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Auditor Report of K-Lifestyle & Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of K-LIFESTYLE AND INDUSTRIES LIMITED. ("the Company"), which comprise the Balance Sheet as on 31st March, 2015 the Statement of Profit and Loss for the period 1st April 2014 to 31st March 2015 and the Cash Flow Statement for the period ending, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements:

The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the act') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014.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 Ms.tatement, whether due to fraud or error.

Auditors' Responsibility :

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material Ms.tatement

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material Ms.tatement 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, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the period ending on that date: and

(c) in the case of the Cash Flow Statement, of the Company for the period ending on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs).

(e) On the basis of the written representations received from the directors as on 31st March, 2015 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 (2) (g) of the Act.

For A.F.KHASGIWALA & Co A.F. KHASGIWALA Sd/- Partner Membership No.:006491 Firm Reg.No.:105114W Place : Mumbai Date :16/05/2015


Mar 31, 2014

1. We have audited the attached Balance Sheet of K-LIFESTYLE & INDUSTRIES LTD As at 31st March, 2014 and also the Profit and Loss Account of the Company for the Year ended on that date and the Cash Flow Statement for the year ended on that date Annexed thereto. These financial statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on these financial statements Based on our audit.

2. We 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.

3. As required by the Companies (Auditor''s Report) Order, 2003(CARO)and the Companies (Auditor''s Report)(Amendment) order 2004 issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: -

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

e) On the basis of the written representations received from the directors as on 31st March,2014and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March,2014 from being appointed as a director of the Company in terms of Section 274(1)(g) of the Act.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Act in the manner so required and give a true and fair view in conformity with 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 Profit & Loss Account, of the Loss of the Company for the year ended on that date and;

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

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF AUDITORS'' REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st March, 2014 K-LIFESTYLE & INDUSTRIES LTD

(FORMELY KNOWN AS KRISHNA LIFESTYLE TECHNOLOGIES LIMITED.)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit, we state that:

1. In respect of its Fixed Assets

(a) The Company has maintained proper records to show full particulars, including quantitative details and situation of the Fixed Assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the books records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

2. In respect of its inventories:

a) The stocks of finished goods, stores, spare parts and raw materials of the company, at all its locations, have been physically verified by the management at reasonable intervals during the year.

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

c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book records were not material and have been properly dealt with in the books of account.

d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

3. a) The Company has not granted any loans, Secured or Unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. b) The Company has not taken any loans secured or unsecured, from companies, firms or parties covered in the register maintained under 301 of the Companies Acts,1956.

4. In our opinion and according to the information and explanations given to us, having Regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are Adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchase of stores, raw materials including Components, plant & machinery, equipment and similar assets & purchase of goods and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor has been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. In respect of transaction covered under Section 301of the Companies Act,1956:

According to the information and explanations given to us, purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating Rs. 5,00,000 or more during the year in respect of each party have been made at prices which are reasonable having regards to the prevailing market price for such goods, materials or services or the prices at which the transactions for similar goods are services have been made with other parties, where applicable.

6. The company has not accepted any deposits from the public to which the provisions of sections 58A and 58AA of the Companies Act, 1956 and Rules framed there under would apply.

7. In our opinion, the internal audit system of the Company is commensurate with the size of the company and nature of its business

8. We are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India under Section 209 (1) (d) of the Act have been maintained. We have, however, not made a detailed examination of such accounts and records.

9. In respect of statutory dues:

a) According to the information and explanations given to us, and the records of the company examined by us, in our opinion, the company is regular in deposited the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income Tax, sales tax, wealth tax, service tax, excise duty, customs duty, cess and other material statutory dues as applicable with the appropriate authorities.

10. According to the records of the company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi /Mutual benefit /Societies are not applicable to the company.

13. During the year, the Company does not have any transactions in respect of dealing and Trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the company have been held by the Company in its own name.

