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Auditor Report of Chitradurga Spintex Ltd.

Mar 31, 2015

Report on the Financial Statements

I have audited the accompanying financial statements of M/s Chitradurga Spintex Limited ("the Company") which comprise the balance sheet as at 31st March, 2015 and the statement of profit and loss and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the matters in sec 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified u/s 133 of the Act read with Rule 7 of the Companies (Account) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design and implementation and maintenance of 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 misstatements, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my audit.

I have taken into account the provisions of the Act and matters which are required to be included in the audit report under the provisions of the Act and Rules made there under.

I conducted my audit in accordance with the Standards on Auditing specified u/s 143(10) of the Act, issued by the Institute of Chartered Accountants of India. Those Standards require that I 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.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Basis of Qualified Opinion

The accounting of gratuity on payment basis as per policy is contrary to generally accepted Accounting standards issued by the Institute of Chartered Accountants of India. The effect of the same on statement on profit & Loss is unascertained.

We draw the attention to the fact that the company is having accumulated loss of Rs 359.04 Lakhs as at the year ended 31-03-2015 which is more than 50% of its net worth, the company has to be treated as sick as per the provision of SICA, 1985. The company not yet started any particular business as stated in postal ballot on 30-10-2008 and as the company has sold all its fixed assets and there are no revenue generated during the year except from interest income, along with other matters set out in the notes of the financial statements, the substantial doubt arise whether the company will be able to continue as going concern.

Qualified Opinion

In my opinion and to the best of my information and according to the explanations given to me, except for the effect of the matter described in the basis for qualified opinion paragraph, 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, 2015;

(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 flow for the year ended on that date

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 215 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, I 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, I report that:

a. I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of my audit;

b. in my opinion proper books of account as required by law have been kept by the Company so far as appears from my examination of those books;

c. the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account;

d. in my opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014; and

e. On the basis of written representations received from the directors as on 31st March, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of section 164 of the Companies Act, 2013.

Annexure to the Auditors' Report

The Annexure referred to in our report to the members of Chitradurga Spintex Limited ('The Company') for the year ended 31 March 2015 and on the basis of such checks as I considered appropriate and according to the information and explanations given to us during the course of our audit, I report that:

1 As the Company does not hold any fixed assets for the year, the requirement of clause (i) of paragraph 3 of the Order, is not applicable to the company.

2. As the Company does not hold any inventories for the year, the requirement of clause (ii) of paragraph 3 of the Order, is not applicable to the company.

3. The company has not granted any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained u/s 189 of the Act

4. The Company has not purchased any goods or fixed assets, and effected any sales during the year, thus requirement of clause (iv) of the Order are not applicable to the Company.

5. According to the information and explanation given to us, the Company has not accepted any deposits from the public. Therefore the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.

6. As informed to us, the Central Government has not prescribed maintenance of Cost Records under sub- section (1) of the section 48 of the Act.

7. a According to the records of the Company, undisputed statutory dues including Provident fund, employees' state insurance, income tax, sales tax, wealth tax, customs duty, excise duty, cess and other material statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2015 for a period of more than six months from the date of becoming payable.

b According to the information and explanation given to us, there are no disputed amounts payable in respect of income tax, Sales tax, Wealth tax, Customs duty, Excise duty and Cess outstanding as at the year end, except Entry Tax of Rs 3.91 Lakhs for the year 1992-93.

c There has not been an occasion in the case of the company during the year under the report to transfer any sums to the Investor Education and Protection fund in accordance with the relevant provisions of the Companies Act 1956(1 of 1956) and rules made there under.

8. The Company has accumulated loss of Rs.359.03 lakhs as at the end of the financial year which is more than fifty per cent of its net worth and it has make profit of Rs. 2.66 lakhs in the current year and had incurred a profit of Rs.56.17 lakhs immediately preceding financial year.

9. According to information and explanation given to us and the records examined by us, the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holder.

10. In our opinion and according to information and explanation given to us, company has not given any guarantee for loans taken by others from bank, financial institution.

11. In our opinion and based on information and explanations given to us by the management, term loans were applied by the Company for the purpose for which they were obtained.

