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Auditor Report of Noesis Industries Ltd.

Mar 31, 2014

1. We have audited the accompanying financial statements of NOESIS INDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit & Loss and also the Cash Flow Statement of the company for the period of nine months ending on 31.03.2014 and a summary of significant accounting policies and other explanatory information.

2. 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 financial position and financial performance of the company in accordance with the Accounting Standards referred to in sub section (3C) of section 211 of the Company 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.

3. 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.

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

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

6. Basis for Qualified Opinion Reference is invited to

- Note No. 27.18 Regarding the financial statements of the company being prepared on a going concern basis, notwithstanding the fact that operations have been discontinued, Loss of Rs.3540.78 Lacs has been incurred during the period, net worth is minus Rs.25,155.92 Lacs and defaults towards repayment of dues to banks and financial institution are of Rs. 24,494.83 Lacs with no activity for revival. We are of the opinion that there is no feasibility for the company to carry on as a going concern, unless additional funds are infused, loans are restructured and revival activities are restarted.

- Note No. 27.12 regarding non availability of confirmations in respect of debit and/or credit balances of loans, advances, deposits, trade receivables and trade payable In the absence of such confirmations, any provision to be made for the adverse variation in carrying of amounts of these balances, are not quantified, as well as the quantum of adjustment if any, required to be made remain unascertained.

- Note No. 27.19 regarding non provision of penal interest on recalled banks loans declared as NPA. Liability for penal interest payable has not been quantified on account of uncertainty and discretionary nature of penal interest, if any payable.

7. Qualified Opinion

In our opinion and to the best of our information and according to the explanation given to us, except for possible effects of the matters described in paragraph , 6 above - the basis of qualified opinion , the financial statements give a true and fare view :-

i) In the case of the Balance sheet, of the state of affairs of the company as at 31st March 2014;

ii) In the case of statement of Profit and Loss of the Loss for the nine months period ending on 31st March, 2014.

iii) In the case of the Cash Flow Statement, of the Cash flow for the nine months period ending on 31st March, 2014 Report on Other Legal and Regulatory Requirements

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

9. 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 our examination of those books.

c. The Financial statements 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 Except provision of leave encashment made on own estimate, rather than on actuarial valuation basis in terms of Accounting standard AS-15 .

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 REFERRED TO UNDER PARAGRAPH 8 OF THE AUDITOR''S REPORT OF EVEN DATE

I) a) The Company has maintained records showing full particulars, including quantitative details and situation of its fixed assets but it needs to be improved.

b) During the period as informed to us, no discrepancy was noticed on physical verification of fixed assets;

c) During the period the company has not disposed off substantial part of fixed asset.

II) a) According to the information given to us the management has conducted physical verification of stocks, at reasonable intervals during the period;

b) In our opinion and according to the information and explanations given to us, the procedure for physical verification of inventory followed by the management needs to be improved keeping in view the past experience size of the company and the nature of its business;

c) The company has maintained proper records of inventory and no sizable discrepancies were noticed on physical verification as compared with the book record.

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

a) The Company has neither granted nor taken any loans to/ from any such parties, accordingly Para''s ''a'' to ''g'' of clause III of the order are not applicable to the company.

IV) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the said internal controls.

V) In respect of transactions covered under section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered;

b) The transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lacs in respect of any party during the period are at fair prices keeping in view the terms and market conditions.

VI) In our opinion and according to the information given to us, the Company has not accepted any deposits from public within the meaning of Sections 58A and 58AA of the Companies Act 1956 and the rules framed there under.

VII) In our opinion the Company''s has an internal audit system which needs to be strengthened to make the same commensurate with the size and the nature of its business.

VIII) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost record under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 in respect of company''s trading activities.

