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Auditor Report of BMB Music & Magnetics Ltd.

Mar 31, 2015

We have audited the attached financial statements of BMB MUSIC & MAGNETICS LIMITED ("The Company"), which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit & Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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 flow 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.

Auditors ' 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 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 that financial statements in order to design audit procedures that are appropriate

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015("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 statement on the matters Specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 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 standalone 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. There are no observations or comments on financial transactions or matters which have any adverse effect on the functioning of the company.

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

g. There are no qualifications, reservations or adverse remarks relating to the maintenance of accounts and other matters connected herewith.

h. The company has adequate internal financial control systems in place and they are operating effectively.

i. 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:

a. The Company has disclosed impact of pending litigations on its financial position in its financial statements as referred to in point no. "t" in Note 1 to the financial statements.

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

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

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in our report to the members of M/s BMB MUSIC & MAGNETICS LIMITED for the year Ended on 31.03.2015. We report that:

(i) (a) Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

YES

(b) Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account;

YES

(ii) (a) Whether physical verification of inventory has been conducted at reasonable intervals by the management;

N.A., Company is not having any physical inventory

(b) Are the procedures of physical verification of inventory followed by the management reasonable and adequate in relation to the size of the company and the nature of its business. If not, the inadequacies in such procedures should be reported;

N.A.

(c) Whether the company is maintaining proper records of inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of account;

N.A.

(iii) Whether the company has granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. If so,

YES

(a) Whether receipt of the principal amount and interest are also regular; and

YES

(b) If overdue amount is more than rupees one lakh, whether reasonable steps have been taken by the company for recovery of the principal and interest;

NO

(iv) Is there an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Whether there is a continuing failure to correct major weaknesses in internal control system.

YES

No any failure in internal control system

(v) In case the company has accepted deposits, whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, where applicable, have been complied with? If not, the nature of contraventions should be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal, whether the same has been complied with or not?

Not Applicable. The company has not accepted any deposits

Where maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, whether such accounts and records have been made and maintained;

NO

(vii) (a) Is the company 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 if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable, shall be indicated by the auditor.

The following amounts of Undisputed Statutory Dues are outstanding for more than 6 months.

TDS - Rs. 18062527- VAT & RST - Rs. 1312667-

(b) In case dues 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 have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending shall be mentioned. (A mere representation to the concerned Department shall not constitute a dispute).

There are no such dues which are not deposited on account of any dispute

(c) Whether the amount 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 has been transferred to such fund within time.

No amount is required to be transferred

(Viii) Whether in case of a company which has been registered for a period not less than five years, its accumulated losses at the end of the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year;

Yes, The company has accumulated losses of Rs. 720.05 Lacs which is more than 50% of the net worth of the company

(ix) Whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders? If yes, the period and amount of default to be reported;

No

(x) Whether the company has given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions

No

(Xi) Whether term loans were applied for the purpose for which the loans were obtained;

N.A.

whether any fraud on or by the company has been noticed or reported during the year; If yes, the nature and the amount involved is to be indicated.

No

For SardaSoni Associates. Chartered Accountants FRN: 117235W

Manoj Kumar Jain (Partner) Membership No. : 120788 Place: Mumbai Date: 30/05/2015


Mar 31, 2014

We have audited the accompanying financial statements of BMB MUSIC & MAGNETICS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, aqd..a.,sujnmaiy.of significant accounting policies and other explanatory information.

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

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

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

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

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

a) in the case of the Balance Sheet, of the state of affairs of the Company asat March 31, 2014;

b) in the case of the Profit and Loss Account, of the Loss 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.

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

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 referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on 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.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO AUDITOR''S REPORT

Accounting Year: 2013-2014

Report on matters to be included pursuant to order issued under section 227(4A) of the

Companies Act, 1956. ''

1. (a) The Company has maintained proper records showing full particulars including

quantitative details and situation of fixed assets, but in case of Plant & Machinery detailed records have not been maintained.

(b) As informed to us the management has conducted physical verification of fixed assets during the year and no material discrepancies were noticed on such verification. There is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion and according to information and explanation given to us, substantial part of fixed asset has not been disposed of by the Company during the previous year.

2. The Company does not have any inventory and hence the Clause is not applicable.

3. (a) The Company has not granted or taken any loan, secured or unsecured to/from the companies, firms or other parties listed in the register maintained u/s 301 of Companies Act, 1956.

