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Auditor Report of Natural Capsules Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s Natural Capsules Limited ("the Company"), which comprise tire Balance Sheet as at 31st March, 2015, 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

The Company's Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (the Act) with respect to the preparation and presentation of these 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) Rule 2014. This responsibility also includes maintenance of accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgment 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 tire accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, tire accounting and auditing standards and matters which are required to be included in the audit report under the provision of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perfornr tire 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 disclosure in the financial statements, the procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 tire company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its profit and its cash flows for tire year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

b. in our opinion, proper books of account as required by Law have been kept by the Company so far as it appears from our examination of these books;

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 26(iii) to the financial statements;

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

iii. There has been no delay in transferring amount, required to be transferred to the Investor

Education and Protection Fund by tire Company.

ANNEXURE TO AUDITOR'S REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

1) In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars including quantitative details and situation of the fixed Assets.

b) As explained to us, the fixed assets were physically verified during the year by the Management with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

2) In respect of its Inventory :

a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

b) In our opinion and according to the Information and explanations given to us, the procedures of physically verification of inventory followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory and the discrepancies noticed on physical verification between the physical stocks and the book records were not material in relation to the operations of the Company.

3) The Company has not granted any loan, secured or unsecured, to the Companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

4) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of examination and according to the information and explanations given to us, we have neither come across nor we have informed of any instance of major weaknesses in the aforesaid internal control systems.

5) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits in terms of Chapter-V the Companies Act, 2013 read with The Companies (Acceptance of Deposits) Rules, 2014 and hence reporting under this clause is not applicable.

6) According to the records produced and information given to us, the provisions of Section 148(1) of the Companies Act, 2013 regarding maintenance of cost records is applicable to the company and the company has maintained the records as required.

7) According to the information and explanations given to us and according to the books and records as produced and examined by us, in respect of statutory due :

a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fluid, Investor Education and Protection Fund, Income Tax, Sales Tax, Excise Duty, Custom Duty, Service Tax, Cess and other statutory dues with the appropriate authorities during the period wherever applicable. However the following undisputed Central Sales tax are in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable ;

Name Of Statue Nature of Amount For the Due Date Dues (in Rs.) Period

Central Sales Tax Collected 21,710 2007-08 April 2008 tax Act

Central Sales Tax Collected 79,269 2008-09 April 2009 tax Act

Central Sales Tax Collected 40,337 2009-10 April 2010 tax Act

b) According to the information and explanation given to us, there are no material dues of Provident Fund, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanation given to us, the following dues of Service Tax have not been deposited by the company on account of disputes :

Name Of Statue Nature of Dues Amount For the (in Rs.) Period

Service Tax Service tax 2,26,747 Jan,2005 to Nov, 2008

Service Tax Penalty on Service 2,58,935 Jan,2005 to Tax Nov, 2008

Service Tax Service tax 22,08,074 Nov,2009 to Oct, 2012

Service Tax Penalty on Service 22,08,074 Nov,20 Tax Oct, 2

Service Tax Penalty and 2,95,907 April, Interest on Service to Mar Tax 2012

Name Of Statue Forum Where dispute is Pending

Service Tax CESTAT

Service Tax CESTAT

Service Tax Commissioner of Central Excise

Service Tax Commissioner of Central Excise

Service Tax Commissioner of Central Excise

c) As per the information and explanation given to us the amounts which were 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 the rules made there under has been transferred to such fund within time, wherever applicable.

8) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

9) According to the information and explanation given to us, the Company has not defaulted in repayment of dues to a Financial Institutions or Banks. There are no outstanding dues to debenture holders during the year,

10) In our Opinion and according to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions and hence reporting under this clause is not applicable to the Company.

11) According to the information and explanation given to us, the term loans were applied for the purpose for which the term loans were obtained.

12) According to the information and explanation given to us by the Management, and according to the books and records as produced and examined by us, no frauds on or by the Company were noticed or reported during the course of our audit.

For GNANOBA & BHAT CHARTERED ACCOUNTANTS Firm Reg. No: 000939S

Place: BANGALORE Date: 30.05.2015

K R GNANOBA (PARTNER) M. No 023137


Mar 31, 2014

We have audited the accompanying financial statements of M/s Natural Capsules Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 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, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("The Act"). 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 disclosure in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation 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 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 ofthe Balance Sheet, ofthe state of affairs ofthe Company as at 31st March, 2014

(b) In the case of the Statement of Profit & Loss, of the Profit for the year ended on that date.

