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Auditor Report of Dharti Proteins Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of DHARTI PROTEINS LTD.,("the company") which comprise the Balance Sheet as at 31/03/2014, and the Statement of Profit and Loss cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management Responsibility for the Financial Statements :

Management is responsible for the preparation of these financial statements that give a true and fair view of financial position, financial performance and cash flow 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") read with the General Circular 15/ 2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. The responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatements, 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 misstatements.

Audit involves performing procedure to obtain audit evidence about the amounts and disclosure in the financial statements. The procedure selected depend upon auditor''s judgement, including the assessment of the risk of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessment, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedure that are appropriate in the circumstances ,but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of financial statements.

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

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

(a) in case of the Balance Sheet, of the state of affairs of the Company as at 31/03/2014;

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

(c) in case of the Cash Flow Statements, 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 Central Government of India in terms of sub-section (4A) of section 227 of the Act, We give in the Annexure a statements on the matters specified in paragraphs 4 and 5 of the order.

2) Further to our comments in the Annexure referred to above, we comment that:

a) Company has not made provision for doubtful trade receivable more than six months of Rs.21855685 and long term loans and advances of Rs. 49820583/- shall resulting in to increasing loss for the year and over statement of debtors and loans and advances to the extent of above amount.

b) Permanent diminution in market value of quoted investments of book value of Rs. 617550/- and value of unquoted shares of Classic Co. Op. Bank Ltd. for Rs. 125440/- and unquoted shares of Rs. 8000100 and NSC of Rs. 20000/- have not been provided shall resulting into increasing loss for the year and over statement of Investments.

c) Confirmations were not available for debtors, loans, Advances taken and given and creditors.

d) Company has granted interest free loans and advance of Rs. 12996405/- to two number of parties (Refer para (iii) (a) (iii) (b)(iii) (c) (iii)(d) annexure to this report) prejudicial to the interest of the company.

e) Internal control system need to be strengthened for recovery of outstanding dues and proper financial management

f) Most of the funds of company are block and movements in those account are negligible so we are of opinion that going concern status is effected due to above blockage of funds

3) As required by section 227(3) of the Act, Subject to our foregoing observation in para 4 and its consequential effects on profit/ loss and assets/ liabilities for the year as at 31st March 2014 we report that :

a. We have obtained all 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 examinations of those books;

c. the Balance Sheet, Statement of Profit and Loss, and cash flow statments 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 statments comply with the Accounting Standards referred to in sub-section(3C) of section 211 of the Companies Act,1956, read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 except mentioned below;

i) Company has not followed AS 13 for perma4nent reduction in value of long-term investments.

e. On the basis of written representations received from the directors as on 31/03/2014 and taken on record by the Board of Directors, none of the director is disqualified as on 31/03/2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITOR''S REPORT OF EVEN DATE

(i) (a) The company is maintaining fixed assets records to show full particulars, including quantitative details and situation of fixed assets. Such register is at the stage of updating during the year.

(b) According to the information and explanations given to us, fixed assets have been physically verified by the management in phase periodical manner during 3 the years. We have been informed that no material discrepancies were noticed on such verification.

(c) There has been no disposal of substantial part of the fixed assets during the year, which may affect the going concern status of the company.

(ii) (a) According to the information and explanation given to us, inventories have been physically verified by the management during the year. In our opinion the frequency of verification is reasonable having regard to the size of the company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book records.

(iii) In respect of the loans, secured or unsecured granted or taken by the company from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(a) The Company has granted interest free loan to 2 companies, Nil firm and Nil other parties. In respect to of the said loan, the maximum amount outstanding at any time during the year is Rs. 132.70 Lacs and year-end balances are is Rs.129.96 Lacs.

(b) In our opinion and according to the information and explanation given to us, all interest free loans/advances are prima facie prejudicial to the interest of the company.

(c) In respect of loan given to associate companies, firms and other parties of the company have no repayment schedule.

(d) In respect of the loan given by the company, there is no repayment schedule therefore the question of overdue amount does not arise.

(e) The Company has taken unsecured loan during the year from Nil companies, Nil firm and 1 other parties. The maximum amount involved during the year was Rs. 36.47 Lacs and the year-end balance of loan taken from such parties is Rs. 36.47 Lacs.

(f) In our opinion and according to the information and explanation given to us the rate of interest and other terms and condition are not prima facie prejudicial to the interest of the company.

(g) The said loan was taken from associate companies, firms and other parties of the company are repayable on demand and there is no repayment schedule.

(iv) In our opinion and according to the information and explanation given to us, there are not adequate internal control procedure commensurate with size of the company and the nature of its business through personal supervision of management of the company with regard to purchase of inventories, purchase of fixed assets and for the sale of goods and services. According to us, Internal control system needs to be strengthening for recovery of loans, advances and debt recovery.

(v) (a) In our opinion and according to the information and explanations given to us the transaction made in

pursuance of contract or arrangement that need to be entered into the register maintained under section 301 of the companies act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the 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 lacs have been so entered if required.

(vi) On the basis of information and explanations given to us company has accepted deposit in violation during the year from the public, within in violation of section 58A and 58AA of the companies act 1956 and companies (Acceptance of deposits) Rule 1975 with regard to acceptance and payment of deposits from public.

(vii) In our opinion based on the information and explanation given to us, the Company has not an Internal Audit system during the year.

(viii) Based on the information and explanations given to us maintenance of cost records has not been prescribed by the central government under clause (d) of sub section (1) of section 209 of the act.

(ix) (a) According to the information and explanation given to us, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Investor Education protection fund, Income tax, sales tax, wealth tax, cess and other material statutory dues, applicable to it.

(b) According to the information and explanation given to us, company has no undisputed amounts payable in respect of income tax, Investor Education Protection fund, wealth tax, cess and other material dues were in arrears as at 31st March, 2014 for a period of more than 6 months from the date they became payable to it otherwise than mentioned below.

