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Auditor Report of KSS Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of KSS LIMITED ("the company"),which comprise the Balance Sheet as at March31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters 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 the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, 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 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 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 aforesaid standalone 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, of the statement of affairs of the company as at March31, 2015, and profit and loss account and its cash flow for the year ended on that date.

Emphasis of Matters

The reports should be read together with the Notes to the financial statements and attention to following matters be given:

a) Notes to the financial statements which describe the uncertainty related to the outcome of the pendencies of appeals and legal matters filed by the company as well as against the company.

Our opinion is not modified in respect of these matters.

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 the paragraph 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 purposes of our audit.

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

c) the Balance Sheet, the 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 section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014.

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

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

i. The Company has disclosed the impact of pending litigations on itsfinancial position in itsfinancial statements; ii. The Company does not have any long-term contracts including derivatives contracts for which any provision is

required; iii. The Company is not required to transfer amounts to the Investor Education and Protection Fund.

Additional Information annexed to the Independent Auditors' Report

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

(b) We are informed that these fixed assets have been physically verified by the management at reasonable intervals;

no material discrepancies were noticed on such verification.

(c) The company has not disposed of any substantial part of its fixed assets so as to affect its going concern status;

(ii) (a) As explained to us, physical verification of inventory has been conducted at reasonable Intervals by the management, in our opinion the frequency of such verification is reasonable.

(b) As per the information given to us, the procedures of physical verification of inventory followed by the management are in our opinion 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 in our opinion, discrepancies noticed on physical verification of inventory were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

(iii) (a)The Company has granted loans four bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act').

(Amount in lacs)

S/no. Name of Company Opening Loan given Repay Balance

1. K Sra sera Box office 54.78 22.56 0.00

Pvt Limited

2. K Sera Sera Miniplex 10.34 5.47 74.01

Limited

3. K Sera Sera Productions 409.52 19.01 -

FZE *(Foreign exch. Gain)

Max amount Closing Balance

K Sra sera Box office 77.34 77.34

K Sera Sera Miniplex (63.65) (58.20)

K Sera Sera Productions 428.53 428.53

(b) In our opinion, the terms and conditions of such interest free advances are not, prima facie, prejudicial to the interest of the Company.

(c) The above interest free advances would be adjusted on the purchase of film rights or On completion of films as applicable, and in accordance with the terms and conditions Stipulated in the agreement, Advances are given by the company to wholly owned subsidiaries companies.

(d) The above interest free advances given by the Company would be adjusted, on the purchase of film rights completion of films, as applicable, and therefore there are no amounts overdue in respect of advances as at the year end. Accordingly, the provisions of clause 4(iii) (d) of the Order are not applicable.

(e) The Company has not taken interest free advances from parties covered under the register maintained under Section 189 of the Act.

(iv) According to the information and explanation given to us, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. According to the information and explanation given to us, we have not come across continuing failure to any to correct major weaknesses in internal control;

(v) According to the information and explanation given to us and records examined by us, The Company has not accepted any deposits from the public during the year.

(Amount in Lacs)

S/no Name of Company Opening Interest given Repay Closing

Balance Balance

1. Aruna Vijay Patil 0.50 0.05 0.55 NIL

2. Bharat Ramanilal Navlakhi 0.25 0.03 0.28 NIL

3. Dinanath Anant Choukekar 0.25 0.03 0.28 NIL

4. Satish R. Panchariya 1.00 0.11 1.11 NIL

5. Vasant Jiji Chavan 0.50 .07 0.57 NIL

6. Md. Shahid Raza Khan 0.12 .02 0.14 NIL

Total 2.62 0.31 2.93 NIL

(vi) We are informed that Maintenance of cost records has been prescribed by the Central Government under sub-section (1) of section 148 of the Act, are not applicable to the company.

