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Auditor Report of Rajesh Exports Ltd.

Mar 31, 2016

We have audited the accompanying Standalone Financial Statements of M/S. RAJESH EXPORTS LIMITED (''the Company'') comprising the Balance Sheet as on 31st March 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ( "the Act") with respect to the Preparation and presentation of these stand alone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the Accounting Principles generally accepted in India, including the Accounting Standards Specified under Section 133 of the Act, read with rule 7 of the Companies ( accounts) rules,2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken in to account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder. We have 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 stand alone financial statements are free from material misstatement. An audit involves performing procedure to obtain Audit evidence about the amounts and the disclosures in the stand alone financial statements. The procedures selected depend on the Auditor''s judgment, including assessment of the risks of material misstatement of the stand alone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the stand alone financial statements that give a true and fair view in order to design audit procedure that are appropriate in the Circumstances. An audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness of the accounting estimates made by the Companies Directors, as well as evaluating the overall presentation of the stand alone financial statements.

We believe that the Audit evidence we have obtained is sufficient and appropriate to provide a basis for our Audit opinion on the standalone Financial Statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the afore said 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 2016, and its profit and its cash flows for the year ended on that date.

Other Matters:

During the year Company has written off Rs.265166427/- as Bad Debts in Inter Corporate Deposit division since it is not recoverable.

Report on the Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Sub Section 11 of the Section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

d) In our opinion, the afore said stand alone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies ( Accounts) rules, 2014;

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

f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in annexure "B"; and

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

i. The company has disclosed the impact of pending litigations on its financial position in its stand alone financial statements- refer Notes of the financial statements.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE – A TO THE INDEPENDENT AUDITORS'' REPORT

In respect of the Annexure referred to in our ''Report to the members of M/s. Rajesh Exports Ltd ( " the company") for the year ended 31st March 2016, we report that:

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

(b). The fixed assets have been physically verified by the Management in a phased manner, designed to cover all the items over a period of 3 years, which, in our opinion is reasonable having regard to the size of the company and nature of its business. Pursuant to the programme certain fixed assets are verified during the year and no material discrepancies were noticed on such verification.

(c). According to the information and explanations given to us and on the basis of our examination of the records of the company, title deeds of immovable properties are held in the name of the company.

(ii). The company has conducted the physical verification of the inventory excluding materials lying with third parties during the year in accordance with programme designed to cover all items over a phased manner. According to the information and explanations given to us, in our opinion the frequency of physical verification of inventories followed by the Management is reasonable. The discrepancies noticed on physical verification of the inventory as compared to book records were not material.

(iii). The Company has not granted any loans, secured or unsecured, to companies, firms, LLP or other parties covered in the Register maintained under Section 189 of the Act. Accordingly, the provisions of paragraph 3(3)(a)(b) and (c) of the order are not applicable to the Company.

(iv). In our opinion and according to the information and explanations given to us, the Company has complied with provisions of Section 185 and 186 of the Act, with respect to the loans and investments made.

(v). The Company has not accepted any deposits during the year from the Public.

(vi). The maintenance of cost records specified by the Central Government under Sub Section (1) of Section 148 of the Companies Act is not applicable.

(vii). According to the information and explanations given to us, in respect of statutory dues.

(a) The Company has been regular in depositing statutory dues, including Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty , Value Added Tax and Cess which have not been deposited as on March 31, 2016 on account of disputes are given below:

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

Karnataka Sales Sales Tax 1,54,702 2001-02 First Appellate authority Tax Act

--Do-- --Do-- 1,00,000 2002-03 --Do--

--Do-- --Do-- 2,24,355 2003-04 --Do--

Income Tax Act Income Tax 26,23,25,771 2007-08 The Commissioner Appeals

Income Tax Act Income Tax 18,84,18,119 2008-09 The Commissioner Appeals

ESI of Karnataka ESI 89,27,290 04/2000 to 03/2003 The Appellate Authority ESI, Karnataka

ESI of Karnataka ESI 37,78,409 04/06 to 09/07 The Appellate Authority ESI, Karnataka

Service Tax Service Tax 3,67,24,590 2006-07 The Appellate Tribunal, and penalty Customs, Excise and Service Tax

(d) There has been a demand by the Income Tax Department, due to a case of mistaken identity. The company has filled an application U/s 154 of the Income Tax Act for rectification of the mistake. As it is a clear case of mistaken identity the company is absolutely confident of mistake being rectified and the demand will be withdrawn.

