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Auditor Report of Lakshmi Precision Screws Ltd.

Mar 31, 2016

To,

The Members of

M/s. Lakshmi Precision Screws Limited 46/1, Mile Stone, Hisar Road,Rohtak-124001

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of Lakshmi Precision Screws Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, and 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 stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 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 of 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 the 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 standalone 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, issued by the Institute of Chartered Accountants of India, as 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 a 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 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 qualified audit opinion on the standalone financial statements.

BASIS FOR QUALIFIED OPINION

1. We are unable to observe physical inventories of Finished Goods, Semi-Finished Goods, Stock in Trade (Traded goods) and Consumables Stores and Spares due to the size and nature of inventories and we are also unable to satisfy ourselves by alternative means concerning the inventories held at 31st March, 2016. The entity has not carried any physical verification in respect of Inventories comprising of Semi Finished Goods, Finished Goods, Stock- in- Trade (Traded goods), Consumables Stores and Spares. The Company has obtained a physical verification certificate on an inadequate sample basis from an independent firm of Chartered Accountants. In our opinion the same does not commensurate with the size and nature of inventories.

2. The Company has capitalized inventory of dies and tools having a value of Rs. 60,64,97,351/- as on 1st January, 2016. However no physical verification has been conducted in respect of dies and tools so capitalized. Adjustments, if any are not ascertainable and will be provided after physical verification of dies and tools.

3. Certain advances for materials, services and capital goods aggregating to Rs. 14,61,43,791/- were outstanding as on 31/03/2016. The confirmations from parties to whom these advances are given has not been made available. Out of such advances, provision for doubtful advances should be recognized in respect of advances, outstanding for a period of three years or more where no movement has taken place and no confirmations are available. Adjustments, if any, are not ascertainable and will be provided on identification of such parties.

4. Balances under Sundry Debtors and Sundry Creditors, loans and advances given by the Company and parties

from whom unsecured loans have been taken are subject to confirmations and adjustments, if any, required upon such confirmations are not ascertainable and hence not provided for.

5. In respect of loans and advances of Rs. 1,01,96,685/given to Lakshmi Extrusions Limited, it is observed that the said party is not making any repayment and the said loan is outstanding for more than three years. In our opinion the same should be classified as doubtful advance and provision should be recognized in accounts. To that extent, the loss for the year is understated.

6. The Company has capitalized Borrowing Costs amounting to Rs.3, 54, 10,046/- for the year ended 31st March,

2016 in respect of capital work in progress at IMT, Rohtak. However the same is not in compliance with Accounting Standard-16 "Accounting for Borrowing Costs". Since no substantial development activity has been carried out at IMT, Rohtak, borrowing costs of Rs. 3,54,10,046/should be charged to the Statement of Profit and Loss and to that extent the loss for the year is understated.

7. A fraud of Rs. 1, 60, 59,342/- was reported during the Financial Year 2005-06 incurred by an ex-employee of the Company which is under litigation and pending before the Hon''ble Delhi High Court. In our opinion, provision for doubtful debt should be recognized for the same and to that extent the loss for the year is understated.

8. The Company is in violation of Section 73 of Companies Act, 2013 read together with Companies (Acceptance of Deposits) Rules, 2014, as it has taken advances from customers amounting to Rs. 2,11,52,638/- having balance outstanding for more than 365 days. In terms of Rule 2(1)(xii)(a) such advances are liable to be treated as deposits read together with section 73 of the Companies Act, 2013 and hence the Company is in violation of the same.

9. The Company has taken unsecured loans from Companies amounting to Rs.7, 29, 00,000/- which are outstanding as at the end of the year and the same has been shown under short term borrowings in the Balance Sheet. However, loan agreements in respect of these loans have not been furnished and in absence of the same, the terms of repayment, chargeability of interest and other terms are not verifiable and have not been furnished.

10. As per the accounting policy of the Company, the Company is valuing its inventories at lower of cost and net realizable value. As explained to us, since exact cost is not ascertainable, the same is arrived at list price less 57% in case of finished goods and at list price less 66% in case of semi-finished goods and special items have been valued at 31% less in case of semi-finished goods and 22% less in the case of finished goods of the selling price. Since proper cost records are not maintained, exact cost is not ascertainable, and therefore the impact if any, on account of valuation of inventories on basis of actual cost is not quantifiable and provided for.

In our opinion and to the best of our information and according to the explanations given to us, subject to the possible effects of the matters described in the Basis for Qualified Opinion paragraphs, the 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 state of affairs of the Company as at March 31, 2016, its losses, and its cash flows for the year ended on that date.

Empasis of Matter

1. Attention is invited to note no. 33(27) where the company has passed an accounting entry relating to excess depreciation charged in earlier years amounting to '' 2,14,57,668/-. However, the same has been adjusted against "other expenses" (note no. 29) while it should be disclosed under the head "other income (note no.21). The same shall have no impact on profit for the year.

2. The managerial remuneration has been paid in terms of sanction from Central Government under section 269,198/301 of the Companies Act, 1956, vide letters dated 17th September, 2013 and 29 th October, 2013 which are valid up to 31st December, 2015. The Company has filed an application with the Central Government seeking approval for payment of remuneration exceeding the limits provided in Schedule V for the proposed period from 1st January, 2016 to 31st December, 2017. The approval for the subsequent period is to be obtained and the amount paid/provided for to the director is subject to consequential adjustment if any, on receipt of approval of Central Government.

Our opinion is not modified is respect of above matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s report) Order, 2016 (''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, a statement on 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) Except for the effects of the matter described in the "Basis for Qualified Opinion paragraph" above, 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 Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) Subject to the possible effects of the matter described in the "Basis for Qualified Opinion paragraph" above, in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) The matters described in clauses 1, 2, 8 and 9 of the Companies (Auditor''s report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (refer Annexure A) in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of written representations received from the directors as on 31st March, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164(2) of the Act;

(g) The matters described in the "Basis for Qualified Opinion Paragraph" above and clauses 1(a),1(b)2 and 3(b), 3 (c), 5,6,7,8 and 11 of the Companies (Auditor''s report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act(refer Annexure A) in our opinion are relate to the maintenance of accounts and other matters connected therewith;

(h) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;

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

1. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.

2. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long —term contracts including derivatives contracts.

3. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE A TO INDEPENDENT

The Annexure A referred to in our report to the members of Lakshmi Precision Screws Limited for the year ended 31.03.2016. We report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details of fixed assets. However, the same needs updating with regard to item-wise identification and situation of fixed assets. The Company has capitalized dies and tools having a book value of Rs.60, 64, 97,351/- as on 1stJanuary 2016 (refer note No.-33(4)). Fixed assets register in respect of said dies and tools capitalized is not updated.

(b)The Company has a phased periodical programme of physical verification of all fixed assets, which in our opinion is reasonable having regard to the size of the Company and the nature of its business. No material discrepancies have been noticed on such verification. However no physical verification has been conducted in respect of dies and tools capitalized on 1st January 2016 and therefore cannot be commented upon.

(c) We have inspected the photocopies of title deeds of immovable properties of the Company held as fixed assets. As informed to us, the original title deeds are in possession of bankers and mortgagees from whom credit facilities have been taken. Letters have been written to the bankers/mortgagees but no confirmation has been received except in the case of Indian Overseas Bank, Rohtak. Therefore, based on our audit procedures and the information and explanations given to us, we report that the title deeds of immovable properties of the Company held as fixed assets are held in the name of the Company.

2. As per explanations given to us, no physical verification in respect of inventories comprising of Finished Goods, Semi- Finished Goods (Work In Progress), Stock In Trade (Traded Goods) and Consumable Stores and Spares have been conducted by the management. However, the Company has obtained a physical verification certificate on an inadequate sample basis from an independent firm of Chartered Accountants at the end of the year. As per information given to us, physical verification was conducted partially in case of Work-In-Progress and Consumables Stores and Spares during the year and Company identified dead and slow moving inventory having a book value of Rs. 5,45,83,125/- and Rs. 6,97,35,433/- respectively and after recognizing a scrap value of Rs. 43,67,760/- and Rs. 13,67,361/respectively, the net write down of Rs. 5,02,15,365/- and Rs. 6,83,68,072/- respectively was debited in financial statements as an Exceptional Item (refer note no.- 31) which in our opinion is material in view of the size and nature of the Company. However, in absence of a complete physical verification of Inventories covering all items, we are unable to comment whether discrepancies between book records and physical verification are material.

3. (a) In our opinion and according to the information and explanations given to us, the Company has not granted any loan during the year to parties covered in the register maintained under section 189 of the Companies Act, 2013. However, the Company has an outstanding balance of loan of Rs.

