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Auditor Report of SER Industries Ltd.

Mar 31, 2014

REPORT ON THE FINANCIAL STATEMENTS:

We have audited the accompanying financial statements of SER INDUSTRIES LIMITED (the Company), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss 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 of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13 th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS''RESPONSIBILITY:

Our responsibility is to express an opinion on these financial statements based on our audit. We 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION:

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

(a) In the case of 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 profit of the Company for the year ended on that date; and

REPORT ON. OTHER LEG ALAND 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 Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

c. The Balance Sheet, 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the CompaniesAct,2013.

e. On the basis of the written representations received from the directors as on March 31,2014, 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 Section 274( l )(g) of the Act.

Annexure to the Auditors'' Report

The Annexure referred to in our report to the members of S E R INDUSTRIES LIMITED, (''the Company'') for the year ended 31st March, 2014.We report that:

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

b. There is a regular program of physical verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of fixed assets. No materials discrepancies have been noticed in respect of the assets physically verified during the period.

c. The Company has not disposed off substantial part of its fixed assets during the year.

(ii) The Company is a service company, Primarily rendering Transportation services. Accordingly, It does not hold any physical Inventories. Therefore, Paragraph (4)

(ii) of the order is not Applicable.

(iii) a. The Company has not granted any loans, secured Or unsecured to the companies, firms or other parties covered in the register maintained u/s 301 of the companies Act. therefore, clause (b), (c) and (d) of paragraph (4) (iii) of the order is not Applicable.

e. The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained u/s 30lof the companies Act. therefore, clause (f) and (g) of paragraph (4) (iii) of the order is not Applicable.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores and spares, plant and machinery, equipment and other assets and with regard to freight collection. There is no continuing failure to correct major weaknesses in the internal control.

(v) a. All the transactions with parties covered under section 301 of the Companies Act, 1956 have been properly entered if and when the transaction takes place in the register maintained under section 301 of the Act.

b. In our opinion, and according to the information and explanations given to us, the Company has not entered into transactions of purchase of goods, materials or services and sale of goods materials or services, the aggregate value of which exceeding rupees five lakhs, made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies Act, 1956.

(vi) The Company has not accepted any deposits from the public during the year.

(vii) The Company has an internal audit system commensurate with the size and nature of its business.

(viii) As explained to us and to the best of our knowledge, the Central Government has not prescribed maintenance of cost records as per clause (d) of sub- section (1) of section 209 of the Companies Act, nor is the Company liable to obtain cost Audit Compliance report.

(ix) a. The Company is generally regular in depositing undisputed statutory dues including provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Wealth Tax, Service Tax with appropriate authorities. The Provisions of Custom Duty, Excise Duty Sales Tax are not applicable to the Company. 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 Company.

According to the information and explanation given to us, no undisputed amounts payable in respect Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, cess and other undisputed statutory dues were outstanding fora period of more than six months from the date they became payable.

(x) The Company has incurred cash loss during the financial year under review, and also during the financial year immediately preceding The company does not have accumulated losses at the end of the financial year under review.

(xi) The Company has not obtained any credit facility from any banks or financial institutions nor has any outstanding debentures.

(xii) According to the information and explanations given to us, and based on the documents and records produced to us, the Company has not granted loan and advances on the basis of security by way of pledge of shares debentures and other securities.

(xiii) In our opinion the Company is not a chit fund, or a nidhi, mutual benefit fund society. Therefore, Clause 4(xiii) of the order is not applicable to the Company.

(xiv) The Company has maintained proper records of the transactions and contract for dealing in shares and securities and timely entries has been made therein ''

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) The Company did not have any dues to a financial institutions, bank or debenture holders during the year under review.

(xvii) As the company has not raised any funds during the year under review, no comments are made on utilization of long term borrowing for short term use and vice versa.

(xviii) The Company has not made any preferential allotment of shares during the year.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by way public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

for G.V. SUNDER & CO., Chartered Accountants (ICAI FRN. 007248S)

Place: Ramanagara Date: 31-05-2014 G.V.SUNDER partner M. No: 019190


Mar 31, 2012

We have audited the attached Balance Sheet of the "SER INDUSTRIES LIMITED", Chikkakuntanahalli Village, Kodiyalakarenahalli Post, via Bidadi, Ramanagar District, Kamataka-562109 as at 31s1 March, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

Wb 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis of our opinion.

As required by the Companies [Auditor's Report] Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section [4A] of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable.

Further to our comments in the Annexure referred to in paragraph 3 above, we state 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 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 the books.

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement referred to in this report are in agreement with the books of accounts.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in section 211 [3C] of Companies Act, 1956.

e. On the basis of the written representations received from the Directors, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2012 from being appointed as a Director in Terms of Clause [g] of sub-section [1] of section 274 of the Companies Act, 1956.

f. In our opinion and as per the information and explanations given to us, the said Balance Sheet and the Profit and Loss Account, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required give a true and fair view in conformity with the accounting principles generally accepted in India.

a. In the case of Balance Sheet, of the state of affairs of the Company as on 31st March 2012.

b. In the case of the Statement of Profit and Loss of the Profit of the Company 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.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS' REPORT TO THE MEMBERS OF THE SER INDUSTRIES LIMITED FOR THE YEAR ENDED 31st MARCH 2012

1. a) The Company has maintained proper records showing full particulars including quantitative details and location of the fixed assets.

b) There is a regular program of physical verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of fixed assets. No material discrepancies have been noticed in respect of the assets physically verified during the period.

c) The Company has not disposed off substantial part of its fixed assets during the year.