(c) In the case of the cash flow statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 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 ofthe 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 it appears from the examination ofthe books.

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

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

e. On the basis of written representations received from the directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 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 AUDITOR''S REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE.

1) In respect of its fixed assets

a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b) The fixed assets have been physically verified by the management. In our opinion the frequency of verification is reasonable. According to the information and explanation given to us no material discrepancies were noticed on such verification.

c) The company has not disposed off its substantial part of fixed assets during the year.

2) In respect of inventories

a) As explained to us inventories were physically verified by the management at reasonable intervals.

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

c) In our opinion, and according to the information and explanation given to us, the company has maintained proper books of its inventories and no material discrepancies were noticed on physical verification.

3) In respect of loans, secured or unsecured, granted or taken by the Company to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, according to the information and explanation given to us

a) During the year, the company has not granted or taken any loans to/from, firms or other parties recorded in register maintained under section 301 ofthe Act.

b) Since no loans are granted / taken sub-clause (b), (c) & (d) of clause iii of paragraph 4 ofthe 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 for the purchase of inventory and fixed assets and for the sale of goods. According to the explanation given to us, there are no failures to correct the major weaknesses observed in the internal control;

5) In respect of transactions entered in the Register maintained in pursuance of Section 301 ofthe Companies Act, 1956

a) To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.

b) The company has entered in to transactions exceeding the value of five lakh rupees. However these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6) As per the records and according to the information given to us, the company has not accepted any deposits from the public.

7) In our opinion, the internal audit functions carried out during the period by a firm of Chartered Accountants appointed by the management have been commensurate with the size ofthe Company and the nature of its business.

8) According to the records produced and information given to us, we have seen that cost records and accounts as prescribed by the Central Government under Section 209 (1) (d) of the Act have been made and maintained by the Company to the extent applicable.

9) According to the information and explanations given to us, in respect of statutory dues and other dues

a) The following statutory dues are unpaid as on the balance sheet date for a period of more than six months from the date they became payable;

Statute Nature of dues Amt. (Rs.) Period to Due date which dues relate Central Sales Tax Act Tax collected 79,269 2008-2009 April 2009

Central Sales Tax Act Tax collected 40,337 2009-2010 April 2010

b) Disputed income tax of Rs.4.26 lacs is pending before Commissioner Appeals. The company has deposited Rs.0.50 lakhs against disputed income tax liability,

Statute Nature of dues Amt. (Rs.) Period to which Due date dues relate

Service Tax Penalty on service tax 2,58,935 Jan 05-Nov 08 1-04-2009

Service Tax Tax Payable 2,26,747 Jan 05-Nov 08 1-04-2009

10) There are no accumulated losses at the end of the year and hence clause (x) ofthe Order is not applicable for the company;

11) Based on our audit procedures and according to the information and explanation given by the management, the Company has not defaulted in repayment of dues to a financial institution or banks;

12) According to the information furnished to us and verified by us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence clause (xi) of the Order is not applicable to the company;

13) In our opinion, the company is not a Chit fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause (xiii) ofthe Order are not applicable to the company;

14) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly provisions of clause (xiv) ofthe Order are not applicable to the company;

15) According to the information and explanation given by the management, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16) To the best of our knowledge and belief and according to the information and explanation given to us, terms loans availed by the Company were, Prima facie, applied by the Company during the period for the purpose for which the loans were obtained.

17) According to the cash flow statement and other records examined by us, and the information and explanations given to us, on an overall basis, funds raised on short term basis have, Prima facie, not been used during the period for long term investment and vice versa.

18) During the year the company has made preferential allotment of shares to the parties covered in the Register maintained under section 301 of the Act. However the price at which shares have been issued is not prejudicial to the interest of the company.

19) The company has not issued any debentures during the year and hence clause (xix) of the Order is not applicable to the company.

20) The company has not raised any money by way of public issue during the year under report and hence clause (xx) of the Order is not applicable.