1,01,96,685/- and Rs. 55,00,003/- due from M/s Lakshmi Extrusions Limited and M/s Hanumat Wires Udyog Private Limited respectively, which was granted in earlier years and outstanding as on 31.03.2016. Since no loan has been granted during the year, para 3(iii)(a) of the Order is not applicable to the Company and hence not commented upon.

(b) According to the information and explanations received by us, the schedule of repayment of principal and payment of interest has not been stipulated between the Company and the related parties listed in the register maintained under section 189 of the Companies Act, 2013 and hence we are unable to comment upon the regularity of repayments or receipts.

(c) The amount due from parties covered in the register maintained under section 189 of the Companies Act, 2013 is more than three years old. And in absence of schedule of repayment and payment of interest, we are unable to comment upon whether any amount is overdue for more than ninety days and whether any steps for recovery have been taken by the Company.

4. In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees and securities granted during the year in respect of which provisions of section 185 and 186 of the Companies Act, 2013 are applicable.Therefore,para3(iv) of the Order is not applicable to the Company and hence not commented upon.

5. The Company is in violation of Section 73 of Companies Act, 2013 read together with Companies (Acceptance of Deposits) Rules, 2014, as it has taken advances from customers amounting to Rs. 2,11,52,638/- which are liable to be treated as deposits in terms of Rule 2(1)(xii)(a) of Companies (Accounts) Rules, 2014. Also, the Company had accepted deposits of Rs. 7, 05, 00,000/- prior to 01.04.2014 in violation of Section 76 of the Companies Act, 2013 read together with Companies (Acceptance of Deposits) Rules, 2014. The Company failed to repay the said deposits by 31.03.2015 and has filed a petition before Hon''ble Company Law Board seeking extension of time for repayment of deposits. The Hon''ble Company Law Board vides Orders dated 16.07.2015 extended the time for repayment of public deposits. But the Company failed to comply with the said order. On a petition filed by the depositors before the Hon''ble Company Law Board, the Company Law Board passed another order dated 18.04.2016for further extension of time for repayment of deposits, which the Company again failed to comply with as on the date of signing of Balance Sheet.

6. The Company is in the business of manufacturing high tensile fasteners, cost records in respect of which have been mandated u/s 148(1) of the Companies Act, 2013 read together with Companies (Cost Accounting Records) Rules, 2014. In our opinion and according to the information and explanations given to us, the necessary cost records have not been maintained by the Company.

7. (a) The Company is not regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities. Arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable are as under:-

SR. NATURE OF NO. STATUTORY DUES

AMOUNT OF ARREAR OUTSTANDING FOR MORE THAN SIX MONTHS FROM THE DATE THEY BECOME PAYABLE (Rs.)

1. Contribution towards PF

10,46,726 /-

2. Contribution towards ESI

1,89,931 /-

3. TDS and TCS

3,12,88,980 /-

4. Work Contract Tax

16,05,149 /-

5. R.D. Cess

3,48,674 /-

6. Excise Duty

64,99,065 /-

7. Service Tax

62,52,155 /-

8. CST / VAT

1,25,16,755 /-

9. Income Tax

1,74,77,093 /-

10. Wealth Tax

3,98,101 /-

11. Interest on PF / ESI

20,01,746 /-

12. Interest on TDS

74,57,747 /-

13. Interest on Excise Duty

30,61,747 /-

14. Interest on Service Tax

18,66,808 /-

15. Interest on CST/VAT

75,14,479 /-

16. Interest on Income Tax

19,26,987 /-

(b) According to the information and explanation given to us, the dues outstanding of income tax and other taxes which have not been deposited on account of any dispute are as follows:-

NAME OF THE STATUTE

NATURE OF THE DUES

AMOUNT (Rs.)

PERIOD TO WHICH THE AMOUNT RELATES

FORUM WHERE DISPUTE ISPEND-ING

Income Tax Act, 1961

Deduction/Claim in respect for export business

u/s 80HHC and charging of interest u/s 234B whether on returned/assessed income

'' 2,90,376 /-

A.Y. 1991-92

High Court, Chandigarh

Determination of book profit before or after depreciation

'' 54,26,222 /-

A.Y. 1990-91

Expenses allowable under various heads viz

bonus and insurance

'' 20,00,075 /-

A.Y. 1990-91

TOTAL

'' 77,16,673 /-

8. In our opinion and according to the information and explanations given to us, the Company has defaulted in repayments of dues to banks, financial institutions and Government as under:-

LENDER CONCERNED

PERIOD OF DEFAULT

(NUMBER OF DAYS-RANGE)

TOTAL AMOUNT INVOLVED

(INCLUDING INTEREST) (Rs.)

Canara Bank (term Loan no. - 11717730 02257)

2 days to 84 days

73,20,567/-

Canara Bank (term Loan no. - 11717730 02272)

6 days to 125 days

1,00,00,000/-

Intec Capital Limited (term loan no.- 2111)

15 days to 228 days

37,14,828/-

Intec Capital Limited (term loan no.- 4078 and 1846)

15 days to 243 days

1,55,34,498/-

Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC)

60 days to 701 days

11,23,85,380/-

Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC)- Deferred Payment Liability

517 days to 1125 days

2,03,53,137/-

Hero Fincorp Limited

1 day to 192 days

7,93,70,074/-

Karvy Financial Services Limited (term Loan no.- 410975)

10 days to 361 days

3,77,50,568/-

Karvy Financial Services Limited (term Loan no.- 411761 and

1,45,67,481/-

701011)

23 days to 420 days

Religare Finvest Limited

1 day to 26 days

22,09,394/-

HDFC Bank Limited- Machine Loan

1 day to 45 days

1,53,012/-

HDFC Bank Limited- Machine Loan

1 day to 45 days

1,52,384/-

ICICI Bank Limited- Finance Lease Obligation

2 days to 3 days

2,86,226/-

State Bank of India- Finance Lease Obligation

13 days

21,560/-

State Bank of India- Finance Lease Obligation

5 days to 13 days

1,95,010/-

State Bank of India- Finance Lease Obligation

6 days to 97 days

2,54,437/-

Volkswagon Finance Limited- Finance Lease Obligation

Canara Bank (Working Capital Loan)

1 day to 57 days

The balance is in excess of sanctioned limits on 348 days during the year

3,61,599/

The balance exceeded the

Sanctioned limits ranging from Rs. 288/- to Rs. 22,21,70,746/- during the financial year

State Bank of India (Working Capital Loan)

The balance is in excess of sanctioned limits on 329 days during the year

The balance exceeded the

sanctioned limits ranging from Rs. 61,625/- to Rs. 2,89,19,625/- during the financial year

9. According to the information and explanations given to us, the Company has not raised any moneys by way of initial public offer or further public offer and has not taken any term loans, therefore para 3(ix) is not applicable to the Company.

10. In our opinion and according to the information and explanations given to us, neither fraud on the Company by its officers or employees nor any fraud by the Company has been noticed or reported during the year.

11. The Company has paid/provided for managerial remuneration amounting to Rs. 3, 73, 80,000/- for the period from 01/04/2015 to 31/03/2016. The same has been paid/provided in accordance with the approval of Central Government, vide letters dated 17th September 2013 and 29th October 2013 valid up to 31/12/2015. The approval for the subsequent period is to be obtained and the amount paid/provided to the director is subject to consequential adjustment, if any, on receipt of approval of Central Government.

12. In our opinion, the Company is not Nidhi Company.Therefore, the provisions of para 3(xii) of the Order are not applicable to the Company and hence not commented upon.

13. In our opinion, the transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

14. According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review, and hence, reporting requirements under para 3(xiv) are not applicable to the Company and therefore not commented upon.

15. In our opinion and according to the information and explanation given to us, the company has not entered into any non-cash transactions with directors or persons connected with him.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 therefore para 3(xvi) is not applicable to the Company.

ANNEXURE-B TO

THE AUDITOR''S REPORT

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 ("THE ACT")

We have audited the internal financial controls over financial reporting of Lakshmi Precision Screws Limited ("the Company") as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Company''s internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that

1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

QUALIFIED OPINION

According to the information and explanations given to us and based on our audit, the following material weakness has been identified as at March 31, 2016:

(a) The procedures of physical verification of inventory of Finished Goods, Semi-Finished Goods, Stock in Trade (Traded goods) and Consumables Stores followed by the management are not reasonable and adequate in relation to the size of the Company and the nature of its business.

(b) The Company did not have an appropriate internal control system over Debtors and Creditors confirmation and reconciliation of balances with the parties. These could potentially result in material misstatements in the Company''s trade payables and trade receivables balances.

(c) The Management does not review the provision for doubtful trade receivables methodology, assumptions and underlying calculation for appropriateness on a periodic basis, there for these could result in risk of material misstated net receivables and bad debts expenses.

