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Auditor Report of Sri Lakshmi Saraswathi Textiles (Arni) Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Sri Lakshmi Saraswathi Textiles (Arni) Limited, (the company) which comprise the Balance Sheet as at March 31, 2015, Statement of Profit and Loss & the Cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements.

The Company's Board of Directors is responsible for the matters stated in Sec 134(5) of the Companies Act, 2013("the act") with respect to the preparation and presentation 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 Principals generally accepted in India, including the Accounting Standards specified under Sec 133 of the act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility 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 judgements and estimates, that are reasonable and prudent and the design, implementation and maintenance of adequate 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 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 Sec 143 (10) of the act. Those standards require that we comply that 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 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 control system over financial reporting and operating effectiveness of the such control. An audit also includes evaluating the appropriateness of 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 qualified audit opinion on the financial statements.

Qualified 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 March 31, 2015

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

c) in the case of Cash flow Statement, of the cash flows for the year ended on that date; Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015(" the order") 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 paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Companies Act 2013, 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) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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) Except for the effects for the matters described in the Basis for Qualified Opinion paragraph above, in our opinion, the Balance Sheet, Statement of Profit and Loss & the Cash flow Statement comply with the Accounting Standards specified under the Section 133 of the act, read with rule 7 in Companies (Accounts) Rules, 2014;

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

f) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in Our Independent Auditors' Report to the members of the company on the financial statements for the year ended 31st March 2015, we report that

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

(b) The company has a regular program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner at reasonable intervals by the management. According to the information and explanations given to us, no material discrepancies where observed by the management on such verification.

(ii) (a) The stock of inventory has been physically verified by the management at reasonable intervals during the year. In our opinion the frequency of verification is reasonable.

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

(c) The company is maintaining proper records of inventory. No material discrepancy was noticed on such physical verification.

(iii) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013. Consequently the provisions of clause (iii) (a) (b) and (c) are not applicable to the company.

(iv) In our opinion and according to the 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 inventory and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

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

(vi) Central Government has prescribed maintenance of cost records under sub- section (1) of section 148 of the Companies Act and such accounts and records have been prepared and maintained by the company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, amount deducted or accrued in the books of account in respect of of undisputed statutory dues including provident fund, income-tax, sales tax, wealth tax, service tax, value added tax, cess and other material statutory dues have been regularly deposited by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of employees' state insurance and duty of excise.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax wealth tax, service tax, value added tax, cess and other material statutory dues were in arrears as at 31st March, 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 material dues of provident fund, sales tax, wealth tax, service tax, value added tax, cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to the information and explanations given to us, the following dues of income tax and employees' state insurance have not been deposited by the company on account of disputes.

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

Income-tax Income tax 12,21,350 Assessment year Act 1961 1999 - 2000

Income-tax Assessment year Act 1961 Income tax 33,86,521 2000 - 2001

Total 46,07,871

Employee's Contribution 4,15,356 2000-01 State Employee's Act 1948 State Insurance Corporation

Name of the Forum where dispute Statue is pending

Income-tax IT Appeals before Act 1961 ITAT, & High Court

Income-tax IT Appeals before Act 1961 ITAT, & High Court

Employee's State High Court Insurance Act 1948

(c) According to the information and explanations given to us, the amounts which were 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 has been transferred to such fund within time.

(viii) The Company has accumulated losses as at March 31, 2015 and has incurred cash loss in the financial year and there was no cash loss in the immediately preceding financial year.

(ix) The company did not have any outstanding dues to financial institutions, banks during the year.

(x) In our opinion and according to the information and explanations given to us the company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) The Company did not have any term loans outstanding during the year.

(xii) 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.

17, Bishop Wallers Avenue (West), For M/s S Viswanathan CIT Colony, Mylapore, Chartered Accountant Chennai - 600 004. FRN: 004770S

Place: Chennai Date: May 26, 2015 Chella K Srinivasan Partner Membership No: .023305


Mar 31, 2014

Report on the Financial Statements.

We have audited the accompanying financial statements of SRI LAKSHMI SARASWATHI TEXTILES (ARNI) LIMITED, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss, Cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements.