21) The Company has noticed and reported a financial fraud by way of fake cheque with forged signatures was presented to the SBI Vellore Branch and the cheque for an amount of Rs.9,23,580/- was credited to an unidentified account of another bank on 25/03/2014. An amount of Rs.26,580/- has been encashed by the perpetrators of fraud and the balance amount of Rs.8,97,000/- has been frozen and held with another bank. The Company has made provision for loss on balance unavailable amount of Rs.26,580/- in its books.

For GNANOBA & BHAT CHARTERED ACCOUNTANTS (Registration No. 000939S)

PLACE : BANGALORE (K.R. GNANOBA) PARTNER DATE : 28.05.2014 Membership No: 023137


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of M/s Natural Capsules Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2013, 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, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("The Act"). 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 disclosure in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those rise assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and 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 318'' March, 2013

(b) In the case of the Statement of Profit & Loss, of the Profit for the year ended on that date.

(c) In the case of the cash flow statement, of the cash flows forthe 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 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 beliefwere necessary for the purpose of our audit.

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow statement comply with the Accounting Standards referred to in sub-section (3C) ofSection211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors as on 31st March, 2013, and taken on record by the Board of Directors, none of the directors are disqualified as on 31s'' March, 2013, 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 AUDITOR''S REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE.

1) In respect of its fixed assets

a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b) The fixed assets have been physically verified by the management. In our opinion the frequency of verification is reasonable. According to the information and explanation given to us no material discrepancies were noticed on such verification.

c) The company has not disposed off its substantial part of fixed assets during the year.

2) In respect of inventories

a) As explained to us inventories were physically verified by the management at reasonable intervals.

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

c) In our opinion, and according to the information and explanation given to us, the company has maintained proper books of its inventories and no material discrepancies were noticed on physical verification.

3) In respect of loans, secured or unsecured, granted or taken by the Company to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, according to the information and explanation given to us

a) During the year, the company has not granted or taken any loans to/from, firms or other parties recorded in register maintained under section 301 of the Act.

b) Since no loans are granted / taken sub-clause (b), (c) & (d) of clause iii of paragraph 4 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 for the purchase of inventory and fixed assets and for the sale of goods. According to the explanation given to us, there are no failures to correct the major weaknesses observed in the internal control;

5) In respect of transactions entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956

a) To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.

b) The company has not entered in to any transactions exceeding the value of five lakh rupees in respect of each party and hence we are not required to comment on such transactions.

6) As per the records and according to the information given to us, the company has not accepted any deposits from the public. The Company Law Board has not passed any order on the company.

7) In our opinion, the internal audit functions carried out during the period by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

8) According to the records produced and information given to us, we have seen that cost records and accounts as prescribed by the Central Government under Section 209 (1)(d) of the Act have been made and maintained by the Company to the extent applicable but no examination of such records and accounts has been carried out by us.

9) According to the information and explanations given to us, in respect of statutory dues and other dues

a) The company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with appropriate authorities during the period.

b) Disputed income tax of Rs.4.26 lacs is pending before Commissioner Appeals. The company has deposited Rs.0.50 lakhs against disputed income tax liability.

c) Central sales tax amount of Rs.0.80 Lacs of 2008-09 is showing as the payable from the year 2008-2009 for which the demand order has not received.

10) There are no accumulated losses at the end of the year and hence clause (x) of the Order is not applicable for the company;

11) Based on our audit procedures and according to the information and explanation given by the management, the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

12) According to the information furnished to us and verified by us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence clause (xi) of the Order is not applicable to the company;

13) In our opinion, the company is not a Chit fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause (xiii) of the Order are not applicable to the company;

14) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly provisions of clause (xiv) of the Order are not applicable to the company;

15) According to the information and explanation given by the management, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16) To the best of our knowledge and belief and according to the information and explanation given to us, terms loans availed by the Company were, Prima facie, applied by the Company during the period for the purpose for which the loans were obtained.

17) According to the cash flow statement and other records examined by us, and the information and explanations given to us, on an overall basis, funds raised on short term basis have, Prima facie, not been used during the period for long term investment and vice versa.

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 and hence clause (xviii) of the Order is not applicable to the company.

19) The company has not issued any debentures during the year and hence clause (xix) of the Order is not applicable to the company.

20) The company has not raised any money by way of public issue during the year under report and hence clause (xx) of the Order is not applicable.

