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Auditor Report of Bhandari Hosiery Exports Ltd.

Mar 31, 2016

INDEPENDENT AUDITORS’ REPORT

To the Members of

M/s Bhandari Hosiery Exports Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Bhandari Hosiery Exports Limited (“the Company”), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, 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 on the standalone financial statements.

Emphasis of Matter-

We draw attention to the fact that the financial statements of the Company for the year ended March 31, 2016 were earlier approved by the Board of Directors at its meeting held on May 28, 2016. The financial statements of the Company were audited by us and our report dated May 28, 2016, addressed to the members of the Company, expressed an unmodified opinion on those financial statements. However to recommend payment of dividend for the financial year 2015-16, the Board of Directors reconsidered and approved the Financial Statements in its meeting held on 22nd July 2016. There were no other changes/corrections/revision made to financial statements except for giving effect to recommendation and payments of dividends for the year 2015-16.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at 31st March 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the “ Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

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

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

(c) The Balance Sheet, the 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 aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 2 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Referred to in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirement'' of our report of even date to the financial statements of the Company for the year ended March 31, 2016:

1) (a) The Company has maintained proper records showing full particulars, including quantitative details

and situation of fixed assets.

(b) The Fixed Assets have been physically verified by the management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the books records and the physical fixed assets have been noticed.

(c) The title deeds of immovable properties are held in the name of the company.

2) (a) The management has conducted the physical verification of inventory at reasonable intervals.

(b) No discrepancies have been noticed on physical verification of the inventory as compared to books records

3) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (c) of the Order are not applicable to the Company and hence not commented upon.

4) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security.

5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

6) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1)of the Companies Act, 2013, related to the manufacture of products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they become payable.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute.

8) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.

9) Based upon the audit procedures performed and the information and explanations given by the management.

a) The company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.

b) The company has raised term loans from the bank for installation of machinery.

10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

11) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;

12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.

13) In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

14) Based upon the audit procedures performed and the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. During the year, The Company''s Equity shares of Rs. 10/- each were sub-divided into 10 equity shares of Rs. 1/- each resulting in increase in number of equity shares from 1,46,52,695 equity shares of Rs. 10/- each to 14,65,26,950 equity shares of Rs. 1/- each.

15) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

16) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.

“ANNEXURE B” TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF BHANDARI HOSIERY EXPORTS LTD

(Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) )

We have audited the internal financial controls over financial reporting of Bhandari Hosiery Exports Limited as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date

Management’s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on “the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India”

Explanatory paragraph

We also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act, the financial statements of Company, which comprise the Balance Sheet as at March 31, 2016, and the related 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, and our report dated July 22, 2016 expressed an unqualified opinion thereon.

For Vipan Kumar Aggarwal & Co.,

(Chartered Accountants)

Place: Ludhiana. (Vipan Aggarwal)

Date : 22.07.2016 (Prop.)

Membership No. 081198


Mar 31, 2015

We have audited the accompanying Financial Statements of Bhandari Hosiery Exports Limited ('the Company') which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the Standards on Auditing issued by the Institute of Chartered Accountants of India and the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the 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 financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, 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 on the financial statements.

4. 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2015

b) in the case of Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Emphasis of Matter-

We draw attention to the fact that the financial statements of the Company for the year ended March 31, 2015 were earlier approved by the Board of Directors at its meeting held on May 29, 2015. The financial statements of the Company were audited by us and our report dated May 29, 2015, addressed to the members of the Company, expressed an opinion on those financial statements. However upon observing some arithmetical errors in calculation of depreciation and some other expenses in the Audited Financial Statements and to recommend payment of dividend for the financial year 2014-15, the Board of Directors reconsidered and approved the Financial Statements in its meeting held on July 22, 2015.

5. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report that:

a. We have sought and 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 it appears from our examination of those 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 aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f. with respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors), 2014, in our opinion and to the best of our information and according to the explanations given to us;

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements,

ii. In our opinion and as per the information and explanations provides to us, the Company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses, and

iii. There has been no delay in transferring the amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS'REPORT

(Referred to in Paragraph 1 under section (Report on Other Legal and Regulatory Requirements, of our report ofn ven date)

1.1. The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

1.2. All the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

2.1. The inventories have been physically verified at reasonable intervals by the management.

2.2. 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.