IX) a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including

Provident Fund, Employees State Insurance Scheme, Income Tax, Sales Tax, Custom Duty, Excise, Cess have generally been regularly deposited with appropriate authorities, barring delayed payments in some cases.

b) According to the information and explanations given to us undisputed amounts in respect of aforesaid dues which were outstanding as at 31st March 2014 for a period of more than 6 months from the date they became payable, are towards Tax deducted at Source of Rs.3.60 lacs and Income Tax of Rs. 5.42 lacs.

c) According to the information and explanations given to us following dues have not been admitted payable on account of disputes /appeals pending with appropriate authorities:-

Name of the Nature of Amount under statute the dues & Period dispute (Rs. in Lacs)

Delhi Sales Act Sales Tax for 87-88 and 88-89 11.50

Sales Tax Act of Sales Tax for 2001-2002 1.96 West Bengal

Delhi Vat Art VAT for 2005-2006 152.48

Income Tax Asstt. Year 2008-2009 30.46

Income Tax Asstt. Year 2009 -2010 79.31

Income Tax Asstt. Year 2010-2011 118.43

Income Tax Asstt. Year 2011-2012 76.54

Total 470.68

Name of the statute Forum where dispute is pending

Delhi Sales Act Delhi High Court

Sales Tax Act of West Bengal Commercial Tax Officer

Delhi Vat Act Tribunal Vat, New Delhi

Income Tax ITAT, New Delhi

Income Tax CIT (Appeals)New Delhi

Income Tax CIT (Appeals) New Delhi

Income Tax CIT (Appeals) New Delhi

*The above figures are exclusive of interest if any payable thereon.

X) The Company has an accumulated loss of Rs. 25,155.92 lacs as at the end of the financial period and it has incurred cash loss of Rs. 3,491.51 Lacs in the current year, previous year 24,083.97 Lacs. Accumulated losses at the end of the financial year are more than the company''s net worth.

XI) According to the information and explanations given to us, during the period the Company has defaulted in re-payment of dues to financial institution and banks amounting to Rs. 24,494.83 lacs as at 31.03.2014, default towards principal amount is Rs. 1,9367.25 lacs and towards interest is Rs. 5,127.57 lacs. The default started from the period beginning from January, 2012 and continue, till the date of our audit.

XII) Based on our examination 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.

XIII) The Company is not a chit fund/nidhi/mutual benefit fund/society; as such the provisions of clause 4(xiii) of The Order are not applicable.

XIV) In our opinion and according to the information and explanations given to us, during the period the company is not engaged in a major way in trading in shares, securities, debentures and other investments. Shares, securities, bonds and other investments are held in its own name.

XV) According to the information and explanations given to us, and the representations made by the management, the guarantees given by the Company for loans taken by other associate companies from banks/ financial institutions, in our opinion, are prima facie, on an overall basis not prejudicial to the interest of the Company.

XVI) In our opinion and according to the information and explanations given to us, the Company has, prima-facie , applied the term loans availed, for the purposes for which these were obtained.

XVII) According to the information and explanations given to us, and on an overall examination of Balance Sheet and the Cash Flow statement of the company, and after placing reliance on the reasonable assumptions made by the Company for classification of usage of funds we are of the opinion that prima facie, short-term funds have not been used for long term investment.

XVIII) During the period the Company has made no preferential allotment of shares to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

XIX) During the period the Company has not issued any debentures.

XX) The Company has not raised any money by public issues during the period.

XXI) During the course of our examination of the books and record of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the period, nor have we been informed of such case by the management.

For ARUN KISHORE & COMPANY CHARTERED ACCOUNTANTS (ICAI Regd.No. 001898 N)

Sd/- Place : New Delhi CA ARUN KISHORE Date : 28th May, 2014 PARTNER [Membership No. 10770]


Jun 30, 2013

1. We have audited the accompanying financial statements of MVL INDUSTRIES LIMITED ("the Company") which comprise the balance sheet as at 30th June 2013, the Statement of Profit & Loss and also the Cash Flow Statement of the company for the year then ended, and a summary of significant accounting policies and other explanatory information.

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

3. 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.