(viii).In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of its dues to financial institutions, Government, Debenture Holders and banks.

(ix). The Company did not raise any monies by way of initial public offer or further public offer (including Debt instruments) during the year. In our opinion and according to the information and explanations given to us, the term loans taken by the company have been applied for the purposes for which they were raised.

(x). According to the information and explanations given to us, no material fraud by the Company or on the company by its Officers or Employees has been noticed or reported during the course of our audit.

(xi). According to the information and explanations given to us and based on our examination of the records of the Company, the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule- V to the Act.

(xii).In our opinion and according to the information and explanations given to us the Company is not a Nidhi Company.

(xiii).According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 & 188 of the Act (where applicable) and details of such transactions have been disclosed in the financial statements as required by the applicable Accounting Standards.

(xiv).According to the information and explanations given to us and based on our examination of the records of the Company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv).According to the information and explanations given to us and based on our examination of the records of the Company, the company has not entered in to non cash transactions with Directors or persons connected with them.

(xvi).According to the information and explanations given to us, the Company is not required to be registered U/s. 45- IA of the Reserve Bank of India Act 1934.

For V. SIVASANKAR & CO,

Chartered Accountants

Firm Regn. No. 010839S

Sd/-

Place : Bangalore (CA VIJAYA SIVASANKAR.P)

Date : May 30, 2016 Prop.

M.No. 214786


Mar 31, 2015

We have audited the accompanying Financial Statements of M/S. RAJESH EXPORTS LIMITED ('the Company') which comprise the Balance Sheet as on 31st March 2015, the Statement of Profit and Loss and Cash Flow Statement of the company 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.

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company's 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 notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013 and in accordance with the Accounting Principles Generally Accepted in India. This responsibility includes the design, implementation and maintenance of adequate accounting records in accordance with the provisions of the Act, and for preventing frauds and detecting frauds and other irregularities and maintenance of adequate internal financial control, that were operating effectively for ensuring accuracy and completeness of 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.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We conducted our audit in accordance with the standards on auditing specified under section 143(10) of the Act. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to fraud or error. An audit includes examining on a test basis, performing the procedure to obtain Audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the Auditor's judgment, including assessment of the risk of material misstatement of financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of financial statements that give a true and fair view in order to design audit procedure 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 operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of financial statements.

We believe that the Audit evidence we have obtained is sufficient and appropriate to provide a basis for our Audit opinion on the standalone Financial Statements.

OPINION

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

Report on the Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure a statement on the maters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

d) In our opinion, the afore said stand alone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies ( Accounts) rules 2014.

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

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

i. The company has disclosed the impact of pending litigations on its financial position in its financial statements- refer Notes of the financial statements.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section 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) . The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories:

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

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were 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, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other 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, company has its own internal audit system and commensurate with the size and the nature of its business, for the purchase of inventory and fixed assets and for sale of goods and services. We have not observed any major weakness in the internal control system during the course of audit.

(v) The maintenance of cost records specified by the Central Government under Sub Section (1) of Section 148 of the Companies Act is not applicable.

(vi) According to the information and explanations given to us, the Company has not accepted any deposit during the year.

(vii) According to the information and explanations given to us, in respect of statutory dues.

