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Auditor Report of Paul Merchants Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s Paul Merchants Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit & Loss and Cash Flow Statement of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards referred specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, ^the auditor considers internal control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of 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 qualified audit opinion.

Opinion

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

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

(b) In the case of the Statement of Profit and Loss, of the profit of the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by 'the Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of Section 143 (11) of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give the Annexure a statement on the matters specified in paragraphs 3and 4 of the Order.

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

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

(b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purpose of audit have been received from branches not visited by us;

(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 and above returns;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss 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 Act;")(which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of general circular 15/2013 dated 13th September, 2013 of The Ministry of Corporate Affairs)

(e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2015, from being appointed as a director in terms of sub-section (2) of Section 164 of the Companies Act, 2013. (f) The company has adequate internal financial control systems in place and are operating effectively.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 1 of our report of even date)

I. 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) According to the information and explanations given to us, the company has a system of regular physical verification of all its fixed assets during the year. In our opinion having regard to the size of the company and the nature of its assets, the program of verification is reasonable. No material discrepancies have been noticed in respect of assets physically verified.

II. In respect of its inventories:

c) The inventory was physically verified during the year by the management. In our opinion, frequency of verification is reasonable.

d) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company is maintaining proper records of its inventory. No material discrepancies were noticed on physical verification of inventory as compared to the book records.

III. According to the information and explanations given to us, the company has not granted any loans during the year to the parties covered in the register maintained under section 189 of the Companies Act 2013.

IV. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our Audit, we have not observed any continuing failure to correct major weaknesses in Internal Control System.

V. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year.

VI. In our opinion and according to the information and explanations given to us, the Company is not required to maintain cost records under section 148(1) of the Companies Act, 2013 .

VII. According to the information and explanations given to us in respect of Statutory and other dues:

a) The company is regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, wealth Tax, Service Tax, and other applicable statutory dues with the appropriate authorities during the year.

b) As per the information and explanation given to us, there is no amount of Income tax/ wealth tax/ service tax, which have not been deposited on account of any dispute.

c) There were no amounts which were required to be transferred to the investor education and protection Fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made there under

VIII. The Company have no accumulated losses at the end of the year and has incurred no cash losses during the current financial year and in preceding financial year.

IX. In our opinion and according to information and explanation given to us, the company has not defaulted in repayment of its dues to any financial institution or bank or debenture holders.

X. According to the information and explanations given to us, the company has not given any corporate guarantee for loans taken by others from banks or financial institutions.

XI. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtained.

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

For JAIN & ASSOCIATES

CHARTERED ACCOUNTANTS

FRN - 01361N

PLACE: CHANDIGARH

DATE: 22-05-2015

Sd/-

(CA. NEERAJ JAIN)

PARTNER

M. No. 089477


Mar 31, 2014

We have audited the accompanying financial statements of M/s Paul Merchants Limited, which comprise the Balance Sheet as at March 31, 2014, and the statement of Profit and Loss and Cash Flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

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

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

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

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case the Balance Sheet, of the state of affairs of the Company as at 31st March 2014.

(ii) In the case of Profit and Loss Account, of the profit for the year ended on that date, and

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

Report on Other Legal and Regulatory Requirements:

1. As required by Companies (Auditors'' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act 1956, we annex hereto a statement on the matters specified in paragraph 4 & 5 of the said order.

2. As required by section 227(3) of the Act, we report that:

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

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

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

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

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.

Referred to in paragraph 1 of Our Report of even date

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

(ii) These fixed assets have been physically verified by the management during the year and there is a regular program of verification which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification;

(iii) No substantial part of fixed assets has been disposed off during the year and according to the information and explanation given to us, we are of the opinion that it has not affected the going concern status of the company;

2. (i) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(ii) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business;

(iii) The company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records as per the physical verification statement received from the management.

3. According to the information and explanations given to us, the company has not granted or taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956.

4. In our opinion and according to information and explanation given to us, there are adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventories, fixed assets and sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5. According to information and explanation given to us, there are no such contracts or arrangements that need to be entered into a register in pursuance of section 301 of the Act.