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

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

6. Without qualifying our report,

Attention of the members is invited to the following points: -

a) Note No. 28.09 with regard to the permanent decline in the value of shares of unlisted company, value reduced by Rs. 1293.48 Lacs.

b) Note No. 28.23 with regard to reversal of Gain on sale of investments of Rs. 304.43 Lacs erroneously booked in the last year.

c) Note No. 28.24 with regard to the decline in the value of inventories by Rs. 941.96 Lacs on account of realizable value being less than the cost to that extent.

d) Note No. 28.25 with regard to settlement and write off of old claims of Debtors to the extent of Rs. 6347.59 Lacs.

7. Basis for Qualified Opinion

Reference is invited to

- Note No. 28.17 Regarding the financial statements of the company being prepared on a going concern basis notwithstanding the fact that operations have been discontinued, Loss of Rs.24136.72 Lacs has been incurred during the year, and net worth is minus Rs.18982.22 Lacs. We are of the opinion that there is no feasibility for the company to carry on as a going concern, unless additional funds are inducted, loans are restructured and activities are restarted.

- Note No. 28.12 regarding non availability of confirmations in respect of debit and/or credit balances of loans, advances, deposits, trade receivables and trade payable In the absence of such confirmations, any provision to be made for the adverse variation in carrying of amounts of these balances, are not quantified, as well as the quantum of adjustment if any, required to be made remain unascertained.

- Note No. 28.18 regarding non provision of penal interest on recalled banks loans declared as NPA. Liability for penal interest payable has not been quantified on account of uncertainty and discretionary nature of penal interest, if any payables.

8. Qualified Opinion

In our opinion and to the best of our information and according to the explanation given to us, except for possible effects of the matters described in paragraph , 7 above - the basis of qualified opinion , the financial statements give a true and fare view :-

i) In the case of the Balance sheet, of the state of affairs of the company as at 30th June 2013;

ii) In the case of statement of Profit and Loss of the Loss for the year ended on that date.

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

Report on Other Legal and Regulatory Requirements

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

10. 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 our examination of those books.

c. The Financial statements 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 Except provision of leave encashment made on own estimate, rather than on actuarial valuation basis in terms of Accounting standard AS-15.

e. On the basis of written representations received from the directors as on June 30, 2013, and taken on record by the board of directors, none of the directors is disqualified as on June 30, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the companies act, 1956

Reg. MVL INDUSTRIES LIMITED YEAR ENDED 30. 06. 2013

ANNEXURE REFERRED TO UNDER PARAGRAPH 8 OF THE AUDITOR'S REPORT OF EVEN DATE

I) a) The Company has maintained records showing full particulars, including quantitative details and situation of its fixed assets;

b) During the year as informed to us, no discrepancy was noticed on physical verification of fixed assets;

c) During the year the company has not disposed off substantial part of fixed asset.

II) a) According to the information given to us the management has conducted physical verification of stocks, at reasonable intervals during the year;

b) In our opinion and according to the information and explanations given to us, the procedure for physical verification of inventory followed by the management needs to be improved keeping in view the past experience size of the company and the nature of its business;

c) The company has maintained proper records of inventory and no sizable discrepancies were noticed on physical verification as compared with the book record.

III) I n respect of loans, secured or unsecured ,granted or taken by the Company to or from Companies ,firms or from other parties covered in the register maintained under Section 301 of the Companies Act,1956,according to the information and explanations given to us :

a) The Company has neither granted nor taken any loans to/ from any such parties, accordingly Para's 'a' to 'g' of clause III of the order are not applicable to the company.

IV) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the said internal controls.

V) In respect of transactions covered under section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered;

b) The transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lacs in respect of any party during the year, we have been informed on account of the unique in nature of the items dealt with during the year comparable rates/quotes for similar items cannot be provided, as such reasonableness of the said prices cannot be commented upon.

VI) In our opinion and according to the information given to us, the Company has not accepted any deposits from public within the meaning of Sections 58A and 58AA of the Companies Act 1956 and the rules framed there under.