Statement of arrears of Statutory Dues Outstanding for More than Six Months :

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

Sales Tax Sales Tax 1812421/- 2005-06 Already Due -- 2006-07

In absence of Sales Tax return copy and non filling for 2005-06, 2006-07 and 2007-08, 2008-09, 2009- 10, 2010-11, 2011-12 and 2012-13. We cannot quantify the liabilities of sales tax. We cannot quantify for interest and penalty on all undisputed due.

(c) According to the information and explanation given to us, there are no dues outstanding of customs duty, Income tax, Sales tax, wealth tax, Excise and on account of dispute except followings.

Statement of Disputed of Statutory Dues as on 31.3.2014 :

Name of Nature of Amount Period to Due date Date of the Statute the Dues (Rs.) which the Payement amount relates Income Tax CIT Appeal 2033191/- 2004-05 17/12/2010 --

Income Tax CIT Appeal 1901976/- 2005-06 17/12/2010 --

Income Tax CIT Appeal 665060/- 2006-07 24/02/2011 --

Income Taxd CIT Appeal 382518/- 2007-08 17/12/2010 --



Details of Accounting Year 2004-05, 2005-06, 2006-07 and 2007-08 are considered on the basis of notice received of Income Tax office dated 21/12/2012. Liabilities on account of interest on tax cannot be accertainable.

(x) Accumulated losses at the end of the financial year is not less than fifty percent of company’s net worth and company has incurred cash losses in the current year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the company has not generally defaulted in repayment of dues to Financial Institutions, Banks or Debenture holders.

(xii) According to the information and explanation given to us and based on the documents and records produced to us, the company has not granted loans and advance on the security by way of pledge of shares, Debenture and other securities.

(xiii) In our opinion the company is not a chit fund or Nidhi/Mutual benefit fund/ Society. Therefore the provisions of clause 4 (xiii) of the companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is dealing in or trading in shares, securities, debentures and other investment. Proper records have not been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other securities have been held by the company. NSC, Shares of Classic Co. Op. Bank Ltd, and Unquoted shares have not been available for verification.

(xv) According to the information and explanation given to us the company has not given, during the year any guarantee for loans taken by others from Banks or financial Institutions. As a result the question of our commenting whether the term and conditions are prejudicial to the interest of the company does not arise.

(xvi) In our opinion and according to the information given to us, company has not taken term loan during the year.

(xvii) Company has not raised fresh short term and long term funds during the year. Most of the fund of company has been block. In absence of movement of funds, we are unable to comment. Company’s equity funds have been blocked in long term advances and investment.

(xviii) According to the information and explanation given to us the company has not made during the year any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies act, 1956.

(xix) According to the information and explanation given to us, the company has not issued any debentures during the year.

(xx) The company has have not raised money from the public during the year.

(xxi) On the basis of our examination of the books of accounts and other relevant records and information made available to us, prima-facie we have not noticed any fraud on or by the company during the year, Further the management has represented to us that no fraud on or by the company has been reported during the year. However we are unable to determine/ verify as to whether any such reporting has been made during the year.

FOR NIMESH M. SHAH & CO., (Chartered Accountants) Reg No.: 115204W

Date : 02/08/2014 NIMESH M. SHAH Place : AHMEDABAD PARTNER M. No.: 047856


Mar 31, 2013

Report on the Financial Statements :

We have audited the accompanying financial statements of DHARTI PROTEINS LIMITED, ("the company") which comprise the Balance Sheet as at 31/03/2013 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 Responsibility for the Financial Statements :

Management is responsible for the preparation of these financial statements that give a true and fair view of financial position, financial performance and cash flow 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") The responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatements, 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 misstatements.

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

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

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

(a) in case of the Balance Sheet, of the state of affairs of the Company as at 31/03/2013;

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

(c) in case of the Cash Flow Statements, 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 Central Government of India in terms of sub-section (4A) of section 227 of the Act, We give in the Annexure a statements on the matters specified in paragraphs 4 and 5 of the order.

2) Further to our comments in the Annexure referred to above, we comment that:

a) Company has not made provision for doubtful trade receivable more than six months of Rs. 21855685 and long term loans and advances of Rs. 42635526 shall resulting in to increasing loss for the year and over statement of debtors and loans and advances to the extent of above amount.

b) Permanent diminution in market value of quoted investments of book value of Rs. 8198248 and value of unquoted shares of Classic Co. Op. Bank Ltd. for Rs. 125440 and unquoted shares of Rs. 8020100 have not been provided shall resulting into increasing loss for the year and over statement of Investments.

c) Confirmations were not available for debtors, loans, Advances taken and given and creditors.

d) Company has granted interest free loans and advance of Rs. 13269905 to number of parties (Refer para (iii) (a) (iii) (b)(iii) (c) (iii)(d) annexure to this report) prejudicial to the interest of the company.

e) Internal control system need to be strengthened for recovery of outstanding dues and proper financial management

f) Most of the funds of company are block and movements in those account are negligible so we are of opinion that going concern status is effected due to above blockage of funds

3) As required by section 227(3) of the Act, Subject to our foregoing observation in para 4 and its consequential

effects on profit/ loss and assets/ liabilities for the year as at 31st March 2013 we report that :

a. We have obtained all 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 examinations of those books;

c. the Balance Sheet, Statement of Profit and Loss, and cash flow statements 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 statements comply with the Accounting Standards referred to in sub-section(3C) of section 211 of the Companies Act,1956 except mentioned below :

i) Company has not followed AS 13 for permanent reduction in value of long-term investments.

e. On basis of information provided by the board of directors we report that Shri Dhiren Thakkar is disqualified as on 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of the section 274 of the Act.

(i) (a) The company is maintaining fixed assets records to show full particulars, including quantitative details and situation of fixed assets. Such register is at the stage of updating during the year.