6. According to information and explanation given to us the company has not accepted any deposits from the public during the year.

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

8. In our opinion and according to information and explanation given to us, the company is not required to maintain cost records as specified u/s 209(1)(d) of the Companies Act, 1956.

9. (i) The company is regular in depositing with appropriate authorities undisputed statutory dues towards Provident fund, Income Tax, Wealth Tax and Service Tax. According to information and explanation given to us Sales Tax, Customs duty and excise duty, cess or any other material statutory dues are not applicable to the company.

(ii) According to information and explanation given to us, no undisputed amount payable in respect of Provident fund, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty and cess were in arrears, as at 31st March, 2014 for a period of more that six months from the date they became payable.

(iii) According to information and explanation given to us, there are no dues of Provident fund , Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty and cess which have not been deposited on account of any dispute.

10. In our opinion, the company has no accumulated losses as on 31.3.2014. Moreover the company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to information and explanation given to us, the company has not defaulted in repayment of its dues to any financial institution or bank or debenture holders;

12. According to information and explanation given to us the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other securities during the year under audit.

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

14. In our opinion, the proper records have /been maintained of the transactions dealing and trading in shares, securities and other investments. The company has held shares in its own name to the extent possible.

15. According to information and explanation given to us the company has not given any guarantees for loans taken by others from banks or financial institutions.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

18. According to information and explanation given to us, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

19. According to information and explanation given to us no Debentures were issued by the company.

20. The Company has not raised any monies by way of public issues during the year.

21. According to information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Jain & Associates Chartered Accountants (FRN - 01361N) Place: Chandigarh Date : 27.05.2014 Sd/- (CA. Neeraj Jain, Partner) (M. No. 089477)


Mar 31, 2013

We have audited the accompanying financial statements of M/s Paul Merchants Limited, which comprise the Balance Sheet as at March 31, 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. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

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

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

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

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case the Balance Sheet, of the state of affairs of the Company as at 31st March 2013.

(ii) In the case of Profit and Loss Account, of the profit for the year ended on that date, and

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

Report on Other Legal and Regulatory Requirements:

1. As required by Companies (Auditors'' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act 1956, we annex hereto a statement on the matters specified in paragraph 4 & 5 of the said order.

2. As required by section 227(3) of the Act, we report that:

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

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

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

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

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

I. 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) According to the information and explanations given to us, the company has a system of physical verification of all its fixed assets once in a year. In our opinion having regard to the size of the company and the nature of its assets, the program of verification is reasonable. No material discrepancies have been noticed in respect of assets physically verified.

c) During the year, Company has not disposed of any substantial / major part of fixed assets.

II. In respect of its inventories:

a) The inventory was physically verified during the year by the management. In our opinion, frequency of verification is reasonable.

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

c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of inventory, the Company is maintaining proper records of its inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

III.

a) According to the information and explanations given to us, and our verification we observed that the company has granted no unsecured loans during the year to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956. Hence clause III (b) & (c) of this clause are not applicable

d) According to the information and explanations given to us, and our verification we observed that the company has not taken any loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956.

e) The terms and conditions regarding repayment of loans and interest thereon have not been specified.

f) As per information provided there is no overdue amount for more than Rs. One Lac but the terms and condition regarding repayment have not been specified.

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 for the purchase of inventory and fixed assets and for the sale of goods.

V. 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 explanation given to us, transactions that needed to be entered into the register have been so entered.

b) As per our verification regarding the transactions exceeding Rs. 5.00 lacs with each party we are of the opinion that the same are made at a price which is reasonable having regard to the prevailing market prices at the relevant time.

VI. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public as per provisions of section 58A and 58AA of the Companies Act 1956

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

VIII. The Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 for the products of the company.

IX. According to the information and explanations given to us in respect of Statutory and other dues:

a) The company is regular in depositing undisputed statutory and other dues, including provident fund, Employees'' State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty and any other statutory dues with the appropriate authorities during the year

b) As per the information and explanation given to us, no disputed amounts payable in respect of Income Tax, Wealth Tax, Custom Duty and Excise Duty were outstanding as on 31.03.2013 for a period more than six months from the date of becoming payable.

