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Auditor Report of Saptarishi Agro Industries Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of Saptarishi Agro Industries Limited (the "Company"), which comprise the Balance Sheet as at March 31,2015 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statement

2. The Company's Board of Directors is responsible for the matters stated in section 134(5) of the companies Act, 2013 ("the Act") with respect to the preparation of these Standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the Accounting principles generally accepted in India, including the Accounting Standards Specified under section 133 of the Act 2013, 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 asset of the company and for preventing and detecting frauds and others irregularities; selection & application of appropriate accounting policies; Making Judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate 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

3. Our responsibility is to express an opinion on these standalone 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 provisions of the Act and the rule made there under.

4. 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.

5. 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 financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the company's directors, as well as evaluating the overall presentation of the financial statements.

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

Basis of Qualified Opinion

a) As mentioned in note 23 (2) (b) of the financial statements regarding non provision of Rs 6,83,060/- being amount payable to Tamil Nadu Pollution control Board. Though Company has disputed the amount payable to the Tamil Nadu Pollution Control Board, it has not taken any legal remedy and accordingly no provision has been made by the Company in this regard. As such we are unable to express any opinion as to the effect thereof on the financial statements for the year.

b) As mentioned in note no 23 (2) (c) of the financial statements, the balances of some of the trade receivables, Advance to Suppliers, Trade Payables and Advance from customers and others are subject to confirmation. As there has been no activity since 4 years and confirmation from parties has not been received, as such we are unable to express any opinion whether the amounts are recoverable or not and as to the effect thereof on the financial statements for the year.

c) As mentioned in note no 23 (2) (d) of the financial statements, the Company's Carry forward losses is more than 50% of its Net Worth and has been incurring Cash Losses continuously. This factor along with other matters such as Non availability of Power, Closure of Production since February 2011 (there was no activity of growing Mushroom by the Company since February 2011), this fact raise doubt that the Company will be able to start production of Mushrooms.

d) The Company has Settled all its employees except 1 employee as per Industrial Disputes Act, 1947, 12 (3) agreement with Workers' Union (all the workers and their account have been Settled in the financial year ended 31.3.2013and 31.3.2014. Further no new employees have been recruited during the year ended 31.3.15, this fact raise doubt that the Company will be able to continue as a going Concern. The Company's ability to continue as a going concern is dependent upon successful restructuring and revival of its business. In Case the going concern concept is vitiated, necessary adjustments will be required on the carrying amount of Assets and Liabilities which are not ascertainable.

The Consequential effect of sub para (b), (c ) and (d) above on assets and liabilities as at 31st March 2015 and the Losses for the year ended 31st March 2015 are not ascertainable. Had the effect of above as stated in sub para (a) had been given the loss for the year would be higher by Rs 6,83,060/-

7. Qualified Opinion

In our opinion, and to the best of our information and according to the explanations given to us, except for the effect of the matters described in the basis of qualified opinion paragraph as mentioned above and read together with other notes, the accompanying 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 the Balance Sheet, of the state of affairs of the Company as at March31,2015

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

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

Other Matter

We draw attention to the following facts

a) During the year under review there was no activity of growing mushrooms (the company has not carried on any business activity since February 2011).

b) There is only 1 employee on the Company's Roll as on 31.03.2015.

c) The TNEB has disconnected power supply to the Company's Plant since 4 years. Due to Non availability of Power and due to Non Maintenance of the Plant & Machinery since last 4 years more importantly it's machinery, buildings, boundary fencing, and other infrastructure have been badly deteriorated.

d) The total value of Inventories as on 31.3.15 was Rs 11,88,247/-. This includes raw materials, Stores & Spares and other Inventories. As there is no production activity since February 2011, the inventories of the Company are old and obsolete.

Report on Other Legal and Regulatory Requirements

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

9. 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 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 Statements dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone 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 representation received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors except Thiru Dilsher Singh (who has been disqualified for appointment as Director for the reason of his not attending board meetings during the year and has resigned from the post of Managing Director but the board has not accepted the resignation and has kept the matter in abeyance) is disqualified as on March 31,2015, from being appointed as a director in terms of section 167 (1)(b) of the Companies Act, 2013.

f) With respect to the other matters to be included in the auditor's report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, In Our opinion and to the best of our information and according to the explanation given to us

(1) The company has, in accordance with the generally accepted accounting practice, disclosed the impact of pending litigation on its financial position in its financial statement and the amount has been quantified in the note no 23 (2) (a) and the Company has not provided for the Liability in the books.