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 referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, 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 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give 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 accounts 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 & Cash flow statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss & Cash flow statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of SRI LAKSHMI SARASWATHI TEXTILES (ARNI) LIMITED . On the accounts of the company for the year ended 31st March, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) There was no disposal of a substantial part of the fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of 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 is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) As informed, 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 Companies Act, 1956. Accordingly, sub-clauses (b), (c) and (d) are not applicable.

(e) The Company has taken unsecured loan from a company covered in the Register maintained under section 301 of the Companies Act, 1956. However, the terms of Repayment and Interest are not prejudicial to the interest of the company.

(f) Maximum amount of loan outstanding during the year being Rs.85,00,000/- while the loan outstanding as on 31st March, 2014 is Rs.55,00,000/-.

(g) The payment of principal amount and the interest were regular during the year.

(iv) There is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services and no major weakness has been noticed in the internal control system.

(v) The particulars of contracts and arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

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

(vii) The Company has not appointed an external agency as internal auditor during the year under review.

(viii)Central Government has prescribed maintenance of Cost Records under Section 209(1)(d) of the Act and such accounts and records have been prepared and maintained.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Customs duty, Value Added Tax, wealth-tax, service tax, cess and other material statutory dues with the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31st March 2014 for a period more than six months from the date they became payable.

(b) According to the records of the Company, the dues outstanding of income-tax, sales- tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

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

Income-tax Act 1961 Income tax 21,52,094 Assessment year IT Appeals before ITAT, 1999-2000 & High Court

Income- tax Act 1961 Income tax 54,43,989 Assessment year IT Appeals before ITAT, 2000-2001 & High Court

Total 75,96,083

Contrib -ution to Employee''s State 4,15,356 2000-01 High Court Employ -ee''s State Insurance Act 1948 Insurance Corpor -ation

* Excludes interest and penalty.

(x) The Company has accumulated losses at the end of the financial year, however it has not incurred cash losses in the current and immediately preceding financial year.

(xi) The Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society and hence, Clause (xiii) of Paragraph 4 of the Order is not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) The Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Term loans borrowed by the Company were applied for the purpose for which the loans were obtained and term loans have been closed at the end of the year.

(xvii) Funds raised on short-term basis have not been used for long-term investments.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures and hence, creation of charge does not arise.

(xx) The Company has not raised any money through public issue and hence, disclosure and verification of end use of money raised through public issues does not arise.

(xxi) According to the information and explanation given to us, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For M/s. S. VISWANATHAN

Chartered Accountants

FRN No.004770S

Place : Chennai

CHELLA K. SRINIVASAN

Date : May 29, 2014 PARTNER

Membership Number: 023305


Mar 31, 2013

Report on the Financial Statements.

We have audited the accompanying financial statements of Sri Lakshmi Saraswathi Textiles (Arni) Limited, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit or Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information

Director''s Responsibility for the Financial Statements.

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

Auditor''s Responsibility

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

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

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 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the Profit and Loss Account, of the PROFIT for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount.

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

ANNEXURE TO THE AUDITORS'' REPORT

(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) According to the information and explanation given to us, the fixed assets have been physically verified during the year by the management at reasonable intervals. No material discrepancies were noticed on such verification.

c) During the year, the Company has not disposed off any major part of its fixed assets, affecting the going concern.

2. a) Physical verification of stocks of Finished Goods, Stores, Spare Parts and Raw materials was conducted by the management during the period, except materials lying with third parties for whom confirmation certificates have been obtained in some cases. Materials in Bond have been verified with the respective Bills of Entry. In our opinion, the frequency of verification was reasonable.

b) The procedures of physical verification of stocks followed by the management are reasonable and adequate, commensurate to the size of the company and the nature of its business.

c) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and were also adjusted.

3. a) The Company has not granted any loan to any party covered in the Register maintained under Section 301 of the Companies Act, 1956.

b) The Company has taken unsecured loan, from a company covered in the Register maintained under section 301 of the Companies Act 1956. However, the terms of repayment and interest are not prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures, commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and with regard to sale of goods.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements that need to be entered into the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) The above said transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. As explained to us, the company is complying with the terms of Section 58A, 58AA and all other relevant provisions of the Companies Act, 1956, in respect of deposits accepted during the year.

7. The Company does not have a formal internal audit system during the year under review. However, the internal control procedures involve adequate internal checking of financial records.