14. According to the information and explanations given to us, the Company has given Corporate gurantees for loan taken by others aggregating to Rs. 33.40Crore in favour of Indian Overseas Bank,Narimon Point Branch, Mumbai for securing loan granted to KSL and Industries Ltd, Eskay knit India Ltd, Jaybharat Textiles & Real Estate Ltd and Krishna Knitwear Technology Ltd, and another corporate Guarantees of Rs.5 Crore in favour of State Bank of India, Vapi for securing the loan Granted to Ambica Chemicals & Synthetics Pvt.Ltd.

15. According to the information and explanations given to us, the working capital term Loans raised during the year were used for the purpose for which they were raised.

16. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company.In our opinion and according to the information and explanations given to us, there are no Funds raised as a short term basis which have been used for long term investment.

17. The Company has not made any preferential allotment of shares during the year.

18. During the year covered by our audit report the Company has not issued any secured Debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. The Company has no accumulated losses as at 31st March, 2014 as the debit balance of Statement of Profit or Loss Rs. 37802.06 Lacs has been adjusted against Surplus & Reserves (Refer Note No.2.2).

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of frauds on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For A.F.KHASGIWALA & CO. Chartered Accountants

Sd/- (A.F.KHASGIWALA) Partner Place: MUMBAI Mem. No.6491 Dated: 30.05.2014 Firm Reg.No.105114W


Mar 31, 2013

1. We have audited the attached Balance Sheet of K-LIFESTYLE & INDUSTRIES LTD (FORMELY KNOWN AS KRISHNA LIFESTYLE TECHNOLOGIES LIMITED.) As at 31st March, 2013 and also the Profit and Loss Account of the Company for the Year ended on that date and the Cash Flow Statement for the year ended on that date Annexed thereto. These financial statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We 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.

3. As required by the Companies (Auditor''s Report) Order, 2003 (CARO)and the Companies (Auditor''s Report)(Amendment) order 2004 issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: -

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

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

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013,

ii) in the case of the Profit & Loss Account, of the Loss of the Company for the year ended on that date and ;

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

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF AUDITORS'' REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST March, 2013 K-LIFESTYLE & INDUSTRIES LTD (FORMELY KNOWN AS KRISHNA LIFESTYLE TECHNOLOGIES LIMITED.)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit, we state that:

1. In respect of its Fixed Assets

a) The Company has maintained proper records to show full particulars, including quantitative details and situation of the Fixed Assets.

b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the books records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

c) In our opinion, and according to the information and explanation given to us, the Company has not disposed of substantial part of fixed assets during the year and on going Concern status of the Company is not affected.

2. In respect of its inventories:

a) The stocks of finished goods, stores, spare parts and raw materials of the company, at all its locations, have been physically verified by the management at reasonable intervals during the year.

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

c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book records were not material and have been properly dealt with in the books of account.

d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

3. a) The Company has not granted any loans, Secured or Unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) The Company has not taken any loans secured or unsecured, from companies, firms or parties covered in the register maintained under 301 of the Companies Acts,1956.

4. In our opinion and according to the information and explanations given to us, having Regard to the explanation that certain items purchased are of special nature for which Suitable alternative sources do not exist for obtaining comparative quotations, there are Adequate internal control procedures commensurate with the size of the Company and The nature of its business with regard to the purchase of stores, raw materials including Components, plant & machinery, equipment and similar assets & purchase of goods and For the sale of goods. Further, on the basis of our examination of the books and records Of the company, and according to the information and explanations given to us, we have Weaknesses in the aforesaid internal control system.

5. In respect of transaction covered under Section 301of the Companies Act,1956:

According to the information and explanations given to us, purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating Rs.5,00,000 or more during the year in respect of each party have been made at prices which are reasonable having regards to the prevailing market price for such goods, materials or services or the prices at which the transactions for similar goods are services have been made with other parties, where applicable.

6. The company has not accepted any deposits from the public to which the provisions of Sections 58A and 58AA of the Companies Act, 1956 and Rules framed there under Would apply.