21) To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For GNANOBA & BHAT

CHARTERED ACCOUNTANTS

(Registration No. 000939S)

M (K.R. GNANOBA)

PLACE : BANGALORE PARTNER

DATE : 25.05.2013 Membership No: 023137


Mar 31, 2012

We have audited the attached Balance Sheet of M/s. NATURAL CAPSULES LIMITED, Bangalore, as at 31st March 2012, and also the Profit & Loss account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003, issued by the Department of Company Affairs in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph (1) above:

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

(ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from the examination of those books;

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

(iv) In our opinion, the Balance Sheet, Profit & Loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the companies Act, 1956;

(v) On the basis of written representations received from the Directors as on 31 st March 2012.

(vi) and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March 2012 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto, 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 31 st March 2012;

(b) in the case of the Profit & Loss account, of the Profit of the Company for year ended on that date; and in the case of Cash flow statement, of the cash flows 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.

ANNEXURE TO AUDITOR'S REPORT (REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE).

1. In respect of its fixed assets

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The fixed assets have been physically verified by the management. In our opinion the frequency of verification is reasonable. According to the information and explanation given to us no material discrepancies were noticed on such verification.

c. The company has not disposed off its substantial part of fixed assets during the year.

2. In respect of inventories

a. As explained to us inventories were physically verified by the management at reasonable intervals.

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

c. In our opinion, and according to the information and explanation given to us, the company has maintained proper books of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the Company to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, according to the information and explanation given to us

a. During the year, the company has not granted or taken any loans to/from, firms or other parties recorded in register maintained under section 301 of the Act.

b. Since no loans are granted / taken sub-clause (b), (c) & (d) of clause iii of paragraph 4 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 for the purchase of inventory and fixed assets and for the sale of goods. According to the explanation given to us, there are no failures to correct the major weaknesses observed in the internal control;

5. In respect of transactions entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956

a. To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.

b. The company has not entered in to any transactions exceeding the value of five lakh rupees in respect of each party and hence we are not required to comment on such transactions.

6. As per the records and according to the information given to us, the company has not accepted any deposits from the public. The Company Law Board has not passed any order on the company.

7. In our opinion, the internal audit functions carried out during the period by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

8. According to the records produced and information given to us, we have seen that cost records and accounts as prescribed by the Central Government under Section 209 (1 )(d) of the Act have been made and maintained by the Company to the extent applicable but no examination of such records and accounts has been carried out by us.

9. According to the information and explanations given to us, in respect of statutory dues and other dues

a. The company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with appropriate authorities during the period.

b. Disputed Excise Duty of Rs. 2.02 lacs are pending before the Commissioner Appeals. The company has deposited Rs.0.53 lacs against the disputed excise duty liability; company has provided an equal amount of penalty for the duty payable.

c. Disputed income tax of Rs.4.26 lacs is pending before Commissioner Appeals. The company has deposited Rs.0.50 lakhs against disputed income tax liability.

d. Central sales tax amount of Rs.0.80 of 2008-09 is showing as the payable from the year 2008-2009 which the company may have to pay.

10. There are no accumulated losses at the end of the year and hence clause (x) of the Order is not applicable for the company;

11. Based on our audit procedures and according to the information and explanation given by the management, the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

12. According to the information furnished to us and verified by us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence clause (xi) of the Order is not applicable to the company;

13. In our opinion, the company is not a Chit fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause (xiii) of the Order are not applicable to the company;

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly provisions of clause (xiv) of the Order are not applicable to the company;

15. According to the information and explanation given by the management, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanation given to us, terms loans availed by the Company were, Prima facie, applied by the Company during the period for the purpose for which the loans were obtained.

17. According to the cash flow statement and other records examined by us, and the information and explanations given to us, on an overall basis, funds raised on short term basis have, Prima facie, not been used during the period for long term investment and vice versa.

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 and hence clause (xviii) of the Order is not applicable to the company.

19. The company has not issued any debentures during the year and hence clause (xix) of the Order is not applicable to the company.