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

CHETAN N. DEDHIA

Chartered Accountant

Membership No : 044402

Place : Mumbai

Date : 29-May-2015


Mar 31, 2014

I have audited the accompanying financial statements of M/s Chitradurga Spintex Limited ("the Company'') which comprise the balance sheet as at 31st March, 2014 and the statement of profit and loss and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that I 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 Companys 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. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Basis of Qualified Opinion

The accounting of gratuity on payment basis as per policy is contrary to generally accepted Accounting standards issued by the Institute of Chartered Accountants of India. The effect of the same on statement of profit & Loss is unascertained.

We draw the attention to the fact that the Company is having accumulated loss of Rs 361.70 Lakhs as at the year ended 31 -03-2014 which is more than 50% of its net worth, the Company has to be treated as sick as per the provision of SICA, 1985. The Company not yet started any particular business as stated in postal ballot on 30-10-2008 and as the Company has sold all its fixed assets and there are no revenue generated during the year except from small interest income, along with other matters set out in the notes of the financial statements, the substantial doubt arise whether the Company will be able to continue as going concern.

The Company has drafted scheme of reduction of capital and filed with Bombay stock exchange, for approval.

Qualified Opinion

In my opinion and to the best of my information and according to the explanations given to me, except for the effect of the matter described in the basis for qualified opinion paragraph, 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 flow for the year ended on that date

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, I 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, I report that:

a. I have obtained all the information and explanations which to the best of my knowledge and belief were necessary for the purpose of my audit;

b. in my opinion proper books of account as required by law have been kept by the Company so far as appears from my examination of those books;

c. the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account [and with the returns received from branches not visited by us];

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

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441 A 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 the Auditors'' Report

The Annexure referred to in our report to the members of Chitradurga Spintex Limited (''The Company) for the year ended 31 March 2014. I report that:

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

b The Companys only Fixed Assets being land and building was sold last year and hence there was no need of regular program of physical verification of Fixed Assets.

c There is disposal of Land & Building during the year to have an impact on the operations of the Company and affects its going concern concept.

2. As the Company does not hold any inventories for the year, the paragraph 4(1) and 4 (ii) of the companies

(Auditor''s Report) order, (as amended) is not applicable to the Company.

3. a The Company has not granted any loans, secured or unsecured to companies, firm or other parties covered in the registered maintained under section 301 of the Act.

b The Company has not taken unsecured loans during the year from other parties covered in the register maintained under section 301 of the companies act, 1956. The year ended balance of loan taken from such parties is NIL.

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 and fixed assets and for the sale of goods. During the course of our audit we have not observed any major weakness in the internal control system during the course of the audit.

5. a In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b In our opinion, and according to the information and explanations given to us, there were no transactions made in pursuance of contracts and arrangements referred to in (v)(a) above exceeding the value of Rs five lakhs with any party during the year

6. In our opinion and according to the information and explanations given to us, the Company has not accepted

any deposits from the public within the meaning of section 58A and 58AA of the companies Act, 1956 and the rules framed there under.

7. The Company has no internal audit system.

8. a According to the information and explanation given to us, the Company is generally regular in depositing with appropriate authorities undisputed dues including Provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

b According to the information and explanation given to us, there are no undisputed amounts payable in respect of income tax, Sales tax, Wealth tax, Customs duty, Excise duty and Cess outstanding as at the year end, for a period of more than six months from the date they become payable.

c According to the information and explanation given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Excise duty or Cess outstanding on account of any dispute except Entry Tax of Rs.3.91 Lakhs for the year 1992 - 93.

9. The central Government has prescribed maintenance of cost records under section 209-(1) (d) of the companies act, 1956 in respect of manufacturing activities of the Company. The said clause is not applicable to the Company as the Company does not have manufacturing activities for the year.

10. According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth tax, Service tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees'' State Insurance, Customs duty and Excise duty.

11. The Company has accumulated loss of Rs.361.69 lakhs as at the end of the financial year which is more than fifty per cent of its net worth and it has make profit of Rs.56.17 Lakhs in the current year and had incurred a loss of Rs.2.09 Lakhs immediately preceding financial year.