(b) According to the information and explanations given to us, fixed assets have been physically verified by the management in phase periodical manner during 3 the years. We have been informed that no material discrepancies were noticed on such verification.

(c) There has been no disposal of substantial part of the fixed assets during the year, which may affect the going concern status of the company.

(ii) (a) According to the information and explanation given to us, inventories have been physically verified by the management during the year. In our opinion the frequency of verification is reasonable having regard to the size of the company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book records.

(iii) In respect of the loans, secured or unsecured granted or taken by the company from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(a) The Company has granted interest free loan to 3 companies, 1 firm and Nil other parties. In respect to of the said loan, the maximum amount outstanding at any time during the year is Rs. 151.44 Lacs and year-end balances are is Rs. 132.70 Lacs.

(b) In our opinion and according to the information and explanation given to us, all interest free loans/advances are prima facie prejudicial to the interest of the company.

(c) In respect of loan given to associate companies, firms and other parties of the company have no repayment schedule.

(d) In respect of the loan given by the company, there is no repayment schedule therefore the question of overdue amount does not arise.

(e) The Company has taken unsecured loan during the year from Nil companies, Nil firm and 1 other parties. The maximum amount involved during the year was Rs. 71.72 Lacs and the year-end balance of loan taken from such parties is Rs. 36.47 Lacs.

(f) In our opinion and according to the information and explanation given to us the rate of interest and other terms and condition are not prima facie prejudicial to the interest of the company.

(g) The said loan was taken from associate companies, firms and other parties of the company are repayable on demand and there is no repayment schedule.

(iv) In our opinion and according to the information and explanation given to us, there are not adequate internal control procedure commensurate with size of the company and the nature of its business through personal supervision of management of the company with regard to purchase of inventories, purchase of fixed assets and for the sale of goods and services. According to us, Internal control system needs to be strengthening for loans, advances and debt recovery.

(v) (a) In our opinion and according to the information and explanations given to us the transaction made in pursuance of contract or arrangement that need to be entered into the register maintained under section 301 of the companies act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the 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 lacs have been so entered if required.

(vi) On the basis of information and explanations given to us company has accepted deposit in violation during the year from the public, within in violation of section 58A and 58AA of the companies act 1956 and companies (Acceptance of deposits) Rule 1975 with regard to acceptance and payment of deposits from public.

(vii) In our opinion based on the information and explanation given to us, the Company has not an Internal Audit system during the year.

(viii) Based on the information and explanations given to us maintenance of cost records has not been prescribed by the central government under clause (d) of sub section (1) of section 209 of the act.

(ix) (a) According to the information and explanation given to us, the company is not regular in depositing with

appropriate authorities undisputed statutory dues including Investor Education protection fund, Income tax, sales tax, wealth tax, cess and other material statutory dues, applicable to it.

(b) According to the information and explanation given to us, company has no undisputed amounts payable in respect of income tax, Investor Education Protection fund, wealth tax, cess and other material dues were in arrears as at 31st March, 2013 for a period of more than 6 months from the date they became payable to it otherwise than mentioned below.

Statement of arrears of Statutory Dues Outstanding for More than Six Months :

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

Sales Tax Sales Tax 1812421/- 2005-06 Already Due - 2006-07

In absence of Sales Tax return copy and non filling for 2005-06, 2006-07 and 2007-08, 2008-09, 200910, 2010-11 and 2011-12. We cannot quantify the liabilities of sales tax. We cannot quantify for interest and penalty on all undisputed due.

(c) According to the information and explanation given to us, there are no dues outstanding of customs duty, Income tax, Sales tax, wealth tax, Excise and on account of dispute except followings.

Statement of Disputed of Statutory Dues as on 31.3.2013 :

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

Income Tax CIT Appeal 2033191/- 2004-05 17/12/2010 --

Income Tax CIT Appeal 1901976/- 2005-06 17/12/2010 --

Income Tax CIT Appeal 665060/- 2006-07 24/02/2011 --

Income Taxd CIT Appeal 382518/- 2007-08 17/12/2010 --

Details of Accounting Year 2004-05, 2005-06, 2006-07 and 2007-08 are considered on the basis of notice received of Income Tax office dated 21/12/2012. Liabilities on account of interest on tax cannot be ascertainable.

(x) Accumulated losses at the end of the financial year is less than fifty percent of company''s net worth and company has incurred cash losses in the current year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the company has not generally defaulted in repayment of dues to Financial Institutions, Banks or Debenture holders. Company has not paid bank interest with in stipulated time

(xii) According to the information and explanation given to us and based on the documents and records produced to us, the company has not granted loans and advance on the security by way of pledge of shares, Debenture and other securities.

(xiii) In our opinion the company is not a chit fund or Nidhi/Mutual benefit fund/ Society. Therefore the provisions of clause 4 (xiii) of the companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is dealing in or trading in shares, securities, debentures and other investment. Proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other securities have been held by the company. NSC, Shares of Classic Co. Op. Bank Lt, Shares of Kanel Oil & Export And Ltd and Unquoted shares have not been available for verification.

(xv) According to the information and explanation given to us the company has not given, during the year any guarantee for loans taken by others from Banks or financial Institutions. As a result the question of our commenting whether the term and conditions are prejudicial to the interest of the company does not arise.

(xvi) In our opinion and according to the information given to us, company has not taken term loan during the year.

(xvii) Company has not raised short term and long term funds during the year. Short Term Loan taken during the year has been used for repayment of dues only. Working Capital loans have not been utilized for business purpose.

(xviii) According to the information and explanation given to us the company has not made during the year any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies act, 1956.

(xix) According to the information and explanation given to us, the company has not issued any debentures during the year.

(xx) The company has have not raised money from the public during the year.