(b) As the Company has not granted any loan, hence the requirement of rate of interest and other terms and conditions of loans granted by the Company, secured or unsecured are prejudicial to the interest of the Company or not is not applicable.

(c) Requirement of regular payment of the principal amount and interest is not applicable being no loan granted by the Company.

(d) No amount is overdue more than Rs. 1 lakh hence this clause is not applicable on the company.

(e) The Company has not taken any loans secured or unsecured from Companies, firm or other parties covered in the register maintained under section 301 of the Act.

(0 As the''Company has not taken any loan, hence the requirement of rate of interest and other terms and conditions of loans taken by the company, secured or unsecured are prejudicial to the interest of the Company or not is not applicable.

(g) Requirement of regular payment of the principal amount and interest is not applicable being no loan taken by the Company.

4. In our opinion and according to the information and explanation 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 purchase 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 the internal control.

5. (a) According to the information and explanation given to us, we are of the opinion that the transaction that are required to be entered into the Register maintained u/s 301 of the Companies Act 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, these transactions are made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any public deposits under the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under.

7. The Company is not having any internal audit system.

8. Maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 has not been prescribed by the Central Government for the Company.

9. (a) According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also based on Management representations, undisputed statutory dues in respect of Provident fund, Employee''s state insurance dues, Investor education and protection fund, Income Tax, Sales tax. Wealth Tax, Service Tax, Custom duty, Excise duty, cess and other statutory dues have not been regularly deposited by the company during the year with the appropriate authorities in India. However following amounts of statutory dues are outstanding in the Company''s books for more than a year.

(b) As per explanations given to us and the records of the Company examined by us, there are no dues of income tax, wealth tax, service tax, sales tax, custom duty, excise duty and cess which have not been deposited on account of any disputes as on 31st March, 2014.

10. The Company is having accumulated loss of Rs. 408.48 Lacs and the accumulated losses of the Company are more than 50 per cent of its net worth.

The Company has incurred cash losses during the financial year covered by our audit and also incurred cash losses in the immediately preceding financial year.

11. The Company has not defaulted in the payment of dues of bank.

12. As per the explanations given by the management, the Company has not granted loans and advances on the basis of the security by way of pledge of shares, debentures and other securities hence this clause is not applicable on the Company.

13. Considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/ Nidhi/ mutual benefit fund/ societies are not applicable to it.

14. The Company is not dealing in or trading in shares, securities, debentures and other investments hence this clause is not applicable to the Company.

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

16. The Company has not taken any term loans hence this clause is not applicable on the Company.

17. According to the information and explanation given to us and on overall examination of the Balance Sheet of the Company and as represented to us by the management, we report that the no funds raised on short term basis have been utilized for long term investments and no long term funds have been used to finance the short term assets except permanent working capital.

18. According to the information and explanation given to us, the Company has not made any preferential allotment to the persons entered into the Register maintained u/s 301 of the Act, so this clause is not applicable.

19. The Company had not issued any debentures hence this clause is not applicable to the Company.

20. No money has been raised from the public hence this clause is not applicable to the Company.

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

For Sarda Soni Associates. Chartered Accountants FRN: 117235W

Manoj Kumar Jain (Partner) Membership No.: 120788

Place: Mumbai Date: 30/05/2014


Mar 31, 2012

We have audited the attached Balance Sheet of the M/s. BMB MUSIC & MAGNETICS LIMITED (Formerly known as Bokadia Films Ltd) as at 31s'' March 2012 and also Statement of Profit & Loss Account and the Cash Flow Statement of the Company for the year ended 31s'' March 2012 annexed hereto. 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.

We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require thd we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for ouropinion.

1. As required by the Companies (Auditor''s Report) Order, 2003, as amended by Companies (Auditor''s Report) (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 we considered appropriate and according to the information and explanation given to us during the course of audit, we enclose in Annexure hereto statement on the matters specified in paragraphs 4 & 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 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 account as required by law have been kept by the Company so far as appears from our examination of the books.

c) The Balance Sheet, Statement of Profit & Loss Account and Cash Flow Statement referred to in this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet .Statement of Profit & Loss Account and Cash Flow Statement dealt with by this report are in compliance with the mandatory Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956 to the extent applicable except reported separately.

e) On the basis of written representations received from the Directors/ Companies as on 31s'' March 2012 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31si 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 financial statements together with the Significant Accounting Policies and other notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

1) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st '' March 2012.