(d) The Company''s financial control over repayment of long term borrowings and short term borrowings is highly ineffective with regard to repayment of principal and interest. The Company has defaulted in repayment of loan taken from Banks, Financial Institutions and others on many occasions and further there is general lack of financial planning and management on part of the Company.

(e) The Company does not have adequate system of segregation of duties to effectively monitor and operate the control of depositing undisputed statutory dues including Provident Fund, Income Tax, TDS, Sales-Tax, Wealth tax, VAT, duty of customs, Service tax, Cess and other material undisputed statutory dues with the appropriate authorities. This could potentially result in levy of interest and other penal provisions of statutes and have a significant impact on functioning of the Company.

(f) There is a material weakness with regard to control over advances given to suppliers for goods and services. The controls with regard to subsequent settlement of advances are ineffective and as a result many parties to whom advances have been given are very old and remain unsettled. Further there is no control system over confirmation and reconciliation of balance with parties. These could potentially result in write off of advances and have an impact on financial statements of the Company.

(g) The Company did not have an adequate internal control system for physical verification of dies and tools capitalized as fixed assets, further the internal control system needs updation with regard to item-wise identification and situation of fixed assets. This may have material impact on stated value of fixed assets and depreciation.

(h) The Company has inadequate design of information technology (IT) general and application controls that prevent the information system from providing complete and accurate information consistent with financial reporting objectives and current needs.

(i) There are significant deficiencies in Controls over the selection and application of accounting principles that are in conformity with generally accepted accounting principles. There is Ineffective internal control over legal compliance by the Company.

(j) The Company did not have an appropriate internal financial control system over financial reporting since the internal controls adopted by the Company did not adequately consider risk assessment, which is one of the essential components of internal control, with regard to the potential for fraud when performing risk assessment.

A ''material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company''s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, because of the effects/possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has not maintained adequate and effective internal financial controls over financial reporting as of March 31, 2016, based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India"

We have considered the material weaknesses, identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 standalone financial statements of the Company,

and these material weaknesses have affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

For V.R. BANSAL & ASSOCIATES,

Chartered Accountants

Firm Registration No. 016534N

SD/-

V.P. BANSAL

PLACE: DELHI Partner

DATED: 14TH JUNE, 2016 Membership No. 008843


Mar 31, 2015

We have audited the accompanying financial statements of Lakshmi Precision Screws Limited ("the Company") which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and 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 stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone 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 issued by the Institute of Chartered Accountants of India, as 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 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 controls system over financial reporting and the effectiveness of such controls. 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. There is a limitation on the scope of our work regarding the physical verification of inventories.

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

Basis for Qualified Opinion

1. The Company has accepted deposits of Rs.70000002/- from promoters' friends prior to 01/04/2014. However as per provisions of Section 76 of the Companies Act, 2013 read together with Companies (Acceptance of Deposits) Rules, 2014, the Company is not eligible to accept public deposits, The Company has failed to repay the said deposits by 31/03/2015 and has filed a petition before the Hon'ble Company Law Board seeking extension of time for repayment of Deposits which is pending before the Board. Further the Company has not complied with the provisions of Section 73 of Companies Act, 2013 read together with Companies (Acceptance of Deposits) Rules, 2014. as it has taken advances from customers amounting to Rs. 47759742/- having balance outstanding for more than 365 days.

2. Certain advances for material and services aggregating to Rs.125136144/- were outstanding as on 31/03/2015. However, confirmation from parties to whom these advances are given has not been made available to us. Out of such advances, in our opinion, provision for doubtful advance amounting to Rs.31289676/- should be recognized as these are outstanding for a period of three years or more.

3. The Company has taken unsecured loans from Companies amounting to Rs. 84313220/- which are outstanding as at the end of the year and the same has been shown under short term borrowings in the Balance Sheet. However, loan agreements in respect of these loans have not been furnished and in absence of the same, the terms of repayment, chargeability of interest and other terms are not verifiable and have not been furnished.

4. The Company has made provisions for Income Tax as per section 115JB of the Income Tax Act, 1961 amounting to Rs. 1806163/-. However, the provision has been credited to Reserves and Surplus instead of crediting the same under current liabilities and provisions. Therefore, to the extent of Rs. 1806163/-, the reserves and surplus are overstated and current liabilities and provision are understated. There is no impact on profit for the year.

5. As per the accounting policy of the Company, the Company is valuing its inventories at lower of cost and net realizable value. As explained to us, since exact cost is not ascertainable, the same is arrived at list price less 57% in case of finished goods and at list price less 66% in case of semi-finished goods and special items have been valued at 31% less in case of semi-finished goods and 22% less in the case of finished goods of the selling price.

The same has been worked out on the basis of overall gross margin and not on exact cost basis. Since proper cost records are not maintained, exact cost is not ascertainable, and therefore the impact if any, on account of valuation of inventories on basis of actual cost is not quantifiable and provided for.

6. The Company has not carried any physical verification in respect of inventories comprising of Raw Material, Work in Progress, Finished Goods, Stock in Trade (Traded goods), Consumables Stores and Spares and Dies and Tools. The Company has obtained a physical verification certificate on an inadequate sample basis from an independent firm of Chartered Accountants. In our opinion the same does not commensurate with size and nature of inventories.

7. As per the accounting policy, the Company is amortizing dies and tools on the basis of effective residual remaining life based on technical assessment conducted by the Committee. However, the said technical assessment has not been carried out during the year and dies and tools have been mortised to the Statement of Profit and Loss as and when scrapped. Pending the technical assessment and determination of effective residual values of dies and tools, the impact of amortization thereof is not ascertainable.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to the possible effects of the matters described in the Basis for Qualified Opinion paragraphs, 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 Profit and Loss Statement, of the profit for the year ended on that date.

c) in the case of 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 ("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 1 a statement on matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(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 the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) Subject to the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement 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 Section164(2) 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 Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

1) The Company has disclosed the impact of pending litigations on its financial position in its financial statements;

2) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long –term contracts including derivatives contracts.

3) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date Re: Lakshmi Precision Screws Limited (the Company)

1. a) The Company has maintained proper records showing full particulars including quantitative details of fixed assets. However the same needs

b) The Company has a phased periodical programme of physical verification of all fixed assets, which in our opinion is reasonable having regard to the size of the Company and the nature of its business. No material discrepancies have been noticed on such verification.

2 a) As per explanations given to us, physical verification of inventories was conducted on test check basis by an independent firm of Chartered

Accountants at the end of the year. In our opinion all the items of inventories should

b) In our opinion, the procedures of physical verification of inventory of finished goods, semi finished goods and raw materials followed by the management are not reasonable and adequate in relation to the size of the Company and the nature of its business. In our opinion, physical verification of inventories should be carried out throughout the year on perpetual basis and the procedure should be so designed that each material item is physically verified at least once in a year in view of the size and nate of the business.

c) The Company is maintaining proper records of inventory We have been informed that no major variances were noticed on physical verification of inventory conducted by an independent firm of chartered accountants as stated in clause 2(a) above. However, in absence of a complete physical verification of Inventories covering all items, we are unable to comment whether discrepancies between book records and physical verification are material.

3 In our opinion and according to the information and explanations given to us, the Company has not granted loans to parties covered in the register maintained under section 189 of the Companies Act, 201 of material and services. Thus clause 3(a) (b) of the Order are not applicable to the Company.

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 the nature of its business with regard to purchases of inventories, fixed assets and for sale of goods and services. However the Company's internal control is not adequate with respect to advances given by the Company for have not observed any continuing failure to correct major weakness in the internal controls except in case of advances given to suppliers for material and services as stated above.

5. The Company is not eligible to accept public deposits as it does not satisfy the criteria laid down under section 76 read together with Companies(Acceptance of Deposits) Rules, 2014 of the Companies Act, 2013. However, it has outstanding deposits from public amounting to Rs.70000002/- as on 31/03/2015 which it has failed to repay by the said date. The Company has filed a petition before the Hon'ble Company Law Board seeking extension of time for repayment of Deposits which is pending before the Board. The Company is in violation of Section 73 of Companies Act, 2013 read together with Companies(Acceptance of Deposits) Rules, 2014, as it has taken advances from customers amounting to Rs.47759742/- having balances outstanding for more than 365 days. In terms of Rule 2(1)(xii)(a) read together with section 73 of the Companies Act, 2013 such advances are liable to be treated as deposits and hence the company is in violation of the same. As per information and explanations given to us, no Order has been passed by Company Law Board or National Company L Tribunal or Reserve Bank of India or any other

6. The Company is in the business of manufacturing high tensile fasteners, cost records in respect of which have been mandated u/s 148(1) of the Companies Act, 2013 read together with Companies (Cost Accounting Records) Rules, 2014 In our opinion and according to the information and explanations given to us, the necessary cost records have not been maintained by the Company.