(vii) (a) According to the information and explanation given to us and records examined by us, the company is generally regular in depositing undisputed statutory dues including Income Tax, Excise Duty, cess and any other statutory dues with the appropriate authorities. According to the information and explanation given to us, there were no undisputed amounts payable in respect of Income Tax, Excise Duty, cess and any other statutory dues outstanding as on 31st March, 2015 for a period more than six months from the date they became payable, except as follows:

(b) According to the information and explanations given to us, the dues in respect of Income Tax and Sales Tax that have not been deposited with the appropriate authorities on account of dispute and the forum where the disputes are pending are as given below:

Name of Period to Section Appeal filed the which amount by Statute relates

A.Y. 2004-05 271 (1) (c) Department

A.Y. 2004-05 271 (1) (c) Assessee

A.Y. 2004-05 143 (3) r.w.s. 153A Assessee

A.Y. 2004-05 143 (3) r.w.s. 153A Department

Income A.Y. 2005-06 271 (1) (c) Assessee

Tax om Act A.Y. 2005-06 143 (3) r.w.s. 153A Assessee

1961 A.Y. 2007-08 271 (1) (c) Department

A.Y. 2007-08 143 (3) r.w.s. 153A Assessee

A.Y. 2007-08 143 (3) r.w.s. 153A Assessee

A.Y. 2007-08 143 (3) r.w.s. 153A Department

A.Y. 2008-09 143 (3) r.w.s. 153A Assessee

A.Y. 2008-09 143 (3) Department

A.Y. 2009-10 143 (3) Assessee

A.Y. 2010-11 143 (3) r.w.s. 144C Assessee

A.Y. 2011-12 143 (3) r.w.s. 144C Assessee

F.Y. 2005-06

Maharas F.Y. 2006-07 htra Value F.Y. 2007-08 AddTax 2002 F.Y. 2008-09 F.Y. 2010-11

Custom F.Y. 2009-10 Under section 112(a), Duty, 114AA and 28 of the The Custom Act 1962.

Custom Act 1962 CBEC

Amount in Closing Balance Lacs (Rs.)

12.89 3.63 4.74 3.97 8.91 Income Tax 7.25 Appellate Tribunal - Mumbai 69.16 19.45 47.73 131.73 120.52 Appeal to be Filed before Honble high Court

196.70 Income Tax Appellate Tribunal - Mumbai 95.02 DRP(Dispute Resolution Panel)

165.63

15.07

Joint Commissioner

494.67 of Sales Tax, Mumbai

333.19

26.54

582.96 approx Commissioner of Customs, ACC, Sahar, and Deputy commissioner of Custom, Mumbai

* In line with film industry consensus, the Company is of the opinion that there are no grounds for levying VAT onfilm distribution activity and hence no provision is made in the books of accounts for these years. The same is disclosed as contingent liability under Notes to Accounts.

** The company, having IEC number 0306007649, export rights of Several films produced by them and/or for which, the distribution rights were purchased/ acquired by them in the past. By exporting distribution rights of the films in the territories abroad, KSS did import of various capital goods including 400 digital cinematographic projectors under EPCG Scheme - concessional rate of duty 3% with the proper compliances. Under EPCG Scheme company have to export eight times (approx 4500.00 lacs) of duty saved within eight years, but till date company did not export under the said obligation.

(c) According to the information and explanations given to us, the company has not defaulted in transfer of amount to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made. Accordingly, the provisions of clause 3(vii) (c) of the Order are not applicable.

(viii) The company has 4271.93 lacs accumulated losses as at 31st March, 2015 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year;

(ix) According to the records of the company examined by us, and the information and explanation given to us, the company has not defaulted in repayment of dues to any bank as at the balance sheet date;

(x) According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions;

S/no. Name of Bank Amount and Case no/ [Remarks

1 Standard Chartered Bank OA 62 of 2008 Against outstanding Bank Guarantee given to Twenty Twenty Television Company Ltd. Of Rs. 160.40 in DRT at Mumbai.

(xi) According to the information and explanation given to us and records examined by us, we have not come across any such cases where the funds raised on short-term basis have been used for long-term investments and vice versa;

(xii) According to the information and explanation given to us and records examined by us, there has not been any fraud on or by the company has been noticed or reported during the year;

FOR Agrawal Jain and Gupta.