7. In our opinion, the internal audit system of the Company is commensurate with the size Of the company and nature of its business

8. We are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India under Section 209 (1) (d) of the Act have been maintained. We have, however, not made a detailed examination of such accounts and records.

9. In respect of statutory dues:

a) According to the information and explanations given to us, and the records of the company examined by us, in our opinion, the company is regular in deposited the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income Tax, sales tax, wealth tax, service tax, excise duty, customs duty, cess and other material statutory dues as applicable with the appropriate authorities.

10 According to the records of the company examined by us and the information and Explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to Us, the Company has not granted any loans and/or advances on the basis of security by Way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi /Mutual benefit / Societies are not applicable to the company.

13. During the year, the Company does not have any transactions in respect of dealing and Trading in shares, securities, debentures and other investments. All shares, debentures And other securities held as investments by the company have been held by the Company in its own name.

14. According to the information and explanations given to us, the Company has given Corporate gurantees for loan taken by others aggregating to Rs.33.40 Crore In favour of Indian Overseas Bank,Narimon Point Branch, Mumbai for securing loan granted to KSL and Industries Ltd, Eskay knit India Ltd, Jaybharat Textiles & Real Estate Ltd and Krishna Knitwear Technology Ltd, and another corporate Guarantees of Rs.5 Crore in favour of State Bank of India, Vapi for securing the loan Granted to Ambica Chemicals & Synthetics Pvt.Ltd.

15. According to the information and explanations given to us, the working capital term loans raised during the year were used for the purpose for which they were raised.

16. According to the information and explanations given to us and on an overall Examination of the balance sheet of the Company.In our opinion and according to the information and explanations given to us, there are no Funds raised as a short term basis which have been used for long term investment.

17. The Company has not made any preferential allotment of shares during the year.

18. During the year covered by our audit report the Company has not issued any secured Debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. The Company has no accumulated losses as at 31st March, 2013 as the debit balance of Statement of Profit or Loss Rs.13052.55 Lacs has been adjusted against Surplus & Reserves (Refer Note No.2.2).

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of frauds on or by the company, noticed or reported during the year, nor have been informed of such case by the management.



For A.F.KHASGIWALA & CO.

Chartered Accountants



Sd/-

(A.F.KHASGIWALA)

Place : MUMBAI Partner

Dated : 28.05.2013 Mem. No.6491

Firm Reg.No.105114W


Mar 31, 2012

1. We have audited the attached Balance Sheet of K-LIFESTYLE & INDUSTRIES LTD as at 31st March, 2012 and also the statement of Profit and Loss Account of the Company for the Year ended on that date and the Cash Flow Statement for the year ended on that date Annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements Based on our audit.

2. We 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.

3. As required by the Companies (Auditor's Report) Order, 2003(CARO)and the Companies (Auditor's Report)(Amendment) order 2004 issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that :-

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

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

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012,

ii) in the case of the Profit & Loss Account, of the Loss of the Company for the year ended on that date and ;

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

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit, we state that :

1. In respect of its Fixed Assets

a) The Company has maintained proper records to show full particulars, including quantitative details and situation of the Fixed Assets.

b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the books records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

c) In our opinion, and according to the information and explanation given to us, the Company has not disposed of substantial part of fixed assets during the year and on going Concern status of the Company is not affected.

2. In respect of its inventories :

a) The stocks of finished goods, stores, spare parts and raw materials of the company, at all its locations, have been physically verified by the management at reasonable intervals during the year.

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

c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book records were not material and have been properly dealt with in the books of account.

d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

3. a) The Company has not granted any loans, Secured or Unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) The Company has not taken any loans secured or unsecured, from companies, firms or parties covered in the register maintained under 301 of the Companies Acts,1956.