12. According to information and explanation given to us and the records examined by us, the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

13. In our opinion and according to information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

14. In our opinion and according to the information and explanation given to us, the nature of the activities of the Company does not attract any special statute applicable to chit fund and nidhi /mutual benefit fund/societies.

15. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

16. 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.

17. In our opinion and based on information and explanations given to us by the management, term loans were applied by the Company for the purpose for which they were obtained.

18. On the basis of an overall examination of the Balance Sheet and Cash Flows of the Company and the information and explanation given to us, we report that the Company has not utilized any funds raised on short term basis for long term investments and vice-versa.

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

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

21. The Company has not raised any money by public issues during the year.

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

Sd/-

CHETAN N. DEDHIA

Chartered Accountant Membership No: 044402

Place: Mumbai Date:21-May-2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying Financial Statements of M/s. Chitradurga Spintex Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the Financial Statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the Financial Statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Qualified Opinion

The accounting of gratuity on payment basis as per policy is contrary to generally accepted Accounting Standards issued by The Institute of Chartered Accountants of India. The effect of the same on Statement of Profit & Loss is unascertained.

We draw the attention to the fact that the Company is having a Accumulated loss of Rs.417.87 Lakhs as at the year ended 31.03.2013 which is more than 50% of its net worth, the company has to be treated as sick as per the provisions of the SICA, 1985. The company not yet started any particular business as stated in postal ballot on 30.10.2008 and as the company has sold substantial portion of the plant and machinery and there are no revenue generation during the year except for small rental income., along with other matters set out in the notes of the financial statement, the substantial doubt will arise whether company will be able to continue AS GOING CONCERN.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the basis for qualified opinion paragraph, 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 March 31, 2013;

(b) in the case of the Statement of Profit and Loss, 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. Report on Other Legal and Regulatory Requirements

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

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

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 the Auditors'' Report

The Annexure referred to in our report to the members of Chitradurga Spintex Limited (''the Company'') for the year ended 31 March 2013. We report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) There is substantial disposal of fixed assets during the year to have an impact on the operations of the company and affects its going concern concept.

(ii) As the Company does not hold any inventories for the year, the paragraph 4(1) and 4 (ii) of the companies (Auditor''s Report) order, (as amended) is not applicable to the company.

(iii) (a) The company has not granted any loans, secured or unsecured to companies, firm or other parties covered in the registered maintained under section 301 of the Act.

(b) The company has not taken unsecured loans during the year from other parties covered in the register maintained under section 301 of the companies act, 1956. The year ended balance of loan taken from such parties is NIL.

(iv) 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 and fixed assets and for the sale of goods. During the course of our audit we have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, there were no transactions made in pursuance of contracts and arrangements referred to in (v)(a) above exceeding the value of Rs five lakhs with any party during the year

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the companies Act, 1956 and the rules framed thereunder.

(vii) The Company has no internal audit system.

(viii) (a)According to the information and explanation given to us, the company is generally regular in depositing with appropriate authorities undisputed dues including Provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanation given to us, there are no undisputed amounts payable in respect of income tax, Sales tax, Wealth tax, Customs duty, Excise duty and Cess outstanding as at the year end, for a period of more than six months from the date they become payable.

(c) According to the information and explanation given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Excise duty or Cess outstanding on account of any dispute except Entry Tax of Rs.3.91 Lakhs for the year 1992 -93.

(ix) The central Government has prescribed maintenance of cost records under section 209-(1) (d) of the companies act, 1956 in respect of manufacturing activities of the company. The said clause is not applicable to the company as the Company does not have manufacturing activities for the year,

(x) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth tax, Service tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees'' State Insurance, Customs duty and Excise duty.

(xi) The Company has accumulated loss of Rs.417.87 lakhs as at the end of the financial year which is more than fifty per cent of its net worth and it has incurred cash loss of Rs.2.10 Lakhs in the current year and Rs.7.45 Lakhs immediately preceeding the financial year.

(xii) According to information and explanation given to us and the records examined by us, the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(xiii) In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) In our opinion and according to the information and explanation given to us, the nature of the activities of the Company does not attract any special statute applicable to chit fund and nidhi /mutual benefit fund/societies.

