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Auditor Report of Kiran Vyapar Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s KIRAN VYAPAR LIMITED which comprise the Balance Sheet as at March 31, 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 stated in Section 134(5) of the Companies Act,2013 ("the Act") with respect to the preparation and presentation of these standalone 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 Companies Act, 2013 ("the Act") read with the Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provision 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 misstatements.

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 judgement, 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 of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the 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 standalone financial statements.

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 March 31, 2015;and

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 Cash Flow Statement, of the Cash Flows of the Company 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 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

e. On the basis of the written representations received from the directors as on March 31, 2015, 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 sub-section (2) of Section 164 of the Act.

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The company has disclosed the impact of pending litigation on its financial position in its Financial Statement – Refer note 2 (g) of the financial statements .

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

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

ANNEXURE TO INDEPENDENT AUDITORS'S REPORT

Statement referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of M/s KIRAN VYAPAR LIMITED on the accounts for the period ended 31st March, 2015.

In terms of the information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:

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

(b) The fixed assets of the company have been physically verified by the management at reasonable intervals. According to the information and explanation given to us no material discrepancies have been noticed in such verification.

ii. (a) Stock of shares physically lying with the company has been verified by the management at reasonable intervals. Further the company has received confirmations of shares lying with depository participants at regular intervals.

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

(c) In our opinion and according to the information and explanations given to us,the company is maintaining proper records of inventory no material discrepancies have been noticed on such verification.

iii. According to the information and explanations given to us The Company has granted loans to companies listed in the register maintained under section 189 of the Companies Act, 2013 ("the Act"). The maximum amount involved during the year was Rs. 3,81,04,62,834/- and the year-end balance was Rs.2,00,33,58,902/ -(Including interest free loan to its wholly owned subsidiary company amounting to Rs.1,27,55,00,000/-)

(a) In the case of the loans granted to the companies listed in the register maintained under section 189 of the Act, the borrowers have been regular in the payment of the interest as stipulated while the principal amount in some company are repayable on demand while that of other parties it is repayable as per the terms of arrangements.

(b) According to the information and explanation given to us reasonable steps have been taken by company for recovery of the principal and interest.

iv. In our opinion and according to the information and explanations, given to us there is an adequate internal control procedure commensurate with the size of the Company and nature of its business with regard to purchases of inventories, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any major weaknesses or continuing failure to correct any major weaknesses in the internal control system of the company in respect of these areas.

v. According to information and explanation given to us, The Company has not accepted any deposits from the public during the year within the provision of Section 73 to Section 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under with regard to the Companies (Acceptance of Deposits) Rules, 2014. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal.

vi. The Company is not required to maintain cost records as specified by the Central Government under section 148 (1) of the Companies Act, 2013.

vii. (a) According to the information given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty, Excise duty and Cess were in arrears, as at 31st March, 2015 for the period exceeding six months from the date they become payable.

(b) Detail of due of income tax which have not been deposited by the company as on March 31, 2015 on account of disputes are given below:

NATURE OF FORUM WHERE PERIOD TO WHICH AMOUNT INVOLVED THE DUE DISPUTE IS PENDING THE AMOUT RELATES (Rs. in lakhs)

INCOME TAX HIGH COURT 2013-2014 685

(c) The company is not required to transfer the amounts to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and the rules made thereunder.

viii. The company does not have any accumulated losses at the end of financial year and has not incurred cash loss during the current year and in the immediately preceding financial year.

ix. The company has not defaulted in repayment of dues to financial institution, banks or debenture holders.

x. The company has not given any guarantee for loans taken by others from banks or other financial institutions.

xi. In our opinion and according to the information and explanations given to us, the terms loans have been applied by the company during the year for the purposes for which they were obtained

xii. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial Statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For AGARWAL MAHESWARI & CO.

Chartered Accountants

Firm Reg. No. 314030E

(Ashoke Kr. Maheswari)

Place: Kolkata Partner

Date: 16.05.2015 M. No. 051394


Mar 31, 2014

We have audited the accompanying financial statements of M/s KIRAN VYAPAR LIMITED (The Company) which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and Cash Flow Statement for the year than ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") read with the General Circular 15/2003 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. 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.

Auditors'' Responsibility

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

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, 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 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.