(xxi) On the basis of our examination of the books of accounts and other relevant records and information made available to us, prima-facie we have not noticed any fraud on or by the company during the year, Further the management has represented to us that no fraud on or by the company has been reported during the year. However we are unable to determine/ verify as to whether any such reporting has been made during the year.

FOR NIMESH M. SHAH & CO.,

(Chartered Accountants)

Reg No.: 115204W

Date : 02/09/2013 NIMESH M. SHAH

Place : AHMEDABAD PARTNER

M. No.: 047856


Mar 31, 2012

(1) We have audited the attached Balance Sheet of DHARTI PROTEINS LTD. as at March 31, 2012, Profit & Loss Account and the cash flow statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

(2) We have conducted our audit in accordance with auditing standards generally accepted in India. 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 check basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

(3) As required by 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 and as per the information and explanations furnished to us and the books and records examined by us in the normal course of audit. We enclose in the annexure statement on the matters specified in paragraphs 4 and 5 of the said order.

(4) Further to our comments in the Annexure referred to above, we comment that :

(a) Company has not made provision for doubtful trade receivable more than six months of Rs. 23871630/- and long term loans and advances of Rs. 42811313/- shall resulting in to increasing loss for the year and over statement of debtors and loans and advances to the extend of above amount.

(b) Permanent diminution in market value of quoted investments of book value of Rs. 8198248/ and value of unquoted shares of Classic Co. Op. Bank Ltd. for Rs. 125440/- and unquoted shares of Rs. 8021101/- have not been provided shall resulting into increasing loss for the year and over statement of Investments.

(c) Confirmations were not available for debtors, loans, Advances taken and given and creditors.

(d) Company has granted interest free loans and advance of Rs. 13494292/- to number of parties (Refer para (iii) (a) (iii) (b)(iii) (c) (iii)(d) annexure to this report)

(e) Internal control system need to be strengthened for recovery of outstanding dues and proper financial management

(f) Most of the funds of company are block and movements in those account are negligible so we are of opinion that going concern status is effected due to above blockage of funds

(5) Subject to our foregoing observation in para 4 and its consequential effects on profit/ loss and assets/ liabilities for the year as at 31s1 March 2012 we report that:-

(a) We have obtained all the information and explanation 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 those books except our observations under para 4 above:

(c) The Balance sheet, Profit & Loss account and the cash flow statement dealt with by this report are in agreement with the books of accounts.

(d) In our opinion the Balance sheet, profit & Loss account and the cash flow statement have been prepared in compliance with the applicable accounting standards referred to in sub-section (3C) of the section 211 of the Companies Act 1956 except mentioned below,

(i) Company has not followed AS 13 for permanent reduction in value of long-term investments.

(e) On basis of information provided by the board of directors we report that Shri Dhirect Thakkar is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of the section 274 of the Act.

(f) Subject to the effects of such adjustments if any, as referred in paragraph 4 as might have been determined to be necessary, had we been able to satisfy ourselves. In our opinion and to the best of our information and according to explanations given to us, the said accounts read together with other notes thereon and statement on significant accounting policies give in the prescribed manner the information required by the act, and also give a true & 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 March 31, 2012 and

(ii) in the case of the Profit & Loss account of the loss for the year ended on that date;

(iii) in the case cash flow statement of the cash flow for the year ended on that date

(i) (a) The company is maintaining fixed assets records to show full particulars, including quantitative details

and situation of fixed assets. Such register is at the stage of updating during the year.

(b) According to the information and explanations given to us, fixed assets have been physically verified by the management in phase periodical manner during 3 the years. We have been informed that no material discrepancies were noticed on such verification.

(c) There has been no disposal of substantial part of the fixed assets during the year, which may affect the going concern status of the company.

(ii) (a) According to the information and explanation given to us, inventories have been physically verified by the management during the year. In our opinion the frequency of verification is reasonable having regard to the size of the company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book records.

(iii) In respect of the loans, secured or unsecured granted or taken by the company from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(a) The Company has granted interest free loan to 4 companies, 1 firm and Nil other parties. In respect to of the said loan, the maximum amount outstanding at any time during the year is Rs. 173.35 Lacs and year-end balances are is Rs. 134.94 Lacs.

(b) In our opinion and according to the information and explanation given to us, all interest free loans/advances are prima facie prejudicial to the interest of the company.

(c) In respect of loan given to associate companies, firms and other parties of the company have no repayment schedule.

(d) In respect of the loan given by the company, there is no repayment schedule therefore the question of overdue amount does not arise.

(e) The Company has taken unsecured loan during the year from Nil companies, Nil firm and 1 other parties. The maximum amount involved during the year was Rs. 5.86 Lacs and the year-end balance of loan taken from such parties are Rs. 5.86 Lacs.

(f) In our opinion and according to the information and explanation given to us the rate of interest and other terms and condition are not prima facie prejudicial to the interest of the company.

(g) The said loan was taken from associate companies, firms and other parties of the company are repayable on demand and there is no repayment schedule.

(iv) In our opinion and according to the information and explanation given to us, there are not adequate internal control procedure commensurate with size of the company and the nature of its business through personal supervision of management of the company with regard to purchase of inventories, purchase of fixed assets and for the sale of goods and services. According to us, Internal control system needs to be strengthen for loans, advances and debt recovery.

(y) (a) In our opinion and according to the information and explanations given to us the transaction made in pursuance of contract or arrangement that need to be entered into the register maintained under section 301 of the companies act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the 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 lacs have been so entered if required.

(vi) On the basis of informations and explanations given to us company has accepted deposit in violation during the year from the public, within in violation of section 58A and 58AA of the companies act 1956 and companies (Acceptance of deposits) Rule 1975 with regard to acceptance and payment of deposits from public.

(vii) In our opinion based on the information and explanation given to us, the Company has not an Internal Audit system during the year.

