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Auditor Report of Kakatiya Textiles Ltd.

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of Kakatiya Textiles Limited, which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in Section 134(5) of the Companies Act, 2013 with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the act and the rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

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

a) in the case of the Balance Sheet, of the State of Affairs of the Company as at March 31, 2015;

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

c) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 issued by the Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

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

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

f) With respect to the other matters to be included in the Auditor's Report and to the best of our information and according to the explanations given to us:

i. the company has disclosed the impact of pending litigations on its financial position in its financial statements;

ii. the company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts; and

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

ANNEXURE TO THE AUDITORS' REPORT OF EVEN DATE

(As required by Companies (Auditor's Report) Order, 2015 & referred to in our report of even date)

1) (a) As per the information provided by the management, the Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) These fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

2) (a) As per the information & explanations given to us, physical verification of inventory has been conducted by the management at reasonable intervals during the year.

(b) The procedures of physical verification of inventory 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3) (a) According to the information and explanations provided to us, the company has not granted any loans, secured or unsecured, to the companies, firms and other parties covered in the register maintained u/s 189 of the Companies Act, 2013.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services.

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 systems.

5) The Company has not accepted any deposits from the public within the meaning of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.

6) According to the information and explanation given to us, the maintenance of cost records has not been prescribed by the Central Government under section 148(1) of the Companies Act, 2013, in respect of the activities carried on by the company.

7) According to the information and explanations given to us in respect of the statutory dues:

a) We report that wherever applicable, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues with the appropriate authorities during the year.

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2015 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us and the records of the company examined by us, no disputed statutory dues were outstanding as at March 31, 2015.

c) According to the information and explanations given to us and the records of the company examined by us, the company is not required to transfer any amount to Investor Education and Protection Fund in accordance with the relevant provisions of the act and the rules framed there under.

8) The company reported is an entity, which has been registered for a period not less than five years and the company has accumulated losses at the end of the financial year which is more than fifty percent of its net worth. The company has incurred cash loss during the financial year and also in the immediately preceding financial year.

9) According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the Balance Sheet date.

10) According to the information and explanations given to us and as per our examination of relevant records, we are of the opinion that the company has not given any guarantee for loans taken by others from banks or financial institutions.

11) According to the information and explanations given to us, no fresh term loans have been availed by the company during the year.

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

For S.Murali Dharan & Co

Chartered Accountants

(Firm Regn. No. 009617S)



S.Murali Dharan

Place:Coimbatore Partner

Date :28.05.2015 (M. No. 026554)


Mar 31, 2013

We have audited the accompanying financial statements of Kakatiya Textiles Limited, which comprise the Balance Sheet as at 31st March 2013, the Statement of Profit and Loss and Cash Flow Statement for the year ended and a summary of significant accounting policies and other explanatory information.

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

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

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

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

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

a) in the case of the Balance Sheet, of the State of Affairs of the Company as at March 31, 2013;

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

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

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

2. As required by section 227(3) of the Act, we report that:

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

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

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

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

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

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

Annexure to the Auditors'' Report

(As required by Companies (Auditors Report) Order, 2003 and referred to in Paragraph 3 of our report of even 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 our audit we report that:

1) (a) The Company is maintaining proper

records showing full particulars, including quantitative details and situation of fixed assets.

(b) These fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) No substantial part of fixed assets has been disposed off during the year and therefore it has not affected the going concern status of the company.

2) (a) As explained to us, the inventories have been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and on the basis of examination of the records, the Company is generally maintaining proper records of its inventories and the discrepancies noticed on verification between the physical stocks and the book records were not material.

3) (a) According to the information and explanations given to us and on the basis of the examination of the books of account, the Company has not given any loans, secured or unsecured, to the companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, the provisions of clauses (iii) (b) to (d) of the order are not applicable.

(b) According to the information and explanations given to us and on the basis of the examination of the books of account, the Company has taken interest free unsecured loans from the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. (No. of Parties - 3 and the amount involved is Rs. 90 Lakhs)

(c) As per the information provided to us, the terms and conditions on which the loan has been taken are prima facie not prejudicial to the interest of the company.

(d) No repayment of Principal, against the loan borrowed, has been made by the Company during the year.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services.

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 systems.

5) (a) Based on the audit procedures applied

by us and according to the information provided by the management and the documents verified by us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act have been so entered for the year under audit.

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

6) The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

7) As per the information and explanations given by the management, the company has an internal audit system which is commensurate with its size and nature of business.

8) According to the information given and the documents produced before us, the company has maintained the cost records as prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956, in respect of the activities carried on by the company.

9) According to the information and explanations given to us in respect of the statutory dues, we report that wherever applicable, the company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2013 for a period of more than six months from the date they become payable.

10) The company reported is an entity, which has been registered for a period not less than five years and the accumulated losses of the company at the end of the financial year are more than fifty percent of its net worth. The company has not incurred cash losses during the financial year under report, but in the immediately preceding financial year.

11) According to the records of the Company examined by us and on the basis of information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the Balance Sheet date.