7. (a) The company is not regular in depositing undisputed statutory dues including Provident Fund, Employees State Wealth Tax, Service tax, Excise Duty Custom Duty Value Added Tax, Cess and any other undisputed statutory dues with the appropriate authorities. The extent of arrears of outstanding Statutory dues as on 31st March, 2015, concerned for a period of more than six months from the date they become payable are as under:-

Nature of Statutory dues Amount of arrear outstanding for more than six months from the date they become payable

Provident Fund Rs. 21,06,083/-

Employee's State Insurance Rs. 55657/-

Labour Welfare Fund Rs. 2,39,235/-

TDS and TCS Rs. 96,12,276/-

Work Contract Tax Rs. 11,73,215/-

Professional Tax Rs. 20,000/-

R.D. Cess Rs. 2,69,647/-

CST/VAT Rs. 1,14,45,238/-

Interest on PF/ESI Rs. 2,74,709/-

Interest on TDS Rs. 14,00,902/-

Income Tax Rs. 2,05,93,729/-

(b) According to the information and explanations given to us there are no dues of Value Added Tax/ sales tax/service tax/income tax/custom duty wealth tax/excise duty/cess payable which have not been deposited on account of any dispute except the following :

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

Income Tax Act, 1961 Deduction/Claim in respect for export business u/s 290376 80HHC and charging of interest u/s 234B whether on returned/assessed income

Income Tax Act, 1961 Determination of book profit before or after depreciation 5426222

Income Tax Act, 1961 Expenses allowable under various heads viz Bonus and 2000075 insurance

TOTAL 7716673

Name of the Statute Period to which Forum where dispute the amount relates is pending

Income Tax Act, 1961 AY. 1991-92 High Court, Chandigarh

Income Tax Act, 1961 AY. 1990-91 High Court, Chandigarh

Income Tax Act, 1961 AY 1990-91 High Court, Chandigarh

TOTAL

(c) The amount required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

8. The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and during the immediately preceding financial year.

9. In our opinion and according to the information and explanations given to us, the Company or banks except, the following payments:

(a) Term loans(Principal) and interest thereon amounting to Rs.4,83,93,640/- has been

(b) Foreign bills and domestic bills amounting to Rs.18,56,42,960/- discounted with banks

(c) Term loans(Principal) and interest thereon amounting to Rs.5,25,78,835/- from Banks, HSIIDC and as on the date of Balance Sheet with a delay of 1 to 336 days.

(d) Deferred payment liabilities(including interest) from HSIIDC amounting to Rs.18212048/- remained outstanding as on the date of Balance Sheet wth a delay of 27 to 701 days.

(e) Cash credit facilities from Canara Bank and State Bank of India was overdrawn

10. According to the information and explanations given to us, the Company has not given corporate guarantees for loan taken by others from banks and financial institutions.

11. Based on overall cash flow analysis, the Company has applied term loans for the purpose for which the loans were obtained except a sum of Rs.85951264/-(availed for investment in Machinery / Capex)

12. Based upon 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 V. R. Bansal & Associates

Chartered Accountants

Firm Registration No. 016534N



V.P Bansal

Place : Noida Partner

Dated : May 29, 2015 Membership No: 08843


Mar 31, 2014

We have audited the accompanying financial statements of Lakshmi Precision Screws 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 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 and financial performance and cash flows of the company in accordance with accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956, read with General Circular 8/2014 dated 4 April, 2014 issued by the Ministry of Corporate Affairs. 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 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 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 statement, of the loss for the year ended on that date.

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

Emphasis of Matter

Without qualifying our report we would like to draw attention to following matters:-

a) As explained to us, physical verification of inventory was conducted on test check basis by an independent firm of Chartered Accountants at the end of the year. The physical verification of inventory should be carried out on perpetual basis and the procedures should be so designed that each material item is physically verified at least once in a year in view of the size and nature of the business.

b) The Company has paid managerial remuneration to a director amounting to Rs. 36,00,000/- for the period from 01/04/2013 to 31/03/2014. The same has been paid in accordance with the approval of Central Government obtained vide letter no. A96200837/2/2010-CL-VII valid for a period of three years w.e.f. 01/10/2010 to 30/09/2013. The approval for the subsequent period is to be obtained and the amount paid to the director is subject to consequential adjustment, if any, on receipt of approval of Central Government.

Our audit report gives emphasis of matter in respect of the matters as stated above.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 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 the 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 the Cash Flow Statement comply with theAccounting Standards notified under the Companies Act, 1956, read with General Circular 8/2014 Dated 4 April, 2014 issued by the Ministry of Corporate Affairs;

e) on the basis of written representations 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 clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. However the same need updation with regard to item-wise depreciation and accumulated depreciation in respect of each asset. Pending determination of item wise depreciation and accumulated depreciation, the impact, if any, on financial statements cannot be ascertained and shall be provided for after updation of fixed assets register.

b) The Company has a phased periodical programme of physical verification of all fixed assets, which in our opinion is reasonable having regard to the size of the Company and the nature of its business. No material discrepancies have been noticed on such verification.

c) Substantial part of fixed assets has not been disposed off during the year

2. a) /As explained to us, physical verification of inventory was conducted on test check basis by an independent firm of Chartered Accountants at the end of the year. In our opinion all the items of inventories should be physically verified by the management on a perpetual basis.

b) In our opinion, the procedures of physical verification of inventory of finished goods, semi finished goods and raw materials followed by the management are not reasonable and adequate in relation to the size of the Company and the nature of its business. In our opinion, physical verification of inventories should be carried out throughout the year on perpetual basis and the procedure should be so designed that each material item is physically verified at least once in a year in view of the size and nature of the business.

c) The Company is maintaining proper records of inventory. We have been informed that no major variances were noticed on physical verification of inventory conducted by an independent firm of chartered accountants as stated in clause 2(a) above. However, in absence of a complete physical verification of Inventories covering all items, we are unable to comment whether discrepancies between book records and physical verification are material.

3. a) In our opinion and according to the information and explanations given to us, Company has not granted any unsecured loan to any company, firm and other parties covered in the register maintained under section 301 of the Act. As explained to us, advances to parties covered under section 301 of the Act are in respect of material and services and given in ordinary course of business. Therefore the clauses 3(a), (b) (c) and (d) are not applicable to the Company.

b) The Company has taken deposits from 13 parties covered in the register maintained under section 301 of the Companies Act, 1956 and having an outstanding balance of Rs. 17,89,99,244/- as on the date of the balance sheet.

c) In our opinion the terms and conditions on which such loans have been taken are not prima facie prejudicial to the interests of the Company.

d) In our opinion, the repayment of principal amount and interest payments are regular wherever stipulated.

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 the nature of its business with regard to purchases of inventories, fixed assets and for sale of goods and services. However the Company''s internal control is not adequate with respect to advances given by the Company for material and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls except in case of advances given to suppliers for material and services as stated above.

5. a) In our opinion and according to our examination and explanations given to us, transactions made in pursuance of contracts or agreements that need to be entered in the register maintained u/s 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and examinations given to us, transactions made in pursuance of contracts or agreements that need to be entered in the register maintained u/s 301 of the Companies Act, 1956 aggregating during the year exceeding Rs. 5,00,000/- have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public. In our opinion, the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed thereunder, or any other relevant provisions of the Act, where applicable, have been complied with. Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal has not passed any Order in respect of public deposits accepted by the Company.

7. The Company has an internal audit system, the scope and coverage of which, in our opinion, requires to be further enhanced to be commensurate with the size and the nature of its business.

8. The Company is in the business of manufacturing high tensile fasteners, cost records in respect of which have been mandated u/s 209(1)(d) of the Companies Act 1956 read together with Companies (Cost Accounting Records) Rules, 2011. In our opinion and according to the information and explanations given to us, the necessary cost records have not been maintained by the Company.