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Incometax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and Cess which have not been deposited as on March 31, 2015 on account of disputes are given below:

Name of Nature of Amount in Period to the Statute the dues Rs. which the amount relates

Karnataka Sales Sales Tax 1,54,702 2001-02 Tax Act

--Do-- --Do-- 1,00,000 2002-03

--Do-- --Do-- 2,24,355 2003-04

Income Tax Act Income Tax 26,23,25,771 2007-08



Income Tax Act Income Tax 18,84,18,119 2008-09



ESI of Karnataka EST 89,27,290 04/2000 to 03/2003

ESI of Karnataka ESI 37,78,409 04/06 to 09/07

Service Tax Service Tax 3,67,24,590 2006-07 and penalty

Name of Nature of Forum where the Statute the dues dispute is pending

Karnataka Sales Sales Tax First Appellate Tax Act authority

--Do-- --Do-- --Do--

--Do-- --Do-- --Do-

Income Tax Act Income Tax The Commissioner Appeals

Income Tax Act Income Tax The Commissioner Appeals

ESI of Karnataka EST The Appellate Authority ESI, Karnataka

ESI of Karnataka ESI The Appellate Authority ESI, Karnataka

Service Tax Service Tax The Appellate and penalty Tribunal, Customs, Excise and Service Tax

(d) The Company has been generally regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder within time.

(viii) The Company does not have accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions and banks. The Company has not issued any debentures.

(x) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks and financial institutions

(xi) According to the Information and explanation to us and on an overall examination of the balance sheet of the company as on 31st march, 2015, the terms loans are applied for the purpose for which the loans were obtained.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit nor have been informed of any such case by the management.

For V. SIVASANKAR & CO, Chartered Accountants Firm Regn. No. 010839S Sd/- Place : Bangalore (CA VIJAYA SIVASANKAR.P) Date : May 28, 2015 Prop. M.No. 214786


Mar 31, 2014

We have audited the accompanying Financial Statements of M/S. RAJESH EXPORTS LIMITED ("the Compan") which comprises the Balance Sheet as on 31st March 2014, the Statement of Profit and Loss and Cash Flow Statement of the company 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.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s 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 notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013 and in accordance with the Accounting Principles Generally Accepted in India. 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.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to fraud or error. 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.

We report as follows.

1. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks and verification of the books of accounts as we consider necessary and to the best of our knowledge and according to the information and explanations given to us during the course of our audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in Paragraph 1 above.

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, the company has kept proper books of account as required by law so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Profit and Loss account and cash Flow Statement dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Statement of Profit and Loss account, Cash Flow Statement and Balance Sheet comply with mandatory 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, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2013 from being appointed as a director in terms of Clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our knowledge and according to the information and explanations given to us, the said accounts give information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the balance sheet, of the state of affairs of the company as 31st March 2014 and

ii) In the case of statement of profit and loss account, of the profit for the year ended on that date;

iii) In the case of cash flow statement, of the cash flow of the company for the year ended on that date. Except that the Company has the accounting policy with regard to accounting of interest income on interest bearing Loans other than Bank Deposits on Cash basis and Company has not recognized the deferred tax liability during the year.

3. We have not audited financial statements of the overseas subsidiary. These unaudited financial statements as approved by the respective Board of Directors of this Company have been furnished to us by the management and our report insofar as it relates to the amount included in respect of amount included in respect of the overseas subsidiary is based solely on such approved unaudited financial statements.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE OF THE AUDTOR’S TO THE MEMBERS OF M/s. RAJESH EXPORTS LIMITED, BANGALORE, ON ACCOUNTS FOR THE YEAR ENDED 31St MARCH 2014.

1. (a). The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets but identification mark on the individual assets is not displayed.

(b). The Company has drawn up a programme of Physical verification of Fixed Assets, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Fixed assets were physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c). Fixed Assets Disposed off during the year were not substantial and therefore do not affect the going concern assumption.

2. As explained to us, Inventories held by the company have been physically verified by the management at regular intervals during the year.

