Auditor Report of Shetron Ltd.

Mar 31, 2015

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

Management's Responsibility for the standalone Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these 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 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 audit evidence about the amounts and the 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015 and its profits and its 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") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

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

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

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

(c) the balance sheet, 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 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 the written representations received from the Directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

(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 explanations given to us :

i. the Company has disclosed the impact of pending litigations, if any, on its financial position in its financial statements ;

ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and

iii. there has been no delay in transferring amounts, if any, required to be transferred, to the Investor Education and Protection Fund by the Company;

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years. In accordance with this programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) (a) The inventory, except goods-in-transit, has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the 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) 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) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act during the year under review.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weakness in internal control system.

(v) The Company has not accepted any deposits from the public in accordance with the provisions of Sections 73 to 76 of the Act and the rules framed there under.

(vi) We have broadly reviewed the records maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub-section 1 of Section 148 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Value added tax, Cess, Professional tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Value added tax, Cess, Professional tax and other material statutory dues were in arrears as at March 31,2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Income tax, Wealth tax, Sales tax, Value added tax, Service tax, Customs duty, Excise duty and Cess which have not been deposited with the appropriate authorities on account of any dispute..

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no amounts required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions 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 year and has not incurred cash losses during the year and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or financial institutions. The Company did not have any outstanding to debentures holders during the year.

According to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loan taken by others from financial institutions are not prejudicial to the interest of the Company. The Company has not given any guarantees for loan taken by others from Banks.

(xi) In our opinion and according to the information and explanations given to us, the Company terms loans raised during the year have been applied by the company for the purpose for which they were obtained.

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

For PAL & SHANBHOGUE Chartered Accountants (Firm Registration No : 2528S)

K.R.SHANBHOGUE Place : Bangalore Partner Date : 29th May, 2015 (Membership No. 018578)

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Mar 31, 2014

We have audited the accompanying financial statements of Shetron Ltd ("the Company") which comprises of:

i. the Balance Sheet as at 31st March, 2014,

ii. the Statement of Profit and Loss for the year ended 31st March,2014

iii. the Cash Flow Statement for the year 31st March,2014

iv. summary of the 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 gives a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with Accounting Standards referred in section 211(3C) of the Companies Act, 1956("the Act") and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

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

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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

b) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date and

c) in case of the Cash Flow Statement, of the cash flows of the Company 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 in terms of Section 227(4A) of 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 it appears from our examination of those books;

c. The Balance Sheet, 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 the Accounting Standards referred to in Section 211 (3C) of the Act;

e. On the basis of the written representations received from the directors as on 31st March, 2014 and taken on record by the Board of Directors, none of the director is disqualified as on 31st March, 2014 from being appointed as a Director in terms of Section 274(1) (g) of the Act.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements'' Section of our Report of even date)

1. In respect of fixed assets

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets. On the basis of available information.

b. As explained to us, the fixed assets are being physically verified under a phased periodical manner, which, in our opinion, is reasonable, having regard to the size of the company and nature of its assets. However, no material discrepancies have been noticed during the year on such verification.

c. In our opinion, the company has not disposed off substantial part of its fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories:

a. Inventories have been physically verified during the year by the management at reasonable intervals.

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

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

3. a. On the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Act.

b. The Company has taken interest free unsecured loans of Rs. 735.50 lakhs (as on 31st March 2014) from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act 1956 and the rate of interest and terms and conditions are not prima facie prejudicial to the interest of the company. There are no stipulations as regards repayment.

4. In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956

a. In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5.00 lakhs in respect of each party during the year have been made at prices which are prima facie reasonable having regard to prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of Sections 58A or 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply.

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by Central Government under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and cost records have been made and maintained. We have however, not made a detailed examination of cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

a. The Company is generally regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Cess and other material statutory dues as applicable with the appropriate authorities.

b. No undisputed amounts payable in respect of statutory dues were outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable.

c. There are no dues of income tax, wealth tax, and customs duty which have not been deposited on account of any dispute.

10. The Company does not have any accumulated losses as at March 31,2014 and has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution, bank or debenture holders during the year.

12. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted 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. Accordingly. Therefore the provisions of clause 4(xiii) of CARO are not applicable to the company.

14. According to the explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the CARO are not applicable to the Company.

15. The company has given guarantees for the loans taken by others from banks and financial institutions. According to the explanations and information given to us we are of opinion of that the terms and conditions thereof are not prima facie prejudicial to the interest of the company

16. According to the information and explanations given to us the term loans availed by the company were prima facie, applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of opinion that funds raised on short-term basis have, prime facie, not been used for long-term investment.

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

19. The company has not issued any debenture during the year .

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

21. Based on the audit procedures performed and considering the size and nature of the company''s operations, no fraud of material significance on or by the company has been noticed or reported during the year.

For PAL & SHANBHOGUE Chartered Accountants (Registration No. 2528 S)

Place :Bangalore K R SHANBHOGUE Date : 19th May, 2014 Partner M.No.18578

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Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s Shetron Limited, as at March 31,2012, 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.

2. 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 the management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (“CARO”)issued by the Central Government of India in terms of sub section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. Further to our comments in the Annexure referred to above, we report as follows:

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 it appears from our examination of those books.

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

d) in our opinion, the Balance Sheet, the statement of Profit and Loss Account and the Cash flow Statement dealt with by this report are in compliance with the Accounting Standards referred to Section 211(3C) of the Companies Act 1956;

e) 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 Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of the Balance Sheet, of the state of the affairs of the company as at March 31, 2012;

ii. in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date; and

iii in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of written representations received from the Directors, taken on record by the Board of Directors, none of the Directors is disqualified as on March 31,2012 from being appointed as a director in terms of Section 274 (1) (g) of the Companies Act 1956.

ANNEXURE TO THE AUDITOR’S REPORT (Referred to in paragraph 3 of our report of even date)

1. In respect of the Company's fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which in our opinion, provides for physical verification of fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company.

2. In respect of the Company’s inventory:

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

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

(c) In our opinion and according to the information and explanation given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of unsecured loans granted by the Company to companies covered in the Register under section 301 of the Companies Act, 1956 and according to the information and explanations given to us

(a) The company has not given any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the companies Act, 1956. Therefore, the provisions of sub- clauses (e), (f) and (g) of clause 4(lll) of CARO are not applicable to the Company.

(b) During the year, the Company has taken interest free unsecured loan, of Rs. 720 Lakhs from Companies, firm or other parties listed in the register maintained under Section 301 of the Companies Act 1956, and the rate of interest and terms and conditions are not prima facie prejudicial to the interest of the Company. There no stipulations as regards repayment.

4. In our opinion and according to the information given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regards to purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations give to us:

(a) The particulars of contracts or arrangements referred to Section 301 that were needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs of any party, the transaction have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain purchases for which comparable quotations are not available and in respect of which we are unable to comment.

6. In our opinion the Company to the information and explanations given to us, the Company has not accepted deposits from the public during the year Therefore, the provisions of clause 4(VI) of CARO are not applicable to the Company.

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

8. We have broadly reviewed cost records maintained by the Company pursuant to the Companies (cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete

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

(a) The company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State insurance, Income "lax, Sales "lax, Wealth "lax, Service "lax, Custom Duty, Cess and other material Statutory dues applicable to it with the appropriate authorities.

(b) No undisputed amounts payable in respect of Provident fund, Income Tax,Sales "lax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and cess were in arrears as at 31 March, 2012 for a period of more than six months from the date they became payable.

(c) There are no disputed matters that are pending before any appropriate authorities.

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

11. According to the information and explanations given to us, the Company has not defaulted in the repayment of dues to any financial institution or a bank as at the balance sheet date.

12. In our opinion and according to the information and explanations given 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 and according to the information and explanations given to us, the Company is not dealing in shares, securities and debentures. Therefore, the provisions of clause 4(XIV) of CARO are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company has given guarantee to the financial Institution for ? 500 lakhs loan taken by Shetron Metro pack Pvt Ltd a subsidiary, In our opinion and according to the information and explanations given to us, the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

15. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

16. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have not been used during the year for long- term investment.