(2) The company did not have any long term contract including derivative contracts for which there were any material foreseeable losses under the applicable law or accounting standards.

(3) There has been no delay in transferring amounts, required to be transferred, to the investor education & protection fund by the company.

(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements in the Independent Auditor's Report of even date to the members of M/s Saptarishi Agro Industries Limited on the financial statements for the year ended March 31,2015)

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

(b)All the assets have not been physically verified by the management during the year but there is a system of verification which in our opinion is reasonable having regard to size of the company and nature of the assets. No material discrepancies were noticed on such verification.

(ii) (a) The stocks were physically verified by the Management In our opinion the frequencies of such verification is reasonable.

(b) The procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of Company and its nature of the business.

(c) The company is maintaining the proper records of inventories. The discrepancies noticed between the physical stocks and books records were not material

(iii) (a) The Company had not granted loan to / from the Companies, firms and parties from Companies listed in the register maintained under section 189 of the Companies Act, 2013, except current account of Holding and Related Company which has advanced the amount to the Company

(b) There is no interest charged either way on loans and balance of Holding and Related Company

(c) Loans and advances in nature of loans have been given to employees and others who are repaying the amount as stipulated.

(d) There is no overdue amount of loan taken from or granted to companies listed in the register maintained under section 189 on the Companies Act, 2013.

(iv) In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, Fixed assets and with regard to the sale of goods and services.

(v) Further during the course of our audit, we have not come across any instances of major weaknesses in internal control that require correction and so continued without correction.

(vi) (a) Based on the information and explanations given to us, we are of the opinion that the transaction if any that need to be entered into the register maintained u/s 189 of the Companies Act, 2013 have been so entered.

(b) In our opinion and according to the information and explanation given to us, there are no transactions of purchase of goods and material and sales of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under section 189 of the Companies Act, 2013 aggregating during the year to Rupees Five lakhs or more in respect of each party which are prejudicial to the interest of the Company.

(vii) In our opinion and according to the information and explanations given to us the company has not accepted the deposits which attract the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public.

(viii) In our opinion the company has an internal audit system commensurate with the size and nature of its business.

(ix) In our opinion and according to information and explanations given to us, the rules made by the Central Government for the maintenance of cost records under section 148 of the Companies Act, 2013 are not applicable to the Company.

(x) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues, provident fund, custom duty, excise duty, cess and other material statutory dues applicable if any to it and there have been no serious delay (Except for delay in depositing provident fund and TDS dues to appropriate authorities on a few occasions).

(b) According to the information and explanation given to us there are no dues of income tax, customs duty, wealth tax excise duty and cess which have not been deposited on account of any dispute.

(c) In our opinion, there is no amount required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, and rules made there under.

(xi) According to the information and explanations furnished to us, the Company has an accumulated carried forward losses are Rs.28,91,19,480/- which are in excess of fifty percent of its net worth. The Company has incurred Cash losses during the financial year under report and the immediately preceding financial year.

(xii) According to the information furnished to us, the company has not taken any working capital loans from the bank.

(xiii) According to the information and explanations furnished to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

(xiv) According to the information and explanations furnished to us, the company has not taken any term loans during the year.

(xv) According to the information and explanation furnished to us and based on the audit procedures generally adopted by us, we report that no fraud on or by the company nor have we been informed by the management, of any such instance being noticed or reported during the year.

Place : Chennai For K.Mahaveer & Co., Date: 29.05.2015 Chartered Accountants, Firm Registration No 006740S

Sd/- (K.Mahaveer) Proprietor Membership No 203601. Firm Registration No 006740S


Mar 31, 2014

We have audited the accompanying financial statements of Saptarishi Agro Industries Limited (the "Company"), which comprise the Balance Sheet as at March 31,2014 and the Statement of Profit and Loss and Cash Flow Statements 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 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 General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. 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 on India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Basis of Qualified Opinion

a) As mentioned in no note 24 (2) (b) (i) of the financial statements regarding non provision of Rs 6,83,060/- being amount payable to Tamil Nadu Pollution control Board. Though Company has disputed the amount payable to the Tamil Nadu Pollution Control Board, it has not taken any legal remedy and accordingly no provision has been made by the Company in this regard. As such we are unable to express any opinion as to the effect thereof on the financial statements for the year.