Chartered Accountants Firm Reg. No. 013538C

CA Narayan Swami

PARTNER

Membership No. 409759 Place: Mumbai Dated:29.05.2015


Mar 31, 2014

We have audited the accompanying financial statements of KSS LIMITED (Formerly known as K Sera Sera Limited) which comprise the Balance Sheet as at March 31, 2014 and statement of Profit and Loss and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting standards referred to in sub- section (3C) of section 211 of the Companies Act,1956.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 misstatements ,whether due to fraud and error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Standards on auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with the ethical requirements plan and perform the audit to obtained 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 risk of material misstatements 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 expressing an opinion on the effectiveness of entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies and the reasonableness of accounting estimates made by management, as well as evaluating the overall financial statement.

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 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;

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

(c) in the case of Cash Flow Statement, of the cash flow for the year ended on that date;

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003("the Order") issued by the Central Government of India in term of sub section (4A) of the 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. Required by section 227(3) of the act, we report that :

(i) 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;

(ii) 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 these books.

(iii) The Balance Sheet and Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and cash flow statements comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representation received from the Directors as on March 31, 2014 and 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 Companies Act, 1956.

Annexure to the Independent Auditors'' Report

Of the even date of member of KSS Limited on the financial statement for the year ended 31st march 2014

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, We report that:

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

(b) The fixed assets have been physically verified by the management at reasonable intervals, which in our opinion, is considered reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifications.

(c) In our opinion, a substantial part of fixed assets has not been dispose off during the year,

(ii) The Company has a policy of treating motion pictures under production as inventory till the date of release/agreement whichever is earlier. Consequently, there is no tangible inventory carried by the Company. Accordingly, the provisions of Paragraph 4(ii) of the said Order are not applicable to the Company.

(iii) (a) The company has granted interest free advances to five parties covered the register maintained under section 301 of the Companies Act, 1956. As below

(Amount in lacs)

S/no. Name of Opening Loan Reply Max Closing Company Balance given amount Balance

1. K Bazzar Online trading Pvt. Limited 5.17 0.08 - 5.25 5.25

2. K Kampus Education Private Limited 8.58 12.62 21.20 12.47 NIL

3. K Sra sera Box office Pvt Limited (252.87) 307.83 0.19 547.79 54.77

4. K Sera Sera Miniplex Limited 624.75 1443.64 2058.05 699.31 10.34

5. K sera sera Fze 409.52 - - 409.52 409.52

(b) In our opinion, the terms and conditions of such interest free advances are not, prima facie, prejudicial to the interest of the Company.

(c) The above interest free advances would be adjusted on the purchase of film rights or on completion of films as applicable, and in accordance with the terms and conditions stipulated in the agreement, Advances are given by the company to wholly owned subsidiaries companies.

(d) The above interest free advances given by the Company would be adjusted, on the purchase of film rights completion of films, as applicable, and therefore there are no amounts overdue in respect of advances as at the year end. Accordingly, the provisions of clause 4(iii)(d) of the Order are not applicable.

(e) The Company has not taken interest free advances from parties covered under the register maintained under Section 301 of the Act.

(f) In our opinion, the terms and conditions of interest free advances taken by the Company are not, prima facie, prejudicial to the interest of the Company.

(g) Interest free advances would be adjusted against in accordance with the terms and conditions stipulated in the agreement, Advance taken by the company to wholly owned subsidiaries companies.

(iv) In our opinion, and according to the information and explanations given to us, the Company''s internal control procedures for the purchase of inventory and for the sale of goods and services needs to be further strengthened so as to be commensurate with the size of the Company and nature of its business. In respect of purchase of fixed assets, the Company has adequate internal control procedures commensurate with the size of the Company and nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

(v) (a) In our opinion the particulars of all contracts or arrangements that need to be been entered in the register maintained under section 301 of the Companies Act, 1956 so entered Owing to the unique and specialized nature of the items involved and in the absence of any comparable prices, we are unable to comment as to whether the transactions made in pursuance of such contracts or arrangements have been made at the prevailing market prices at the relevant time.

(vi) In our opinion to the information and explanation given to us The Company has complied with the provision of section 58A, 58AA or any other applicable provision of the Companies Act, 1956 and the Companies (Acceptance and Deposit) Rules 1975, with regard to the deposit accepted from public. No order has been passed by the Company Law Board, National Company Law Tribunal or Reserve bank of India or any court or any other Tribunal.