(xv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xvi) 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.

(xvii) In our opinion and based on information and explanations given to us by the management, term loans were applied by the Company for the purpose for which they were obtained.

(xviii) On the basis of an overall examination of the Balance Sheet and Cash Flows of the Company and the information and explanation given to us, we report that the Company has not utilised any funds raised on short term basis for long term investments and vice-versa.

(xix) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xx) The Company has not issued any debentures during the year.

(xxi) The Company has not raised any money by public issues during the year.

(xxii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit. for H.M.V.Murthy &Co.,

Chartered Accountants

H.M.Vrushabhendra Murthy

Proprietor.

MM No.026432

Place: Bangalore

Date: June 24, 2013


Mar 31, 2012

I. We have audited the attached Balance Sheet as at 31st March 2012, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

III. 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 in paragraphs 4 and 5 of the said Order to the extent applicable.

VI. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

1. 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.

2. 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 the books.

3. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement are in agreement with the Books of Account.

4. In our Opinion, the balance sheet, Statement of Profit and Loss and Cash Flow Statement dealt by this report complied with accounting standards mentioned under sub section (3C) of section 211 of the Companies Act 1956, subject to the observation referred to in Para below.

In our opinion, the accounting of gratuity on payment basis as per policy is contrary to generally accepted Accounting Standards issued by The Institute of Chartered Accountants of India. The effect of the same on Statement of Profit & Loss is unascertained.

5. Based on written representation made by the Directors of the company and according to the information and explanation given to us, in our opinion the directors of the company are not prima facie disqualified from being appointed as Directors U/s 274(1 )(g) of "the Act".

6. We draw the attention to the fact that the Company is having a Accumulated loss of Rs. 415.48 as at the year ended 31.03.2012 which is more than 50% of its networth, the company has to be treated as sick as per the provisions of the SICA, 1985. The company not yet started any particular business as stated in postal ballot on 30.10.2008 and as the company has sold substantial portion of the plant and machinery and there are no revenue generation for a period of 10 months during the year., along with other matters set out in the notes of the financial statement, the substantial doubt will arise whether company will be able to continue AS GOING CONCERN. Subject to the above and regarding contingent liability, and read with other notes thereon, in our opinion and to the best of our knowledge and according to the explanations given to us, the said accounts and read together with the Significant Accounting Policies and notes thereon, give the information required by the Companies Act. 1956, in the manner so required and also give true and fair view.

1) In the case of Balance Sheet of the State of Affairs of the Company as at 31 st March 2012, and

2) In the case of Statement of Profit and Loss 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 for the year ended on that date.

ANNEXURE TO AUDITOR'S REPORT

Referred to in Paragraph 3 of our Report of even date.

(1) (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of

fixed assets.

(b) The fixed assets have been physically verified by the management as per phased programme of verification. In our opinion, the frequency of verification is reasonable having regard to the size of Company and the nature of its assets. The Discrepancies reported on such verification were not material and have been properly dealt with in the books of accounts.

(c) There is substantial disposal of fixed assets during the year to have an impact on the operations of the company and affects its going concern concept.

(2) As the Company does not hold any inventories for the year, the paragraph 4(1) and 4 (ii) of the companies (Auditor's Report) order, (as amended) is not applicable to the company

i

(3) (a) The company has not granted any loans, secured or unsecured to companies, firm or other parties covered in the registered maintained under section 301 of the Act.

(b) The company has not accepted/repaid any loans during the year from parties listed in the register maintained under section 301 of the companies act, 1956. The year end balance of loan taken from such parties is NIL.

(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 for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit no major weakness has been observed in the internal controls.

(5) (a) Based on the audit procedure applied by us and according to the information and explanation provided by the management, we are of the opinion that all transaction that need to be entered into the resister in pursuance of section 301 of the Act have been entered.

(b) During the year company has not made any transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies act, 1956 and exceeding the value of Rs. Five lakhs.

(6) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the companies Act, 1956 and the rules framed there under.

(7) The Company has no internal audit system.