17. According to the information and explanations given to us, during the period covered by our audit, the Company has not made any preferential allotment of equity shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

18. According to the information and explanations given to us, during the year covered by our report, the Company has not issued any debentures.

29. During the year covered by our report, the Company has not raised any money by way of public issue.

20. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For RUL & SHANBHOGUE

Chartered Accountants (Registration No. 2528 S)

Place :Bangalore KR SHANBHOGUE

Date : 29th May, 2012 Partner M.No.18578

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Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s Shetron Limited, as at March 31, 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, signed by us under reference to this report. 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.

2. 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 the management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) (hereinafter referred to as “the Order”) issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, (hereinafter referred to as “the Act”) we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

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

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

d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act.

e) on the basis of written representations received from the directors, as at 31 March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31,2010 from being appointed as a director in terms of section 274 (1) (g) of the Act.

f) 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 Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

i. in the case of the Balance Sheet, of the state of the affairs of the company as at March 31, 2010;

ii. in the case of the Profit and Loss Account, of the profit 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.

Annexure referred to in paragraph 3 of our report of even date

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

(b) The Company has a programme for phased physical verification of all fixed assets which in our opinion, is reasonable having regard to the size of the company and the nature of its fixed assets. As informed, no material discrepancies were noticed on such verification.

(c) In our opinion, the Company has not disposed off substantial part of its fixed assets during the year and therefore going concern concept of the company is not affected.

2. (a) The management has conducted physical verification of inventory at reasonable intervals during the year and in our opinion the frequency of verification is reasonable.

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

(c) The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on the physical verification of inventories as compared to the book records.

3. (a) The company has not granted any loans, secured or unsecured, to the companies, firms or other parties

listed in the register maintained under section 301 of the Act. Hence clauses (iii) (f) & (g) of the order are not applicable.

(b) The company has taken interest free unsecured loan of Rs.335 lacs from companies, firm or other parties covered in the register maintained under section 301 of the Act without any stipulation for repayment of the loan and interest.

4. In our opinion and according to the information given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business and for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the companies Act, 1956,

(a) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered in the register maintained under Section 301 of the companies Act, 1956 have so been entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts/ arrangements entered in the register under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs, in respect of any party during the year have been made at the prices which appear reasonable having regard to the prevailing market prices at relevant time.

6. The company has not accepted any deposits from the public, within the meaning of sections 58A and 58AA or any other relevant provisions of the Act, and the companies (Acceptance of Deposits) Rules, 1975.

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

8. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under clause (d) of sub section (1) of section 209 of the Act, for the Company.

9. In respect of statutory dues:

(a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, (investor education and protection fund) Employees’ State insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty, and cess were in arrears, as at 31 March, 2010 for a period of more than six months from the date they became payable.

(c) The disputed dues aggregating that have not been deposited on account of disputed matters pending before the appropriate authorities are as under:



Sl. No Nature of Nature of Amount Period to which Forum where The statute the Dues (Rs.In lacs) the amount relates dispute is pending

1. Income Tax Demand by 140.00 A.Y. 2006-07 CIT Appeals Act, 1961 assessing Officer

10. The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

11. According to the information and explanations provided to us, the company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date. The company has not issued any debentures during the year.

12. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanations given to us, the company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, provisions of clause 4(xiii) of the order are not applicable to the company.

14. In our opinion and according to the information and explanations given to us the company is not dealing in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the Company.

15. The company has given guarantees for the loans taken by others from the Banks and financial institutions. In our opinion and according to the information and explanation given to us, the terms and conditions thereof are not prima facie prejudicial to the interest of the company.

16. The company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purpose for which they are raised.

17. According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that no funds raised on short term basis have been used for long term investments.

18. According to the information and explanations 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.

19. According to the information and explanations given to us the Company has not issued any debentures during the period covered by our report. Accordingly, the provisions of clause (xix) of the order are not applicable to the company.

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

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



For PAL & SHANBHOGUE Chartered Accountants (Registration No. 2528 S) Date : Bangalore K R SHANBHOGUE Place :14th May, 2010 Partner Membership No: 018578