20. The company has not raised any money by way of public issue during the year under report and hence clause (xx) of the Order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For GNANOBA & BHAT

CHARTERED ACCOUNTANTS

(Registration No. 000939S)

(K.R. GNANOBA)

PLACE: BANGALORE PARTNER

DATE : 26.05.2012 Membership No: 023137


Mar 31, 2011

We have audited the attached Balance Sheet of M/s. NATURAL CAPSULES LIMITED, Bangalore, as at 31st March 2011, and also the Profit & Loss account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003, issued by the Department of Company Affairs in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph (1) above:

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

(ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from the examination of those books;

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

(iv) In our opinion, the Balance Sheet, Profit & Loss account and cash flow statement dealt with by this report comply

with the accounting standards referred to in sub-section (3C) of section 211 of the companies Act, 1956;

(v) On the basis of written representations received from the Directors as on 31 st March 2011

(vi) and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March 2011 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vii) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto, 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 31 st March 2011;

(b) in the case of the Profit & Loss account, of the Profit of the Company for year ended on that date; and in the case of Cash flow statement, of the cash flows 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.

ANNEXURE TO AUDITOR'S REPORT (REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE).

1. In respect of Us fixed assets

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The fixed assets have been physically verified by the management. In our opinion the frequency of verification is reasonable. According to the information and explanation given to us no material discrepancies were noticed on such verification.

c. The company has not disposed off its substantial part of fixed assets during the year.

2. In respect of inventories

a. As explained to us inventories were physically verified by the management at reasonable intervals.

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

c. In our opinion, and according to the information and explanation given to us, the company has maintained proper books of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the Company to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, according to the information and explanation given to us

a. During the year, the company has not granted or taken any loans to/from, firms or other parties recorded in register maintained under section 301 of the Act.

b. Since no loans are granted / taken sub-clause (b), (c) & (d) of clause iii of paragraph 4 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 for the purchase of inventory and fixed assets and for the sale of goods. According to the explanation given to us, there are no failures to correct the major weaknesses observed in the internal control;

5. In respect of transactions entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956

a. To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.

b. The company has not entered in to any transactions exceeding the value of five lakh rupees in respect of each party and hence we are not required to comment on such transactions.

6. As per the records and according to the information given to us, the company has not accepted any deposits from the public. The Company Law Board has not passed any order on the company.

7. In our opinion, the internal audit functions carried out during the period by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

8. According to the records produced and information given to us, we have seen that cost records and accounts as prescribed by the Central Government under Section 209 (1 )(d) of the Act have been made and maintained by the Company to the extent applicable but no examination of such records and accounts has been carried out by us.

9. According to the information and explanations given to us, in respect of statutory dues and other dues

a. The company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with appropriate authorities during the period.

b. Disputed Excise Duty of Rs. 2.02 lacs are pending before the Commissioner Appeals. The company has deposited Rs.0.53 lacs against the disputed excise duty liability; company has provided an equal amount of penaltyforthe duty payable.

c. Disputed income tax of Rs.9.12 lacs is pending before Commissioner Appeals. The company has deposited Rs.0.50 lakhs against disputed income tax liability.

d. Central sales tax amount of Rs.0.80 of 2008-09 is showing as the payable from the year 2008-2009 which the company may have to pay.

10. There are no accumulated losses at the end of the year

and hence clause (x) of the Order is not applicable for the company;

11. Based on our audit procedures and according to the information and explanation given by the management, the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

12. According to the information furnished to us and verified by us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence clause (xi) of the Order is not applicable to the company;

13. In our opinion, the company is not a Chit fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause (xiii) of the Order are not applicable to the company;

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly provisions of clause (xiv) of the Order are not applicable to the company;

15. According to the information and explanation given by the management, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanation given to us, terms ioans availed by the Company were, Prima facie, applied by the Company during the period for the purpose for which the loans were obtained.

17. According to the cash flow statement and other records examined by us, and the information and explanations given to us, on an overall basis, funds raised on short term basis have, Prima facie, not been used during the period for long term investment and vice versa.

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 and hence clause (xviii) of the Order is not applicable to the company.

19. The company has not issued any debentures during the year and hence clause (xix) of the Order is not applicable to the company.