(8) (a) According to the information and explanation given to us, the company is generally regular in depositing with appropriate authorities undisputed dues including Provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, customs duty, excise duty, cess and other materia! statutory dues applicable to it.

(b) According to the information and explanation given to us, there are no undisputed amounts payable in respect of income tax, Sales tax, Wealth tax, Customs duty, Excise duty and Cess outstanding as at the year end, for a period of more than six months from the date they become payable.

(c) According to the information and explanation given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Excise duty of Cess outstanding on account on any dispute except Entry Tax of Rs.3.91 Lakhs for the year 1992 -93.

(9) The Company has accumulated loss of Rs.415.48 lakhs as at the end of the financial year which is more than fifty per cent of its net worth and it has incurred cash loss of Rs. 7.45 Lakhs in the current year and not incurred a cash loss immediately preceding the financial year.

(10) According to information and explanation given to us and the records examined by us, there are no term loans availed by the company, hence comments on this clause does not arise.

(11) In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

(12) In our opinion and according to the information and explanation given to us, the nature of the activities of the Company does not attract any special statute applicable to Chit Fund and Nidhi /Mutual benefit fund/societies.

(13) The Company does not deal or trade in shares, securities, debentures and other investments.

(14) According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof are prima facie prejudicial to the interest of the Company.

(15) As informed to us the company has not availed any term loans, hence comments on this clause does not arise. The term loans were applied by the Company for the purpose for which they were obtained.

(16) On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanation given to us, we report that the Company has not utilized funds raised on short term basis for long term investments and vice versa.

(17) The Company has not made any preferential allotment of shares to parties or companies covered under section 301 of the Act.

(18) The company has not issued any debentures.

(19) The Company has not raised any money through a public issue during the year.

(20) In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For H.M.V. MURTHY & CO., Chartered Accountants

(H.M.Vrushabhendra Murthy)

Place:Bangalore Proprietor.

Date: 27th August, 2012 M.No.26432


Mar 31, 2011

I. We have audited the attached Balance Sheet as at 31st March 2011 and also the Profit and Loss Account of the Company for the year ended on that date annexed there to and the cash flow statement for the year ended on that date. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

III. 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 in paragraphs 4 and 5 of the said Order to the extent applicable.

Vi Further to our comments in the annexure referred to in paragraph 3 above, we report that:

1. 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.

2. 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 the books.

3. The Balance Sheet and the Profit and Loss Account and Cash Flow shows statement are in agreement with the Books of Account.

4. In our Opinion, the balance sheet, Profit and Loss Account and Cash Flow shows statement dealt by this report complied with accounting standards mentioned under sub section (3C) of section 211 of the Companies Act 1956, subject to the observation referred to in Para below.

In our opinion, the accounting of gratuity on payment basis as per policy No. 6. of schedule 14, is contrary to generally accepted Accounting Standards issued by The Institute of Chartered Accountants of India. The effect on Profit & Loss Account is unascertained.

5. Based on written representation made by the Directors of the company and according to the information and explanation given to us, in our opinion the directors of the company are not prima facie disqualified from being appointed as Directors U/s274(1)(g)oftheAct".

6. We draw the attention to fact that company is having a Accumulated loss incurred up to the year ended 31.03.2011 amounting to Rs.407.88 Lakhs and not yet started any particular business as stated in postal ballot on 30.10.2008 and as the company has sold substantial portion of the plant and machinery, along with other matters set out in the notes of the financial statement, the substantial doubt will arise whether company will be able to continue AS GOING CONCERN. Subject to the above and note No.3 of schedule No. 14 regarding contingent liability, and read with other notes thereon, in our opinion and to the best of our knowledge and according to the explanations given to us, the said accounts and read with other notes and schedules appearing there on, give the information required by the Companies Act. 1956, in the manner so required and also give true and fair view.

1) In the case of Balance Sheet of the State of Affairs of the Company as at 31 st March 2011, and

2) In the case of Profit and Loss Account, of the profit of the Company for the year ended on that date.

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

ANNEXURE TO AUDITOR'S REPORT Referred to in Paragraph 3 of our Report of even date.

