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Auditor Report of Samtex Fashions Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s SAMTEX FASHIONS LIMITED ("The Company")(Financial statements of trading office of the company at New York are duly audited by R. Rehani & Co. Certified Public Accountants P.C. New York)which comprise the Balance Sheet as at March 31, 2015 and 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 RESPONSIBILTY:

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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 thereunder. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain 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 the 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 on the financial statements.

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;

Subject to the above we report that the accounts represent true and fair view

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

ii) In the case of the Statement of Profit and Loss for the year ended on that date; and

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") as required by Companies Act,2013 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 annex hereto a statement on the matters specified in said Order.

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

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

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

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

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

f) With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its FINANCIAL position in its financial statements.(refer note 28 part A annexed to financial statement)

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

iii. There has been no amount required to be transferred, to the Investor Education and Protection FUND by the Company.

ANNEXURE REFERRED TO IN OUR AUDIT REPORT OF EVEN DATE OF M/S SAMTEX FASHIONSLIMITED, PURSUANT TO THE COMPANIES (AUDITORS' REPORT) ORDER 2015 ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015

i. (a) The Company hasupdated its records of fixed assets showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to us, most of the fixed assets have been physically verified by the management during the year and as per the explanations and information given to us, there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As explained to us discrepancies noticed on physical verification were not significant and have been properly dealt with in the books of accounts.

(c) During the year, the Company has not disposed off any part of the fixed assets, which will have the effect on the going concern of the company.

ii. (a) As explained to us the inventory has been physically verified during the year by the management.

(b) 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) As explained and based on the information given to us, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. (a) The Company has neither granted nor taken any loan, secured or unsecured to/from companies, firms or other parties covered in the Register maintained under section 189 of the Companies Act. 2013 except those mentioned in Note No. 28, part C of notes to financial statements.

iv. In our opinion and according to the information and explanations given to us, the company has an adequate internal control system in respect of purchase of inventory, fixed assets and sale of goods.

v. In our opinion and according to the information and explanation given to us, the company has not accepted any deposits, hence provisions of section 73 to 76 or any other relevant provisions of the Company Act is not applicable.

vi. The Company has prepared and maintained cost records as prescribed by the Central Government under subsection (1) of section 148 of the companies Act 2013.

vii (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employee's state insurance, income tax, sales tax, wealth tax, custom duty, excise-duty, cess and other statutory dues applicable to it.

(b) According to the records of the company, the disputed statutory dues i.e. Income Tax aggregating to Rs. 125.42lacs that have not been provided for in the books of accounts on account of matters pending before concerned appellate authorities/ Delhi High Court and ITAT Delhi Bench. However a sum of Rs.110.65 lacs is deposited under protest against above demand. As mentioned in point no. A of Note No. 28 to "Notes on Account.

(c) According to the information and explanation given to us by the management, no amount is pending to be transferred to Investor Education And Protection Fund in accordance with the relevant provision of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

viii. The company does not have any accumulated losses at the end of the financial year March 31,2015. Further it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding year.

ix. As explained and informed to us by the management, we are of opinion that the company has not defaulted in repayment of dues of any financial institution or bank.

x. According to the information and explanations provided to us by the management, the company has guaranteed a sum of Rs.77,384Lacs (previous year Rs. 73,841Lacs) against secured Loans taken from financial institutions by SSA International Ltd. Subsidiary of the Company.

xi. Based on the records, we report that the Company has not raised new term loan during the year. The term loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

xii. To the best of our knowledge and according to information and explanations given to us, no fraud on or by the Company has been noticed and reported during the year.

FOR AGGARWAL & RAMPAL Chartered Accountants F.R.No.003072N

Sd/- VINAY AGGARWAL Place : New Delhi Partner Date : May 30, 2015 M.No.082045




Mar 31, 2014

We have audited the accompanying financial statements of M/S SAMTEX FASHIONS LIMITED ("The Company"), which comprise the Balance Sheet as at March 31,2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT RESPONSIBILITY:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementa- tion 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 state- ments. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material mis- statement 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 ac- counting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

OPINION:

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

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

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) In the case of the Profit and Loss Account, of the profit/ loss for the year ended on that date; and

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give that the same is not applicable to the Company.