(viii) Based on the information and explanations given to us maintenance of cost records has not been prescribed by the central government under clause (d) of sub section (1) of section 209 of the act.

(ix) (a) According to the information and explanation given to us, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Investor Education protection fund, Income tax, sales tax, wealth tax, cess and other material statutory dues, applicable to it.

(b) According to the information and explanation given to us, company has no undisputed amounts payable in respect of income tax, Investor Education Protection fund, wealth tax, cess and other material dues were in arrears as at 31st March, 2012 for a period of more than 6 months from the date they became payable to it otherwise than mentioned below.

Statement of arrears of Statutory Dues Outstanding for More than Six Months :

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

Sales Tax Sales Tax 1812421/- 2005-06 Already Due - 2006-07

Income Tax CIT Appeal 1324370/- 2003-04 24/02/2011 -

Income Tax CIT Appeal 2033191/- 2004-05 17/12/2010 -

Income Tax CIT Appeal 1901976/- 2005-06 17/12/2010 -

Income Tax CIT Appeal 665060/- 2006-07 24/02/2011 -

Income Tax CIT Appeal 382518/- 2007-08 17/12/2010 -

In absence of Sales Tax return copy and non filling for 2005-06, 2006-07 and 2007-08, 2008-09, 2009- ID, 2010-11 and 2011-12. We can not quantify the liabilities of sales tax. We can not quantify for interest and penalty on all undisputed due.

(c) According to the information and explanation given to us, there are no dues outstanding of customs duty, Income tax, Sales tax, wealth tax, Excise and on account of dispute.

(x) Accumulated losses at the end of the financial year is less than fifty percent of company's net worth and it has incurred cash losses in the current year immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the company has generally defaulted in repayment of dues to Financial Institutions, Banks or Debenture holders. Company has not paid bank interest with in stipulated time

(xii) According to the information and explanation given to us and based on the documents and records produced to us, the company has not granted loans and advance on the security by way of pledge of shares, Debenture and other securities.

(xiii) In our opinion the company is not a chit fund or Nidhi/Mutual benefit fund/ Society. Therefore the provisions of clause 4 (xiii) of the companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is dealing in or trading in shares, securities, debentures and other investment. Proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other securities have been held by the company. NSC, Shares of Classic Co. Op. Bank Ltd. and Unquoted shares have not been available for verification.

(xv) According to the information and explanation given to us the company has not given, during the year any guarantee for loans taken by others from Banks or financial Institutions. As a result the question of our commenting whether the term and conditions are prejudicial to the interest of the company does not arise.

(xvi) In our opinion and according to the information given to us, company has not taken term loan during the year.

(xvii) Company has raised short term and long term funds during the year. Short Term Loan taken during the year have been used for repayment of dues only. Working Capital loans have not been utilized for business purpose.

(xviii) According to the information and explanation given to us the company has not made during the year any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies act, 1956.

(xix) According to the information and explanation given to us, the company has not issued any debentures during the year.

(xx) The company has have not raised money from the public during the year.

(xxi) On the basis of our examination of the books of accounts and other relevant records and information made available to us, prima-facie we have not noticed any fraud on or by the company during the year, Further the management has represented to us that no fraud on or by the company has been reported during the year. However we are unable to determine/ verify as to whether any such reporting has been made during the year.

For, NIMESH M. SHAH & CO.,

Chartered Accountants

Reg. No. : 115204W

Date : 5th September, 2012 (Nimesh M. Shah)

Place : Ahmedabad Partner

Membership No. : 047856


Mar 31, 2011

(1) We have audited the attached Balance Sheet of DHARTI PROTEINS LTD. as at March 31, 2011, Profit A Loss Account and the cash flow statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement based on our audit.

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

(3) As required by 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 and as per the information and explanations furnished to us and the books and records examined by us in the normal course of audit. We enclose in the annexure statement on the matters specified in paragraphs 4 and 5 of the said order.

(4) Further to our comments in the Annexure referred to above, we comment that :

(a) Company has not made provision for doubtful debtors more than six months . of Rs. 23871630/- and loans of Rs. 33133991/- and advance recover able in cash or kind of Rs. 13996520/- and advance to creditor Rs. 2870768/- and Deposits Rs. 100000/- resulting in to increasing loss for the year and over statement of debtors and loans and advances to the extend of above amount. (Refer schedule- 17 Notes to the Financial Statements Point-6)

(b) Permanent diminution in market value of quoted investments of book value of Rs. 9853888/- and value of unquoted shares of Classic Co. Op. Bank Ltd. for Rs. 125440/- and unquoted shares of Rs. 8000000/- have not been provided resulting into increasing loss for the year and over statement of Investments. (Schedule-17 Accounting policies Point-E)

(c) Confirmations were not available for debtors, loans, Advances taken and given and creditors, (schedule-17 Notes to the Financial Statements Point-16)

(d) Company has granted interest free loans and advance of Rs. 24687135/- to number of parties (Refer para (iii) (a) (iii) (b)(iii) (c) (iii)(d) annexure to this report)

(e) Company's holding of 470000 shares of M/s Kanel oil and exports industries ltd. are lying with SICOM for availing loan to Kanel oil 4 Exports Industries Ltd.

(f) Internal control system need to be strengthened for recovery of outstanding dues and proper financial management (Schedule-17 Notes to the Financial Statements Point-17)

(g) Most of the funds of company are block and movements in that account are negligible so we are of opinion that going concern status is effected due to above blockage of funds

(5) Subject to our foregoing observation in para 4 and its consequential effects on ¦ profit/ loss and assets/ liabilities for the year as at 31st March 2011 we report ¦ that:-

(a) We have obtained all the information and explanation 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 I the company so far as appears from our examination of those books except I our observations under para 4 above: I

(c) The Balance sheet. Profit & Loss account and the cash flow statement dealt with by this report are in agreement with the books of accounts.