2. a. Since, the Company did not have any inventory at the end of the reporting period, no comments are made on this clause.

3. a. The Company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act.The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act. As the company neither accepted nor granted any loan, sub clause (b), (c), (d), (f) and (g) of this clause are not applicable.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores and spares, plant and machinery, equipment and other assets and with regard to freight collection. There is no continuing failure to correct major weaknesses in internal control.

5. a. All the transactions with parties covered under section 301 of the Companies Act, 1956 have been properly entered, if and when transaction takes place, in the register maintained under section 301 of the Act.

b. In our opinion and according to the information and explanations given to us, the Company has not entered into transactions of purchase of goods, materials or services and sale of goods, materials or services, the aggregate value of which exceeding rupees five lakhs, made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public during the year.

7. The Company has an internal audit system commensurate with the size and nature of its business.

8. As explained to us and to the best of our knowledge, the Central Govt, has not prescribed maintenance of cost records as per clause (d) of sub-section (1) of section 209 of the Companies Act, nor the Company is liable to obtain Cost Audit Compliance report.

9. a. The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax with appropriate authorities. The provisions of Custom Duty, Excise Duty Sales Tax are not applicable to the Company.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Cess and other undisputed statutory dues were outstanding for a period of more than six months from the date they became payable.

b. The disputed Statutory dues amounting to Rs. 1,37,76,112 in respect of Income Tax demand received by the Company for the Assessment Year 2008-09, for which the Company has filed an appeal before the CIT (Appeals), Bangalore and the same is pending disposal.

10. The Company has not incurred cash loss during the financial year under review. However, in the financial year immediately preceding the financial year the Company has incurred cash flow. The Company does not have accumulated losses at the end of the financial year under review.

11. The Company has not obtained any credit facility from any banks or financial institutions nor has any outstanding debentures.

12. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. 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 (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

14. The Company has maintained proper records of the transactions and contracts for trading or dealing in shares and securities and timely entries has been made therein

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The Company did not have any dues to a financial institutions, banks or debenture holders during the year under review.

17. As the Company has not raised any funds during the year under review, no comments are made on utilization of long term borrowings for short term use and vice versa.

18. The Company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by way public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting the true and fairview of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

for G. V. SUNDER & CO.,

Chartered Accountants.

G.V. SUNDER

Partner

Place: Ramanagara M.No.019190

Date-: 29.05.2012 FRN: 007248S


Mar 31, 2011

We have audited the attached Balance Sheet of the "SER INDUSTRIES LIMITED", Chikkakuntanahalli Village, Kodiyalakarenahalli Post, via Bidadi, Ramanagar District, Karnataka - 562 109 as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies [Auditor's Report] Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section [4A] of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable. Further to our comments in the Annexure referred to in paragraph 3 above, we state 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 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 the books.

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

d. In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in section 211 [3C] of Companies Act, 1956.

e. On the basis of the written representations received from the Directors, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2011 from being appointed as a Director in Terms of Clause [g] of sub-section [1] of section 274 of the Companies Act, 1956.

f. In our opinion and as per the information and explanations given to us, the said Balance Sheet and the Profit and Loss Account, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required give a true and fair view in conformity with the accounting principles generally accepted in India.

a. In the case of Balance Sheet, of the state of affairs of the Company as on 31st March 2011.

b. In the case of the Profit and Loss Account of the Loss of the Company 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.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS' REPORT TO THE MEMBERS OF THE SER INDUSTRIES LIMITED FOR THE YEAR ENDED 31st MARCH 2011

1. a. The Company has maintained proper records showing full particulars including quantitative details and location of the fixed assets.

b. There is a regular program of physical verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of fixed assets. No materials discrepancies have been noticed in respect of the assets physically verified during the period.

c. The Company has not disposed off substantial part of its fixed assets during the year.

2. a. Inventories (Stores and Spares) have been physically verified during the year by the Management at regular intervals. In our opinion the frequency of verification is reasonable.

b. In our opinion and according to the information given to us, the procedures of physical verification of inventory ( Stores and Spares) followed by the Management are reasonable and adequate in relation to the size of the Company and nature of its business.

c. The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification

3. a. As informed to us, the Company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act.

e. As informed to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act. As the company neither accepted nor granted any loan, sub clause (b), (c), (d), (f) and (g) of this clause are not applicable.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores and spares, plant and machinery, equipment and other assets and with regard to freight collection and payment. There is no continuing failure to correct major weaknesses in internal control.

5. a. All the transactions with parties covered under section 301 of the Companies Act, 1956 have been properly entered, if and when transaction takes place, in the register maintained under section 301 of the Act.

b. In our opinion and according to the information and explanations given to us, the Company has not entered into transactions of purchase of goods, materials or services and sale of goods, materials or services, the aggregate value of which exceeding rupees five lakhs, made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public during the year.