8. Central Government has prescribed the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 and such accounts and records have been made and maintained.

9. The Company is regular in depositing its undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities.

10. The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

11. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. None of the provisions of any special statute applicable to chit fund, nidhi or mutual benefit society is applicable to the Company.

13. The Company is not dealing or trading in shares, securities, debentures and other investment.

14. The company has not given any guarantee for loans taken by others from banks or financial institution.

15. The term loans have been applied for the purpose for which they were raised.

16. The funds raised by the Company on short-term basis have not been used for long-term investments.

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

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

19. The Company has not made any public issue during the year.

20. No fraud on or by the Company has been noticed or reported during the course of our audit.

21. In our opinion, the company is not dealing in or trading in Shares, Securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors'' Report) Order, 2003, as amended by the Companies (Auditors'' Report) (Amendment) Order, 2004 are not applicable to the company.

For M/s. S. VISWANATHAN

Chartered Accountants

Firm NO.004770S

Place : Chennai

Date : May29,2013 Membership Number: 023305


Mar 31, 2012

We have audited the attached Balance Sheet of M/s. Sri Lakshmi Saraswathi Textiles (Ami) Limited as at 31st Mairch 2012 and also statement of the Profit and Loss Account of the Company for the year ended on that date annexed thereto and Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We have conducted our audit in accordance with 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 accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditors' Report) (Amendment) Order, 2004, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement of the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

c) The balance sheet and profit and loss account dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Profit and Loss Account read with Schedules and Notes thereon dealt with by this Report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the CompaniesvAct 1956, so far as applicable.

e) On the basis of the written representation received from the directors as on 31st March 2012 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 subsection <1) of Section 274 of the Companies Act 1956.

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

i. In the case of Balance Sheet, of the state of affairs of the Company as at 3151 March 2012 and

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

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

ANNEXURE TO THE AUDITORS' REPORT

(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) According to the information and explanation given to us, the fixed assets have been physically verified during the year by the management at reasonable intervals. No material discrepancies were noticed on such verification. ‘

c) During the year, the Company has not disposed off any major part of its fixed assets, affecting the going concern.

2. a) Physical verification of stocks of Finished Goods, Stores, Spare Parts and Raw materials was conducted by the management during the period, except materials lying with third parties for whom confirmation certificates have been obtained in some cases. Materials in Bond have been verified with the respective Bills of Entry. In our opinion, the frequency of verification was reasonable.

b) The procedures of physical verification of stocks followed by the management are reasonable and adequate, commensurate to the size of the company and the nature of its business.

c) On the basis of our examination.of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and were also adjusted.

3. a) The Company has not granted any loan to any party covered in the Register maintained under

Section 301 of the Companies Act, 1956.

b) The Company has taken unsecured loan, from a company covered in the Register maintained under section 301 of the Companies Act 1956. However, the terms of repayment and interest are not prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures, commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and with regard to sale of goods.

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

provided by the management, we are of the opinion that the particulars of contracts and arrangements that need to be entered into the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) The above said transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. As explained to us, the company is complying with the terms of Section 58A, 58AA and all other relevant provisions of the Companies Act, 1956, in respect of deposits accepted during the year.

7. The Company does not have a formal internal audit system during the year under review. However, the internal control procedures involve adequate internal checking of financial records.

8. Central Government has prescribed the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 and such accounts and records have been made and maintained.

9. a) The Company is regular in depositing its undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities.

b) At the end of the financial year there were no dues of sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess which have not been deposited on account of any dispute except as follows:

Name of the statute Nature of dues Amount Forum where dispute is pending

Income tax Income tax Rs. 1,30,76,791 IT Appeals before ITAT & CIT (A) & High Court

ESI ESI Rs. 4,15,356 High Court

10. The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

11. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

12. None of the provisions of any special statute applicable to chit fund, nidhi or mutual benefit society is applicable to the Company.

13. The Company is not dealing or trading in shares, securities, debentures and other investment.

14. The company has not given any guarantee for loans taken by others from banks or financial institution.

15. The term loans have been applied for the purpose for which they were raised.

16. The funds raised by the Company on short-term basis have not been used for long-term investments.

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

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

19. The Company has not made any public issue during the year.

20. No fraud on or by the Company has been noticed or reported during the course of our audit.

21. In our opinion, the company is not dealing in or trading in Shares, Securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditors' Report) (Amendment) Order, 2004 are not applicable to the company.

