions exceeding the value of Rs. 5,00,000/- have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted any deposits as defined under sections 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, maintenance of cost records have not been prescribed by the Central Govt, under section 209 (1) (d) of the Companies Act, 1956.

(ix) (a) According to the records of the company, in our opinion the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no undisputed amount payable in respect of income tax, sales tax, customs duty, wealth tax and excise duty were outstanding as on 31st March, 2010 for a period of more than six months from the date becoming payable except the following:

Name of Nature of Dues Amount in Lacs Period to which the Statute the amount relates

Service Tax Act Service Tax 30.34 01.10.2008 to 31.03.2010

Income Tax Act TDS 0.78 01.04.2009 to 31.03.2010

Income Tax Act Income Tax 5.55 01.04.2008 to 31.03.2009

(x) The company has no accumulated losses as at 31st March, 2010 and it has not incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the records of the company examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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

(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society.

(xiv) In respect of shares, securities, debentures and other investments, dealt in or traded by the company, proper records have been maintained in respect of transactions and contracts, and timely entries have been made therein.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others, from banks or financial institutions during the year.

(xvi) The Company has not obtained any term loans during the current year.

(xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment and vice-versa.

(xviii) According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

(xx) The company has not raised money by way of public issues during the year.

(xxi) Based on the audit procedures performed and information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For SNMG & CO.

Chartered Accountants

Sd/- Place : New Delhi (Neeraj Gupta)

Dated : 03.09.2010 Partner Membership No. 87004



 
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