2.3. In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on such physical verification.

3. As informed to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the sub-clauses (a) and (b) are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. According to the information and explanations given to us, the Company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.

6. We have broadly reviewed the books of account maintained by the Company pursuant to sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

7.1 The company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities and we have been informed that there are no arrears of outstanding statutory dues as at the last day of the financial year under audit for a period of more than six months from the date they became payable.

7.2 According to the information and explanations given to us, no undisputed amount is payable in respect of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess as at March 31, 2015, . An amount of Rs. 397265.00 on account of Income Tax has not been deposited due to appeals pending before the Appellate Authorities

7.3 In our opinion and according to the information and explanations given to us, amounts required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder have been transferred to such fund within time,

8. The Company has no accumulated losses at the end of the financial year under audit. The company has not incurred cash losses during the financial year covered by audit and in the immediately preceding financial year.

9. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank.

10. 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, where the terms and conditions are prejudicial to the interest of the Company.

11. According to the information and explanations given to us, the term loans have been applied for the purpose for which they have been obtained.

12. Based upon the audit procedures performed and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year of our audit.

For Vipan Kumar Aggarwal & Co.,

(Chartered Accountants) Place : Ludhiana. (Vipan Aggarwal) Date : 22.07.2015 (Prop.) Membership No. 081198


Mar 31, 2014

1. Report on the Financial Statements

We have audited the accompanying Financial Statements of Bhandari Hosiery Exports Limited (''the Company'') which comprise the Balance Sheet as at 31 March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. 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 notified under Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th 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.

3. 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.

4. 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.

5. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, and sub-section (11) of Section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order, We give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the 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, 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, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e) on the basis of written representations received from the Directors as on 31st March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 and sub-section (2) of Section 164 of the Companies Act, 2013.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 5 of our report of even date on the accounts for the year ended 31st March, 2014 of M/s BHANDARI HOSIERY EXPORTS LIMITED

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

(b) According to the information and explanations given to us, the management during the year has physically verified fixed assets. No material discrepancies were noticed on such verification. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and the nature of its business.

2. (a) According to the information and explanations given to us inventories have been physically verified during the year by the management at the close of the year.

(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 as evidenced by the written procedures and instructions 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 records of the company, we are of the opinion that the company is maintaining proper records of inventory. Discrepancies in inventories noticed during verification has been properly dealt with and accounted for.

3. (a) According to the information and explanations given to us, the company has not accepted any loans from its directors covered in the register maintained under Section 301 of the Companies Act, 1956 and/or Section 189 of the Companies Act, 2013.

(b) In our opinion and according to the information and explanations given to us no loan have been taken from the parties listed in the registers maintained under Section 301 of the Companies Act 1956 and/or Section 189 of the Companies Act, 2013.

(c) No loans has been taken from or granted to the companies, firm or other parties listed in the registers maintained under Section 301 of the Companies Act 1956 and/or Section 189 of the Companies Act, 2013.

4. 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 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, we have not observed any continuing failure to correct major weaknesses in internal controls procedures.

5. Based on the audit procedures applied by us and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956, have been so entered.

6. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or agreements entered in the registers maintained under section 301 of the Companies Act 1956 and/or Section 189 of the Companies Act, 2013 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us, the company has not invited or accepted any deposits from the public.

8. In our opinion, the company has internal audit system commensurate with the size and nature of its business.

9. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government, the maintenance of cost records has been prescribed under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

10. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, custom duty, excise-duty, cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales tax, custom duty and excise duty were outstanding, as at 31.03.2014 for a period of more than six months from the date they became payable.

(c) According to the records of the company, there are no dues of sales tax, , custom tax/wealth-tax, excise duty/cess as on 31-03-2014. An amount of Rs. 11,48,751.00 (Rs. 7,51,486/- for year 2004-05 and Rs. 3,97,265/- for year 2008-09) on account of Income Tax has not been deposited due to appeals pending before the Appellate Authorities .