9. a) The Company is generally regular in depositing undisputed statutory dues in respect of Investor Education and Protection Fund, Excise Duty and Custom Duty. However in respect of Provident Fund, Employees'' State Insurance, Income Tax, Wealth Tax, Service Tax, TCS and TDS, the Company has deposited the amount with delays. There are no arrears of outstanding statutory dues as at 31st March 2014 for a period of more than six months from the date they become payable except in respect of TDS amounting to Rs.26,34,980/-, Income Tax amounting to Rs.2,13,67,729/- and Wealth Tax amounting to Rs.1,64,849/-. The Company has deposited TDS amounting to Rs.26,34,980/- on 27th May, 2014 and Wealth Tax amounting to Rs.1,64,849/- on 31st March, 2014.

b) According to the information and explanations given to us there are no dues of Value Added Tax/ sales tax/service tax/income tax/custom duty wealth tax/excise duty/cess payable which have not been deposited on account of any dispute except the following :

Name of the Statute Nature of dues

Income Tax Act, 1961 Deduction/Claim in respect for export business u/s 80HHC and charging of interest u/s 234B whether on returned/assessed income

Income Tax Act, 1961 Determination of book profit before or after depreciation Income Tax Act, 1961 Expenses allowable under various heads viz Bonus and insurance

TOTAL

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

Income Tax Act, 1961 290376 A.Y. 1991-92 High Court, Chandigarh

Income Tax Act, 1961 5426222 A.Y. 1990-91 High Court, Chandigarh

Income Tax Act, 1961 2000075 A.Y. 1990-91 High Court, Chandigarh

TOTAL 7716673

10. The Company does not have any accumulated losses at the end of accounting period nor has incurred cash losses in the accounting period covered under audit and in the immediately preceding financial year.

11. 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 institutions or banks except, the following payments:

Particulars Amount Period of delay Remarks (Rs.) (Days)

Term Loans Rs.13,06,33,252/- 4 to 89 Paid during the year

Foreign Bills Rs.16,12,50,948/- 3 to 27 Paid during the year

Domestic Bills Rs.3,89,32,741/- 1 to 28 Paid during the year

Term Loans Rs.2,26,35,268/- Remained unpaid as on Balance Sheet date

Deferred Payment Rs.1,03,69,364/- Remained unpaid as on Liabilities Balance Sheet date

Bills Discounted Rs.57,56,070/- Remained unpaid as on with Banks Balance Sheet date

Working Capital Limits from

Canara Bank Overdrawn 1 to 60 Regularized on 15/04/2014

State Bank of India Overdrawn 1 to 32 Regularized on 27/05/2014

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

13. In our opinion the Company is not a chit fund, 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.

14. In respect of dealing in investments, proper records have been maintained of the transactions and contracts and timely entries have been made therein, In our opinion and according to the information and explanation given to us Shares held by the Company are held in the name of the Company.

15. Based on our examination of records and according to the information and explanations given to us, the company has not given guarantee for loans taken by others from bank or financial institutions, which are prejudicial to the interests of the company.

16. In our opinion and according to the information and explanations given to us, on and overall basis, the term loans have been applied for the purposes for which they were raised except out of term loan of Rs.17,84,51,000/- disbursed by Haryana State Industrial and Infrastructure Development Corporation Limited, a sum of Rs.1,32,155/- is lying idle in the current account. As explained to us the same shall be utilized for the purpose for which it was sanctioned in the current financial year.

17. According to the information and explanations given to us and an overall examination of the balance sheet of the company, we are of the opinion that the funds raised on short term basis have not been utilized for long term investment.

18. According to the information and explanation given to us the company has not made any preferential allotment accordingly the provisions of clause 4(xviii) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

19. According to the information and explanations given to us the company has not issued any debenture, accordingly the provisions of clause 4(xix) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

20. According to the information and explanations given to us the company has not raised money by public issue during the year, accordingly the provisions of clause 4(xx) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period that causes the financial statement to be materially misstated.

For V. R. Bansal & Associates Chartered Accountants Firm Registration No: 016534N

V.P. Bansal Place : Delhi Partner Dated : May 29, 2014 Membership No: 08843


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fi nancial statements of Lakshmi Precision Screws Limited ("the Company") which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profi t and Loss and Cash Flow Statement for the year ended on that date annexed thereto and a summary of signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position and fi nancial performance and cash fl ows of the company in accordance with accounting principles generally accepted in India, including the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fi nancial 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 fi nancial 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 fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial 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 fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our qualifi ed audit opinion.

Basis for Qualified Opinion

The Company has not obtained actuarial valuation in respect of provision for gratuity liability and leave encashment payable to its employees. The impact of liability on this account is therefore not ascertainable and cannot be quantifi ed. Further, the disclosures as required by AS-15 ''Employee Benefi ts'' are not furnished in their entirety.

As per the accounting policy of the Company, the Company is valuing its inventories at lower of cost and net realizable value. As explained to us, since exact cost is not ascertainable, the same is arrived at list price less 55% in case of fi nished goods and at list price less 65% in case of semi-fi nished goods and special items have been valued at 30% less in case of semi-fi nished goods and 20% less in the case of fi nished goods of the selling price.

As explained to us the exact cost will be ascertained after implementation of detailed cost records. Pending such determination of exact cost, the impact, if any, on the fi nancial statements is not ascertainable and hence not provided for.

As per the information and explanations given to us, stocks of dies carried as inventories are amortized as a charge to the statement of profi t and loss when they are scrapped from active use while the same should be written off on a systematic basis over their useful period of lives based on actual production. The impact, if any, on the fi nancial statements is not ascertainable and hence cannot be quantifi ed.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualifi ed Opinion paragraphs, the fi nancial 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 Profi t and Loss statement, of the profi t for the year ended on that date.

c) in the case of Cash Flow Statement, of the cash fl ows 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 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 specifi ed 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 Profi t and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profi t and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956; except for the possible effects of the matters described in the Basis for Qualifi ed Opinion paragraph;

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 is disqualifi ed 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 notifi cation 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.

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory requirements'' section of our report of even date)

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fi xed assets. However the same need updation with regard to item-wise depreciation and accumulated depreciation in respect of each asset.

b) The Company has a phased periodical programme of physical verifi cation of all fi xed assets, which in our opinion is reasonable having regard to the size of the Company and the nature of its business. No material discrepancies have been noticed on such verifi cation.

c) Substantial part of fi xed assets has not been disposed off during the year.

2. a) As explained to us, physical verifi cation of inventory was conducted on test check basis by an independent fi rm of Chartered Accountants at the end of the year. In our opinion all the items of inventories should be physically verifi ed by the management at least once in a year and not on a test check basis.

b) In our opinion, the procedures of physical verifi cation of inventory of fi nished goods, semi fi nished goods and raw materials followed by the management are not reasonable and adequate in relation to the size of the company and the nature of its business. In our opinion, physical verifi cation of inventories should be carried out throughout the year on perpetual basis and the procedure should be so designed that each material item is physically verifi ed at least once in a year in view of the size and nature of the business.

c) The Company is maintaining proper records of inventory. We have been informed that no major variances were noticed on physical verifi cation of inventory conducted by an independent fi rm of chartered accountants as stated in clause 2(a) above. However, in absence of a complete physical verifi cation of Inventories covering all items, we are unable to comment whether discrepancies between book records and physical verifi cation are material.

3. a) In our opinion and according to the information and explanations given to us, Company has not granted any unsecured loan to any company, fi rm and other parties covered in the register maintained under section 301 of the Act. As explained to us, advances to parties covered under section 301 of the Act are in respect of material and services and given in ordinary course of business. Therefore the clauses 3(a), (b) (c) and (d) are not applicable to the Company.

b) The Company has taken deposits from 12 parties covered in the register maintained under section 301 of the Companies Act, 1956 and having an outstanding balance of Rs. 71074136/- as on the date of the balance sheet.

c) In our opinion the terms and conditions on which such loans have been taken are not prima facie prejudicial to the interests of the Company.

d) In our opinion, the repayment of principal amount and interest payments are regular wherever stipulated.

4. In our opinion and according to the information & 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 inventories, fi xed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5. a) In our opinion and according to our examination and explanations given to us, transactions made in pursuance of contracts or agreements that need to be entered in the register maintained u/s 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and examinations given to us, transactions made in pursuance of contracts or agreements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year exceeding Rs. 5,00,000/- have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public. In our opinion, the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed thereunder, or any other relevant provisions of the Act, where applicable, have been complied with. Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal has not passed any Order in respect of public deposits accepted by the Company.

7. The Company has an internal audit system, the scope and coverage of which, in our opinion, requires to be further enhanced to be commensurate with the size and the nature of its business.

8. The company is in the business of manufacturing high tensile fasteners, cost records in respect of which have been mandated u/s 209(1)(d) of the Companies Act 1956 read together with Companies (Cost Accounting Records) Rules, 2011. In our opinion and according to the information and explanations given to us, the necessary cost records have not been maintained by the Company.