b) As mentioned in note no 24 (2) (c) of the financial statements, the balances of some of the trade receivables, Advance to Suppliers, Trade Payables and Advance from customers and others are subject to confi -rmation. As such we are unable to express any opinion as to the effect thereof on the financial statements for the year.

c) As mentioned in note no 24 (2) (d) of the financial statements, the Company''s Carry forward losses is more than 50% of its Net Worth and has been incurring Cash Losses continuously. This factor along with other matters such as Non availability of Power, Closure of Production since February 2011 (there was no activity of growing Mushroom by the Company since February 2011),

d) The Company has Settled all its employees except 2 employees as per Industrial Disputes Act, 1947, 12 (3) agreement with Workers'' Union (all the workers and their account have been Settled in the financial year ended 31.3.2013. Further no new employees have been recruited during the year ended 31.3.14, This fact raise doubt that the Company will be able to continue as a going Concern. The Company''s ability to continue as a going concern is dependent upon successful restructuring and revival of its business. In Case the going concern concept is vitiated, necessary adjustments will be required on the carrying amount of Assets and Liabilities which are not ascertainable.

The Consequential effect of sub para (b), (c ) and (d) above on assets and liabilities as at 31st March 2014 and the Losses for the year ended 31st March 2014 are not ascertainable. Had the effect of above as stated in sub para (a) had been given the loss for the year would be higher by Rs 6,83,060/-

Qualified Opinion

In our opinion, and to the best of our information and according to the explanations given to us, except for the effect of the matters described in the basis of qualified opinion paragraph as mentioned above and read together with other notes, the accompanying 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 the Balance Sheet, of the state of affairs of the Company as at March31,2014

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

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

1. We draw attention to the following facts

a) During the year under review there was no activity of growing mushrooms (the company has not carried on any business activity since February 2011).

b) There are only 2 employees on the Company''s Roll as on 31.03.2014.

c) The TNEB has disconnected power supply to the Company''s Plant since 3 years. Due to Non availability of Power and due to Non Maintenance of the Plant & Machinery since last 3 years more importantly it''s machinery, buildings, boundary fencing, and other infrastructure have been badly deteriorated.

d) During the year under review, the Company has sold fixed assets (Boiler, Cooling Tower, Growing room racks etc) whose original purchase cost was Rs 1,23,65,846/- and the depreciated value was Rs 36,31,959/.

e) The total value of Inventories as on 31.3.14 was Rs 15,71,432/-. This includes raw materials, Stores & Spares and other Inventories. As there is no production activity since February 2011, the inventories of the Company are old and obsolete

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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 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 Statements dealt with by this Report are in agreement with the books of account;

d) Except for the matter described in the Basis of qualified opinion paragraph, In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statements dealt with by this report comply with the Accounting Standards notified under the Companies Act read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e) On the basis of written representation received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements in the Independent Auditor''s Report of even date to the members of M/s Saptarishi Agro Industries Limited on the financial statements for the year ended March 31,2014

(i) (a) The Company has maintained proper records showing full particulars including details of

quantitative and situation fixed assets.

(b) All the assets have not been physically verified by the management during the year but there is a system of verification which in our opinion is reasonable having regard to size of the company and nature of the assets. No material discrepancies were noticed on such verification.

(c) Some of the Fixed Assets have been disposed off during the year, In our opinion and according to the information and explanation give to us, the disposal does not constitute a substantial part of fixed assets of the Company.

(ii) (a) The stocks were physically verified by the Management In our opinion the frequencies of

such verification is reasonable.

(b) The procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of Company and its nature of the business.

(c) The company is maintaining the proper records of inventories. The discrepancies noticed between the physical stocks and books records were not material

(iii) (a) The Company had not granted loan to / from the Companies, firms and parties from

Companies listed in the register maintained under section 301 of the Companies Act, 1956, except current account of Holding and Related Company which has advanced the amount to the Company

(b) There is no interest charged either way on loans and balance of Holding and Related Company

(c) Loans and advances in nature of loans have been given to employees and others who are repaying the amount as stipulated.

(d) There is no overdue amount of loan taken from or granted to companies listed in the register maintained under section 301 on the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, Fixed assets and with regard to the sale of goods and services.