VII) In our opinion the Company's has an internal audit system which needs to be strengthened to make the same commensurate with the size and the nature of its business.

VIII) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost record under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 in respect of company's trading activities.

IX) a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Employees State Insurance Scheme, Income Tax, Sales Tax, Custom Duty, Excise, Cess have generally been regularly deposited with appropriate authorities, barring delayed payments in some cases.

b) According to the information and explanations given to us undisputed amounts in respect of aforesaid dues which were outstanding as at 30th June 2013 for a period of more than 6 months from the date they became payable, are towards Tax deducted at Source of Rs.6.47 lacs and Income Tax of Rs. 16.36 lacs.

c) According to the information and explanations given to us following dues have not been admitted payable on account of disputes /appeals pending with appropriate authorities:-

S. No. Name of the Nature of Amount under Forum where statute the dues & Period dispute (Rs. in Lacs) dispute is pending

1. Delhi Sales Act Sales Tax for 87-88 and 88-89 11.50 Delhi High Court

2. Sales Tax Act of West Bengal Sales Tax for 2001- 2002 1.96 Commercial Tax Officer

3. Delhi Vat Act VAT for 2005- 2006 152.48 Tribunal Vat, New Delhi

4. Income Tax Asstt. Year 2008-2009 30.46 ITAT, New Delhi

5. Income Tax Asstt. Year 2009 - 2010 79.31 CIT (Appeals) New Delhi

6. Income Tax Asstt. Year 2010- 2011 120.75 CIT (Appeals) New Delhi

Total 396.46*

*The above figures are exclusive of interest if any payable thereon.

X) The Company has an accumulated loss of Rs.21615.13 lacs as at the end of the financial year and it has incurred cash loss of Rs.24083.97 Lacs in the current year, previous year 8467.30 Lacs. Accumulated losses at the end of the financial year are more than the company's net worth.

XI) According to the information and explanations given to us, during the year the Company has defaulted in re-payment of dues to financial institution and banks amounting to Rs.22191.21 lacs as at 30.06.2013,default towards principal amount is Rs. 18847.40 lacs and towards interest is Rs.3343.81 lacs. The default started from the period beginning from January,2012 and continue till the date of our audit.

XII) Based on our examination 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.

XIII) The Company is not a chit fund/niche/mutual benefit fund/society; as such the provisions of clause 4(xiii) of The Order are not applicable.

XIV) In our opinion and according to the information and explanations given to us, during the year the company is not engaged in a major way in trading in shares, securities, debentures and other investments. Shares, securities, bonds and other investments are held in its own name.

XV) According to the information and explanations given to us, and the representations made by the management, the guarantees given by the Company for loans taken by other associate companies from banks/ financial institutions, in our opinion, are prima facie, on an overall basis not prejudicial to the interest of the Company.

XVI) In our opinion and according to the information and explanations given to us, the Company has, prima-facie , applied the term loans availed, for the purposes for which these were obtained:

XVII) According to the information and explanations given to us, and on an overall examination of Balance Sheet and the Cash Flow statement of the company, and after placing reliance on the reasonable assumptions made by the Company for classification of usage of funds we are of the opinion that prima facie, short-term funds have not been used for long term investment ;

XVIII) During the year the Company has made no preferential allotment of shares to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

XIX) During the year the Company has not issued any debentures.

XX) The Company has not raised any money by public issues during the year.

XXI) During the course of our examination of the books and record of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management

For ARUN KISHORE & COMPANY

CHARTERED ACCOUNTANTS

( ICAI Regd.No. 001898 N)

Sd/-

Place : New Delhi CA ARUN KISHORE

Date : 31st August 2013 PARTNER

[Membership No. 10770]


Jun 30, 2010

1. We have audited the attached Balance Sheet of MVL INDUSTRIES LIMITED New Delhi as at 30th June 2010 and also the Profit & Loss Account and Cash Flow Statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have 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 statement presentation. We believe that our audit provides a reasonable basis of our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (the Order) as amended, issued by the Central Government of India in terms of Section 227 (4A) 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.