(d) In our opinion the Balance sheet, profit & Loss account and the cash flow statement have been prepared in compliance with the applicable accounting standards referred to in sub-section (3C) of the section 211 of the Companies Act 1956 except mentioned below,

(i) Company has not followed AS 13 for permanent reduction in value of long-term investments.

(e) On basis of information provided by the board of directors we report that none of the directors is qualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of the section 274 of the Act. In absence of disclosure from all the directors we are not able to comment on their qualification.

(f) Subject to the effects of such adjustments if any, as referred in paragraph 4 as might have been determined to be necessary, had we been able to satisfy ourselves. In our opinion and to the best of our information and according to explanations given to us, the said accounts read together with other notes thereon and statement on significant accounting policies give in the prescribed manner the information required by the act, and also give a true A 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 March 31, 2011 and

(ii) in the case of the Profit <& Loss account of the loss for the year ended on that date;

(iii) in the case cash flow statement of the cash flow for the year ended on that date

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITOR'S REPORT OF EVEN DATE

(i) (a) The company is maintaining fixed assets records to show full particulars, including quantitative details and situation of fixed assets. Such register is at the stage of updating during the year.

(b) According to the information and explanations given to us, fixed assets have been physically verified by the management in phase periodical manner during 3 the years. We have been informed that no material discrepancies were noticed on such verification.

(c) There has been no disposal of substantial part of the fixed assets during the year, which may affect the going concern status of the company.

(ii) (a) According to the information and explanation given to us, inventories have been physically verified by the management during the year. In our opinion the frequency of verification is reasonable having regard to the size of the company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks arid the book records.

(iii) In respect of the loans, secured or unsecured granted or taken by the company from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(a) The Company has granted interest free loan to 4 companies, 1 firm and Nil other parties. In respect to of the said loan, the maximum amount ' outstanding at any time during the year is Rs. 261.61 Lacs and year-end balances are is Rs. 246.87 Lacs.

(b) In our opinion and according to the information and explanation given to us, all interest free loans/advances are prima facie prejudicial to the interest of the company. .

(c) In respect of loan given to associate companies, firms and other parties of the company have no repayment schedule.

(d) In respect of the loan given by the company, there is no repayment i schedule therefore the question of overdue amount does not arise. ¦

(e) The Company has taken unsecured loan during the year from Nil companies. Nil firm and 1 other parties. The maximum amount involved during the year was Rs. 19.31 Lacs and the year-end balance of loan taken from such parties are Rs. 5.13 Lacs.

(f) In our opinion and according to the information and explanation given to us I the rate of interest and other terms and condition are not prima facie | prejudicial to the interest of the company.

(g) The said loan was taken from associate companies, firms and other parties of the company are repayable on demand and there is no repayment schedule. I

(iv) In our opinion and according to the information and explanation given to i us, there are adequate internal control procedure commensurate with si2e of the company and the nature of its business through personal supervision of management of the company with regard to purchase of inventories, purchase of fixed assets and for the sale of goods and services.

According to us, Internal control system needs to be strengthen for loans, advances and debt recovery.

(v) (a) In our opinion and according to the information and explanations given to us the transaction made in pursuance of contract or arrangement that need to be entered into the register maintained under section 301 of the companies act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the 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 lacs have been so entered if required. In absence of daily market price and heavy volatility in the daily price, we practically can not comment on reas nobleness of market price at which such goods or similar goods, material service s have been entered with other parties.

(vi) On the basis of information and explanations given to us company has accepted deposit during the year from the public, within the meaning of section 58A and 58AA of the companies act 1956 and companies (Acceptance of deposits) Rule 1975 with regard to acceptance and payment of deposits from public.

(vii) In our opinion based on the information and explanation given to us, the Company has not an Internal Audit system during the year.

(viii) Based on the information and explanations given to us maintenance of cost records has not been prescribed by the central government under clause (d) of sub section (1) of section 209 of the act.

(ix) (a) According to the information and explanation given to us, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Investor Education protection fund. Income tax, sales tax, wealth tax, cess and other material statutory dues, applicable to it.

(b) According to the information and explanation given to us, company has no undisputed amounts payable in respect of income tax. Investor Education Protection fund, wealth tax, cess and other material dues were in arrears as at 31st March, 2011 for a period of more than 6 months from the date they became payable to it otherwise than mentioned below.

Statement of arrears of Statutory Dues Outstanding for More than Six Months

Name of Nature of Amount the the Dues (Rs.) Statute

Sales Tax Sales Tax 1812421/-

Income CIT 1324370/- Tax Appeal

Income CIT 1901976/- Tax Appeal

Income CIT 665060/- Tax Appeal

Income CIT 382518/- Tax Appeal



Period to Due Date Date of which the Payment amount relates

2005-06 Already 2006-07 Due

2003-04 Already Due

2005-06 Already Due

2006-07 Already Due

2007-08 Already Due



In absence of Soles Tax return copy and non filling for 2005-06, 2006- 07 and 2007-08, 2008-09, 2009-10 and 2010-11. We can not quantify the liabilities. We can not quantify for interest and penalty on undisputed due.

(c) According to the information and explanation given to us, there are no dues outstanding of customs duty. Income tax. Sales tax, wealth tax,

Excise and on account of dispute otherwise than mention below :_

Statement of Dispute Dues

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

Income Tax CIT Appeal 5941420 2004-05 ITAT Appeal

We can not quantify interest and penalty on outstanding amount.

(x) Accumulated losses at the end of the financial year is less than fifty percent of company's net worth and it has incurred cash losses in the current year immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the company has not generally defaulted in repayment of dues to Financial Institutions, Banks or Debenture holders.

(xii) According to the information and explanation given to us and based on the documents and records produced to us, the company has not granted loans and advance on the security by way of pledge of shares. Debenture and other securities.