(v) Further during the course of our audit, we have not come across any instances of major weaknesses in internal control that require correction and so continued without correction.

(vi) (a) Based on the information and explanations given to us, we are of the opinion that the

transaction if any that need to be entered into the register maintained u/s 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, there are no transactions of purchase of goods and material and sales of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rupees Five lakhs or more in respect of each party which are prejudicial to the interest of the Company.

(vii) In our opinion and according to the information and explanations given to us the company has not accepted the deposits which attract the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public.

(viii) In our opinion the company does not have an internal audit system commensurate with the size and nature of its business.

(ix) In our opinion and according to information and explanations given to us, the rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 are not applicable to the Company.

(x) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues,

provident fund, custom duty, excise duty, cess and other material statutory dues applicable if any to it and there have been no serious delay (Except for delay in depositing provident fund and TDS dues to appropriate authorities on a few occasions).

(b) According to the information and explanation given to us there are no dues of income tax, customs duty, wealth tax excise duty and cess which have not been deposited on account of any dispute.

(xi) According to the information and explanations furnished to us, the Company has accumulated carried forward losses are Rs.28, 43, 64,206 which are in excess of fifty percent of its net worth. The Company has incurred Cash losses during the financial year under report and the immediately preceding financial year.

(xii) According to the information furnished to us, the company has not taken any working capital loans from the bank.

(xiii) According to the information furnished to us, the company has not granted loans and advances on the basis of security by way of property documents and other securities. Therefore the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion and according to the information and explanations furnished to us, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) According to the information furnished to us, the company is not trading in shares, securities, debentures and other investments and securities therefore the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xvi) According to the information and explanations furnished to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

(xvii) According to the information and explanations furnished to us, the company has not taken any term loans during the year.

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

(xix) According to the information and explanation given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xx) According to the information and explanation given to us during the period covered by our audit report, the company had not issued debentures

(xxi) According to the information and explanation given to us during the period covered by or audit report the company had not raised any money by public issue.

(xxii) According to the information and explanation furnished to us and based on the audit procedures generally adopted by us, we report that no fraud on or by the company nor have we been informed by the management, of any such instance being noticed or reported during the year.

Place : Chennai For K.Mahaveer & Co., Date : 23.07.2014 Chartered Accountants, Firm Registration No 006740S Sd/- (K.Mahaveer) Proprietor Membership No 203601. Firm Registration No 006740S


Mar 31, 2012

We have Audited the attached Balance Sheet of Saptarishi Agro Industries Limited as at March 31st, 2012, it's Profit and Loss Account for year ended on that date and it's Cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 and material misstatement. An audit includes examining, on a test basis, evidence supporting the amount and disclosures in the financial statements. As audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) order, 2003, issued by the Central government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on matters specified in paragraphs 4 and 5 of the said order.

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

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

b) In our opinion, the company has kept proper books of accounts as required by the law so far, as appears from our examination of such 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 of the Company.

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with accounting standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 as may be applicable except non provision of deferred tax as per the Accounting Standard 22 & non provision of amount payable to Tamil Nadu Pollution Control Board. (Point No 7 & 2 of Other Notes (Note 23) respectively)

e) According to information and explanation given to us and on the basis of written representation received from the directors, taken on record by the Board of Directors, no directors is disqualified as on 31-03-2012 from being appointed as director under section 274 (1) (g) of the Companies Act,1956.

f) The Company's Carry forward loss is more than 50% of its Net worth and has been incurring Cash Losses continuously. The above factor along with other matters such as the Continued workers' strike since February 2011 and shortage of Power, the company did not carry on any business activity since February 2011, (there was no activity of growing mushrooms by the Company during the year under review). Notwithstanding the above the financial statement have been prepared as that of going concern and the terminal values of various assets and liabilities have not been determined, and we are, therefore, unable to express our opinion whether adopting the going concern assumption is appropriate or not, especially in view of continued strike by the workers and acute shortage of power from TNEB. The Company's ability to continue as a going concern is dependent upon the efforts by the management to resolve the Labour Dispute and revival of its Business.

g) Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us the said accounts Subject to matter given in para (f) above give the information required by the Company's 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 at 31st March 2012 and

ii) In the case of Profit and Loss Account gives a true and fair view of the Loss for the year ended on 31st March 2012

iii) In the case of Cash Flow Statement, on the Cash Flow for the year ended on 31st March 2012

Annexure to Auditor's Report

As required by the Companies (Auditors Report) Order, 2003 and according to the information and explanation given during the course of our audit and on the basis of such checks and verification of the books and records of the Saptarishi Agro Industries Limited as we considered appropriate, we report that;

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

(b) All the assets have not been physically verified by the management during the year but there is a system of verification which in our opinion is reasonable having regard to size of the company and nature the assets. No material discrepancies were noticed on such verification.