11. There are no working losses to the company. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

12. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of interest and principal dues to the banks.

13. Based on our examination of documents and records, we are of the opinion that the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The company is a manufacturing company and therefore, the provision of Clause 4 (xiii) of the Companies (Auditors'' Report) Order 2003 in regard to the Nidhi and chit funds, are not applicable to the company.

15. According to the information and explanations given to us, the Company has not dealt or traded in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the company.

16. The company has not given any guarantee for loans taken by others from bank or financial institutions.

17. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were prima facie, applied by the company during the year for the purposes for which the loans were obtained.

18. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long-term investment. Further no long-term funds have been used to finance short-term assets

19. Based on our examination of records and the information provided to us by management we report that the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act 1956 and/or Section 189 of the Companies Act, 2013.

20. During the year under review, covered by our audit report, the company has not issued any debentures. The question of creation of any security in the respect of debentures does not arise.

21. During the year under review, the company has not raised any money by public issue. Therefore the provisions of clause 4(xx) of the Companies (Auditor Report), order 2003 are not applicable to the company.

22. Based upon the audit procedures performed and information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Vipan Kumar Aggarwal & Co. (Chartered Accountants)

Sd/- Place : Ludhiana. (Vipan Aggarwal) Date : 30.05.2014 (Prop.) Membership No. 081198


Mar 31, 2013

1. We have audited the attached Balance Sheet of M/s Bhandari Hosiery Exports Limited. as at 31st March 2013, and also the Statement of Profit and Loss and Cash Flow Statement 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 an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. These 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, the 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.

3. As required by the Companies (Auditor''s Report ) Order, 2003 issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified by in paragraphs 4 and 5 of the said order.

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 our audit;

(b) In our opinion, proper books of accounts 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 the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet and the Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of Section 211 the Companies Act, 1956

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

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 2013; 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 the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS'' REPORT

Referred to in paragraph 3 of our report of even date on the accounts for the year ended 31st March, 2013 of M/s BHANDARI HOSIERY EXPORTS LIMITED

1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets. (b) According to the information and explanations given to us, the management during the year has physically verified fixed assets. No material discrepancies were noticed on such verification. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and the nature of its business.

2. (a) According to the information and explanations given to us inventories have been physically verified during the year by the management at the close of the year.

(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 as evidenced by the written procedures and instructions 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 records of the company, we are of the opinion that the company is maintaining proper records of inventory. Discrepancies in inventories noticed during verification has been properly dealt with and accounted for.

3. (a) According to the information and explanations given to us, the company has not accepted any loans from its directors covered in the register maintained under Section 301 of the Companies Act, 1956. (b) In our opinion and according to the information and explanations given to us no loan have been taken

from the parties listed in the registers maintained under Section 301 of the Companies Act 1956. (c) No loans has been taken from or granted to the companies, firm or other parties listed in the registers maintained under Section 301 of the Companies Act 1956.

4. 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 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, we have not observed any continuing failure to correct major weaknesses in internal controls procedures.

5. Based on the audit procedures applied by us and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 have been so entered.

6. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or agreements entered in the registers maintained under section 301 of the Companies Act 1956 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us, the company has not invited or accepted any deposits from the public.

8. In our opinion, the company has internal audit system commensurate with the size and nature of its business.

9. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government, the maintenance of cost records has been prescribed under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

10. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, custom duty, excise-duty, cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales tax, custom duty and excise duty were outstanding, as at 31.03.2013 for a period of more than six months from the date they became payable.

(c) According to the records of the company, there are no dues of sales tax, , custom tax/wealth-tax, excise duty/cess as on 31-03-2013. An amount of Rs. 11,48,751.00 (Rs. 7,51,486/- for year 2004-05 and Rs. 3,97,265/- for year 2008-09) on account of Income Tax has not been deposited due to appeals pending before the Appellate Authorities .

11. There are no working losses to the company. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

12. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of interest and principal dues to the banks.