2) In so far as it relates to the Statement of Profit & Loss Account, of the Loss of the Company for the year ended on that date.

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

REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

1. Fixed Assets:

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

b) As per the information and explanations given to us, the Company has a system of physical verification of all fixed assets and accordingly the management has physically verified the fixed assets. In our opinion the frequency of the verification is reasonable. No material discrepancies have been noticed on verification.

c) During the year, the Company has not disposed off a substantial part of fixed assets.

2. Inventory:

a) In our opinion, the procedures of physical verification of stocks followed by the Management at reasonable intervals is satisfactory.

b) The Company is maintaining proper records of inventory. No material discrepancies have been noticed on physical verification of stocks as compared to book record in so far as appears from our examination of the books.

3. Loans and Advances

a) The Company has not granted any loans to Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. The other sub- clauses 3(b) to 3(d) of the Report are not applicable.

b) The Company has not taken loans secured or unsecured from Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Ac, 1956_ Hence the retirement of rate ef interest and other termsand oond«ns of such ieans are not prejudicial to the interest of the Company or not is not applicable. .

4 in our opinion, and according to the information and "he adequate internal control procedures commensurate with the size ot the company ana nature of its business.

5 Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and expiations time. ''

6 In our opinion and according to the information and f*Planations Order is not applicable.

I. In oar opinion, and according ,0 information and expiation!given to has a" internal Audit system commensurate with its size and the nature of its business.

8 The Central Government has not prescribed maintenance of cost

(1) (d) of the Companies Act, 1956, Accordingly, paragraph 4(vn) of the Order is no, applicable.

9. (a) According to the books and records as produced and examined by for more than a year.

EPF Payable 52912.00

Sales Tax Payable 54341.00

Surcharge on RST 85.00

TDS Payable 26775.00

VAT Payable 76840.00

10. As per explanations given to us and records of the company examined by us, there are no dues of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess which have not been deposited on account of any disputes as on 31 March, 2012

11. The Company has accumulated losses of Rs. 231.83 Lacks and the accumulated losses of the Company are not more than 50% of its net worth.

12. In our opinion and according to the information and explanations given to us the Company has not granted loans and advances on the basis of security by way of p debentures and other similar securities. Accordingly, paragraph 4 ) of the Order is not applicable.

13. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the payment of dues of the Bank.

14 The Company has not raised any money by public issue, therefore the requirement of by the Management on the end use of money raised by public issues and verification of the same is not applicable.

15 In our opinion and According to the information and explanations given to us the Company '' has not used any raised on short term basis for long term investment and vice versa.

16. As per information given to us, special statutes regarding chit Fund, Nidhi or mutual benefit society are not applicable to the Company.

17. The Company is not dealing in or trading in shares, securities, debentures and other investments, hence this clause is not applicable.

18 During the course of our examination of books of accounts and records of the Company carried out in accordance with the generally accepted auditing practices in India according to the information and explanations given to us we have not co™ ac ss instance of fraud on or by the Company, noticed or reported during the year, that causes the financial statements to be materially misstated, nor have we been informed of such cases y the Management.

19. Other clauses of the Order are not applicable to Company forthe year. FOR SARDA SONI ASSOCIATES

Chartered Accountants

(MANOJ KUMAR JAIN)

M.NO: 120788

Place : Mumbai

Date : 4th September, 2012.


Mar 31, 2010

We have audited the attached Balance Sheet of BOKADIA FILMS LIMITED (Formerly BMB MUSIC & MAGNETICS LTD.) As on 31st March 2010 and Profit & Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management, our responsibilities is to express an opinion on these financial statements.

We have 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 from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks, as we considered appropriate, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

In accordance with the provision of section 227 of the Companies Act, 1956, we further report as under:

a) We have obtained all the information and explanation, 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 appears from our examination of such books.

c) The Balance Sheet and Profit & Loss account referred to in this report are in agreement with the books of accounts.

d) In our opinion, Balance Sheet and Profit & Loss a/c dealt with by this report comply with the accounting standards referred to in sub section 3(c) of-Section 211 of Companies Act, 1956 to the extent applicable except AS-28, regarding Impairment of-Assets.

e) On the basis of written representations received from the directors, as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 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 explanation given to us and subject to the points mentioned in the Notes on Accounts & Auditors observations attached to the Balance Sheet, 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, 2010, and,

ii) In the case of the Profit & Loss A/c, of the Loss for the year ended on that date.