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

The Company has maintained proper records of inventories. As explained to us, there were no discrepancies noticed on physical verification of inventory as compared to the book records.

3. As per the information and explanations furnished by the Management, the company has not granted any loans to companies or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

The Company has taken loan from the parties listed in the register maintained under section 301 of the companies Act, 1956. These loans were taken from three parties and the amount outstanding as at the year end is Rs.446599110/- and maximum amount taken at any time of the year is Rs. 451919252/-. The rate of interest and other terms and conditions of these loans taken are not prima facie prejudicial to the interest of the company.

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

5. (a). In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the companies Act, if any, have been entered in the register maintained under section 301 the companies Act, 1956.

(b). The transactions made in pursuance of such contracts or arrangements, exceeding the value of rupees five lakhs in respect of any part during the year, if any, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The company has accepted deposits from an individual and the directives issued by the Reserve Bank of India and the provision of Section 58A and 58AA or any other relevant provisions of the Companies Act 1956 and the rules framed there under, where applicable, have been complied with. The Company Law Board has not passed any order with regard to public deposits.

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

8. The company has maintained cost records and accounts as prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956. We have broadly reviewed the accounts and records of the company in this connection and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the same.

9. According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty, Cess and other statutory dues, as applicable to it, with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding at the year end for a period of more than six months from the date they become payable. Based on information and explanations given to us, we furnish hereunder the particulars of disputed dues :-

Name of the Statute Nature of the dues Amount in Rs. Karnataka Sales Tax Act Sales Tax 1,54,702

-Do- -Do- 1,00,000

-Do- -Do- 2,24,355

Income Tax Act Income Tax 26,23,25,771

Income Tax Act Income Tax 18,84,18,119

ESI of Karnataka ESI 89,27,290

ESI of Karnataka ESI 37,78,409 Service Tax Service Tax 3,67,24,590 and penalty



Name of the Statute Period to Forum where which the dispute is pending amount relates Karnataka Sales Tax Act 2001-02 First Appellate authority

-Do- 2002-03 -Do-

-Do- 2003-04 -Do-

Income Tax Act 2007-08 The Commissioner Appeals

Income Tax Act 2008-09 The Commissioner Appeals

ESI of Karnataka 04/2000 to 03/2003 The Appellate Authority ESI, Karnataka

ESI of Karnataka 04/06 to 09/07 The Appellate Authority ESI, Karnataka Service Tax 2006-07 The Appellate Tribunal, Customs, Excise and Service Tax

During the financial year an Income Tax search was conducted on the Company U/s.132 of the Income Tax Act by DDIT (Inv), Unit-I(3), Bangalore. The Company has not declared any additional Income and according to the Company no discrepancies were found in the accounts of the Company.

10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by the audit or in the immediately preceding financial year.

11. As per information furnished by the management, the company has not defaulted in repayment of dues to banks, financial institutions and debenture holders.

12. According to the information and explanations given to us, the Company has maintained adequate document and records in cases where the Company has granted loans on the basis of security by way of pledge of immovable properties.

13. The company is not a chit fund or a nidhi /mutual benefit fund/society and hence clause 4 (xiii) of Companies (Auditor’s Report) Order 2003 is not applicable to the company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

15. The company has not given guarantees for loans taken by others from banks or financial institutions.

16. The Company did not have any outstanding term loans at the end of the year.

17. According to the information and explanations 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 by the company.

18. During the year, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has not created any security or charge in respect of debentures/bonds issued.

20. The company has not raised any money through a public issue during the year.

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

For V. SIVASANKAR & CO,

Chartered Accountants Firm Regn. No. 0108395 Sd/-

Place : Bangalore (CA VIJAYA SIVASANKAR.P) Date : 30-5-2014 Prop.

M.No. 214786


Mar 31, 2013

We have audited the attached balance sheet of M/S. RAJESH EXPORTS LIMITED as on 31st March 2013, and the Profit and 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 company''s management; our responsibility is to express an opinion on these financial statements based on our audit.