(vii) The Company has an internal audit system, commensurate with the size of the Company and the nature of its business.

(viii) As informed to us, the maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 in respect of the activities of the Company. Accordingly the provisions of Paragraph 4(viii) of the said Order are not applicable to the Company.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales tax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have been regularly deposited with the appropriate authorities and there have been significant delays in a below cases. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows.

(x)

Name of the Nature of Amount Period to Due Date Date of statute the dues which the Payment amount relates

Finance Act, Service 2007 to 30.06.2014 1994 Tax 28.75 *Lacs March 2014 Service Tax

*Statutory liabilities of Service tax company has applied for Voluntary Compliance Encouragement Scheme,2014 as per Notification No: 10/2014-Service tax- Tax due Declare Rs 57,49,701/- amount of Rs 28,74,851/-to paid 30th December 2014, Remaining Before 30th June 2014 Rs 28,74,850/-

(b) The dues outstanding in respect of sales-tax, income-tax, custom duty, wealth-tax, excise duty, cess on account of any dispute are as follows.

Name of Nature of Amount Period to the statute the dues which the amount relates

Maharashtra Value Value Added *Rs 17.71 Lacks F.Y. 20065-07 Added Tax Act, 2002 Tax (Gross) Rs 314.67 Lacks F.Y. 2009-10 Value Added Amount of other Tax (Gross) years liabilities is still not certain by the Authority

Income Tax Act, 1961 Income tax Income Tax **417.14 Laks A.Y. 2009-10

CBEC- details Custom duty Amount of 2009-10 regarding matter liabilities is pending before CIU still not certain by the Authority

* In line with film industry consensus, the Company is of the opinion that there are no grounds for levying VAT on film distribution activity and hence no provision is made in the books of accounts for these years. The same is disclosed as contingent liability under Notes to Accounts.

Company appeal against the said orders of in higher authority.

** Company appeal against the said orders of income tax in higher authority.

(xi) After considering the effect of quantified qualification, in our opinion and according to the information and explanations given to us, the accumulated losses of the Company at the end of the financial year does not exceed fifty percent of its net worth. The Company has not incurred cash losses during the current financial year and also in the immediately preceding financial year.

(xii) In our opinion, and on the basis of our examination and according to the information and explanations given to us, the Company has not defaulted in repayment of its dues to financial institutions :

(xiii) In our opinion, and on the basis of 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. Accordingly the provisions of Paragraph 4(xii) of the said Order are not applicable to the Company.

(xiv) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the provisions of Paragraph 4(xiii) of the said Order are not applicable to the Company.

(xv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Paragraph 4(xiv) of the said Order are not applicable to the Company.

(xvi) According to the information and explanations given to us, the Company has given guarantee to the Company as reflected in Note no 3 to Schedule ''S''.

(xvii) According to the information and explanations given to us that the company had not raised any term loan.

(xviii) On the basis of 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 on short-term basis, which have been used for long-term purposes.

(xix) The Company has not made preferential allotment of shares to the parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of Paragraph 4(xviii) of the said Order are not applicable to the Company.

(xx) The Company has not issued any debentures during the year. Accordingly, the provisions of Paragraph 4(xix) of the said Order are not applicable to the Company.

(xxi) During the year the Company has partly restructured the Bank loan by issuing Fully Convertible Warrants as stated in Notes.

(xxii) To the best of our knowledge and belief, and according to the information and explanations given to us, there have been no cases of fraud on or by the Company noticed or reported during the year.

For Agrawal Jain & Gupta Chartered Accountants FRN:013538C

CA Nitesh Agrawal Partner M. No -406155 Mumbai, 30th May 2014


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of KSS LIMITED (Formerly known as K Sera Sera Limited) which comprise the Balance Sheet as at March 31, 2013 and 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

2. 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 211of 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 misstatements ,whether due to fraud and error.

Auditor''s Responsibility

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

4. 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 risk of material misstatements 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 and the reasonableness of accounting estimates made by management, as well as evaluating the overall financial statement.

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

Opinion

6. 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 Profit and Loss Account, of the profit/ loss for the year ended on that date; and

(c) in the case of Cash Flow Statement, of the cash flow for the year ended on that date;

Report on other Legal and Regulatory Requirements

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

8. Required by section 227(3) of the act, we report that :

(i) 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;

(ii) 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 these books.