20. The company has not raised any money by way of public issue during the year under report and hence clause (xx) of the Order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For GNANOBA & BHAT CHARTERED ACCOUNTANTS (Registration No. 000939S)

(K.R. GNANOBA) PARTNER Membership No: 023137

PLACE: BANGALORE DATE: 28.05.2011


Mar 31, 2010

We have audited the attached Balance Sheet of M/s. NATURAL CAPSULES LIMITED, Bangalore, as at 31st March 2010, and also the Profit & Loss account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003, issued by the Department of Company Affairs in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph (1) above:

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

(ii) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from the examination of those books;

(iii) The Balance Sheet, Profit & Loss account and the Cash Flow Statement dealt with by this report are in agreementwith the books of account.

(iv) In our opinion, the Balance Sheet, Profit & Loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the companies Act, 1956;

on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March 2010 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto, 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 31 st March 2010;

(b) in the case of the Profit & Loss account, of the Profit of the Company for year ended on that date; and

(c) in the case of Cash flow statement, of the cash flows for the year ended on that date.

(v) On the basis of written representations received from the Directors as on 31st March 2010 and taken

ANNEXURE TO AUDITORS REPORT (REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE).

1. In respect of its fixed assets

a. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

b. The fixed assets have been physically verified by the management. In our opinion the frequency of verification is reasonable. According to the information and explanation given to us no material discrepancies were noticed on such verification.

c. The company has not disposed off its substantial part of fixed assets during the year.

2. In respect of inventories

a. As explained to us inventories were physically verified by the management at reasonable intervals.

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

c. In our opinion, and according to the information and explanation given to us, the company has maintained proper books of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the Company to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, according to the information and explanation given to us

a. During the year, the company has not granted or taken any loans to/from, firms or other parties recorded in register maintained under section 301 of the Act.

b. Since no loans are granted / taken sub-clause (b), (c) & (d) of clause iii of paragraph 4 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 for the purchase of inventory and fixed assets and for the sale of goods. According to the explanation given to us, there are no failures to correct the major weaknesses observed in the internal control;

5. In respect of transactions entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956

a. To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered. b. The company has not entered in to any transactions exceeding the value of five lakh rupees in respect of each party and hence we are not required to comment on such transactions.

6. As per the records and according to the information given to us, the company has not accepted any deposits from the public. The Company Law Board has not passed any order on the company.

7. In our opinion, the internal audit functions carried out during the period by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

8. According to the records produced and information given to us, we have seen that cost records and accounts as prescribed by the Central Government under Section 209 (1) (d) of the Act have been made and maintained by the Company to the extent applicable but no examination of such records and accounts has been carried out by us.

9. According to the information and explanations given to us, in respect of statutory dues and other dues

a. The company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Investor Education and Protection Fund, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other statutory dues with appropriate authorities during the period.

b. Disputed Excise Duty of Rs.1.26 lacs is pending before the Commissioner Appeals. The company has deposited Rs.0.53 lacs against the disputed excise duty liability.

c. Disputed income tax of Rs.7.65 lacs is pending before Commissioner Appeals. The company has deposited Rs.0.50 lakhs against disputed income tax liability.

10. There are no accumulated losses at the end of the year and hence clause (x) of the Order is not applicable for the company;

11. Based on our audit procedures and according to the information and explanation given by the management, the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

12.According to the information furnished to us and verified by us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence clause (xi) of the Order is not applicable to the company;

13. In our opinion, the company is not a Chit fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause (xiii) of the Order are not applicable to the company;

14. In our opinion, the company is not dealing in ortradingin shares, securities, debentures and other investments and accordingly provisions of clause (xiv) of the Order are not applicable to the company;

15. According to the information and explanation given by the management, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanation given to us, terms loans availed by the Company were, Prima facie, applied by the Company during the period for the purpose for which the loans were obtained.

17. According to the cash flow statement and other records examined by us, and the information and explanations given to us, on an overall basis, funds raised on short term basis have, Prima facie, not been used during the period for long term investment and vice versa.

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 and hence clause (xviii) of the Order is not applicable to the company.

19. The company has not issued any debentures during the year and hence clause (xix) of the Order is not applicable to the company.

20. The company has not raised any money by way of public issue during the year under report and hence clause (xx) of the Order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.



For GNANOBA & BHAT CHARTERED ACCOUNTANTS



(K.R. GNANOBA)

PARTNER

Membership No: 023137

PLACE:BANGALORE

DATE : 22nd May, 2010

 
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