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

ANNEXURE TO AUDITORS REPORT Accounting Year: 2009-2010 Report on matters to be included pursuant to order issued under section 227(4A) of the Companies Act, 1956.

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets, but in case of Plant & Machinery detailed records have not been maintained.

(b) As informed to us the management has conducted physical verification of fixed assets during the year and no material discrepancies were noticed on such verification. There is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets.

(c) In our opinion and according to information and explanation given to us. a substantial part of fixed asset has not been disposed of by the company during the previous year.

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

(b) The procedures of physical verification of the inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The company is maintaining proper records of the inventory. The discrepancies noticed by the management on verification between the physical stocks and the book records were not material.

3. (a) The company has not granted or taken any loan, secured or unsecured to/from the companies, firms or other parties listed in the register maintained u/s 301 of Companies Act, 1956.

(b) Rate of interest and other terms and conditions of loan taken by the company are not prima facie prejudicial to the interest of the company.

(c) According to the explanations given to us, the company is regular in repayment of principal and interest.

(d) No amount is overdue more than Rs. 1 lakh hence this clause is not applicable on the company.

(e) The company has not taken any loans secured or unsecured from companies, firm or other parties covered in the register maintained under section 301 of the Act.

(f) As the company has not taken any loan, hence the requirement of rate of interest and other terms and conditions of loans taken by the company,secured or unsecured are prejudicial to the interest of the company or not is not applicable.

(g) Requirement of regular payment of the principal amount and interest is not applicable being no loan taken by the company.

4. In our opinion and according to the information and explanation 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 purchase 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 the internal control.

5. (a) According to the information and explanation given to us, we are of the opinion that the transaction that are required to be entered into the register maintained u/s 301 of the Companies Act 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, these transactions are made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any public deposits under the provisions of section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under.

7. The company is not having any internal audit system 5 Maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 has not been prescribed by the Central Government for the Company.

9. (a) According to the books and records as produced and examined by us in accordance with generally accepted auditing practices in India and also based on Management representations, undisputed statutory dues in respect of Provident fund, Employees state insurance dues, Investor education and protection fund, Income Tax, Sales tax, Wealth Tax, Service Tax, Custom duty, Excise duty, cess and other statutory dues have not been regularly deposited by the company during the year with the appropriate authorities in India. However following amounts of Statutory dues are outstanding in the companies books for more than a year.

EPF Payable 52912.00

Sales Tax Payable 54341.00

Surcharge on RST 85.00

TDS Payable 26290.00

VAT Payable 76840.00

TOTAL 210468.00

(b) As per explanations given to us and the records of the company examined by us, there are no dues of income tax, wealth tax, service tax, sales tax, custom duty, excise duty and cess which have not been deposited on account of any disputes as on 31st March, 2010.

9. The company is having accumulated loss of Rs. 76.42 Lacs and the accumulated losses of the company are not more than 50 per cent of its net worth.

The company has incurred cash losses during the financial year covered by our audit and not incurred any cash losses in the immediately preceding financial year.

10. The company has not defaulted in the payment of dues of bank.

11. As per the explanations given by the management, the company has not granted loans and advances on the basis of the security by way of pledge of shares, debentures and other securities hence this clause is not applicable on the company.

12. Considering the nature of activities carried on by the company during the year, the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to it.

13. The company is not dealing in or trading in shares, securities, debentures and other investments hence this clause is not applicable to the company.

14. As per information and explanations given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

15. The company has not taken any term loans hence this clause is not applicable on the company.

16. According to the information and explanation given to us and on overall examination of the balance sheet of the company and as represented to us by the management, we report that the no funds raised on short term basis have been utilized for long term investments and no long term funds have bee^ jsed to fi"a~ce re s-;" :e"~ assets except permanent wording capitai.

17. According to the information and explanation given to us, the company has not made any preferential allotment to the persons entered into the register maintained u/s 301 of the Act, so this clause is not applicable.

18. The company had not issued any debentures hence this clause is not applicable on the company.

19. No money has been raised from the public hence this clause is not applicable on the company.

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

For KARNANI & CO.

Chartered Accountants

[P. D. Karnani, FCA] Partner, M.N. 054422

Place: Jaipur Dated: 30.05.2010

 
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