(xiii) In our opinion the company is not a chit fund or Nidhi/Mutual benefit fund/ Society. Therefore the provisions of clause 4 (xiii) of the companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is dealing in or trading in shares, securities, debentures and other investment. Proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other securities have been held by the company. 2950 Number of shares are not available for physical verification so we have been write off such shares. Profit/Loss Account does not show true and fair view to that extent.

(xv) According to the information and explanation given to us the company has not given, during the year any guarantee for loans taken by others from Banks or financial Institutions. As a result the question of our commenting whether the term and conditions are prejudicial to the interest of the company does not arise. Company's owned 470000 shares of Kane I Oil & Exports Industries Ltd. (Associate) are lying as collator to SI COM. All Investments are doubtful of recovery

(xvi) In our opinion and according to the information given to us, company has not taken term loan during the year.

(xvii) Company has raised short term and long term funds during the year. Term Loan taken during the year have been used for repayment of dues only.

(xviii) According to the information and explanation given to us the company has not made during the year any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies act, 1956.

(xix) According to the information and explanation given to us, the company has not issued any debentures during the year.

(xx) The company has have not raised money from the public during the year.

(xxi) On the basis of our examination of the books of accounts and other relevant records and information made available to us, prima-facie we have not noticed any fraud on or by the company during the year. Further the management has represented to us that no fraud on or by the company has been reported during the year. However we are unable to determine/ verify as to whether any such reporting has been made during the year.

For. NIAAESH AA. SHAH & CO.,

Chartered Accountants

Reg. No. : 115204W

(Nimesh AA. Shah) Date: 2nd September. 2011

Partner Place: Ahmedabad.

Membership No. : 047856


Mar 31, 2010

(1) We have audited the attached Balance Sheet of DEVIKA PROTEINS LTD. as at March 31, 2010, Profit & Loss Account and the cash flow statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statement based on our audit.

(2)We have conducted our auditor 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 check basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

(3) As required by 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 and as per the information and explanations furnished to us and the books and records examined by us in the normal course of audit. We enclose in the annexure statement on the matters specified in paragraphs 4 and 5 of the said order.

(4) Further to our comments in the Annexure referred to above, we comment that:

(a) Company has not made provision for doubtful debtors more than six months of Rs. 14037980/- and loans of Rs. 34210837/- and advance recover able in cash op kind of Rs. 15764520/- and advance to creditor Rs. 2211818/- and Deposits Rs. 100000/- resulting in to increasing loss for the year and over statement of debtors and loans and advances to the extend «f above amount. (Refer schedule- 17 Notes on accounts Point-6)

(b) Permanent diminution in market value of quoted investments of book value of Rs. 9929246/- ard value of unquoted shares of Classic Co. Op. Bank Ltd. for Rs. 125440/- have not been provided resulting into increasing loss for the year and over statement of Investments. (Schedule-17 Accounting policies Point-5)

(c) Confirmations were not available for debtors, loans. Advances taken and given and creditors, (schedule-17 Notes on accounts Point-16)

(d) Company has granted interest free loans and advance of Rs. 34210837/- to number of parties (Refer para (iii) (a) (iii) (b)(iii) (c) (iii)(d) annexure to this report)

(e) Companys holding of 470000 shares of M/s Kanel oil and exports industries ltd. are lying with SICOfA for availing loan to Kanel oil & Exports Industries Ltd.

(f) Internal control system need to be strengthened for recovery of outstanding dues, (Schedule-17 Notes on Account Point-17)

(5) Subject to our foregoing observation in para 4 and its consequential effects on profit/ loss and assets/ liabilities for the year as at 31st March 2010: we report that:-

(a) We have obtained all the information and explanationa 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 those books except our observations under para 4 above:

(c) The Balance sheet, Profit & Loss account and the cash flow statement dealt with by this report are in agreement with the books of accounts.

(d) In our opinion the Balance sheet, profit & Loss account and the cash flow statement have been prepared in compliance with the applicable accounting standards referred to in sub-section (3C) of the section 211 of the Companies Act 1956 except mentioned below,

(i) Accounting entry of deferred tax assets and deferred tax liabilities has passed only at the end of the year.

(ii) Company has not followed AS 13 for permanent reduction in value of long- term investments.

(e) On basis of information provided by the board of directors we report that none of the directors is qualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of the section 274 of the Act. In absence of disclosure from all the directors we are not able to comment on their qualification.

(f) Subject to the effects of such adjustments if any, as referred in paragraph 4 as might have been determined to be necessary, had we been able to satisfy ourselves. In our opinion and to the best of our information and according to explanations given to us, the said accounts read together with other notes thereon and statement on significant accounting policies give in the prescribed manner the information required by the act, and also give a true & 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 Narch 31, 2010 and

(ii) in the case of the Profit & Loss account of the loss for the year ended on that date;

(iii) in the case cash flow statement of the cash flow for the year ended on that date

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE

(i) (a) The company is maintaining fixed assets records to show full particulars, including quantitative details and situation of fixed assets. Such register is at the stage of updating during the year.

(b) According to the information and explanations given to us, fixed assets have been physically verified by the management in phase periodical manner during the year. We have been informed that no material discrepancies were noticed on such verification.

(c) There has been no disposal of substantial part of the fixed assets during the year, which may affect the going concern status of the company.

(ii) (a) According to the information and explanation given to us, inventories have been physically verified by the management during the year. In our opinion the frequency of verification is reasonable having regard to the size of the company and the nature of its business.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the mar-egsment are reasonable and adequate in relation to the size of the company end the nature of its business. Stock lying with third partys factory have-been taken on the basis of stock certified by third party.

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book records.

(iii) In respect of the loans, secured or unsecured granted or taken by the company to/ from companies, firm or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(a) The Company has granted interest free loan to 4 companies, 1 firm and 2 other parties. In respect to of the said loan, the maximum amount outstanding at any time during the year is Rs. 313.56 Lacs and year-end balances are is Rs. 241.99 Lacs.