4. Further to our comments in the Annexure, referred to in paragraph 3 above, we report that:

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

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

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

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956,

e) On the basis of the written representations received from the directors, as on June 30, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on June 30, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, Subject to Note No. B - 24 of Schedule Ft regarding some of the unconfirmed balances of Sundry Debtors, Creditors, Loans, advances and deposits and Note No. B 17 of the said schedule regarding non provision of advances/debts considered doubtful of recovery and read together with Significant Accounting Policies and Notes given in Schedule R give the information required by the Companies Act, 1956, in the manner so required and also give a true and fair view in conformity with the accounting principles generally accepted in India :

1. In the case of Balance Sheet, of the state of the affairs of the company as at 30" June, 2010 ,

2. In the case of the Profit & Loss Account, of the Profit of the company for the year ended on that date.

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

Reg. MVL INDUSTRIES LIMITED YEAR ENDED 30.06.2010 ANNEXURE REFERRED TO UNDER PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE

I) In respect of Fixed Assets

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

b) During the year as informed to us, no discrepancy was noticed on physical verification of fixed assets;

c) During the year the company has not disposed off substantial part of fixed asset.

II) In respect of Inventories

a) According to the information given to us the management has conducted physical verification of stocks, at reasonable intervals during the year;

b) In our opinion and according to the information and explanations given to us, the procedure for physical verification of inventory followed by the management is reasonable and adequate keeping in view the size of the company and the nature of its business;

c) The company has maintained proper records of inventory and no sizable discrepancies were noticed on physical verification as compared with the book record.

III) In respect of loans, secured or unsecured .granted or taken by the Company to or from Companies .firms or from other parties covered in the register maintained under Section 301 of the Companies Act,1956,according to the information and explanations given to us :

a) The Company has granted inter corporate loan to one party .At the year end, the outstanding balance of such loan was Rs. 427.46 Lacs and the maximum amount involved during the year was Rs. 1020.66 Lacs.

b) In our opinion, the rate of interest and other terms and conditions of the said loan are not prima facie, prejudicial to the interest of the Company.

c) In respect of the loan given by the Company, the same is repayable on demand and therefore there is no overdue amount.

d) As per information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

e) Since the company has not taken any loans, secured or unsecured provisions of clause 4 (iii) (e) & (f) of the Companies (Auditors Report) Order 2003 are not applicable.

IV) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and me nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

V) In respect of transactions covered under section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companied Act, 1956 have been so entered;

b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lacs in respect of any party during the year, have been made at prices which are generally reasonable, having regard to the prevailing market prices and other terms .

VI) In our opinion and according to the information given to us, the Company has not accepted any deposits from public within the meaning of Sections 58A and 58AA of the Companies Act 1956 and the rules framed there under.

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

VIII) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost record under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 in respect of companys activities.

IX) a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Employees State Insurance Scheme, Income Tax, Sales Tax, Custom Duty, Excise, Cess have generally been regularly deposited with appropriate authorities, though there are some delayed payments;

b) According to the information and explanations given to us no undisputed amount payable in respect of aforesaid dues where outstanding as at 30lh June 2010 for a period of more than 6 months from the date they become payable except Income-Tax dues of Rs. 85 Lacs (Rupees Eighty Five lacs ) for which provision has been made in the books;

c) According to the records of the Company, following disputed statutory dues aggregating to Rs. 377.88 Lacs that have not been accepted as payable on account of appeals pending with appropriate authorities:-

S.No. Name of the Nature of Amount under Forum where statute the dues dispute dispute is & period (Rs. in lacs) pending

1. Delhi Sales Act Sales Tax for 87-88 11.50 Delhi High Court and 88-89

2. Sales Tax Act of Sales Tax for 2001-2002 1.96 Commercial Tax West Bengal Officer

3. U.P. Sales Tax Act Sales Tax for 2001 -2002 1.34 Joint Commissioner appeal Trade Tax

4. Income Tax Asstt. Year 2000-2001 210.60 ITAT, New Delhi to 2005-2006

5. Delhi Vat Act VAT, Nov. 05 152.48 Tribunal Vat, New Delhi Total 377.88

X) The Companys has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding to financial year.