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

1. As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks and verification of the books of accounts as we consider necessary and to the best of our knowledge and according to the information and explanations given to us during the course of our audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in Paragraph 1 above.

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, the company has kept proper books of account as required by law so far as appears from our examination of the books.

c) The Balance Sheet, Profit and Loss account and cash Flow Statement dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Profit and Loss account, Cash Flow Statement and Balance Sheet comply with mandatory 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, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2013 from being appointed as a director in terms of Clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our knowledge and according to the information and explanations given to us, the said accounts give information required by the Companies Act, 1956, in the manner so required and subject to (i). That the Company has the accounting policy with regard to accounting of interest income on interest bearing Loans other than Bank Deposits is on Cash basis, (ii) Company has not recognized the deferred tax liability during the year give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the balance sheet, of the state of affairs of the company as on 31st March 2013 and

ii) In the case of the profit and loss account, of the profit for the year ended on that date;

iii) In the case of cash flow statement, of the cash flow of the company for the year ended on that

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE OF THE AUDITOR''S TO THE MEMBERS OF M/S. RAJESH EXPORTS LIMITED, BANGALORE, ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2013.

1. (a). The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets but identification mark on the individual assets is not displayed.

(b). The Company has drawn up a programme of Physical verification of Fixed Assets which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Fixed assets were physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c). There was no disposal of substantial part of fixed assets during the year and therefore, it does not affect the going concern assumption.

2. As explained to us, Inventories held by the company have been physically verified by the management at regular intervals during the year.

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

The Company has maintained proper records of inventories. As explained to us, there were no discrepancies noticed on physical verification of inventory as compared to the book records.

3. As per the information and explanations furnished by the Management, the company has not granted any loans to companies or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

The Company has taken loan from the parties listed in the register maintained under section 301 of the companies Act, 1956. These loans were taken from three parties and the amount outstanding as at the year end is Rs.33,35,54,504/- and maximum amount taken at any time of the year is Rs. 45,19,19,252/-. The rate of interest and other terms and conditions of these loans taken are not prima facie prejudicial to the interest of the company.

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

5. (a). In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the companies Act, if any, have been entered in the register maintained under section 301 the companies Act, 1956.

(b). The transactions made in pursuance of such contracts or arrangements, exceeding the value of rupees five lakhs in respect of any part during the year, if any, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The company has accepted deposits from an individual and the directives issued by the Reserve Bank of India and the provision of Section 58A and 58AA or any other relevant provisions of the Companies Act 1956 and the rules framed there under, where applicable, have been complied with. The Company Law Board has not passed any order with regard to public deposits.

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

8. The company has maintained cost records and accounts as prescribed by the Central Government under section 209(l)(d) of the Companies Act, 1956. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the same.

9. According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income - Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty, Cess and other statutory dues, as applicable to it, with the appropriate authorities.

According to the information and explanations give to us, no undisputed amounts payable in respect of aforesaid dues were outstanding at the year end for a period of more than six months from the date they become payable. Based on information and explanations given to us, we furnish hereunder the particulars of disputed aforesaid dues which have not been deposited:-

Name of Nature of Amount in the Statute the dues Rs.

Karnataka Sales Sales Tax 1,54,702 Tax Act

-Do- -Do- 1,00,000

-Do- -Do- 2,24,355

Income Tax Act Income Tax 26,23,25,771

Income Tax Act Income Tax 18,84,18,119

ESI of Karnataka ESI 89,27,290

ESI of Karnataka ESI 37,78,409

Service Tax Service Tax 3,67,24,590 and penalty

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

Karnataka Sales Tax Act 2001-02 First Appellate authority

--Do-- 2002-03 -Do-

--Do-- 2003-04 -Do-

Income Tax Act 2007-08 The Commissioner Appeals

Income Tax Act 2008-09 The Commissioner Appeals

ESI of Karnataka 04/2000 to 03/2003 The Appellate Authority ESI, Karnataka

ESI of Karnataka 04/06 to 09/07 The Appellate Authority ESI, Karnataka

Service Tax 2006-07 The Appellate Tribunal, Customs, Excise and Service Tax

10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by the audit or in the immediately preceding financial year.