13. Based on our examination of documents and records, we are of the opinion that the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The company is a manufacturing company and therefore, the provision of Clause 4 (xiii) of the Companies (Auditors'' Report) Order 2003 in regard to the Nidhi and chit funds, are not applicable to the company.

15. According to the information and explanations given to us, the Company has not dealt or traded in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the company.

16. The company has not given any guarantee for loans taken by others from bank or financial institutions.

17. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were prima facie, applied by the company during the year for the purposes for which the loans were obtained.

18. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long-term investment. Further no long-term funds have been used to finance short-term assets

19. Based on our examination of records and the information provided to us by management we report that the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act 1956.

20. During the year under review, covered by our audit report, the company has not issued any debentures. The question of creation of any security in the respect of debentures does not arise.

21. During the year under review, the company has not raised any money by public issue. Therefore the provisions of clause 4(xx) of the Companies (Auditor Report), order 2003 are not applicable to the company.

22. Based upon the audit procedures performed and information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Vipan Kumar Aggarwal & Co.,

(Chartered Accountants)

Sd/-

Place : Ludhiana. (Vipan Aggarwal)

Date : 29.05.2013 (Prop.)

Membership No. 081198


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s Bhandari Hosiery Exports Limited. as at 31st March 2012, and also the Statement of Profit and Loss and Cash Flow Statement 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 an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. These 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, the 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.

3. As required by the Companies (Auditor's Report ) Order, 2003 issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified by in paragraphs 4 and 5 of the said order.

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 our audit;

(b) In our opinion, proper books of accounts 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 the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet and the Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of Section 211 the Companies Act, 1956

(e) On the basis of written representations received from all the directors as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 2012; 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 the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Referred to in paragraph 3 of our report of even date on the accounts for the year ended 31st March, 2012 of M/s BHANDARI HOSIERY EXPORTS LIMITED

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

(b) According to the information and explanations given to us, the management during the year has physically verified fixed assets. No material discrepancies were noticed on such verification. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and the nature of its business.

2. (a) According to the information and explanations given to us inventories have been physically verified during the year by the management at the close of the year.

(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 as evidenced by the written procedures and instructions 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 records of the company, we are of the opinion that the company is maintaining proper records of inventory. No discrepancies have been noticed on such verification of the physical stocks.

3. (a) According to the information and explanations given to us, the company has not accepted any loans from its directors covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanations given to us no loan have been taken from the parties listed in the registers maintained under Section 301 of the Companies Act 1956.

(c) No loans has been taken from or granted to the companies, firm or other parties listed in the registers maintained under Section 301 of the Companies Act 1956.

4. 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 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, we have not observed any continuing failure to correct major weaknesses in internal controls procedures.

5. Based on the audit procedures applied by us and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 have been so entered.

6. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or agreements entered in the registers maintained under section 301 of the Companies Act 1956 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us, the company has not invited or accepted any deposits from the public.

8. In our opinion, the company has internal audit system commensurate with the size and nature of its business.

9. The Maintenance of cost records has not been prescribed by the Central Government U /s 209(1)(d) of the Companies Act 1956, in respect of the Company's Products

10. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, custom duty, excise-duty, cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales tax, custom duty and excise duty were outstanding, as at 31.03.2012 for a period of more than six months from the date they became payable.

(c) According to the records of the company, there are no dues of sales tax, , custom tax/wealth-tax, excise duty/cess as on 31-03-2012. An amount of Rs. 1148751.00 on account of Income Tax has not been deposited due to appeals pending before the Appellate Authorities

11. There are no working losses to the company. The company has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

12. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of interest and principal dues to the banks.

13. Based on our examination of documents and records, we are of the opinion that the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The company is a manufacturing company and therefore, the provision of Clause 4 (xiii) of the Companies (Auditors' Report) Order 2003 in regard to the Nidhi and chit funds, are not applicable to the company.

15. According to the information and explanations given to us, the Company has not dealt or traded in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company.

16. The company has not given any guarantee for loans taken by others from bank or financial institutions.

17. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were prima facie, applied by the company during the year for the purposes for which the loans were obtained.

18. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long-term investment. Further no long-term funds have been used to finance short-term assets

19. Based on our examination of records and the information provided to us by management we report that the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act 1956.

20. During the year under review, covered by our audit report, the company has not issued any debentures. The question of creation of any security in the respect of debentures does not arise.

21. During the year under review, the company has not raised any money by public issue. Therefore the provisions of clause 4(xx) of the Companies (Auditor Report), order 2003 are not applicable to the company.

22. Based upon the audit procedures performed and information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Vipan Kumar Aggarwal & Co.,

(Chartered Accountants)

Sd/-

Place : Ludhiana. (Vipan Aggarwal)

Date : 29.05.2012 (Prop.)

Membership No. 081198


Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s Bhandari Hosiery Exports Limited as at 31st March 2011,the Profit and Loss Account and also the Cash Flow Statement 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 an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with the auditing standards generally accepted in India. These 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, the 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 reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956. We enclose in the Annexure a statement on the matters specified by in paragraphs 4 and 5 of the said order.

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 purpose of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the company so far as it appears from our examination of those books.

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with books of accounts.

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 to in sub section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from Directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011, from being appointed as Director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with the notes appearing in Schedule-U 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 2011, and

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

iii) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Referred to in paragraph (3) of our report of even date on the accounts for the year ended 31st March, 2011 of Bhandari Hosiery Exports Limited.

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

(b) According to the information and explanations given to us, the management during the year has physically verified fixed assets. No discrepancies were noticed on such verification. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and the nature of its business.

2. (a) According to the information and explanations given to us, inventories have been physically verified during the year by the management at the close of the year.

(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) On the basis of our examination of the records of the company, we are of the opinion that the company is maintaining proper records of inventory. No material discrepancies have been noticed on verification between the physical stocks & book records.

3. (a) According to the information and explanations given to us, the company has not accepted any loans from its directors covered in the register maintained under Section 301 of the Companies Act, 1956 and the year end balance of loans taken from such parties was NIL.

(b) In our opinion and according to the information and explanations given to us no loans have been taken from the party listed in the registers maintained under Section 301 of the Companies Act, 1956.

(c) The company has not taken any loans from the parties listed in the register under Section 301 of the Companies Act, 1956

(d) No loans has been taken from or granted to the companies, firms or other parties listed in the registers maintained under Section 301 of the Companies Act, 1956.

4. 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, we have not observed any continuing failure to correct major weaknesses in internal control procedures.

5. Based on the audit procedures applied by us and according to the information and explanations given to us, the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been so entered.

6. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or agreements entered in the registers maintained under Section 301 of the Companies Act, 1956 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

7. In our opinion and according to the information and explanations give to us, the company has not invited or accepted any deposits from the public during the year under review.

8. In our opinion, the company has internal audit system commensurate with the size and nature of its business.

9. The maintenance of cost records has not been prescribed by the Central Government u/s 209 (1) (d) of the Companies Act, 1956 in respect of the Company's products.

10. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding as at 31st March, 2011 for a period of more than six months from the date they become payable.

(c) According to the records of the company, there are no dues of sales tax, custom duty tax, wealth tax, excise duty/ Cess . An amount of Rs. 1148751/- on account of Income Tax has not been deposited due to appeals pending before the appellate authorities.

11. There are no accumulated losses of the company and the company has not incurred any cash losses during the year covered by our audit and in the immediately preceding financial year under review.

12. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to banks.

13. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The company is a manufacturing company and therefore, the provisions of Clause 4 (xiii) of the Companies (Auditors' Report) Order, 2003 are not applicable to the company.

15. According to the information and explanations given to us, the Company has not dealt or traded in shares, securities, debentures and other investments except sale of old written off investments.

16. The company has not given any guarantee for loans taken by others from bank or financial institutions.

17. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtained.

18. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short term basis have been used for long term investment. Further no long term funds raised have been used to finance short term assets.

19. During the year under review, the company has not issued any debentures. No creation of any security in respect of any debentures was made.