9. a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund,

Employees'' State Insurance, Excise Duty, Income- tax, Wealth tax, Custom Duty, Cess and any other statutory dues with the appropriate authorities except some delays. However in respect of dues of TDS and Sales-tax the Company is not regular in depositing undisputed statutory dues with the appropriate authorities. There are no arrears of outstanding statutory dues as at 31st March 2013 for a period of more than six months from the date they become payable. The Company has not made any provision towards cess payable u/s 441A of the Companies Act, 1956, since the required notifi cation has not been issued by the Central Government in this regard.

b) According to the information and explanations given to us there are no dues of Value Added Tax/ sales tax/service tax/income tax/custom duty wealth tax/excise duty/cess payable which have not been deposited on account of any dispute except the following :

Name of the Statute Nature of dues Amount Period to which Forum where dispute (Rs.) the amount relates is pending Income Tax Act, 1961 Deduction/Claim in respect for export business u/s 290376 A.Y. 1991-92 High Court, Chandigarh 80HHC and charging of interest u/s 234B whether on returned/ assessed income

Income Tax Act, 1961 Determination of book profit before or after depreciation 5426222 A.Y 1990-91 High Court, Chandigarh

Income Tax Act, 1961 Expenses allowable under various heads viz Bonus and 2000075 A.Y. 1990-91 High Court, Chandigarh insurance

TOTAL 7716673



10 The Company does not have any accumulated losses at the end of accounting period nor has incurred any cash losses in the accounting period covered under audit and in the immediately preceding fi nancial year.

11 In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a fi nancial institutions or banks except, in case of term loans, repayments of Rs.1,26,08,468/-, Rs. 11,26,06,925/- and of Rs. 1,03,46,340/- have been made with delays of 6 to 40 days, 41 to 100 days and 101 to 175 days respectively and in case of bills of exchange overdue as on Balance Sheet date for a period from 1 to 40 days for bills aggregating to Rs. 3,62,58,154/-. Further a sum of Rs. 4,10,29,716/- remained unpaid on account of principal and interest in respect of term loans from banks and other parties as on the Balance Sheet date.

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

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

14 In respect of dealing in investments, proper records have been maintained of the transactions and contracts and timely entries have been made therein. In our opinion and according to the information and explanation given to us Shares held by the Company are held in the name of the Company.

15 Based on our examination of records and according to the information and explanations given to us, the company has not given guarantee for loans taken by others from bank or fi nancial institutions, which are prejudicial to the interest of the company.

16 In our opinion and according to the information and explanations given to us, on and overall basis, the term loans have been applied for the purposes for which they were raised except term loans of Rs.5680000/- taken from Canara Bank lying idle with the Company as on the Balance Sheet date. As explained to us the same shall be utilised for the purpose for which it was sanctioned in the current fi nancial year.

17 According to the information and explanations given to us and an overall examination of the balance sheet of the company, we are of the opinion that the funds raised on short term basis have not been utilized for long term investment.

18 According to the information and explanation given to us the company has not made any preferential allotment accordingly the provisions of clause 4(xviii) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

19 According to the information and explanations given to us the company has not issued any debenture, accordingly the provisions of clause 4(xix) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

20 According to the information and explanations given to us the company has not raised money by public issue during the year, accordingly the provisions of clause 4(xx) of the Companies (Auditor Report) Order, 2003 are not applicable to the company.

21 According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period that causes the fi nancial statement to be materially misstated.



For V.R. BANSAL & ASSOCIATES

Chartered Accountants

Firm Registration No: 016534N

Place: Delhi Rajan Bansal

Dated: May 29, 2013 Partner

Membership No: 93591


Mar 31, 2012

We have audited the attached Balance Sheet of Lakshmi Precision Screws Limited as at 31st March, 2012 and also the statement of Profit and Loss for the year ended on that date annexed thereto and the Cash Flow Statement for the period ended on that date. 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 misstatements. 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.

As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the annexure referred to above, 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 purpose 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 those books and proper returns adequate for the purpose of audit have been received from the branches not visited by us;

iii) the Balance Sheet and the statement of Profit and Loss Account dealt with by this report are in agreement with the books of account;

iv) in our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 except AS-15 Employee Benefits' issued by the Institute of Chartered Accountants of India;

v) 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 is 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;

vi) We further state that:

The Company has not obtained actuarial valuation in respect of provision for gratuity liability and leave encashment payable to its employees. The impact of liability on this account, is therefore not ascertainable and cannot be quantified. Further, the disclosures as required by AS-15 'Employee Benefits' are not furnished in their entirety.

As per the accounting policy of the Company, the Company is valuing its inventories at lower of cost and net realizable value. As explained to us, since exact cost is not ascertainable, the same is arrived at list price less 55% in case of finished goods and at list price less 65% in case of semi-finished goods and special items have been valued at 30% less in case of semi-finished goods and 20% less in the case of finished goods of the selling price.

As explained to us the exact cost will be ascertained after implementation of cost records. Pending such determination of exact cost, the impact, if any, on the financial statements is not ascertainable and hence not provided for.

As per the information and explanations given to us, stocks of dies carried as inventories are amortized as a charge to the statement of profit and loss when they are scrapped from active use while the same should be written off on a systematic basis over their useful period of lives based on actual production. The impact, if any, on the financial statements is not ascertainable and hence cannot be quantified.

vii) Subject to our observations as stated in para vi) above with consequential effects on the financial statements, in our opinion, and to the best of our informations and according to the explanations given to us, the financial statements read together with 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

(b) In the case of Statement of Profit and Loss, of the profit of the Company 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.

(Referred to our report of even date)

In terms of the information and explanations 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 as under:

1. a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets. However the same needs updation with regard to item-wise depreciation and accumulated depreciation in respect of each asset.

b) The fixed assets have been physically verified by the management at reasonable intervals having regard to the size of the Company and nature of its assets. We have been informed that no material discrepancies were noticed on such physical verification.

c) Substantial part of fixed assets has not been disposed off during the year.

2. a) As explained to us, physical verfication of inventory was conducted on test check basis by an independent firm of Chartered Accountants at the end of the year. In our opinion all the items of inventories should be physically verified by the management at least once in a year and not on a test check basis.

b) In our opinion, the procedures of physical verification of inventory of finished goods, semi finished goods and raw materials followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. In our opinion, physical verification of inventories should be carried out throughout the year on perpetual basis and the procedure should be so designed that each material item is physically verified at least once in a year in view of the size and nature of the business.

c) The Company is maintaining proper records of inventory. We have been informed that no major variances were noticed on physical verification of inventory conducted by an independent firm of Chartered Accountants as stated in clause 2(a) above.

3. a) In our opinion and according to the informations and explanations given to us, Company has not granted any unsecured loan to any Company, firm and other parties covered in the register maintained under section 301 of the Act. As explained to us, advances to parties covered under section 301 of the Act are in respect of material and services and given in ordinary course of business. Therefore the clauses 3(a), (b) (c) and (d) are not applicable to the Company

e) The Company has taken loans and deposits from 11 parties covered in the register maintained under section 301 of the Companies Act, 1956 and having an outstanding balance of Rs.6,55,74,136/- as on the date of the balance sheet.

f) In our opinion, the terms and conditions on which such loans have been taken are not prima facie prejudicial to the interests of the Company.

g) In our opinion, the repayment of principal amount and interest payments are regular wherever stipulated.

4. In our opinion, there is adequate internal control system 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. In our opinion, there is no continuing failure to correct major weaknesses in internal control.

5. a) As per our prima facie examination of the register maintained under section 301 of the Act, we are of the opinion that the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public. In our opinion, the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed thereunder, or any other relevant provisions of the Act, where applicable, have been complied with. Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal has not passed any order in respect of public deposits accepted by the Company.

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

8. The Company is in the business of manufacturing high tensile fasteners, cost records in respect of which have been mandated u/s 209(1)(d) of the Companies Act, 1956 read togehter with Companies (Cost Accounting Records) Rules, 2011. In our opinion and according to the informations and explanations given to us, the necessary cost records have not been maintained. As per explanations and information given to us the Company has appointed a Cost Accountant for maintenance of proper cost records and compliance report as prescribed under rule 2 and rule 5 of Companies (Cost Accounting Records) Rules, 2011 shall be furnished within the due time.

9. a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Excise Duty, Income tax, Sales tax, Wealth Tax, Custom Duty, cess and any other statutory dues with the appropriate authorities except with some minor delays. However in respect of dues of TDS and Sales-tax the Company is not regular in depositing undisputed statutory dues with the appropriate authorities. There are no arrears of outstanding statutory dues as at 31st March 2012 for a period of more than six months from the date they become payable. However, the Company has not made any provision towards cess payable u/s 441 A of the Companies Act, 1956, since the required notification has not been issued by the central government in this regard.

b) According to the information and explanations given to us, there were no amounts of dues of sales tax/ income tax/ custom duty/ wealth tax/ excise duty/ cess which have not been deposited on account of any dispute other than the following:-

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

Income Tax Act, 1961 Deduction/Claim in respect for export business u/s 290376 A.Y.1991-92 High Court, Chandigarh

80HHC and charging of interest u/s 234B whether on returned/ assessed income

Income Tax Act, 1961 Determination of book profit before or after depreciation 5426222 A.Y. 1990-91 High Court, Chandigarh

Income Tax Act, 1961 Expenses allowable under various heads viz Bonus and 2000075 A.Y. 1990-91 High Court, Chandigarh insurance

total 7716673

Industrial Dispute Act, 1947 Suit filed by the employee for recovery of arrears 239980 1999 to 2002 Labour Court, Rohtak

ToTAL 239980

10. The Company has no accumulated losses. The Company has not incurred cash losses in the financial year under report and in the financial year immediately proceeding such financial year.