11. As per information furnished by the management, the company has not defaulted in repayment of dues to banks, financial institutions and debenture holders.

12. According to the information and explanations given to us, the Company has maintained adequate document and records in cases where the Company has granted loans on the basis of security by way of pledge of shares, debenture and other securities.

13. The company is not a chit fund or a nidhi /mutual benefit fund/society and hence clause 4 (xiii) of Companies ( Auditor''s Report) Order 2003 is not applicable to the company.

14. In our opinion, the company is not a dealer or a trader in shares, securities, debentures and other investments.

15. The company has not given guarantees for loans taken by others from banks or financial institutions.

16. The Company did not have any outstanding term loans at the end of the year.

17. According to the information and explanations 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 by the company.

18. During the year, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has not created any security or charge in respect of debentures/bonds issued.

20. The company has not raised any money through a public issue during the year.

For V. SIVASANKAR & CO,

Chartered Accountants

Firm Regn. No. 0108395

Sd/-

Place : Bangalore (CA VIJAYA SIVASANKAR.P)

Date : 30-5-2013 Prop.

M.No. 214786


Mar 31, 2011

We have audited the attached balance sheet of M/S. RAJESH EXPORTS LIMITED as at 31st March 2011, and the profit and 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 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 and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report as follows

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks and verification of the books of accounts as we consider necessary and to the best of our knowledge and according to the information and explanations given to us during the course of our audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in Paragraph 1 above.

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, the company has kept proper books of account as required by law so far as appears from our examination of the books.

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

d) In our opinion, the Profit and Loss account, Cash Flow Statement and Balance Sheet comply with the mandatory 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, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2011 from being appointed as a director in terms of Clause (g) of sub section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our Knowledge and according to the information and explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and Subject to; (i) that the Company has adopted the Accounting Policy with regard to accounting of interest income on interest bearing loans other than bank deposits from accrual to cash basis, as a result of which the profit for year has been understated by Rs.33,08,58,0681 -(as stated in Para A.6 in schedule 'S');(ii) that during the year 99.055 Kilos of gold jewellery is charged off from the Stocks as same is not recoverable from some of the employees and (Hi) that there is no value addition in sales made in SEZ Unit of the Company in the quarter ended 31st March 2011, read with other notes in Schedule 'S' annexed to the audited accounts, give a true and fair view:

i) In the case of the balance sheet, of the state of affairs of the company as at 31st March 2011 and

ii) In the case of the profit and loss account, of the profit for the year ended on that date;

iii) In the case of cash flow statement, of the cash flow of the company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE OF THE AUDITOR'S TO THE MEMBERS OF M/S. RAJESH EXPORTS LIMITED, BANGALORE, ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2011.

1. The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets but identification mark on the individual assets is not displayed. The Company has drawn up a programme of Physical verification of Fixed Assets which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Fixed assets were physically verified by the Management during the year and no material discrepancies were noticed on such verification. Substantial part of the fixed assets has not been disposed off during the year.

2. As explained to us, Inventories held by the company have been physically verified by the management at regular intervals during the year.

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

The Company has maintained proper records of inventories. As explained to us, there were no discrepancies noticed on physical verification of inventory as compared to the book records.

3. As per the information and explanations furnished by the Management, the company has not granted any loans to companies or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

The Company has taken loan from the parties listed in the register maintained under section 301 of the Companies Act, 1956. These loans were taken from three parties and the amount outstanding as at the year end is Rs.384,176,838/- and maximum amount taken at any time of the year is Rs.388,226,838/-. The rate of interest and other terms and conditions of these loans taken are not prima facie prejudicial to the interest of the company. The payment of principle amount and interest thereon are also regular wherever stipulated.