20. The company has not raised any money by way of public issue during the year. However company has issued 2609495 equity shares of Rs. 10/- each as fully paid Bonus shares by capitalizing the equal amount from Share premium & General Reserves .

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Vipan Kumar Aggarwal & Co.,

(Chartered Accountants)

Sd/-

(Vipan Aggarwal)

(Prop.) Membership No. 081198

Place : Ludhiana. Date : 27.08.2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s Bhandari Hosiery Exports Limited as at 31st March 2010,the Profit and Loss Account and also the Cash Flow Statement 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 statements based on our audit.

2. We have conducted our audit in accordance with the auditing standards generally accepted in India. These 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, the 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 reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub section (4A) of Section 227 of the Companies Act, 1956. We enclose in the Annexure a statement on the matters specified by in paragraphs 4 and 5 of the said order.

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 purpose of our audit;

b) In our opinion, proper books of accounts as required by law have been kept by the company so far as it appears from our examination of those books.

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with books of accounts.

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 to in sub section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from Directors and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010, from being appointed as Director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with the notes appearing in Schedule-U 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 2010, and ii) In the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date.

iii) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph (3) of our report of even date on the accounts for the year ended 31st March, 2010 of Bhandari Hosiery Exports Limited.

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

(b) According to the information and explanations given to us, the management during the year has physically verified fixed assets. No discrepancies were noticed on such verification. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and the nature of its business.

2. (a) According to the information and explanations given to us, inventories have been physically verified during the year by the management at the close of the year.

(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) On the basis of our examination of the records of the company, we are of the opinion that the company is maintaining proper records of inventory. No discrepancies have been noticed on verification between the physical stocks & book records.

3. (a) According to the information and explanations given to us, the company has not accepted any loans from its directors covered in the register maintained under section 301 of the Companies Act, 1956 and the year end balance of loans taken from such parties was Rs. NIL.

(b) In our opinion and according to the information and explanations given to us no loans have been taken from the party listed in the registers maintained under Section 301.

(c) The company has not taken any loans from the parties listed in the register under sec 301 of the Companies Act 1956

(d) No loans has been taken from or granted to the companies, firms or other parties listed in the registers maintained under Section 301 of the Companies Act, 1956.

4. 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, we have not observed any continuing failure to correct major weaknesses in internal control procedures.

5. Based on the audit procedures applied by us and according to the information and explanations given to us, the transactions that need to be entered in the register maintained under Section 301 have been so entered.

6. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or agreements entered in the registers maintained under Section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to the prevalent market prices at the relevant time.

7. In our opinion and according to the information and explanations give to us, the company has not invited or accepted any deposits from the public during the year under review. *

8. In our opinion, the company has internal audit system commensurate with the size and nature of its business.

9. The maintenance of cost records has not been prescribed by the Central Government u/s 209 (1) (d) of the Companies Act, 1956 in respect of the Companys products.

10. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding as at 31st March, 2010 for a period of more than six months from the date they become payable.

(c) According to the records of the company, there are no dues of sales tax, income tax, custom duty tax , wealth tax, excise duty/ Cess which have not been deposited on account of any dispute.

11. There are no accumulated losses of the company and the company has not incurred any cash losses during the year covered by our audit and in the immediately preceding financial year under review.

12. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to banks.

13. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The company is a manufacturing company and therefore, the provisions of Clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

15. According to the information and explanations given to us, the Company has not dealt or traded in shares, securities, debentures and other investments. Therefore, the provisions of Clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

16. The company has not given any guarantee for loans taken by others from bank or financial institutions.

17. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtained.

18. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short term basis have been used for long term investment. Further no long term funds have been used to finance short term assets.

19. During the year under review, the company has not issued any debentures. No creation of any security in respect of any debentures was made.

20. The company has not raised any money by way of public issue during the year. Therefore, the provisions of Clause 4 (xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Vipan Kumar Aggarwal & Co., (Chartered Accountants) Sd/- Place : Ludhiana. (Vipan Aggarwal)

Date : 13.08.2010 (Prop.)

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