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

13) The Company is not a Chit Fund / Nidhi / Mutual Benefit Fund / Society. Therefore, the provisions of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14) According to the information and explanations given to us, the Company has not dealt in securities, debentures and other investments during the year.

15) According to the information and explanations given to us and as per our examination of relevant records, we are of the opinion that the company has not given any guarantee for loans taken from banks.

16) Based on the audit procedures applied by us and the information given by the management, we report that the company has not raised any term loans during the year.

17) On the basis of our examination of the books of accounts and the information and explanations given to us and on an overall examination of Balance Sheet of the company as at 31st March 2013, we report that no funds raised on short term basis that have been used for long term investments and vice versa.

18) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

19) The company has not issued any debentures during the year under the report and hence creation of securities in respect of debentures is not applicable. The company has no outstanding debentures during the year under audit.

20) The company has not raised any money through public issue during the year and hence reporting on end use of money raised on public issue does not arise.

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

For S MURALI DHARAN & CO

Chartered Accountants

(Firm Registration No.009617S)



S MURALIDHARAN

Coimbatore Partner

25th May, 2013 Membership No. 026554


Mar 31, 2012

We have audited the attached Balance Sheet of KAKATIYA TEXTILES LIMITED as at 31st March 2012 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors' Report) Order,2003, as amended by the Companies (Auditor's Report) (Amendment) Order 2005, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act,1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of the audit, we enclose in the Annexure statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to above and subject to the Notes on Accounts, we report that:

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us.

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

d) In our Opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the Directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March 2012 from being appointed as a Director in terms of clause (g) of Sub- Section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

i. In the case of Balance Sheet, of the State of Affairs of the Company as at 31st March, 2012;

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

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

Annexure to the Auditors' Report

(As required by Companies (Auditors Report) Order, 2003 and referred to in Paragraph 3 of our report of even date)

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

(b) These fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) No substantial part of fixed assets has been disposed off during the year and therefore it has not affected the going concern status of the Company.

2) (a) As per information & explanation given to us, the inventory has been physically verified during the year by the management at reasonable intervals.

(b) 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 and the discrepancies noticed on verification between the physical stocks and the book records were not material.

3) (a) According to the information and explanations given to us, the Company has not given any loans, secured or unsecured, to the Companies, firms and other parties covered in the register maintained u/s. 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii) (b) to (d) of the order are not applicable.

(b) According to the information and explanations given to us, the Company has taken interest free unsecured loans from the companies, firms or other parties covered in the register maintained u/s.301 of the Companies Act, 1956. (No. of Parties -1 and the amount involved is Rs.90 Lakhs)

(c) As per the information provided to us, the terms and conditions on which the loan has been taken are prima facie not prejudicial to the interest of the Company.

(d) No repayment of Principal, against the loan borrowed, has been made by the Company during the year.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services.

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 systems.

5) (a) According to the information provided by the management and the documents verified by us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Act have been so entered for the year under audit.

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

6) The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

8) According to the information given and the documents produced before us, the Company has maintained the cost records as prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956, in respect of the activities carried on by the Company.

9) According to the information and explanations given to us in respect of the statutory dues, we report that wherever applicable, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2012 for a period of more than six months from the date they become payable.

10) The Company reported is an entity, which has been registered for a period not less than five years and the accumulated losses of the Company at the end of the financial year are more than fifty percent of its networth. The Company has incurred cash losses during the financial year under report.

11) According to the records of the Company examined by us and on the basis of information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the Balance Sheet date.

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

13) The Company is not a Chit/ Nidhi /Mutual Benefit Fund/ Society; hence this clause will not be applicable to the Company.

14) According to the information and explanations given to us, the Company has not dealt in securities, debentures and other investments during the year.

15) According to the information and explanations given to us, and as per our examination of , relevant records, we are of the opinion that the Company has not given any guarantee for loans taken from banks.

16) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

17) On the basis of our examination of the books of accounts and the information and explanations given to us and on an overall examination of balance sheet of the Company, we report that no funds raised on short term basis that have been used for long term investments and vice versa.

18) The Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under Section 301 of the Act. Accordingly the provisions of clause 4 (xviii) of the Companies (Audit Report) Order 2003 are not applicable to the Company.

19) The Company has not issued any debentures during the year under the report and hence creation of securities in respect of debentures is not applicable.

20) The Company has not raised any money through a public issue during the year and hence reporting on end use of money raised on public issue does not arise.

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

For S MURALI DHARAN & CO

Chartered Accountants

Registration No.009617S

S MURALIDHARAN

Coimbatore Partner

24th May, 2012 Membership No. 026554


Mar 31, 2011

We have audited the attached Balance Sheet of your company as at 31st March 2011 and the Profit and Loss Account and Cash Flow Statement of the Company annexed thereto for the Twelve-month period ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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.

1. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to and subject to our comments in Annexure referred to in paragraph 1 above, and subject to the notes on accounts, we report that:

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

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

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

d) In our opinion, the Profit and Loss Account, Balance Sheet and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required to give a true and fair view in conformity with the accounting principles generally accepted in India.

g) i. In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2011 and

ii. In the case of the Profit and Loss Account, of the profits of the company as at 31st March 2011 year ended on that date.

iii. In the case of cash flow statement, of the cash flows for the year ended as on that date

ANNEXURE TO THE AUDITORS REPORT

(As required by Companies (Auditors Report) Order, 2003 and referred to in Paragraph 3 of our report of even date)

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

(b) As per information & explanation given to us, the assets have been physically verified by the management during the year and there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets.

(c) During the year, the company has not disposed any major assets.

(ii) (a) The management has physically verified the inventories during the year, at regular intervals which are reasonable to the size & nature of the company.

(b) 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii)(a) According to the information and explanations given to us, the company has not granted any loans during the year, to companies, firms or other parties as covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company had taken loan from a party covered in the register maintained under section 301 of the Companies Act, 1956.The maximum amount involved during the year was Rs. 90.08 lakhs and the year end balance of the loan taken from the party was Rs.90 lakhs and the terms and conditions are not prejudicial to the interest of the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) As per information & explanations given to us the company has entered all the transactions with the parties to be entered in the register maintained under section 301 of the Companies Act, 1956. In our opinion and according to the information and explanations given to us, each of these transactions have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) During the year under audit, The Company has not accepted deposits from the public.

(vii) During the year, the company had internal audit system commensurate with its size and nature of its business.

(viii) The company has made & maintains costing records prescribed under section 209 (1) (d) of the Companies Act, 1956.

(ix) As per information & explanations given to us the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, sales tax and other materia! statutory dues applicable to it.

(x) In our opinion and as per information and explanations given to us the company has accumulated loss in excess of fifty percent of its net worth. The company has not incurred cash loss during the financial year and also in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(xii) In our opinion and as per the information and explanations given to us, the company has not granted any loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the

provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) According to information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) In our opinion and as per the information and explanations provided to us, the term loans have been applied for the purpose for which they were raised.

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

(xviii) During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) During the year the company has not issued any debentures.

(xx) The company has not raised any money by public issue during the year.

(xxi) In our opinion, and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For S.MURALI DHARAN & CO

Chartered Accountants

Registration No.009617S

S. MURALI DHARAN

Coimbatore Partner

28th May, 2011 Membership No.026554


Mar 31, 2010

We have audited the attached Balance Sheet of your company as at 31st March 2010 and the Profit and Loss Account and Cash Flow Statement of the Company annexed thereto for the Twelve-month period ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 assur- ance 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 state- ment presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to and subject to our comments in Annexure referred to in paragraph 1 above, and subject to the notes on accounts, we report that:

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

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

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

d) In our opinion the Profit and Loss Account, Balance Sheet and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required give a true and fair view in conformity with the accounting principles generally accepted in India.

g) i. In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2010 and

ii. In the case of the Profit and Loss Account, of the profit of the company as at 31st March 2010 year ended on that date.

iii. In the case of cash flow statement, of the cash flows for the year ended as on that date.

Annexure to the Auditors Report

(As required by Companies (Auditors Report) Order, 2003 and referred to in Paragraph 3 of our report of even date)

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. However, additional details such as cost, year of purchase etc., have to be recorded to ensure maintenance of proper records with full particulars of the assets.

(b) As per information & explanation given to us, the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets.

(c) During the year, the company has not disposed any major assets.

(ii) (a) The management has physically verified the inventories during the year, at regular intervals which are reasonable to size & nature of the company.

(b) 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) According to the information and explanations given to us, the company had not granted or taken any loans, secured or unsecured, from companies, firms or other parties as covered in the register maintained under section 301 of the Companies Act, 1956 and hence the provisions of clause (iii)(e), clause (iii)(f) and clause (iii)(g) of the said Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) As per information & explanation given to us the company has entered all the transactions with the parties to be entered under 301 register. In our opinion and according to the information and explanations given to us, each of these transactions have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) During the year under audit, the Company has not accepted deposits from the public.

(vii) During the year, the company had internal audit system commensurate with its size and nature of its business.

(viii) The company has made & maintains costing records prescribed under section 209 (1) (d) of the Companies Act, 1956.

(ix) As per information & explanation given to us the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, sales tax, and other material statutory dues applicable to it.

(x) In our opinion and as per information & explanation given to us the company

has accumulated loss in excess of fifty percent of its net worth. The company has not incurred cash loss during the financial year and in immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(xii) In our opinion and as per the information and explanations given to us, the company has not granted any loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) According to information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) In our opinion and as per the information and explanations provided to us, the term loans have been applied for the purpose for which they were raised.

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

(xvfii) During the year the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) During the year the company has not issued any debentures.

(xx) The company has not raised any money by public issue during the year.

(xxi) In our opinion, and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For S MURALI DHARAN & CO

Chartered Accountants Registration No.009617S

S Murali Dharan

Partner

Membership No. 026554

Coimbatore 21st May, 2010

 
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