11. In our opinion and according to information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank except, in case of term loans, repayments of Rs.47460443/- and of Rs.81152071/- have been made with delays of 1 to 2 days and 10 to 87 days respectively and in case of bills of exchange for a period from 1 to 60 days for bills aggregating to Rs.21745903/-. Further a sum of Rs.33751572/- remained unpaid on account of principal and interest as on the Balance Sheet date.

12. The Company has not granted 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 or mutual benefit fund/society. Therefore the clauses 13 (a), (b), (c) and (d) are not applicable.

14. In respect of dealing in investments, proper records have been maintained of the transactions and contracts and timely entries have been made therein. Shares held by the Company are held in the name of the Company.

15. In our opinion and according to explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. In our opinion and on the basis of examination of cash flow statement, and as per the explanations given to us, we are of the opinion that, the term loans were applied for the purpose for which the loans were obtained.

17. In our opinion and on the basis of examination of cash flow statement and as per the explanations given to us, we are of the opinion that the funds raised on short-term basis have not been used for long term investment.

18. 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.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by way of public issue during the year.

21. According to information and explanation given to us, no fraud on or by the Company has been noticed reported during the year under audit. for V.R. Bansal & Associates chartered Accountants

Registration No.-016534 N

Place : NoiDA V.P. Bansal

Dated : May 23, 2012 Partner

M No. 8843


Mar 31, 2011

We have audited the attached Balance Sheet of Lakshmi Precision Screws Limited as at 31st March, 2011 and also the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the period ended on that date. 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 misstatements. 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.

As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the annexure referred to above, 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 purpose 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 those books and proper returns adequate for the purpose of audit have been received from the branches not visited by us;

iii) the Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account;

iv) in our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 except AS-15 'Employee Benefits' issued by the Institute of Chartered Accountants of India;

v) 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 is 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;

vi) in the absence of the notification in the Official Gazette of the Central Government, the Company has not made any provision for cess payable under Section 441A of the Companies Act, 1956. As per the explanations given to us, the required provision for cess payable shall be made in accordance with the notification, as and when issued by the Central Government in its Official Gazette;

vii) in our opinion, and to the best of our information and according to the explanations given to us, the accounts subject to the Note No. 14 of Schedule 17 with regard to non provision of gratuity liability and leave encashment in accordance with the provisions of AS-15 'Employee Benefits' issued by the Institute of Chartered Accountants of India and read together with other 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

(b) In the case of Profit and Loss Account, of the profit of the Company 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.

ANNEXURE TO THE AUDITORS' REPORT (Referred to our report of even date)

In terms of the information and explanations 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 as under:

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

b) The fixed assets have been physically verified by the management during the year at reasonable intervals. In our opinion, the frequency of physical verification is reasonable having regard to the size of the Company and nature of its assets. We have been informed that no material discrepancies were noticed on such physical verification.

c) Substantial part of fixed assets has not been disposed off during the year.

2. a) The stocks of finished goods, semi finished goods and raw materials have been physically verified at the end of the year by the Management. In our opinion, the frequency of verification is reasonable. In respect of stocks of consumable stores, spare parts and dies and tools, as explained to us, the management is taking necessary steps for physical verification of these items during the year.

b) In our opinion, the procedures of physical verification of inventory of finished goods, semi finished goods and raw materials 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 physical verification of stocks of finished goods, semi finished goods and raw materials as compared to book records were not material, however, the same have been properly dealt within the books of account.

3. a) The Company has not granted any unsecured loan to any Company, firm and other parties covered in the register maintained under section 301 of the Act. Therefore the clauses 3(a), (b) (c) and (d) are not applicable to the Company

e) The Company has taken deposits from 10 parties covered in the register maintained under section 301 of the Companies Act, 1956 and having an outstanding balance of Rs 6,03,74,136 /- as on the date of the balance sheet. '

f) In our opinion, the terms and conditions on which such loans have been taken are not prima facie prejudicial to the interests of the Company.

g) In our opinion, the repayment of deposits and interest thereon is regular as per stipulated terms. The Company has taken interest free loans and advances from directors, their relatives and a Company amounting to Rs. 4,87,74,136/- as on the balance sheet date.

4. In our opinion, there are adequate internal control system 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. In our opinion, there is no continuing failure to correct major weaknesses in internal control.

5. a) As per our prima facie examination of the register maintained under section 301 of the Act, we are of the opinion that the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

b) 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.

6. The Company has accepted deposits from the public. In our opinion, the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed thereunder, or any other relevant provisions of the Act, where applicable, have been complied with. Company Law Board oc National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal has not passed any order in respect of public deposits accepted by the Company.

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

8. With regard to the applicability of the cost records prescribed u/s 209(1)(d) of the Companies Act, 1956, the Central Government has issued a notification dated April 24, 2001 whereby the Cost Accounting Records (Engineering Industries) Rules 1984 have been amended to include in its appendix all types of 'automotive parts and accessories'. As per the information and explanations given to us by the Company, the products of the Company has multiple usage and the principal business of the Company does not comprise of such products, which are capable of being used as automotive parts and accessories. The Company has also taken a legal opinion regarding applicability of Cost Records according to which, the said records are not applicable to the Company. Accordingly, prima-facie, we are of the opinion that the aforesaid rules are not applicable to the Company.

9. a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'

State Insurance, Income tax, Sales tax, Wealth Tax, Custom Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities however with some delays. There are no arrears of outstanding statutory dues as at 31st March 2011, concerned for a period of more than six months from the date they become payable. However, the Company has not made any provision towards cess payable uls 441A of the Companies" Act, 1956, since the required notification has not been issued by the central government in this regard.

b) According to the information and explanations given to us, there were no amounts of dues of sales tax/income tax/custom duty/wealth tax/excise duty/cess which have not been deposited on account of any dispute other than the following:-

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

Income Tax Act, 1961 Deduction/Claim in respect 290376 for export business u/s 80HHC and charging of interest u/s 234B whether on returned /assessed income

Income Tax Act, 1961 Determination of book profit 5426222 before or after depreciation

Income TaxAct, 1961 Expenses allowable under 2000075 various heads viz Bonus and insurance

TOTAL 7716673

Industrial Dispute Act, 1947 Recovery of money due from 239980 employer

TOTAL 239980

Employees State Insurance Recovery of contribution under Section 45-C and 45-I of 17714 Act, 1948 Employees State Insurance Act, 1948

Employees State Insurance Recovery of contribution under Section 45-C and 45-I of 29044 Act, 1948 Employees State Insurance Act, 1948

Employees State Insurance Recovery of contribution under Section 45-C and 45-I of 173779 Act, 1948 Employees State Insurance Act, 1948

TOTAL 220537

Name of the Statute Period to which Forum where dispute the amount relates is pending

Income Tax Act, 1961 AY. 1991-92 High Court, Chandigarh

Income Tax Act, 1961 A.Y. 1990-91 High Court, Chandigarh

Income Tax Act, 1961 A.Y. 1990-91 High Court, Chandigarh

Industrial Dispute Act, 1947 1999 to 2002 Labour Court, Rohtak

Employees State Insurance April 1995 to ESI Court, Rohtak Act, 1948 March 1996

Employees State Insurance April 2000 to ESI Court, Rohtak Act, 1948 March 2001

Employees State Insurance April 2002 to ESI Court,' Rohtak Act, 1948 March 2003

10. The Company has no accumulated losses. The Company has not incurred cash losses in the financial year under report and in the financial year immediately proceeding such financial year.

11. In our opinion and according to information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank except some delays in making repayment of foreign currency term loan aggregating to Rs.2,28,28,801/- (USD 533000) to 1CICI Bank Ltd. for a period from 6 days to 45 days.

12. The Company has not granted 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 or mutual benefit fund/society. Therefore the clauses 13 (a), (b), (c) and (d) are not applicable.

14. In respect of dealing in investments, proper records have been maintained of the transactions and contracts and timely entries have been made therein. Shares held by the Company are held in the name of the Company.