X. The Company does not have accumulated losses as at the end of the year and the Company has not incurred cash losses during the current and the immediately preceding financial year.

XI. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions and banks.

XII. According to the information and explanations, given to us, the Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

XIII. The company is not a chit fund company, Nidhi or mutual benefit fund / society.

XIV. The company is not dealing or trading in shares, securities, debentures and other investments.

XV. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

XVI. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtained.

XVII. On our verification we are of the opinion and as per 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 year for long term investment and vice versa.

XVIII. The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act 1956, during the year.

XIX. The Company has not issued any debenture during the year.

XX. The company has not raised any money by way of public issue during the year.

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

For JAIN & ASSOCIATES CHARTERED ACCOUNTANTS Firm Reg. no.-01361N

SD/- PLACE: CHANDIGARH (NEERAJ JAIN) DATE: 28-05-2013 PARTNER M. NO. 089477


Mar 31, 2012

We have audited the attached Balance Sheet of M/s Paul Merchants Ltd. as at 31st March, 2012 and the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. 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 the auditing standards generally accepted in India. Those standards require that we plan & 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 for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 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 & 5 of the said order.

2. Further to our comments in the Annexure referred to above we report that:

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

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

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

d) 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 3(C) of Section 211 of the Companies Act, 1956 to the extent applicable.

e) According to the information & explanation given to us and on the basis of representations made by all the Directors of the company, we report that none of the Directors of the company are disqualified as on 31st March 2012 from being appointed as Director under section 274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanation given to us the said Balance Sheet and the Profit & Loss Account read together with the notes thereon gives the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :-

i) insofar as it relates to the Balance Sheet of the state affairs of the company as at 31st March, 2012.

ii) insofar as it relates to the Profit & Loss Account, of the Profit of the company for the year ended on that date.

iii) insofar as it relates to Cash Flow Statement, of the Cash Flows for the year ended on that date.

Annexure: Re. Paul Merchants Ltd.

Referred to in paragraph 1 of Our Report of even date

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

(ii) These fixed assets have been physically verified by the management during the year and there is a regular program of verification which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification;

(iii) No substantial part of fixed assets has been disposed off during the year and according to the information and explanation given to us, we are of the opinion that it has not affected the going concern status of the company;

2 (i) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(ii) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business;

(iii) The company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records as per the physical verification statement received from the management.

3. According to the information and explanations given to us, the company has not granted or taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956.

4. In our opinion and according to information and explanation given to us, there are adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventories, fixed assets and sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5. According to information and explanation given to us, there are no such contracts or arrangements that need to be entered into a register in pursuance of section 301 of the Act.

6. According to information and explanation given to us the company has not accepted any deposits from the public during the year.

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

8. In our opinion and according to information and explanation given to us, the company is not required to maintain cost records as specified u/s 209(1)(d) of the Companies Act, 1956.

9. (i) The company is regular in depositing with appropriate authorities undisputed statutory dues towards Provident fund, Income Tax, Wealth Tax and Service Tax. According to information and explanation given to us Sales Tax, Customs duty and excise duty, cess or any other material statutory dues are not applicable to the company.

(ii) According to information and explanation given to us, no undisputed amount payable in respect of Provident fund, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty and cess were in arrears, as at 31st March, 2012 for a period of more that six months from the date they became payable.

(iii) According to information and explanation given to us, there are no dues of Provident fund , Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty and cess which have not been deposited on account of any dispute.

10. In our opinion, the company has no accumulated losses as on 31.3.2012. Moreover the company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to information and explanation given to us, the company has not defaulted in repayment of its dues to any financial institution or bank or debenture holders;

12. According to information and explanation given to us the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other securities during the year under audit.

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

14. In our opinion, the proper records have been maintained of the transactions dealing and trading in shares, securities and other investments. The company has held shares in its own name to the extent possible.