(iii) The Balance Sheet and Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and cash flow statements comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representation received from the Directors as on March 31, 2013 and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31,2013 from being appointed as a Director in terms of Section 274 (1)(g) of the Companies Act 1956.

Of the even date of member of KSS Limited on the financial statement for the year ended 31st march 2013

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, We report that:

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

(b) The fixed assets have been physically verified by the management at reasonable intervals, which in our opinion, is considered reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifications.

(c) In our opinion, a substantial part of fixed assets has not been dispose off during the year,

(ii) The Company has a policy of treating motion pictures under production as inventory till the date of release/agreement whichever is earlier. Consequently, there is no tangible inventory carried by the Company. Accordingly, the provisions of Paragraph 4(ii) of the said Order are not applicable to the Company.

(iii) (a) The company has granted interest free

advances to five parties covered the register maintained under section 301 of the Companies Act 1956 the Maximum amount outstanding during the year is 1214.15 lacs and the year ended balance 970.36 lacs.

(b) In our opinion, the terms and conditions of such interest free advances are not, prima facie, prejudicial to the interest of the Company.

(c) The above interest free advances would be adjusted on the purchase of film rights or on completion of films as applicable, and in accordance with the terms and conditions stipulated in the agreement. Advance given by the company to wholly owned subsidiaries companies.

(d) The above interest free advances given by the Company would be adjusted, on the purchase of film rights completion of films, as applicable, and therefore there are no amounts overdue in respect of advances as at the year end. Accordingly, the provisions of clause 4(iii)(d) of the Order are not applicable.

(e) The Company has taken interest free advances from two parties covered under the register maintained under Section 301 of the Act. The maximum amount outstanding during the year is 735.68 lacs and the year-end balance is 283.60 lacs.

(f) In our opinion, the terms and conditions of interest free advances taken by the Company are not, prima facie, prejudicial to the interest of the Company.

(g) Interest free advances would be adjusted against in accordance with the terms and conditions stipulated in the agreement. Advance taken by the company to wholly owned subsidiaries companies.

(iv) In our opinion, and according to the information and explanations given to us, the Company''s internal control procedures for the purchase of inventory and for the sale of goods and services needs to be further strengthened so as to be commensurate with the size of the Company and nature of its business. In respect of purchase of fixed assets, the Company has adequate internal control procedures commensurate with the size of the Company and nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

(v) (a) In our opinion the particulars of all contracts or arrangements that need to be been entered in the register maintained under section 301 of the Companies Act, 1956 so entered Owing to the unique and specialized nature of the items involved and in the absence of any comparable prices, we are unable to comment as to whether the transactions made in pursuance of such contracts or arrangements have been made at the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A, 58AA and any other relevant provisions of the Companies Act, 1956 and the rules framed there under are applicable. Accordingly, the provisions of Paragraph 4(vi) of the said Order are not applicable to the Company.

(vii) The Company has an internal audit system, commensurate with the size of the Company and the nature of its business.

(viii) As informed to us, the maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 in respect of the activities of the Company. Accordingly the provisions of Paragraph 4(viii) of the said Order are not applicable to the Company.

(ix) (a) Undisputed statutory dues including provident

fund, investor education and protection fund, employees'' state insurance, income-tax, sales tax, wealth-tax, service-tax, custom duty, excise duty, cess and other material statutory dues, as applicable, have not been regularly deposited with the appropriate authorities and there have been significant delays in a large number of cases. Undisputed amounts payable in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows. Name Nature Amount Period Due Date of the of the to which Date of statute dues the Payment relates amount

Finance Service 57.49 2007 to 31.12.2013 Act, 1994 Tax *Lacs March Service 2013 Tax

* Statutory liabilities of Service tax company has applied

for Voluntary Compliance Encouragement Scheme,2013 as per Notification No: 10/2013-Service tax- Tax due Declare Rs 57,49,701/-Minimum amount to be paid 31st December 2013 Rs 28,74,851/-, Remaining Before 30th June 2014 Rs 28,74,850/-

(b) The dues outstanding in respect of sales-tax, income-tax, custom duty, wealth-tax, excise duty, cess on account of any dispute are as follows.