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

5. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the companies Act, 1956, if any, have been entered in the register maintained under section 301 of the companies Act, 1956. The transactions made in pursuance of such contracts or arrangements, exceeding the value of rupees five lakhs in respect of any party during the year, if any, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has accepted deposits from an individual and the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act 1956 and the rules framed there under, where applicable, have been complied with. The Company Law Board has not passed any order with regard to public deposits.

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

8. The company has maintained cost records and accounts as prescribed by the Central Government under section 209 (1) (d) of the Companies Act, 1956.We have broadly reviewed the accounts and records of the company in this connection and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the same.

9. According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs Duty, Excise duty, Cess and other statutory dues, as applicable to it, with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding at the year end for a period of more than six months from the date they became payable. Based on information and explanations given to us, we furnish hereunder the particulars of disputed aforesaid dues which have not been deposited: -

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

Karnataka Sales Sales Tax 1,54,702 2001-02 First Appellate authority Tax Act

-Do- -Do- 1,00,000 2002-03 -Do-

-Do- -Do- 2,24,355 2003-04 -Do-

Income Tax Act Income Tax 26,23,25,771 2007-08 The Commissioner Appeals

Income Tax Act Income Tax 18,84,18,119 2008-09 The Commissioner Appeals

ESI of Karnataka ESI 89,27,290 04/2000 to 03/2003 The Appellate Authority ESI, Karnataka

ESI of Karnataka ESI 37,78,409 04/06 to 09/07 The Appellate Authority ESI, Karnataka

Service Tax Service Tax 3,67,24,590 2006-07 The Appellate Tribunal, and penalty Customs, Excise and Service Tax

10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

11. As per information furnished by the management, the company has not defaulted in repayment of dues to banks, financial institutions and debenture holders.

12. According to the information and explanations given to us, the Company has maintained adequate documents and records in cases where the Company has granted loans on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a chit fund or a nidhi/mutual benefit fund/society and hence clause 4 (xiii) of Companies (Auditor's Report) Order 2003 is not applicable to the company.

14. In our opinion, the Company is not a dealer or a trader in shares, securities, debentures and other investments.

15. The company has not given guarantees for loans taken by others from banks or financial institutions.

16. The Company did not have any outstanding term loans at the year end of the year. However, the company has a sum of Rs. 765,872,000/- outstanding as on 31st March 2011 as FCCB issue proceeds shown under the head 'Unsecured Loan' in Schedule 'E' annexed to the accounts and the same is kept with bank deposits in Foreign currency till it's utilization.

17. According to the information and explanations 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 by the company.

18. During the year, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has not created any security or charge in respect of debentures/bonds issued.

20. The Company has not raised any money through a public issue during the year.

21. In our opinion and according to the information and explanations given to us, no fraud by or against the Company has been noticed or reported during the year except that 99.055 Kilos of gold jewellery was mishandled by the employees.



For P.K. RUNGTA & CO.,

Chartered Accountants

Sd/-

(CA P.K. RUNGTA)

Place: Bangalore Proprietor

Date: 30th May 2011 Membership No. 051184








Mar 31, 2000

We have audited the attached Balance Sheet of M/s. RAJESH EXPORTS LIMITED, as at March 2000, and also Profit and Loss account of the company lor the year ended on that date annexed thereto, and report that ;

1. As required by the manufacturing and other companies (Auditors Report) order, 1988 issued by the Company Law Board in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks and verifications of the books of accounts as we considered necessary and to the best of our knowledge and according to the information and explanations given to us during the course of audit, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order :

2, Further to our comments in the annexure referred to in paragraph 1 above.