For M/s. S. VISWANATHAN Chartered Accountants Firm No.004770S

Place : Chennai

Date :August08,2012 CHELLA K. SRINIVASAN

PARTNER

Membership Number: 023305


Mar 31, 2010

We have audited the attached Balance Sheet of M/s. Sri Lakshmi Saraswathi Textiles (Ami) Limited as at 31st March 2010 and also the Profit and Loss Account of the Company for the year ended on that date annexed thereto and Cash Flow Statement for the year ended on that date. 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 have 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 accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for ouropinion.

As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement of the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

c) The balance sheet and profit and loss account dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Profit and Loss Account read with Schedules and Notes thereon dealt with by this Report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act 1956, so far as applicable.

e) On the basis of the written representation received from the directors as on 31st March 2010 we report that none of the directors is disqualified as oh 31s! March 2010 from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act 1956.

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

i. In the case of Balance Sheet, of the state of affairs of the Company as at 31stMarch 2010 and ii. In the case of Profit and Loss Account of the LOSS for the year ended on that date. iii. In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (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) According to the information and explanation given to us, the fixed assets have been physically verified during the year by the management at reasonable intervals. No material discrepancies were noticed on such verification.

c) During the year, the Company has not disposed off any major part of its fixed assets, affecting the going concern.

2. a) Physical verification of stocks of Finished Goods, Stores, Spare Parts and Raw materials was conducted by the management during the period, except materials lying with third parties for whom confirmation certificates have been obtained in some cases. Materials in Bond have been verified with the respective Bills of Entry. In our opinion, the frequency of verification was reasonable.

b) The procedures of physical verification of stocks followed by the management are reasonable and adequate, commensurate to the size of the company and the nature of its business.

c} Oh the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and were also adjusted.

3. a) The Company has not granted any foan to any party covered in the Register maintained under Section 301 of the Companies Act, 1956.

b) The Company has taken unsecured loan, from a company covered in the Register maintained under section 301 of the Companies Act 1956 and from a Director. However, the terms of repayment and interest are not prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures, commensurate with the size of the company and the nature of its business with regard to purchase of inventory and fixed assets and with regard to sale of goods.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements that need to be entered into the Register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) The above said transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. As explained to us, the company is complying with the terms of Section 58A, 58AA and all other relevant provisions of the Companies Act, 1956, in respect of deposits accepted during the year.

7. The Company does not have a formal internal audit system during the year under review. However, the internal control procedures involve adequate internal checking of financial records.

8. Central Government has prescribed the maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 and such accounts and records have been made and maintained.

9. a) The Company is regular in depositing its undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State insurance, Income Tax, Sales Tax, Wealth.Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities.

b) At the end of the financial,year there were no dues of Sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess which have not been deposited on account of any dispute except as follows:

Name of the statue Nature of dues Amount Forum where dispute is pending

Income tax Income tax Rs. 1,30,76,791 IT Appeals before

ITAT & CIT(A) & High Court

ESI ESI Rs. 4,15,356 Labour Court



10.The Company does not have accumulated losses. However, the Company has incurred cash loss during the financial year 2009-10 and in the previous financial year.

11.The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

12.The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13.None of the provisions of any special statute applicable to chit fund, nidhi or mutual benefit society is applicable to the Company.

14.The Company is not dealing or trading in shares, securities, debentures and other investment.

15.The company has not given any guarantee for loans taken by others from banks or financial institution.

16.The term loans have been applied for the purpose for which they were raised.

17.The funds raised by the Company on short-term basis have not been used for long term investments.

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

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

20.The Company has not made any public issue during the year.

21.No fraud on or by the Company has been noticed or reported during the course of our audit.

22.in our opinion, the company is not dealing in or trading in Shares, Securities, debentures and other investments. Accordingly, the provisions-of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 are not applicable to the company.

For M/s. S. VISWANATHAN

Chartered Accountants

Firm NO.004770S

CHELLAK.SRINIVASAN

Place : Chennai PARTNER

Date : May 28, 2010 Membership Number:23305