(b) In our opinion and according to the information and explanation given to us, all interest free loans/advances are prima facie prejudicial to the interest of the company.

(c) In respect of loan given to associate companies, firms and other parties of the company have no repayment schedule.

(d) In respect of the loan given by the company, there is no repayment schedule therefore the question of overdue amount does not arise.

(e) The Company has taken unsecured loan during the year from 1 companies, Nil firm and 2 other parties. The maximum amount involved during the year was Rs. 47.11 Lacs and the year-end balance of loan taken from such parties are Rs. 47.11 Lacs.

(f) In our opinion and according to the information and explanation given to us the rate of interest and other terms and condition are not prima facie prejudicial to the interest of the company.

(g) The said loan was taken from associate companies, firms and other parties of the company are repayable on demand and there is no repayment schedule.

(iv) In our opinion and according to the information and explanation given to us,there are adequate internal control procedure commensurate with size of the company and the nature of its business through personal supervision of management of the company with regard to purchase of inventories, purchase of fixed assets and for the sale of goods and services. According to us, Internal control system need to be strengthen for loans, advances and debt recovery.

(v) (a) In our opinion and according to the information and explanations given to us the transaction made in pursuance of contract or arrangement that need to be entered into the register maintained under section 301 of the companies act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the 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 lacs have been so entered if required. In absence of daily market price and heavy volatility in the daily price, we practically can not comment on reasonableness of market price at which such goods or similar goods, material services have been entered with other parties.

(vi) On the basis of informations and explanations given to us company has not accepted any deposit during the year from the public, within the meaning of section 58A and 58AA of the companies act 1956 and companies (Acceptance of deposits) Rule 1975 with regard to acceptance and payment of deposits from public.

(vii) In our opinion based on the information and explanation given to us, the Company has not an Internal Audit system during the year.

(viii) Based on the information and explanations given to us maintenance of cost records has not been prescribed by the central government under clause (d) of sub section (1) of section 209 of the act.

(ix) (a) According to the information and explanation given to us, the company is not regular in depositing with appropriate authorities undisputed statutory dues including Investor Education protection fund, Income tax, sales tax, wealth tax, cess and other material statutory dues, applicable to it.

(b) According to the information and explanation given to us, company has no undisputed amounts payable in respect of income tax, Investor Education Protection fund, wealth tax, cess and other material dues were in arrears as at 31st March, 2010 for a period of more than 6 months from the date they became payable to it otherwise than mentioned below.

Statement of arrears of Statutory Dues Outstanding for More than Six Months

Name of Nature of Amount Period to Due Date Date of the the Dues (Rs.) which the Payment Statute amount

relates

Sales Tax Sales Tax 1812421 2005-06 Already ------

2006-07 Due

Municipal Municipal 38403 2008-09 Already ------

Tax Tax Due



Inabsence of Sales Tax return copy and non filling for 2005-06, 2006-07 and 2007-08, 2008-09 and 2009-10. We can not quantify the liabilities. We can not quantify for interest and penalty on undisputed due.

(c) According to the information and explanation given to us, there are no dues outstanding of customs duty, Income tax, Sales tax, wealth tax, Excise and on account of dispute otherwise than mention below :

Statement of Dispute Dues

Name of the Nature of Amount (Rs.) Period to Forum where

Statute the Dues which the dispute is

amount pending relates

Income Tax Order u/s. 1324370 2003-04 CIT Appeal 153A

Income Tax Order u/s. 5941420 2004-05 CIT Appeal 153A 4728416 ITAT Appeal

Income Tax Order u/s. 1901976 2005-06 CIT Appeal 153A

Income Tax Order u/s. 665060 2006-07 CIT Appeal 153A

Income Tax Order u/s. 382518 2007-08 CIT Appeal 153A

We can not quantify interest and penalty on outstanding.

(x) Accumulated losses at the end of the financial year is less than fifty percent of companys net worth and it has incurred cash losses in the current year and incurred cash profit in immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the company has not generally defaulted in repayment of dues to Financial Institutions, Banks or Debenture holders.

(xii) According to the information and explanation given to us and based on the documents and records produced to us, the company has not granted loans and advance on the security by way of pledge of shares, Debenture and other securities.

(xiii) In our opinion the company is not a chit fund or Nidhi/Mutual benefit fund/ Society. Therefore the provisions of clause

(xiii) of the companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is dealing in or trading in shares, securities, debentures and other investment. Proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other securities have been held by the company, in its own name except to the extent of the exemption, if any, granted under section 49 of the Act.

(xv) According to the information and explanation given to us the company has not given, during the year any guarantee for loans taken by others from Banks or financial Institutions. As a result the question of our commenting whether the term and conditions are prejudicial to the interest of the company does not arise. Companys owned 470000 shares of Kane/ Oil & Exports Industries Ltd. are lying as collotary to SICOM. All Investments are doubtful of recovery.

(xvi) In our opinion and according to the information given to us, company has not taken term loan during the year.

(xvii) Company has not raised short term and long term funds during the year.

(xviii) According to the information and explanation given to us the company has not made during the year any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies act, 1956.

(xix) According to the information and explanation given to us, the company has not issued any debentures during the year.

(xx) The company has have not raised money from the public during the year.

(xxi) Or the basis of our examination of the books of accounts and other relevant records and information made available to us, prima-facie we have not noticed any fraud on or by the company during the year, Further the management has represented to us that no fraud on or by the company has been reported during the year. However we are unable to determine/ verify as to whether any such reporting has been made during the year.



For, NIMESHM. SHAH & CO.

Chartered Accountants

Reg. No. : 115204W

(Nimesh M. Shah) Date : 2nd September, 2010

Partner Place : Ahmedabad.

Membership No.: 047856