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 the books.

c. The Balance Sheet dealt with by this report are in agreement with the books of accounts.

d. In our opinion, the Profit & Loss Account and Balance Sheet comply with the mandatory accounting standards referred to in section 211 (3C) of the Companies Act, 1956.

e. In our opinion and to the best of our knowledge and according to the informations and explanations given to us. the accounts give the information required by the Companies Act, 1956, in the manner so required and subject No.6 (vi) regarding non provision of gratuity liability read with other notes in Schedule P give a true and fair view.

i. In the case of the Balance Sheet of the State of Affairs of the company as at 31st March, 2000.

AND

ii. In the case of the Profit and Loss Account of the profit lor the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF EVEN DATE OF HIE AUDITORS TO THE MEMBERS OF MESSERS RAJESH EXPORTS LIMITED, BANGALORE ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2000.

1. The Company has maintained proper records, showing full particulars including quantitative details and situations of Fixed Assets, The company has drawn up a programme of physiacl verification of Fixed Assets over a period of two years which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Fixed Assets were physically verified by the Management during the year and no material discrepancies have been noticed on physical verification.

2. None of the Fixed Assets have been revalued during the year.

3. Physiacl verification of stocks was conducted by the Management during the year end and in our opinion, the frequency of verification was reasonable.

4. The procedures of physical verification of stocks followed by the company are reasonable and adequate, commensurate with the size of the company and the nature of its business.

5. No material discrepancies have been noticed on physical verification of stocks as compared to the book records.

6 In our Opinion, the Valuation Of Stocks is fair and proper in accordance With the normally accepted accounting principles.

7. As per the information and explanation furnished by the Management, the company has not granted any loan the companies and other parties as listed in the register maintained under section 301 of the Companies Act. 1956 or to the companies, under the same management as defined under section 370 (1B) of the companies act, 1956.

8. As per information and explanations furnished by the Management, the Company has not taken any loan secured or unsecured from the companies, and other parties listed in the register maintained under section 301 of the Companies Act, 1956 or from the companies, under the Management as defined under sub-section (1B) of section 370 of the Companies Act, 1956.

9. In respect of loans and advances in the nature of loans given by the Company, as explained to us, the parties are regular in payment as required by the Company. No interest has been charged on these loans and advances in the nature of the loans.

10. 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 a sales of goods and the purchase materials including components, plant and machinery, equipment and other assets.

11. There are no transactions of purchase and sale of goods and materials made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act 1956, and aggregating to Rs.50.000/- or more in respect of each party.

12. As explained to us, unserviceable or damaged stores have been determined by the management and where required, adequate provision has been made in the accounts for the loss arising on items so determined. There were no unserviceable or damaged raw materials and finished goods.

13. As per information and explanation given to us, the company has not accepted any deposits as per the provisions of section 58A of the Companies Act, 1956 and the rules framed thereunder.

14. As explained to us, the company is maintaining reasonable records for the sale and disposal of realisable by-products and scraps.

15. The company did not have formal internal audit system.

16. We have been informed that the Central Government has not prescribed the maintenance of cost records for the year under review under Sec. 209(1)(d) of the Companies Act. 1956.

17. As per the information and explanations given to us by the Management the Provident Fund Act and Employees State Insurance Fund Act are not applicable in company at present.

18. According to the information and explanation given to us, there are no undisputed amounts payable in respect of income tax. wealth tax, sales tax, customs duty and excise duty, which are outstanding for more than 6 months as on 31st March, 2000.

19. Based on the test checks carried out by us and the information and explanation given to us, no personal expenses have been charged to the Profit and Loss Account except those payable under contractal obligations and or in accordance with the generally accepted business practice.

20. The Company is not a sick industrial company within the meaning of clause (O) of sub-section(i) of section 3 of the Sick Industrial Companies (special provision) Act, 1985.

21. In respect of trading activities, the company did not have any damaged goods.

for P.K. RUNGTA & CO., Chartered Accountant

(P.K. RUNGTA)

Place : Bangalore Date : 28th June, 2000

 
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