15. In our opinion and according to explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. In our opinion and on the basis of examination of cash flow statement, and as per the explanations given to us, we are of the opinion that, the term loans were applied for the purpose for which the loans were obtained except in case of term loan obtained from IDBI Bank Limited, out of which idle fund which are not required for immediate utilization have been gainfully invested in liquid investment payable on demand. The amount of idle funds outstanding, as at the year end amounted to Rs. 144.98 lacs.

17. In our opinion and on the basis of examination of cash flow statement and as per the explanations given to us, we are of the opinion that the funds raised on short-term basis have not been used for long term investment.

18. 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.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by way of public issue during the year.

21. According to information and explanation given to us, no fraud on or by the Company has been noticed reported during the year.

for V.R. Bansal & Associates Chartered Accountants Registration No.-016534 N



V.R Bansal Partner M No. 8843

Place : NOIDA Dated : May 30,2011


Mar 31, 2010

We have audited the attached Balance Sheet of Lakshmi Precision Screws Limited as at 31st March, 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the 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 misstatements. 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.

As required by the Companies (Auditors Report) order, 2003 as amended by the Companies (Auditors Report) (Amendment) order 2004 issued by the Central Government of India in terms of sub-section 4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

Further to our comments in the annexure referred to above, 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 purpose 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 those books and proper returns adequate for the purpose of audit have been received from the branches not visited by us;

iii) the Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account; iv in our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section

(iV) of section 211 of the Companies Act, 1956 except AS-15 Employee Benefits’ issued by the Institute of Chartered Accountants of India;

v) on the basis of written representations received from the directors, as on 31st March, 2010 and taken on record by he Board of Directors, we report that none of the directors is 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;

vi) in the absence of the notification in the official gazette of the Central Government, the Company has not made any provision for cess payable under section 441A of the Companies Act, 1956. As per the explanations given to us, the required provisions for cess payable shall the notification, as and when issued by the Central Government in its official gazette; vii) in our opinion, and to the best of our information and according to the explanations given to us, the accounts subject to the Note No. 11 with regard to provision of gratuity liability and non-furnishing of information as required by AS-15 ’Employee Benefits’ issued by the Institute of Chartered Accountants of India and read together with 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 :

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.

(b) In the case of Profit and Loss Account, of the profit of the Company 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.

ANNEXURE TO THE AUDITORS REPORT

In terms of the information and explanations 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 as under:

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

b) The fixed assets have been physically verified by the management during the year at reasonable intervals, having regard to the size of the Company and nature of its assets. We have been informed that no material discrepancies were noticed on such physical verification.

c) Substantial part of fixed assets has not been disposed off during the year.

2. a) The stocks of finished goods, semi finished goods and raw materials have been physically verified at the end of the year by the Management. In our opinion, the frequency of verification is reasonable. In respect of stocks of consumable stores, spare parts and dies and tools, as explained to us, the management is in the process of devising a suitable programme for physical verification of the aforesaid items.

b) In our opinion, the procedures of physical verification of inventory of finished goods, semi finished goods and raw materials 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 physical verification of stocks of finished goods, semi finished goods and raw materials as compared to book records were not material, however, the same have been properly dealt within the books of account.

3. a) The Company has not granted any unsecured loan to any Company, firm and other parties covered in the register maintained under section 301 of the

Act. Therefore the clauses 3(a), (b) (c) and

(d) are not applicable to the Company.

e) The Company has taken deposits from 10 parties covered in the register maintained under section 301 of the Companies Act, 1956 and having an outstanding balance of Rs.5,99,95,840/- as on the date of the balance sheet.

f) In our opinion the terms and conditions on which such loans have been taken are not prima facie prejudicial to the interests of the Company.

g) In our opinion, the repayment of deposits and interest thereon is regular as per stipulated terms. The Company has taken interest free loans and advances from directors and their relatives amounting to Rs.3,12,62,540/- as on the balance sheet date.

4. In our opinion, there are adequate internal control system 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. In our opinion, there is no continuing failure to correct major weaknesses in internal control.

5. a) As per our prima facie examination of the register maintained under section 301 of the Act, we are of the opinion that the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

b) 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.

6. The Company has accepted deposits from the public. In our opinion, the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the Act and the rules framed thereunder, or any other relevant provisions of the Act, where applicable, have been complied with Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal has not passed any order in respect of public deposits accepted by the Company.

7. The Company had an internal audit system commensurate with the size and nature of its business during the first half of the year. No internal audit was conducted during the second half of the year and as explained to us, the Company is in the process of appointing internal auditors.

8. With regard to the applicability of the cost records prescribed u/s 209(1)(d) of the Companies Act, 1956, the Central Government has issued a notification dated April 24, 2001 whereby the Cost Accounting Records (Engineering Industries) Rules 1984 have been amended to include in its appendix all types of ‘automotive parts and accessories. As per the information and explanations given to us by the Company, the products of the Company have multiple usage and the principal business of the Company does not comprise of such products, which are capable of being used as automotive parts and accessories. Accordingly, prima-facie, we are of the opinion that the aforesaid rules are not applicable to the Company.

9. a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees

State Insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities except with some minor delays. There are no arrears of outstanding statutory dues as at 31st March 2010, for a period of more than six months from the date they become payable. However, the Company has not made any provision towards cess payable u/s 441 A of the Companies Act, 1956, since the required notification has not been issued by the central government in this regard.

b) According to the information and explanations given to us, there were no amounts of due cess which have not been deposited on account of any dispute other than the following:-

Name of the Statute Nature of dues Amount

(Rs.)

Income Tax Act, 1961 Deduction/Claim in respect for

export business

u/s 290376

80HHC and charging

of interest u/s 234B whether on

returned/assessed income

Determination of book profit

before or after

depreciation 5426222

" Expenses allowable under

various heads viz Bonus and 2000075

insurance

TOTAL 7716673

Industrial Dispute

Act, 1947 Recovery of money due from employer 239980

TOTAL 239980

Employees State

Insurance Recovery of contribution under Section

Act 1948 45-C and 45-I of 17714

Employees State Insurance Act,

1948

Employees State

Insurance Recovery of contribution under

Section 45-C and 45-I of 29044

Act 1948 Employees State Insurance Act,

1948

Employees State

Insurance Recovery of contribution under Section

45-C and 45-I of 173779 Act 1948

Employees State Insurance

Act, 1948

TOTAL 220537



Name of the Statute Period to which Forum where dispute

the amount relates is pending

Income Tax Act, 1961 AY. 1991-92 High Court, Chandigarh

AY 1990-91 High Court, Chandigarh

AY 1990-91 High Court, Chandigarh

Industrial Dispute 1999 to 2002 Labour Court, Rohtak

Act, 1947

Employees State April 1995 to ESI Court, Rohtak

Insurance

Act 1948

March 1996

Employees State April 2000 to ESI Court, Rohtak

Insurance

Act 1948

March 2001

Employees State April 2002 to ESI Court, Rohtak

Insurance

Act 1948

March 2003

10. The Company has no accumulated losses. The Company has not incurred cash losses in the financial year under report and in the financial year immediately preceding such financial year.

11. In our opinion and according to explanations given to us, the Company has not defaulted in repayment of dues to afinancial institution or bank except some delays in making repayment of foreign currency term loan as under :

Name of Financial Institution Nature of Loan Due Date

ICICI Bank Limited Term Loan 22.06.2009

ICICI Bank Limited Term Loan 22.06.2009

ICICI Bank Limited Term Loan 22.12.2009



Name of Financial Institution Actual Date of Payment Amount (USD)

ICICI Bank Limited 26.06.2009 333000

ICICI Bank Limited 20.11.2009 333000

ICICI Bank Limited 10.02.2010 333000

12. The Company has not granted 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 or mutual benefit fund/society. Therefore the clauses 13 (a), (b), (c) and (d) are not applicable.

14. In respect of dealing in investments, proper records have been maintained of the transactions and contacts and timely entries have been made therein. Shares held by the Company are held in the name of the Company.

15. In our opinion and according to explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. In our opinion and on the basis of examination of cash flow statement, and as per the explanations given to us, we are of the opinion that, the term loans were applied for the purpose for which the loans were obtained except in case of term loan obtained from IDBI Bank Limited, out of which idle fund which are not required for immediate utilization have been gainfully invested in liquid investment payable on demand. The amount of idle funds outstanding as at the year end amounted to Rs. 330.65 lacs.

17. In our opinion and on the basis of examination of cash flow statement and as per the explanations given to us, we are of the opinion that the funds raised on short-term basis have not been used for long term investment.

18. 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.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by way of public issue during the year.

21. According to information and explanation given to us, no fraud on or by the Company has been noticed reported during the year under audit.

For V.R. Bansal & Associates

Chartered Accountants

Registration No.-016534 N

Place : NOIDA

V.P. Bansal

Dated : May 27, 2010 Partner

M No : 8843 ft

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