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

(b) The fixed assets have been physically verified by the management as per phased programme of verification. In our opinion, the frequency of verification is reasonable having regard to the size of Company and the nature of its assets. The Discrepancies reported on such verification were not material and have been properly dealt with in the books of accounts.

(c) There is substantial disposal of fixed assets during the year to have an impact on the operations of the company or affects its going concern.

(2) As the Company does not hold any inventories for the year, the paragraph 4(i) and 4(ii) of the Companies (Auditor's Report) Order, (as amended) is not applicable to the Company.

(3) (a) The company has not granted any loans, secured or unsecured to companies, firm or other parties covered in the registered maintained under section 301 of the Act.

(b) The company has not accepted/repaid any loans during the year from parties listed in the register maintained under section 301 of the companies act, 1956. The year end balance of loan taken from such parties is NIL.

(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 for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit no major weakness has been observed in the internal controls.

(5) (a) Based on the audit procedure applied by us and according to the information and explanation provided by the management, we are of the opinion that all transaction that need to be entered into the resister in pursuance of section 301 of the Act have been entered.

(b) During the year company has not made any transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies act, 1956 and exceeding the value of Rs. Five lakhs.

(6) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the companies Act, 1956 and the rules framed there under.

(7) The Company has no internal audit system.

(8) (a) According to the information and explanation given to us, the company is generally regular in depositing with appropriate authorities undisputed dues including Provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanation given to us, there are no undisputed amounts payable in respect of income tax, Sales tax, Wealth tax, Customs duty, Excise duty and Cess outstanding as at the year end, for a period of more than six months from the date they become payable.

(c) According to the information and explanation given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Excise duty of Cess outstanding on account on any dispute except Entry Tax of Rs.3.91 Lakhs for the year 1992-93.

(9) The Company has accumulated losses of Rs.407.88 Lakhs at the end of the financial year and it has not incurred cash loss in the current year and incurred a cash loss of Rs.89.74 lakhs immediately preceeding the financial year.

(10) According to information and explanation given to us and the records examined by us, the Company has not defaulted in repayment of dues to financial institutions.

(11) In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

(12) In our opinion and according to the information and explanation given to us, the nature of the activities of the Company does not attract any special statute applicable to Chit Fund and Nidhi /Mutual benefit fund/societies.

(13) The Company does not deal or trade in shares, securities, debentures and other investments.

(14) According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof are prima facie prejudicial to the interest of the Company.

(15) As informed to us, the term loans were applied by the Company for the purpose for which they were obtained.

(16) On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanation given to us, we report that the Company has not utilized funds raised on short term basis for long term investments and vice versa.

(17) The Company has not made any preferential allotment of shares to parties or companies covered under section 301 of the Act.

(18) The company has not issued any debentures.

(19) The Company has not raised any money through a public issue during the year.

(20) In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For H.M.V. MURTHY & CO.,

CHARTERED ACCOUNTANTS

(H.M.Vrushabhendra Murthy)

Proprietor. M.No.26432

Place:Bangalore Date : 27thAugust, 2011


Mar 31, 2010

I. We have audited the attached Balance Sheet as at 31st March 2010 and also the Profit and Loss Account of the Company for the year ended on that date annexed there to and the cash flow statement for the year ended on that date. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

III. 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 in paragraphs 4 and 5 of the said Order to the extent applicable.

Vi Further to our comments in the annexure referred to in paragraph 3 above, we report that:

1. 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.

2. 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 the books.

3. The Balance Sheet and the Profit and Loss Account and cash flow show statement are in Agreement with the Books of Account.

4. In our Opinion, the balance sheet, Profit and Loss Account and cash flow shows statement dealt by this report complied with accounting standards mentioned under sub section (3C) of section 211 of the Companies Act 1956, subject to the observation referred to in Para below.

In our opinion, the accounting of gratuity on payment basis as per policy No. 7. of schedule 17, is contrary to generally accepted Accounting Standards issued by The Institute of Chartered Accountants of India. The effect on Profit & Loss Account is unascertained.