4. In our opinion and according to the information and explanations given to us, having Regard to the explanation that certain items purchased are of special nature for which Suitable alternative sources do not exist for obtaining comparative quotations, there are Adequate internal control procedures commensurate with the size of the Company and The nature of its business with regard to the purchase of stores, raw materials including Components, plant & machinery, equipment and similar assets & purchase of goods and For the sale of goods. Further, on the basis of our examination of the books and records Of the company, and according to the information and explanations given to us, we have Neither come across nor has been informed of any continuing failure to correct major Weaknesses in the aforesaid internal control system.

5. In respect of transaction covered under Section 301of the Companies Act,1956 :

According to the information and explanations given to us, purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating Rs.5,00,000 or more during the year in respect of each party have been made at prices which are reasonable having regards to the prevailing market price for such goods, materials or services or the prices at which the transactions for similar goods are services have been made with other parties, where applicable.

6. The company has not accepted any deposits from the public to which the provisions of Sections 58A and 58AA of the Companies Act, 1956 and Rules framed there under Would apply.

7. In our opinion, the internal audit system of the Company is commensurate with the size Of the company and nature of its business

8. We are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India under Section 209 (1) (d) of the Act have been maintained. We have, however, not made a detailed examination of such accounts and records.

9. In respect of statutory dues:

a) According to the information and explanations given to us, and the records of the company examined by us, in our opinion, the company is regular in deposited the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income Tax, sales tax, wealth tax, service tax, excise duty, customs duty, cess and other material statutory dues as applicable with the appropriate authorities.

10. According to the records of the company examined by us and the information and Explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to Us, the Company has not granted any loans and/ or advances on the basis of security by Way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi /Mutual benefit / Societies are not applicable to the company.

13. During the year, the Company does not have any transactions in respect of dealing and Trading in shares, securities, debentures and other investments. All shares, debentures And other securities held as investments by the company have been held by the Company in its own name.

14. According to the information and explanations given to us, the Company has given Corporate gurantees for loan taken by others aggregating to Rs.33.40Crore In favour of Indian Overseas Bank,Narimon Point Branch, Mumbai for securing loan granted to KSL and Industries Ltd, Eskay knit India Ltd, Jaybharat Textiles & Real Estate Ltd and Krishna Knitwear Technology Ltd, and another corporate Guarantees of Rs 5 Crore in favour of State Bank of India, Vapi for securing the loan Granted to Ambica Chemicals & Synthetics Pvt.Ltd.

15. According to the information and explanations given to us, the working capital term Loans raised during the year were used for the purpose for which they were raised.

16. According to the information and explanations given to us and on an overall Examination of the balance sheet of the Company.In our opinion and according to the information and explanations given to us, there are no Funds raised as a short term basis which have been used for long term investment.

17. The Company has not made any preferential allotment of shares during the year.

18. During the year covered by our audit report the Company has not issued any secured Debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. The Company has no accumulated losses as at 31st March, 2012 as the debit balance of Statement of Profit or Loss Rs 4482.28 Lacs has been adjusted against Surplus & Reserves (Refer Note No.2.2) and has not incurred any Cash losses in the financial year ended on that date or in the immediately preceding Financial year.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of frauds on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For A. F. KHASGIWALA & CO.

Chartered Accountants

sd/-

(A. F. KHASGIWALA)

Place : MUMBAI Partner

Dated : 27.04.2012 Mem. No.6491

Firm Reg.No.105114W


Mar 31, 2011

(FORMELY KNOWN AS KRISHNA LIFESTYLE TECHNOLOGIES LIMITED)

1. We have audited the attached Balance Sheet of K-LIFESTYLE & INDUSTRIES LTD (FORMELY KNOWN AS KRISHNA LIFESTYLE TECHNOLOGIES LIMITED) As at 31st March, 2011 and also the Profit and Loss Account of the Company for the Year ended on that date and the Cash Flow Statement for the year ended on that date Annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements Based on our audit.