© During the year, the company has not disposed off any of its assets. (ii) (a) The stocks were physically verified by the Management In our opinion the frequencies of such verification is reasonable.

(b) The procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of Company and its nature of the business.

© The company is maintaining the proper records of inventories. The discrepancies noticed between the physical stocks and books records were not material

(iii) (a) The Company had not granted loan to / from the Companies, firms and parties from Companies listed in the register maintained under section 301 of the Companies Act, 1956, except current account of Holding and Related Company which has advanced the amount to the Company

(b) There is no interest charged either way on loans and balance of Holding and Related Company

(c) Loans and advances in nature of loans have been given to employees and others who are repaying the principal amount and interest if any as stipulated.

(d) There is no overdue amount of loan taken from or granted to companies listed in the register maintained under section 301 on the Companies Act, 1956.

(iv) In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, Fixed assets and with regard to the sale of goods and services. Further during the course of our audit, we have not come across any instances of major weaknesses in internal control that require correction and so continued without correction.

(v) (a) Based on the information and explanations given to us, we are of the opinion that the transaction if any that need to be entered into the register maintained u/s 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanation given to us, there are no transactions of purchase of goods and material and sales of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rupees Five lakhs or more in respect of each party which are prejudicial to the interest of the Company.

(vi) In our opinion and according to the information and explanations given to us the company has not accepted the deposits which attract the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public.

(vii) In our opinion the company does not have an internal audit system commensurate with the size and nature of its business. (viii) In our opinion and according to information and explanations given to us, the rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 are not applicable to the Company. (ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues, provident fund, custom duty, excise duty, cess and other material statutory dues applicable if any to it and there have been no serious delay (Except for delay in depositing provident fund and TDS dues to appropriate authorities on a few occasions).

(b) According to the information and explanation given to us there are no dues of income tax, customs duty, wealth tax excise duty and cess which have not been deposited on account of any dispute.

(x) According to the information and explanations furnished to us, the Company has accumulated carried forward losses are Rs.25,42,36,871/- which are in excess of fifty percent of its net worth. The Company has incurred Cash losses during the financial year under report and the immediately preceding financial year.

(xi) According to the information furnished to us, the company has not taken any working capital loans from the bank.

(xii) According to the information furnished to us, the company has not granted loans and advances on the basis of security by way of property documents and other securities. Therefore the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiii) In our opinion and according to the information and explanations furnished to us, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) According to the information furnished to us, the company is not trading in shares, securities, debentures and other investments and securities therefore the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) According to the information and explanations furnished to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations furnished to us, the company has not taken any term loans during the year.

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

(xviii) According to the information and explanation given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanation given to us during the period covered by our audit report, the company had not issued debentures

(xx) According to the information and explanation given to us during the period covered by or audit report the company had not raised any money by public issue.

(xxi) According to the information and explanation furnished to us and based on the audit procedures generally adopted by us, we report that no fraud on or by the company nor have we been informed by the management, of any such instance being noticed or reported during the year.

For K.Mahaveer & Co.,

Chartered Accountants,

Place: Chennai Proprietor.

Date : 23-08-2012 (K.Mahaveer)

Membership No 203601 Firm Registration No 006740S


Mar 31, 2010

* We have Audited the attached Balance Sheet of the Saptarishi Agro Industriesrs Limited as at March 31st, 20010 Profit and Loss Account of the company for the year ended on that date and Cash Flow for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

* We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material mis-statement. An audit includes examining, on a test basis, evidence supporting the amount 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 statements presentation. We believe that our audit provides a reasonable basis for our opinion.

* As required by the Companies (Auditors Repor t) order, 2003, issued by the Central government of India in terms of Section 227 (4A) of the Companies Act 1956, we enclose in the annexure a statement on matters specified in paragraphs 4 and 5 of the said order.