Name Nature Amount Period of the of the to statute dues which the amount relates

Maharashtra Value * Amount of F.Y. Value Added Added liabilities is 2005-06 Tax Act, 2002 Tax still not to Value Added (Gross) certain 2012-13 Tax (Gross) by the Authority certain

Income Tax Act, Income **336.14 A.Y. 1961 Tax lakhs 2003-04 Income tax to 2009-10

CBEC - details Custom Amount of 2009-10 regarding matter duty liabilities is pending before still not CIU certain by the Authority

* In line with film industry consensus, the Company is of the opinion that there are no grounds for levying VAT on film distribution activity and hence no provision is made in the books of accounts for these years. The same is disclosed as contingent liability under Notes to Accounts.

** Company appeal against the said orders of income tax in higher authority.

(x) After considering the effect of quantified qualification, in our opinion and according to the information and explanations given to us, the accumulated losses of the Company at the end of the financial year does not exceed fifty percent of its net worth. The Company has not incurred cash losses during the current financial year and also in the immediately preceding financial year.

(xi) In our opinion, and on the basis of our examination and according to the information and explanations given to us, the Company has not defaulted in repayment of its dues to financial institutions :

(xii) In our opinion, and on the basis of 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. Accordingly the provisions of Paragraph 4(xii) of the said Order are not applicable to the Company.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the provisions of Paragraph 4(xiii) of the said Order are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Paragraph 4(xiv) of the said Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee to the Company as reflected in Note no 3 to Schedule''S''.

(xvi) According to the information and explanations given to us that the company had not raised any term loan.

(xvii) On the basis of 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 on short- term basis, which have been used for long-term purposes.

(xviii) The Company has not made preferential allotment of shares to the parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of Paragraph 4(xviii) of the said Order are not applicable to the Company.

(xix) The Company has not issued any debentures during the year. Accordingly, the provisions of Paragraph 4(xix) of the said Order are not applicable to the Company.

(xx) During the year the Company has partly restructured the Bank loan by issuing Fully Convertible Warrants as stated in Notes.

(xxi) To the best of our knowledge and belief, and according to the information and explanations given to us, there have been no cases of fraud on or by the Company noticed or reported during the year.

For Agrawal Jain & Gupta

Chartered Accountants

FRN: 013538C



CA Narayan Swami

Partner

M. No - 409759

Mumbai, 30th May 2013


Mar 31, 2011

1. We have audited the attached balance sheet of K Sera Sera Limited ('the Company') as at March 31, 2011, the profit and loss account and also the cash flow statement of the Company for the year ended on that date (all together referred to as the 'financial statements'). 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 the 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 ('the said Order') issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956 (The Act'), we enclose 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 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 account;

d. in our opinion, the balance sheet, the profit and loss account 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 the written representations received from the directors, and taken on record by the board of directors, we report that none of the directors are disqualified as on March 31,2011 from being appointed as a director under 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 explanation given to us, the said financial statements, read with the notes thereon 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 the balance sheet, of the state of affairs of the Company as at March 31,2011;

ii. in the case of the profit and 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 TO AUDITORS' REPORT

(Referred to in paragraph 4 of our report to the members of K Sera Sera Limited of even date)

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

(b) The fixed assets have been physically verified by the management at reasonable intervals, which in our opinion, is considered reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifications.

(c) The Company has not disposed off a substantial part of fixed assets during the year, and accordingly, going concern is not affected.

(ii) The Company has a policy of treating motion pictures under production as inventory till the date of release/agreement whichever is earlier. Consequently, there is no tangible inventory carried by the Company. Accordingly, the provisions of Paragraph 4(ii) of the said Order are not applicable to the Company.

(iii) According to the information and explanations given to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act 1956. Accordingly, Paragraph 4(iii) of the said Order is not applicable to the Company.