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 March 31, 2014; and

(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 Cash Flow Statement, of the Cash Flows for the year ended on that date.

Attention is invited to the following observation:

As regarding the figures of the previous year, we refer to note no. (c to e) of note 2 wherein it has been stated that the figures of previous year ended 31-03-2013 have been amended to give effect to the Scheme of Arrangement between Maharaja Shree Umaid Mills Limited (Demerged Company) and Kiran Vyapar Limited (Resulting Company) with effect from the 1st day of April, 2012 and such amendments have been audited by us.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Section 227(4A) 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 sub-section (3C) of section 211 of the Act 1956, read with the General Circular 15/2003 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

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

ANNEXURE TO INDEPENDENT AUDITORS''S REPORT

Statement referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of M/s. KIRAN VYAPAR LIMITED on the accounts for the year ended 31st March 2014.

In terms of the information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that

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

(b) The fixed assets of the Company have been physically verified by the management at reasonable intervals. No material discrepancies have been noticed on such verification.

(c) None of the Fixed Assets have been sold/disposed of during the year under report.

(ii) (a) Stock of shares physically lying with the Company has been verified by the management at reasonable intervals. Further the company has received confirmations of shares lying with depository participants at regular intervals.

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

(c) The company is maintaining proper records of inventory. No material discrepancies have been noticed on such verification.

(iii) (a) According to the information and explanations given to us the company has granted loans to parties covered in the Register maintained under section 301 of the Companies Act, 1956. The Maximum Amount involved during the year was Rs. 417,83,94,247/- and the year-end balance was Rs. 331,18,94,248/-(Including interest free loan to its wholly owned subsidiary company amounting to Rs.202,45,00,000/-).

(b) The terms and condition of loans are prima facie not prejudicial to the interest of the company.

(c) The principal amounts are repayable over a period of one to five years, while the interest is payable annually, both at the discretion of the company.

(d) There is no overdue amount of loans granted to a company listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company has not taken any loans, secured or unsecured, from Companies, firm or other parties covered in the register maintained under section 301 of the Act, and according, clauses (iii) (f) and (iii) (g) of papagraph 11 of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses or continuing failure to correct any major weaknesses in the internal control system of the company in respect of these areas.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that needs to be entered into the register maintained under section 301 have been so entered.

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

(vi) The Company has not accepted any deposits from the public during the year within the meaning of Section 58A, Section 58AA of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any other tribunal or any court.

(vii) On the basis of Internal audit report broadly reviewed by us, we are of the opinion that, the Company has an adequate internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the company is not required to maintain the cost records in terms of section 209(1)(d) of the Companies Act, 1956.

(ix) (a) As explained to us, the Provident Fund Scheme and Employees State Insurance Scheme are not applicable to the Company.

(b) According to the information given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and Excise Duty and cess were in arrears, as at 31st March 2014 for the period exceeding six months from the date they become payable.

(c) According to the information and explanation given to us, there are no dues in respect of Income tax, Custom Duty, Sales Tax and Wealth Tax etc. that have not been deposited with the appropriate authorities on account of any dispute.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and 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 financial institution or bank with which transactions have been made during the year.

(xii) According to the information and explanations given to us and based on the documents and records produced before 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.

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

(xiv) The Company has held the shares, securities, debentures and other securities in its own name except to the extent of the exemption if any granted under section 49 of the Companies Act 1956 and the securities etc. acquired on account of Scheme of Arrangement.

(xv) The company has given security for Letter of Credit taken by its Group Company from Bank. According to the

information and explanation given to us, we are of the opinion that the terms and conditions there of are not prime facie prejudicial to the interest of the company.

(xvi) In our opinion and according to the information and explanations given to us, no term loans have been taken by the Company during the year.

(xvii)According to the information and explanations given to us and on 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)The Company has not made any preferential allotment of shares during the year to parties or companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix)The Company has not issued any debenture during the year and therefore the question of creating security in respect thereof does not arise.

(xx) The Company has not made any public issues during the year and therefore the question of disclosing the end use of money does not arise.

(xxi)Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial Statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For AGARWAL MAHESWARI & CO. Chartered Accountants Firm Reg. No. 314030E

( Ashoke Kr. Maheswari) Partner M. No. 051394

Place: Kolkata Date: 29.05.2014

 
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