Fur ther to our comments in the annexure referred to in paragraph 1 above, we report that;

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

b) In our opinion, the company has kept proper Book of Accounts as required by the law so far, as appear from our examination of such books.

c) The Balance Sheet, Profit and Loss Account and Cash Flow dealt with by the report or in agreement with the books of account of the Company.

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow comply in all material respects with mandatory accounting standards referred to in section 211 (3C) of the Companies Act, 1956 as may be applicable except non provision of deferred tax as per the Accounting standard 22.(Note 10 of Schedule 16)

e) According to information and explanation given to us and on the basis of written representation received from the directors, taken on record by the Board of Directors, no director is disqualified as on 31.03.2010 from being appointed as director under section274 (1) (g) of the Companies Act, 1956.

f) Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us the said accounts give the information required by the Companys 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 at 31st March 2010 and

ii) In the case of Profit and Loss Account gives a tr ue and fair view of the Loss for the year ended on 31st March 2010

iii) In the case of Cash Flow Statement, of the Cash Flow for the year ended on 31st March 2010.

ANNEXTURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our Report of 02.09.2010)

On the basis of such checks and verification of the books and records of the Saptarishi Agro Industriesrs Limited as we considered proper and according to the information and explanations given during the course of our audit, we report that:

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

(b) All the assets have not been physically verified by the management during the year but there is system of verification which in our opinion reasonable having regard to size of the company and nature of the assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has disposed of Assets and reasonable method of dispose of the items adopted by the Company.

(ii) (a) The stocks were physically verified by the Management .In our opinion the frequencies of of such verification is reasonable.

(b) The procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of Company and its nature of the business.

(c) The Company is maintaining the proper records of inventories. The discrepancies noticed between the physical stocks and books records were not material.

(iii) (a) The Company had not granted loan to/from the Companies, firms and parties from Companies listed in the register maintained under Section 301 of the Companies Act, 1956, Except current account of Holding Company which has advance the amount to the Company

(b) There is no Interest charged either way on loans and balance of Holding Company.

(c) Loans and advances in nature of loans have been given to employees and others who are repaying the principal amount and interest if any as stipulated.

(d)As there is no overdue of Loan taken from or granted to companies listed in the registered maintained under section 301 of the Companies Act.,1956..

(iv) In our opinion and according to the information and explanations given to us during the internal control procedures for purchase of Fixed Assets and with regards to sales are generally adequate considering the size of the company and the nature of its business. During the course of audit we have not observed any continuing failure to correct major weakness in Internal Controls.

(v) (a)According to information and explanation given to us ,we are of the opinion that the transaction if any that need

to be entered into the registered maintained u/s 301 of the Companies Act.,1956 have been entered

(b) In our opinion and according to explanation given to us, there are no transaction of purchase of goods and

materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the registered maintained under Section 301 of the Companies Act.,1956 and aggregating during the year to Rupees Five Lakhs or more in respect of each par ty which are prejudicial to the interest of the Company.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted the deposits which attract the provisions of sections 58A and 58AA of the Companies Act, 1956 and the companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. (vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) In our opinion and according to information rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 are applicable to the Company.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues, provident fund, custom duty, excise duty, cess and other material statutory dues applicable if any to it and there have been no serious delay( Except for depositing provident fund to appropriate authorities on few times.)

(b)According to the information and explanations given to us, there are no dues of income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.:

(x) In our opinion, the accumulated carried forward losses are Rs. 206,238,914/., which are in excess of fifty percent of its net worth.

(xi) The company has not taken any working capital Loans from the bank.

(xii) The company has not granted loans and advances on the basis of security by way of property documents and other securities. Therefore, the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Repor t) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is not trading in shares, securities, debentures and other investments the shares and securities. Therefore, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

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

(xvi) In our opinion, during the year company has not taken any term loans.

(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 the no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance shor t-term assets except permanent working capital.

(xviii) According to the information and explanations given to us, the company has not made preferential allotment of shares to par ties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company had not issued debentures .

(xx) According to the information and explanations given to us, during the period covered by our audit report, the company had not raised any money by public issues. .

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or repor ted during the course of our audit.

For SINGHI & SUDHIR

Chartered Accountants

Place : Chennai.

Date :02.09.2010

SUDHIR SINGHI

Proprietor(M.No.70277)



 
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