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 neces- sary 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 agree- ment with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Ac- counting Standards referred to in subsection (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.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

THE ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE OUR REPORT OF EVEN DATE TO THE MEMBERS OF M/S SAMTEX FASHIONS LIMITED ON THE ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31ST MARCH, 2014

i (a) In our opinion and as per information and explanation provided to us the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us the fixed assets have been physically verified by the management during the year and as per the explanations and information given to us there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As explained to us discrepancies noticed on physical verification were not significant and have been properly dealt with in the books of accounts.

(c) During the year, the company has not disposed off any part of the plant and machinery, which will have the effect on the Going concern of the company.

ii (a) As explained to us the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to 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) As explained and based on the information given to us, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and the same has been properly dealt with in the books of account.

iii (a) The company has granted loan to parties covered in the register maintained under section 301 of the companies Act, 1956. (Refer Note No. 31 (C)).

(b) The above loans and advances are in the nature of interest free loan and in our opinion the terms and conditions are not, prima facie prejudicial to the interest of the company.

(c) As explained to us, there is no stipulated time frame for the repayment of the above loans and advances and hence we are unable to comment on the regularity of the repayment of the Principal and Interest on the above loan taken or granted to the parties covered under section 301 of the Companies Act, 1956.

(d) In view of the above we are unable to comment whether there is any overdue amounts of loans taken from or granted to the Companies, Firms or Other Parties listed in the register maintained u/s 301 of the Companies Act, 1956.

(e) No Loan/advance is reported to be overdue.

(f) The company has not taken any loans and advances, secured or unsecured from Companies, Firms or Other Parties covered in the register maintained under section 301 of the companies Act, 1956. Hence part (e), (f) & (h) of Clause 4(iii) are not applicable.

iv In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of company and the nature of its business with regard to, purchase of stores and spares, raw materials, fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in such internal controls.

v. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakhs rupees 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 times.

vi. In our opinion and according to the information and explanations given to us, the company has not accepted any Deposits as defined with in the meaning of Sections 58A and 58AA of the companies Act, 1956 and the companies (Acceptance of Deposits) Rules 1975 and hence the provisions of clause 4(vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

vii. Internal Audit has been conducted by an independent firm of Chartered Accountants during the year and it is commensurate with the size and nature of Business. However, It needs to be further strengthened.

viii. As informed to us maintenance of cost records has been prescribed by the Central Government under section 209 (1)

(d) of The Companies Act, 1956 is in the process but not shown to us and management ensures that the compliance report will be submitted within the time period stipulated in the relevant statute.

ix. (a) As informed to us, and records of the company examined by us, In our opinion, the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, Service Tax, custom duty, excise duty, cess and other statutory dues applicable to it and as informed and explained to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty and excise duty were outsta -nding, as at 31.03.2014 for a period of more than six months from the date they became payable.

(b) According to the records of the company, the disputed statutory dues i.e. Income Tax aggregating to Rs. 111.88 lacs that have not been provided for in the books of accounts on account of matters pending before concerned appellate authorities/ Delhi High Court and ITAT Delhi Bench. However a sum of Rs.110.65 lacs is deposited under protest against above demand. As mentioned in point no. A of Note No. 29 to "Notes on Account.

x. The company does not have any accumulated losses. Further it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. As explained and informed to us by the management, we are of the opinion that the company has not defaulted in repayment of dues to any financial institution, or bank.

xii. Based on the records we report that the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The company is not a chit fund company or mutual fund / Society, thus the provisions of this para are not applicable.

xiv. As per records of the company and the information and explanations given to us by the management, The Company is not dealing or trading in shares, securities, and debentures and other investment except those investments, which are held as investment. In our opinion, in respect of those investments held by the Company, proper records have been maintained of the transactions and contracts and timely entries have been made therein and the shares, securities and other investments have been held by the Company, in its own name.