5. Based on written representation made by the Directors of the company and according to the information and explanation given to us, in our opinion the directors of the company are not prima facie disqualified from being appointed as Directors U/s 274(1 )(g) of "the Act".

6. We draw the attention to the note No.3 of schedule 17 regarding huge loss incurred during the year amounting to Rs.89.74 Lakhs, not yet started any particular business as stated in postal ballot on 30.10.2008 and as the company has sold substantial portion of the plant and machinery, along with other matters set out in the notes of the financial statement, the substantial doubt will arise whether company will be able to continue AS GOING CONCERN. Subject to the above and note No.4 of schedule No. 17 regarding contingent liability, and read with other notes thereon, in our opinion and to the best of our knowledge and according to the explanations given to us, the said accounts and read with other notes and schedules appearing there on, give the information required by the Companies Act. 1956, in the manner so required and also give true and fair view.

1) In the case of Balance Sheet of the State of Affairs of the Company as at 31st March 2010, and

2) In the case of Profit and 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 for the year ended on that date.

ANNEXURE TO AUDITORS REPORT Referred to in Paragraph 3 of our Report of even date.

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

(b) The fixed assets have been physically verified by the management as per phased programme of verification. In our opinion, the frequency of verification is reasonable having regard to the size of Company and the nature of its assets. The Discrepancies reported on such verification were not material and have been properly dealt with in the books of accounts.

(c) There is substantial disposal of fixed assets during the year to have an impact on the operations of the company or affects its going concern.

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

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and the book records were not material in relation to the operation of the company and the same have been properly dealt with in the books of accounts.

(3) (a) During the year the company has recovered unsecured loan of Rs.40 lakhs from a company listed in the register maintained under section 301 of the companies act, 1956, the opening balance in this account was Rs.40 lakhs and yearend balance in this account is Nil.

(b) The company has not accepted/repaid any loans during the year from parties listed in the register maintained under section 301 of the companies act, 1956. The yearend balance of loan taken from such parties is NIL.

(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 for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit no major weakness has been observed in the internal controls.

(5) (a) Based on the audit procedure applied by us and according to the information and explanation provided by the management, we are of the opinion that all transaction that need to be entered into the resister in pursuance of section 301 of the Act have been entered.

(b) In our opinion and according to the information and explanation given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies act, 1956 and exceeding the value of Rs. Five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

(6) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the companies Act, 1956 and the rules framed there under.

(7) The Company has no internal audit system.

(8) (a) According to the information and explanation given to us, the company is generally regular in depositing with appropriate authorities undisputed dues including Provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanation given to us, there are no undisputed amounts payable in respect of income tax, Sales tax, Wealth tax, Customs duty, Excise duty and Cess outstanding as at the year end, for a period of more than six months from the date they become payable.

(c) According to the information and explanation given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Excise duty of Cess outstanding on account on any dispute except Entry Tax of Rs.3.91 Lakhs for the year 1992-93.

(9) The Company has accumulated losses of Rs.408.69 Lakhs at the end of the financial year and it has incurred a cash loss of Rs.89.74 Lakhs in the current year and Rs.122.39 lakhs immediately preceeding the financial year.

(10) According to information and explanation given to us and the records examined by us, the Company has not defaulted in repayment of dues to financial institutions.

(11) In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

(12) In our opinion and according to the information and explanation given to us, the nature of the activities of the Company does not attract any special statute applicable to chit fund and Nidhi /Mutual benefit fund/societies.

(13) The Company does not deal or trade in shares, securities, debentures and other investments.

(14) According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof are prima facie prejudicial to the interest of the Company.

(15) As informed to us, the term loans were applied by the Company for the purpose for which they were obtained.

(16) On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanation given to us, we report that the Company has not utilized funds raised on short term basis for long term investments and vice versa.

(17) The Company has not made any preferential allotment of shares to parties or companies covered under section 301 of the Act.

(18) The company has not issued any debentures.

(19) The Company has not raised any money through a public issue during the year.

(20) In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.



For H.M.V.MURTHY & CO., Chartered Accountants,

[H.M.Vrushabhendramurthy]

Proprietor.

Bangalore, 27th August 2010 M.No.26432





 
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