(iv) In our opinion, and according to the information and explanations given to us, the Company's internal control procedures for the purchase of inventory and for the sale of goods and services needs to be further strengthened so as to be commensurate with the size of the Company and nature of its business. In respect of purchase of fixed assets, the Company has adequate internal control procedures commensurate with the size of the Company and nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

(v) In our opinion and according to the information and explanations given to us, there are no transactions that need to be been entered in the register maintained under section 301 of the Companies Act, 1956.

(vi) The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A, 58AAand any other relevant provisions of the Companies Act, 1956 and the rules framed there under are applicable. Accordingly, the provisions of Paragraph 4(vi) of the said Order are not applicable to the Company.

(vii) The Company has an internal audit system, commensurate with the size of the Company and the nature of its business.

(viii)As informed to us, the maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub- section (1) of section 209 of the Companies Act, 1956 in respect of the activities of the Company. Accordingly the provisions of Paragraph 4(viii) of the said Order are not applicable to the Company.

(ix) (a) According to the information and explanations given to us, except for delays in depositing tax deducted at source, the Company is generally regular in depositing undisputed statutory dues including provident fund, investors education and protection fund, employees' state insurance, income-tax, service tax, excise duty, custom duty, cess and any other statutory dues as applicable, with the appropriate authorities during the year. Except arrears of outstanding Income Tax Demand pertaining to period 2006-07 amounting to Rs.4,18,94,580/- as at the end of the financial year, and the company had filed appeal against the said order. There are no outstanding Statutory dues except above as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales tax, income-tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute.

(x) After considering the effect of quantified qualification, in our opinion and according to the information and explanations given to us, the accumulated losses of the Company at the end of the financial year does not exceed fifty percent of its net worth. The Company has not incurred cash losses during the current financial year and also in the immediately preceding financial year.

(xi) In our opinion, and on the basis of our examination and according to the information and explanations given to us, the Company has not defaulted in repayment of its dues to financial institutions:

(xii) In our opinion, and on the basis of 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. Accordingly the provisions of Paragraph 4(xii) 1 of the said Order are not applicable to the Company.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the provisions of Paragraph 4(xiii) of the said Order are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Paragraph 4(xiv) of the said Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee to the Company as reflected in Note no 3 to Schedule'S'.

(xvi) According to the information and explanations given to us that the company had not raised any term loan.

(xvii) On the basis of 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 on short-term basis, which have been used for long-term purposes.

(xviii) The Company has not made preferential allotment of shares to the parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of Paragraph 4(xviii) of the said Order are not applicable to the Company.

(xix) The Company has not issued any debentures during the year. Accordingly, the provisions of Paragraph 4(xix) of the said Order are not applicable to the Company.

(xx) Previous year the Company has partly restructured the Bank loan by issuing Fully Convertible Bonds which is still not yet converted in equity share as stated in Note no.8 of schedule's'.

(xxi) To the best of our knowledge and belief, and according to the information and explanations given to us, there have been no cases of fraud on or by the Company noticed or reported during the year.

For Agrawal Jain & Gupta

Chartered Accountants

FRN : 013538C

CA Narayan Swami

Partner

M. No-409759

Mumbai, 30th May2011








Mar 31, 2010

1. We have audited the attached balance sheet of K Sera Sera Productions Limited (the Company) as at March 31, 2010, the profit and loss account and also the cash flow statement of the Company for the year ended on that date (all together referred to as the financial statements). 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 the Auditing Standards Generally Accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whetherthe 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 (the said Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the CompaniesAct, 1956 (The Act), we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our coThe most diverrs 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 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 account;

d. In our opinion, the balance sheet, the profit and loss account 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 the written representations received from the directors, and taken on record by the board of directors, we report that none of the directors are disqualified as on March 31, 2010 from being appointed as a director under clause (g) of sub-section (1) of section 274 of the CompaniesAct, 1956;

f. In our opinion and to the best of our information and according to the explanation given to us, the said financial statements, read with the notes thereon give the information required by the CompaniesAct, 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 the Balance Sheet, of the state of affairs of the Company as at March 31,2010;

ii. In the case of the Profit and 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 Company for the year ended on that date.

Annexure to Auditors Report (Referred to in paragraph 4 of our report to the members of K Sera Sera Productions Limited of even date)

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

(b) The fixed assets have been physically verified by the management at reasonable intervals, which in our opinion, is considered reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifications.