xv. According to the information and explanations provided to us by the management, the company has guaranteed a sum of Rs.73,841 Lacs (previous year Rs. 59,360 Lacs) & Rs. Nil (previous year Rs.575 Lacs) against secured Loans taken from financial institutions by SSA International Ltd. & Sam Buildcon Ltd. Respectively; wholly owned subsidiaries of the Company.

xvi. The term loans obtained by the company have been applied for the purpose for which they were raised.

xvii. 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. No long-term funds have been used to finance short-term assets except core (permanent) working capital.

xviii. As explained and informed to us by the management and upon our examination of records we report that the company has made any preferential allotment of equity shares to parties and companies covered in the register maintained under section 301 of the Act.

xix. During the period covered by our audit report, the company has not issued any types of debentures. The question of creation of any security in the respect of debentures does not arise.

xx. During the financial year the company did not raise any money by public issue.

xxi. In our opinion and according to information and explanations given to us by the management, there was no fraud on or by the company which has been noticed and reported during the year that causes the financial statements to be materially misstated.

For AGGARWAL & RAMPAL CHARTERED ACCOUNTANTS FIRM REGD.NO:003072N

Sd/- Place : New Delhi VINAY AGGARWAL Dated : May 30, 2014 PARTNER M.No. 082045


Mar 31, 2013

We have audited the accompanying financial statements of M/S SAMTEX FASHIONS LIMITED ("The Company"), 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 RESPONSIBILITY:

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

AUDITOR''S RESPONSIBILITY:

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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.

OPINION:

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) In the case of the Profit and Loss Account, of the profit/ loss for the year ended on that date; and

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give that the same is not applicable to the Company.

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 subsection (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.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

THE ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE OUR REPORT OF EVEN DATE TO THE MEMBERS OF M/S SAMTEX FASHIONS LIMITED ON THE ACCOUNTS OF THE COMPANY FOR THE YEAR ENDED 31ST MARCH, 2013.

i (a) In our opinion and as per information and explanation provided to us the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us the fixed assets have been physically verified by the management during the year and as per the explanations and information given to us there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As explained to us discrepancies noticed on physical verification were not significant and have been properly dealt with in the books of accounts.

(c) During the year, the company has not disposed off any part of the plant and machinery, which will have the effect on the Going concern of the company.

ii (a) As explained to us the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to 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) As explained and based on the information given to us, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and the same has been properly dealt with in the books of account.

iii (a) The company has granted loan to parties covered in the register maintained under section 301 of the companies Act, 1956. (Refer Note No. 31 (C)).

(b) The above loans and advances are in the nature of interest free loan and in our opinion the terms and conditions are not, prima facie prejudicial to the interest of the company.

(c) As explained to us, there is no stipulated time frame for the repayment of the above loans and advances and hence we are unable to comment on the regularity of the repayment of the Principal and Interest on the above loan taken for granted to the parties covered under section 301 of the Companies Act, 1956.

(d) In view of the above we are unable to comment whether there is any overdue amounts of loans taken from or granted to the Companies, Firms or Other Parties listed in the register maintained u/s 301 of the Companies Act, 1956.

(e) No Loans advances is reported to be overdue.

(f) The company has not taken any loans and advances, secured or unsecured from Companies, Firms or Other Parties covered in the register maintained under section 301 of the companies Act, 1956. Hence part (e), (f) & (h) of Clause 4(iii) are not applicable.

iv In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of company and the nature of its business with regard to, purchase of stores and spares, raw materials, fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in such internal controls.

v. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the

management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakhs rupees 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 times

vi. In our opinion and according to the information and explanations given to us, the company has not accepted any Deposits as defined with in the meaning of Sections 58A and 58AA of the companies Act, 1956 and the companies (Acceptance of Deposits) Rules 1975 and hence the provisions of clause 4(vi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

vii. Internal Audit has been conducted by an independent firm of Chartered Accountants during the year and it is commensurate with the size and nature of Business. It needs to be further strengthened.