2. We have conducted our audit in accordance with 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.

3. As required by the Companies (Auditors Report) Order, 2003(CARO)and the Companies (Auditors Report)(Amendment) order 2004 issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: -

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

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

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011,

ii) in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date and ;

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

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST March, 2011 K-LIFESTYLE & INDUSTRIES LTD (FORMELY KNOWN AS KRISHNA LIFESTYLE TECHNOLOGIES LIMITED)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit, we state that:

1. In respect of its Fixed Assets

(a) The Company has maintained proper records to show full particulars, including quantitative details and situation of the Fixed Assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the books records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion, and according to the information and explanation given to us, the Company has not disposed of substantial part of fixed assets during the year and on going Concern status of the Company is not affected.

2. In respect of its inventories:

a) The stocks of finished goods, stores, spare parts and raw materials of the company, at all its locations, have been physically verified by the management at reasonable intervals during the year.

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

c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book records were not material and have been properly dealt with in the books of account.

d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

3. a) The Company has not granted any loans, Secured or Unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) The Company has not taken any loans secured or unsecured, from companies, firms or parties covered in the register maintained under 301 of the Companies Acts,1956.

4. In our opinion and according to the information and explanations given to us, having Regard to the explanation that certain items purchased are of special nature for which Suitable alternative sources do not exist for obtaining comparative quotations, there are Adequate internal control procedures commensurate with the size of the Company and The nature of its business with regard to the purchase of stores, raw materials including Components, plant & machinery, equipment and similar assets & purchase of goods and For the sale of goods. Further, on the basis of our examination of the books and records Of the company, and according to the information and explanations given to us, we have Neither come across nor has been informed of any continuing failure to correct major Weaknesses in the aforesaid internal control system.

5. In respect of transaction covered under Section 301of the Companies Act,1956: According to the information and explanations given to us, purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating Rs5,00,000 or more during the year in respect of each party have been made at prices which are reasonable having regards to the prevailing market price for such goods, materials or services or the prices at which the transactions for similar goods are services have been made with other parties, where applicable.

6. The company has not accepted any deposits from the public to which the provisions of Sections 58A and 58AA of the Companies Act, 1956 and Rules framed there under Would apply.

7. In our opinion, the internal audit system of the Company is commensurate with the size Of the company and nature of its business

8. We are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India under Section 209 (1) (d) of the Act have been maintained. We have, however, not made a detailed examination of such accounts and records.

9. In respect of statutory dues:

a) According to the information and explanations given to us, and the records of the company examined by us, in our opinion, the company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income Tax, sales tax, wealth tax, service tax, excise duty, customs duty, cess and other material statutory dues as applicable with the appropriate authorities.

10. According to the records of the company examined by us and the information and Explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to Us, the Company has not granted any loans and/or advances on the basis of security by Way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi /Mutual benefit / Societies are not applicable to the company.

13. During the year, the Company does not have any transactions in respect of dealing and Trading in shares, securities, debentures and other investments. All shares, debentures And other securities held as investments by the company have been held by the Company in its own name.

14. According to the information and explanations given to us, the Company has given Corporate gurantees for loan taken by others aggregating to Rs33.40Crore In favour of Indian Overseas Bank,Narimon Point Branch, Mumbai for securing loan granted to KSL and Industries Ltd, Eskay knit India Ltd, Jaybharat Textiles & Real Estate Ltd and Krishna Knitwear Technology Ltd, and another corporate Guarantees of Rs5 Crore in favour of State Bank of India, Vapi for securing the loan Granted to Ambica Chemicals & Synthetics Pvt.Ltd.

15. According to the information and explanations given to us, the working capital term Loans raised during the year were used for the purpose for which they were raised.

16. According to the information and explanations given to us and on an overall Examination of the balance sheet of the Company.In our opinion and according to the information and explanations given to us, there are no Funds raised as a short term basis which have been used for long term investment.