7. The Company has an internal audit system and in our opinion, the same is commensurate with the size and nature of its business.

8. To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of subsection (1) of section 209 of the Companies Act, 1956.

9. a. The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, income Tax, Wealth Tax, Service Tax with appropriate authorities. The Company is not covered under the provisions of Custom Duty, Excise Duty and Sales Tax.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Cess and other undisputed statutory dues were outstanding at the year end for a period of more than six months from the date they became payable, except as disclosed below which has not been deposited by the Company on account of dispute.

Name of the Nature of Amount Statute the Due Due(Rs)

Income Tax Act. Income Tax 137.76 lakhs

Name of the Period to which forum where Statue the amount relates dispute pending

Income Tax Act. A.Y. 2008-09 CIT (Appeals)

10. The Company has incurred cash loss during the financial year under review and in the financial year immediately preceding the financial year also. The Company does not have accumulated losses at the end of the financial year under review.

11. The Company has not obtained any credit facility from any banks / financial institutions nor has any outstanding debentures.

12. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities,

13. 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 (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

14. The Company has maintained proper records of the transactions and contracts for trading / dealing in shares and securities and timely entries has been made therein

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The Company did not have any term loan outstanding during the year.

17. As the Company has not raised any funds during the year under review, no comments are made on utilization of short term borrowings for long term use and vice versa.

18. The Company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by way public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For G. V. Sunder & Co. Chartered Accountants Firm Regn. No. 007248S

G. V. Sunder Partner Membership No. 019190

Place : Bangalore Date : 24-05-2011




Mar 31, 2010

We have audited the attached Balance Sheet of the "SER INDUSTRIES LIMITED", Chikkakuntanahalli Village, Kodiyalakarenahalli Post, via Bidadi, Ramanagar District, Karnataka - 562 109 as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

As required by the Companies [Auditors Report] Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section [4A] of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order to the extent applicable.

Further to our comments in the Annexure referred to in paragraph 3 above, we state 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 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 the books.

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

d. In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in section 211[3C] of Companies Act, 1956.

e. On the basis of the written representations received from the Directors, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2010 from being appointed as a Director in Terms of Clause [g] of sub-section [1] of section 274 of the Companies Act, 1956.

f. In our opinion and as per the information and explanations given to us, the said Balance Sheet and the Profit and Loss Account, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required give a true and fair view in conformity with the accounting principles generally accepted in India.

a. In the case of Balance Sheet, of the state of affairs of the Company as on 31st March 2010.

b. In the case of the Profit and Loss Account of the Loss of the Company 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.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT TO THE MEMBERS OF THE SER INDUSTRIES LIMITED FOR THE YEAR ENDED 31st MARCH 2010

1. a) The Company has maintained proper records showing full particulars including quantitative details and location of the fixed assets.

b) There is a regular program of physical verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of fixed assets. No materials discrepancies have been noticed in respect of the assets physically verified during the period.

c) The Company has not disposed off substantial part of its fixed assets during the year.

2. a) Inventories (stores and spares) have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) The procedures of physical verification of stocks (stores and spares) followed by the management are adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

3. a) The Company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act.

b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act. As the company neither accepted nor granted any loan, no comments are made on sub clause (b), (c), (d), (f) and (g) of this clause.

4. In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores and spares, plant and machinery, equipment and other assets and with regard to freight collection. There is no continuing failure to correct major weaknesses in internal control.

5. a. All the transactions with parties covered under section 301 of the Companies Act, 1956 have been properly entered, if and when transaction takes place, in the register maintained under section 301 of the Act.

b. In our opinion and according to the information and explanations given to us, the Company has not entered into transactions of purchase of goods, materials or services and sale of goods, materials or services, the aggregate value of which exceeding rupees five lakhs, made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public during the year.

7. The Company has an internal audit system commensurate with the size and nature of its business.

8. Maintenance of cost records as per clause (d) of sub-section (1) of section 209 of the Companies Act, is not applicable to the Company.

9. a. The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Service Tax with appropriate authorities. The Company is not covered under the provisions of Custom Duty, Excise Duty and Sales Tax. b. No dues ?re pending to be deposited on account of disputes pending at various forums.

10. The Company has incurred cash loss during the financial year under review and in the financial year immediately preceding the financial year. The Company does not have accumulated losses at the end of the financial year under review.

11. The Company has not obtained any credit facility from any banks / financial institutions nor has any outstanding debentures.

12. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. 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 Report) Order, 2003 (as amended) are not applicable to the Company.

14. The Company has maintained proper records of the transactions and contracts for trading / dealing in shares and securities and timely entries has been made therein.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. Based on our audit procedures and as per the information and explanations given by the management, the Company did not have any dues to a financial institution, bank or debenture. holders.

17. As the Company has not raised any funds during the year under review, no comments are made on utilization of short term borrowings.

18. The Company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by way public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For G. V. Sunder & Co.

Chartered Accountants

Firm Regn. No. 007248S

Place : Bangalore G. V. Sunder

Date: 26-05-2010 Partner

Membership No. 19190



 
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