XI) According to the information and explanations given to us, during the year the Company has not defaulted in re-payment of dues to any financial institution or banks. The Company has no liability for debenture.

XII) Based on our examination 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.

XIII) The Company is not a chit fund/nidhi/mutual benefit fund/ society, as such the provisions of clause 4(xiii) of the order are not applicable.

XIV) In our opinion and according to the information and explanations given to us, during the year the company is engaged in trading in shares, securities, debentures and other investments. The Company has maintained proper records of transaction and contracts , timely entries are made therein and the shares , securities, bonds and other investments are held in its own name.

XV) According to the information and explanations given to us, and the representations made by the management, the guarantees given by the Company for loans taken by others from banks , in our opinion, are prima facie, not prejudicial to the interest of the Company.

XVI) In our opinion and according to the information and explanation given to us, we have to state that, the Company has, prima-facie , applied the term loans availed, for the purpose for which it was obtained:

XVII) According to the information and explanations given to us, and on an overall examination of Balance Sheet and the Cash Flow statement of the company, and after placing reliance on the reasonable assumptions made by the Company for classification of usage of funds we are of the opinion that prima facie, short-term funds have not been used for long term investment ;

XVIII) During the year the Company has made preferential allotment of shares to parties covered in the register maintained under Section 301 of the Companies Act,1956.The price at which preferential allotment of shares has been made is in accordance with SEBI (Issue of capital and disclosure requirements) guidelines and are not prejudicial to the interest of the company.

XIX) During the year the Company has not issued any debentures.

XX) The Company has not raised any money by public issues during the year.

XXI) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For ARUN KISHORE & COMPANY

CHARTERED ACCOUNTANTS

(FRN: 001898 N)

Sd/-

Place : New Delhi CA ARUN KISHORE

Date : 28th August, 2010 PARTNER

Membership No. 10770


Jun 30, 2009

1. We have audited the attached Balance Sheet of MVL INDUSTRIES LIMITED New Delhi as at 30th June 2009 and also the Profit & Loss Account and Cash Flow Statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have 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 statement presentation. We believe that our audit provides a reasonable basis of our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (the Order) as amended, issued by the Central Government of India in terms of Section 227(4A) 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.

4. Further to our comments in the Annexure, referred to in paragraph 3 above, we report that:

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

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

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

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956,

e) On the basis of the written representations received from the directors, as on June 30, 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on June 30, 2009 from being appointed as a director in terms of clause (g) of sub-section (!) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, Subject to Note No. B - 25 of Schedule R regarding some of the unconfirmed balances of Sundry Debtors, Creditors, Loans, advances and deposits and Note No. B 15 of the said schedule regarding non provision of advances considered doubtful of recovery and read together with Significant Accounting Policies and Notes given in Schedule R give the information required by the Companies Act, 1956, in the manner so required and also give a true and fair view in conformity with the accounting principles generally accepted in India :

1. In the case of Balance Sheet, of the state of the affairs of the company as at 30th June, 2009 ,

2. In the case of the Profit & Loss Account, of the Profit of the company for the year ended on that date.

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

ANNEXURE REFERRED TO UNDER PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE

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

b) During the year as informed to us, no discrepancy was noticed on physical verification of fixed assets;

c) During the year the company has not disposed off substantial part of fixed asset.

II) a) According to the information given to us the management has conducted physical verification of stocks, at reasonable intervals during the year;

b) In our opinion and according to the information and explanations given to us, the procedure for physical verification of inventory followed by the management is reasonable and adequate keeping in view to the size of the company and the nature of its business;

c). The company has maintained proper records of inventory and no sizable discrepancies were noticed on physical verification as compared with the book record.