17. The Company has not made any preferential allotment of shares during the year.

18. During the year covered by our audit report the Company has not issued any secured Debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. The Company has no accumulated losses as at 31st March, 2011and has not incurred any Cash losses in the financial year ended on that date or in the immediately preceding Financial year

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of frauds on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For A.F.KHASGIWALA & CO.

Chartered Accountants

Sd/-

(A.F. KHASGIWALA)

Partner Place : Mumbai Mem. No. 6491

Date : 29.04.2011 Firm Reg.No.105114W


Mar 31, 2010

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

2. We 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.

3. As required by the Companies (Auditors Report) Order, 2003(CARO)and the Companies (Auditors Report)(Amendment) order 2004 issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: -

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

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

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010,

ii) in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date and;

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 ST MARCH, 2010 OF KRISHNA LIFESTYLE TECHNOLOGIES LIMITED.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit, we state that:

1. In respect of its Fixed Assets

(a) The Company has maintained proper records to show full particulars, including quantitative details and situation of the Fixed Assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the books records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion, and according to the information and explanation given to us, the Company has not disposed of substantial part of fixed assets during the year and on going Concern status of the Company is not affected.

2. In respect of its inventories:

a) The stocks of finished goods, stores, spare parts and raw materials of the company, at all its locations, have been physically verified by the management at reasonable intervals during the year.

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

c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book records were not material and have been properly dealt with in the books of account.

d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/ from Companies, firm or other parties covered in the register maintained under 301 of the Companies Act,1956:

a) The Company has not taken any loans, Secured or Unsecured from companies and other parties listed in the register maintained under Section 301 of the Act and / or Companies under the same management as defined under Section 370(1-B) which is rendered inoperative since insertion of sub section (6) of section 370 of the Companies Act, 1956.

b) The Company has not granted any loans secured or unsecured, during the year, to companies, firms or parties listed in the register maintained under 301 of the Companies acts, 1956. On the basis of the information and explanations given to us, there are no companies under the same management within the meaning of section 370(1 -B) which is rendered inoperative since insertion of sub section (6) of section 370 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchase of stores, raw materials including components, plant & machinery, equipment and similar assets & purchase of goods and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. In respect of transaction covered under Section 301 of the Companies Act, 1956:

According to the information and explanations given to us, purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating during the year to Rs.5,00,000 or more in respect of each party have been made at prices which are reasonable having regards to the prevailing market price for such goods, materials or services or the prices at which the transactions for similar goods are services have been made with other parties, where applicable.

6. The company has not accepted any deposits from the public to which the provisions of Sections 58A and 58AA of the Companies Act, 1956 and Rules framed there under would apply.

7. In our opinion, the internal audit system of the Company is commensurate with the size of the company and nature of its business

8. We have broadly reviewed the books of accounts maintained by the Company in respect of product where, pursuant to the rules made by the Central Government of India under Section 209 (1) (d) of the Act and are of the opinion that prima facie, the prescribed account and records have been made and maintained. However we are not required to and have not carried out any detailed examination of such accounts and records

9. In respect of statutory dues:

a) According to the information and explanations given to us, and the records of the company examined by us, in our opinion, the company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income Tax, sales tax, wealth tax, service tax, excise duty, customs duty, cess and other material statutory dues as applicable with the appropriate authorities.

10. According to the records of the company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi /Mutual benefit / societies are not applicable to the company.

13. During the year, the Company does not have any transactions in respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the company have been held by the Company in its own name.

14. According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from bank or financial institutions.

15. According to the information and explanations given to us, the working capital term loans raised during the year were used for the purpose for which they were raised.

16. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the Company has used no funds raised on Short-term basis for long-term investment.

17. The Company has not made any preferential allotment of shares during the year.

18. During the year covered by our audit report the Company has not issued any secured debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. The Company has no accumulated losses as at 31st March, 2010and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of frauds on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For A.F.KHASGIWALA & CO. Chartered Accountants

Sd/- (A.F. KHASGIWALA) Place: Mumbai Partner

Date :25th May, 2010 Mem. No. 6491

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