15. According to information and explanation given to us the company has not given any guarantees for loans taken by others from banks or financial institutions.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

18. According to information and explanation given to us, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

19. According to information and explanation given to us no Debentures were issued by the company.

20. The Company has not raised any monies by way of public issues during the year.

21. According to information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Jain & Associates Chartered Accountants Place: Chandigarh Date: 17.08.2012 Sd/- (CA. Neeraj Jain) Partner (M. No. 089477)


Mar 31, 2011

We have audited the attached Balance Sheet of M/s Paul Merchants Ltd. as at 31st March, 2011 and the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. 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 the auditing standards generally accepted in India. Those standards require that we plan & 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 for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 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 & 5 of the said order.

2. Further to our comments in the Annexure referred to above we report that:

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

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

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

d) 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 3(C) of Section 211 of the Companies Act, 1956 to the extent applicable.

e) According to the information & explanation given to us and on the basis of representations made by all the Directors of the company, we report that none of the Directors of the company are disqualified as on 31st March 2011 from being appointed as Director under section 274(1)(g) of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanation given to us the said Balance Sheet and the Profit & Loss Account read together with the notes thereon gives the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :-

i) insofar as it relates to the Balance Sheet of the state affairs of the company as at 31st March, 2011.

ii) insofar as it relates to the Profit & Loss Account, of the Profit of the company for the year ended on that date.

iii) insofar as it relates to Cash Flow Statement, of the Cash Flows for the year ended on that date.

Referred to in paragraph 1 of Our Report of even date

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

(ii) These fixed assets have been physically verified by the management during the year and there is a regular program of verification which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification;

(iii) No substantial part of fixed assets has been disposed off during the year and according to the information and explanation given to us, we are of the opinion that it has not affected the going concern status of the company;

2 (i) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(ii) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business;

(iii) The company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records as per the physical verification statement received from the management.

3. (i) During the year, the company has granted and taken unsecured loans from six parties covered in the register maintained under section 301 of the Act. The year-end balance of loans taken from such parties were 8.32 lacs.

(ii) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from/ granted to company or other parties listed in the register maintained under section 301 of the companies Act, 1956, are not prima facie, prejudicial to the interest of the company and the repayment of principal and interest are also regular as per terms of agreement with the parties. There is no overdue amount.

4. In our opinion and according to information and explanation given to us, there are adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventories, fixed assets and sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5. (i) According to information and explanation given to us, we are of the opinion that the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered;

(ii) In our opinion and according to information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to information and explanation given to us the company has not accepted any deposits from the public during the year.

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

8. In our opinion and according to information and explanation given to us, the company is not required to maintain cost records as specified u/s 209(1)(d) of the Companies Act, 1956.

9. (i) The company is regular in depositing with appropriate authorities undisputed statutory dues towards Provident fund, Income Tax, Wealth Tax and Service Tax. According to information and explanation given to us Sales Tax, Customs duty and excise duty, cess or any other material statutory dues are not applicable to the company.

(ii) According to information and explanation given to us, no undisputed amount payable in respect of Provident fund, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty and cess were in arrears, as at 31st March, 2011 for a period of more that six months from the date they became payable.

(iii) According to information and explanation given to us, there are no dues of Provident fund , Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs duty, Excise Duty and cess which have not been deposited on account of any dispute.

10. In our opinion, the company has no accumulated losses as on 31.3.2011. Moreover the company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to information and explanation given to us, the company has not defaulted in repayment of its dues to any financial institution or bank or debenture holders;

12. According to information and explanation given to us the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other securities during the year under audit.

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

14. In our opinion, the proper records have been maintained of the transactions dealing and trading in shares, securities and other investments. The company has held shares in its own name to the extent possible.

15. According to information and explanation given to us the company has not given any guarantees for loans taken by others from banks or financial institutions.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

18. According to information and explanation given to us, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

19. According to information and explanation given to us no Debentures were issued by the company.

20. We have verified the end use of money raised by public issue as disclosed in the notes to the financial statements.

21. According to information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Jain & Associates Chartered Accountants Place: Chandigarh Date: 02.09.2011 Sd/- (CA. Neeraj Jain) Partner

 
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