viii. As informed to us maintenance of cost records has been prescribed by the Central Government under section 209 (1)

(d) of The Companies Act, 1956 is in the process but not shown to us and management ensures that the compliance report will be submitted within the time period stipulated in the relevant statute

ix. (a) As informed to us, and records of the company examined by us, In our opinion, the company is regular in depositing

with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, Service Tax, custom duty, excise duty, cess and other statutory dues applicable to it and as informed and explained to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty and excise duty were outstanding, as at 31.03.2013 for a period of more than six months from the date they became payable.

(b) According to the records of the company, the disputed statutory dues i.e. Income Tax aggregating to Rs. 111.88 lacs that have not been provided for in the books of accounts on account of matters pending before concerned appellate authorities/ Delhi High Court and ITAT Delhi Bench. However a sum of Rs.110.65 lacs is deposited under protest against above demand. As mentioned in point no. A of Note No. 31 to "Notes on Account.

x. The company does not have any accumulated losses. Further it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. As explained and informed to us by the management, we are of the opinion that the company has not defaulted in repayment of dues to any financial institution, or bank.

xii. Based on the records we report that the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The company is not a chit fund company or mutual fund / Society, thus the provisions of this para are not applicable.

xiv. As per records of the company and the information and explanations given to us by the management, The Company is not dealing or trading in shares, securities, and debentures and other investment except those investments, which are held as investment. In our opinion, in respect of those investments held by the Company, proper records have been maintained of the transactions and contracts and timely entries have been made therein and the shares, securities and other investments have been held by the Company, in its own name.

xv. According to the information and explanations provided to us by the management, the company has guaranteed a sum of Rs. 59360 Lacs & Rs. 575 Lacs against secured Loans taken from financial institutions by SSA International Ltd. & Sam Buildcon Ltd. Respectively; wholly owned subsidiaries of the Company.

xvi. The term loans obtained by the company have been applied for the purpose for which they were raised.

xvii. 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. No long-term funds have been used to finance short-term assets except core (permanent) working capital.

xviii. As explained and informed to us by the management and upon our examination of records we report that the company has made any preferential allotment of equity shares to parties and companies covered in the register maintained under section 301 of the Act. The allotment of 5,000,000 equity shares been made at the face value of Rs. 10 per share and security premium of Rs. 18 per share. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the company.

xix. During the period covered by our audit report, the company has not issued any types of debentures. The question of creation of any security in the respect of debentures does not arise.

xx. During the financial year the company did not raise any money by public issue.

xxi. In our opinion and according to information and explanations given to us by the management, there was no fraud on or by the company which has been noticed and reported during the year that causes the financial statements to be materially misstated.

For AGGARWAL & RAMPAL

CHARTERED ACCOUNTANTS

FIRM REGD. NO. : 003072N



Sd/-

Place : New Delhi VINAY AGGARWAL

Dated : May 30, 2013 PARTNER

M.No. 082045


Mar 31, 2010

We have audited the attached Balance Sheet of M/S SAMTEX FASHIONS LIMITED as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. We have expressed an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audit included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audit also included 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;

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

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

1. 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.

2. 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.

3. The Balance Sheet and Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account.

4. In our opinion, the Profit & Loss Account and Balance Sheet generally comply with the accounting standard referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

5. On the basis of the written representation received from the directors, as on 31 st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31-03-2010 from being appointed as a director in terms of clause (g)of sub-section (1) of section 274 of the Companies Act, 1956.

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

i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 and

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

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

ANNEXURE REFERRED TO IN OUR AUDIT REPORT OF EVEN DATE OF M/S SAMTEX FASHIONS LIMITED PURSUANT TO THE COMPANIES (AUDITORS REPORT) ORDER 2003 AMENDED BY THE COMPANIES (AUDITORS REPORT) (AMENDMENT) ORDER, 2004:-



i. (a) In our opinion and as per information and explanation provided to us the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us the fixed assets have been physically verified by the management during the year and as per the explanations and information given to us there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As explained to us discrepancies noticed on physical verification were not significant and have been properly dealt with in the books of account.