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

a) The Company has granted inter corporate loan to one party. At the year end, the outstanding balance of such loan was Rs. 833.65 Lacs and the maximum amount involved during the year was Rs. 833.65 Lacs.

b) In our opinion, the rate of interest and other terms and conditions of the said loan are not prima facie, prejudicial to the interest of the Company.

c) In respect of the loan given by the Company, the same is repayable on demand and therefore there is no overdue amount.

d) As per information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

e) Since the company has not taken any loans, secured or unsecured provisions of clause 4 (iii) (e) & (f) of the Companies (Auditors Report) Order 3003 are not applicable.

IV) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

V) In respect of transactions covered under section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companied Act, 1956 have been so entered;

b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lacs in respect of any party during the . year, have been made at prices which are generally reasonable, having regard to the prevailing market prices and other terms however in some cases because of unique and specialized nature, brand and value additions etc , no comparison of prices could be made. The company informed us that there are no alternate sources of supply for such goods.

VI) In our opinion and according to the information given to us, the Company has not accepted any deposits from public within the meaning of Sections 58A and 58AA of the Companies Act 1956 and the rules framed thereunder.

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

VIII) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost record under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 in respect of companys activities.

IX) a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Employees State Insurance Scheme, Income Tax, Sales Tax, Custom Duty, Excise, Cess have generally been regularly deposited with appropriate authorities, though there are some delay In few cases;

b) According to the information and explanations given to us no undisputed amount payable in respect of aforesaid dues where outstanding as at 30th June 2009 for a period of more than 6 months from the date they become payable except Income-Tax dues of Rs. 58 Lacs (Rupees Fifty Eight lacs) for which provision has been made in the books;

c) According to the records of the Company, following disputed statutory dues aggregating to Rs. 378.10 Lacs that have not been accepted as payable on account of appeals pending with appropriate authorities:-

S.No. Name of the Nature of Amount under Forum where statute the dues dispute dispute is & period (Rs. In lacs) pending

1. Delhi Sales Act Sales Tax for 87-88 and 88-89 11.50 Delhi High Court

2. Sales Tax Act of Sales Tax for 1.98 Commercial Tax West Bengal 2001-2002 Officer

3. U.P. Sales Tax Sales Tax for 1.56 Joint Commissioner Act 2001-2002 appeal Trade Tax

4. Income Tax Asstt. Year 2000- 210.60 ITAT, New Delhi 2001 to 2005-2006

5. Delhi Vat Act VAT, Nov. 05 152.48 Tribunal Vat, New Delhi Total 378.10

X) The Companys has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding to financial year.

XI) According to the information and explanations given to us, during the year the Company has not defaulted in re-payment of dues to any financial institution or banks. The Company has no liability for debenture.

XII) Based on our examination 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.

XIII) The Company is not a chit fund/nidhi/mutual benefit fund/ society.

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

XV) According to the information and explanations given to us, and the representations made by the management, the guarantees given by the Company for loans taken by others from banks are, in our opinion, prima facie, not prejudicial to the interests of the Company.

XVI) On the basis of the records examined by us, we have to state that, the Company has, prima-facie , applied the term loan availed, for the purpose for which it was obtained:

XVII) According to the information and explanations given to us, and on an overall examination of the financial statements of the company, and after placing reliance on the reasonable assumptions made by the Company for classification of usage of funds we are of the opinion that prima facie, short-term funds have not been used for long term investment ;

XVIII) The Company has made no preferential allotment of shares to parties covered in the register maintained under Section 301 of the Companies Act,1956.

XIX) During the year the Company has not issued any debentures.

XX) The Company has not raised any money by public issues during the year.

XXI) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For ARUN KISHORE & COMPANY CHARTERED ACCOUNTANTS

Sd/- Place : New Delhi CA ARUN KISHORE

Date : 26th September, 2009 PARTNER

Membership No. 10770

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