(c) The Company has not disposed off a substantial part of fixed assets during the year, and accordingly, going concern is not affected.

(ii) The Company has a policy of treating motion pictures under production as inventory till the date of release/ agreement whichever is earlier. Consequently, there is no tangible inventory carried by the Company. Accordingly, the provisions of Paragraph 4(ii) of the said Order are not applicable to the Company.

(iii) According to the information and explanations given to us, the Company has not taken any loan, secured or unsecured from companies, f irms or other parties listed in the register maintained under section 301 of the Companies Act 1956. Accordingly, Paragraph 4(iii) of the said Order is not applicable to the Company.

(iv) In our opinion, and according to the information and explanations given to us, the Companys internal control procedures for the purchase of inventory and forthe sale of goods and services needs to be further strengthened so as to be commensurate with the size of the Company and nature of its business. In respect of purchase of fixed assets, the Company has adequate internal control procedures commensurate wiThe most divers nature of its business. Dunng the course of our audit, we have not observed any continuing failure to correct majorweakness in internal control system.

In our opinion and according to the information and explanations given to us, there are no transactions that need to be been entered in the register maintained under section 301 of the Companies Act, 1956.

(vi) The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A, 58AA and any other relevant provisions of the Companies Act, 1956 and the rules framed there under are applicable. Accordingly, the provisions of Paragraph 4(vi) of the said Order are not applicable to the Company.

(vii) The Company has an internal audit system, commensurate with the size of the Company and the nature of its business.

(viii) As informed to us, the maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 in respect of the activities f of the Company. Accordingly the provisions of Paragraph 4(viii) of the said Order are not applicable to the Company.

(ix) (a) According to the information and explanations given to us, except for delays in depositing tax deducted at source, the Company is generally regular in depositing undisputed statutory dues including provident fund, investors education and protection fund, employees state insurance, income-tax, service tax, excise duty, custom duty, cess and any other statutory dues as applicable, with the appropriate authorities during the year. Except arrears of outstanding Income Tax Demand pertaining to period 2006- 07 amounting to Rs.4,18,94,580/- as at the end of the financial year, and the company had filed appeal against the said order. There are no outstanding Statutory dues except above as at the last day of the financial year concerned for a period of more than six months from the date they became payable.

According to the information and explanations given to us, there are no dues of sales tax, income-tax, wealth tax, service tax, custom duty, excise duty and cess which have not been deposited on account of any dispute.

(x) After considering the effect of quantified qualification, in our opinion and according to the information and explanations given to us, the accumulated losses of the Company at the end of the financial year does not exceed fifty percent of its net worth. The Company has not incurred cash losses during the current financial year and also in the immediately preceding financial year.

(xi) In our opinion, and on the basis of our examination and according to the information and explanations given to us, the Company has not defaulted in repayment of its dues to financial institutions:

(xii) In our opinion, and on the basis of 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. Accordingly the provisions of Paragraph 4(xii) of the said Order are not applicable to the Company.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the. provisions of Paragraph 4(xiii) of the said Order are not applicable to the Company.

(xiv) The Company is not dealing in ortrading in shares, securities, debentures and other investments. Accordingly, the provisions of Paragraph 4(xiv) of the said Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee to the Company as reflected in Note no 3 to ScheduleS.

(xvi) According to the information and explanations given to us that the company had not raised any term loan.

(xvii) On the basis of 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 on short-term basis, which have been used for long-term purposes.

(xviii) The Company has not made preferential allotment of shares to the parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of Paragraph 4(xviii) of the said Order are not applicable to the Company.

(xix) The Company has not issued any debentures during the year. Accordingly, the provisions of Paragraph 4(xix) of the said Order are not applicable to the Company.

(xx) During the year the Company has partly restructured the Bank loan by issuing Fully Convertible Warrants as stated in Note no.8 of schedule S.

(xxi) To the best of our knowledge and belief, and according to the information and explanations given to us, there have been no cases of fraud on or by the Company noticed or reported during the year.

For Agrawal Jain & Gupta

Chartered Accountants FRN:013538C

CA Narayan Swami

Partner

M. No-409759

Mumbai, 26th May 2010

 
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