(c) During the year, the company has not disposed off any part of the plant and machinery, which will have the effect on the Going concern of the company.

ii (a) As explained to us the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to 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) As explained and based on the information given to us, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and the same has been properly dealt with in the books of account.

iii (a) The company has not taken loan from any other companies covered in the register maintained under section 301 of the companies Act, 1956, and the company has not given loan to any other party covered in the register maintained under section 301 of the Companies Act. 1956, and thus provisions of Para 3(b), (c) and, (d) of the order are not applicable to the company.

iv In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of company and the nature of its business with regard to, purchase of stores and spares, raw materials, fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in such internal controls.

v. (a) According to the information and explanations provided by the management, we are of the opinion that there were no transactions that need to be entered in the register maintained under section 301.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakhs rupees 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 times.

vi. In our opinion and according to the information and explanations given to us, the company has not accepted any Deposits as defined with in the meaning of Sections 58A and 58AA of the companies Act, 1956 and the companies (Acceptance of Deposits) Rules 1975 and hence the provisions of clause 4(vi) of the Companies (Auditors Report) Order,2003 are not applicable to the Company.

vii. Internal Audit has been conducted by an independent firm of Chartered Accountants during the year and it is commensurate with the size and nature of Business.

viii. As informed to us maintenance of cost records has not been prescribed by the Central Government under section 209 (1)(d) of the Companies act, 1956.

ix. (a) The company is generally been regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise-duty, cess and other statutory dues applicable to it and as informed and explained to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty and excise duty were outstanding, as at 31.03.2010 for a period of more than six months from the date they became payable.

(b) According to the records of company, the disputed statutory dues i.e, Income Tax aggregating to Rs. 113.63 lacs that have not been provided for in the books of accounts on account of matters pending before concerned appellate authorities/ Delhi High Court and IT AT Delhi Bench. However a sum of Rs.107.50 lacs is deposited under protest against above demand. As mentioned in point no. B 2. of other notes of Schedule XXII pertaining to "Notes on Account."

x. The company does not have any accumulated losses. Further it has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi. As explained and informed to us by the management, we are of the opinion that the company has not defaulted in repayment of dues to any financial institution, or bank .

xii. Based on the records we report that the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The company is not a chit fund company or mutual fund / Society, thus the provisions of this para are not applicable.

xiv. As per records of the company and the information and explanations given to us by the management, The Company is not dealing or trading in shares, securities, and debentures and other investment except those investments, which are held as investment. In our opinion, in respect of those investments held by the Company, proper records have been maintained of the transactions and contracts and timely entries have been made therein and the shares, securities and other investments have been held by the Company ,in its own name.

xv. According to the information and explanations provided to us by the management, the company has guaranteed a sum of Rs. 31,090 Lacs against secured loans taken from financial institutions/Banks by its wholly owned subsidiary Company i.e, SSA International Limited.

xvi. The term loans obtained by the company have been applied for the purpose for which they were raised.

xvii. 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. No long-term funds have been used to finance short-term assets except core (permanent) working capital.

xviii. As explained and informed to us by the management and upon our examination of records we report that 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.

xix. During the period covered by our audit report, the company has not issued any types of debentures. The question of creation of any security in the respect of debentures does not arise.

xx. During the financial year the company did not raise any money by public issue.

xxi. In our opinion and according to information and explanations given to us by the management, there was no fraud on or by the company which has been noticed and reported during the year that causes the financial statements to be materially misstated.



For AGGARWAL & RAMPAL

CHARTERED ACCOUNTANTS FIRM REGD. NO. : 003072N



Sd/- Place : New Delhi VINAY AGGARWAL

Dated : 28.08.2010 PARTNER

M. No. F 82045



 
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