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Auditor Report of Sri Vajra Granites Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Sri Vajra Granites Limited, ("the Company") which comprise the Balance Sheet as at March 31,2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility forthe 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, are the in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956(the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the ministry of corporate Affairs in respect of section 133 of companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depends 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 circumstance, but not for the purpose of expressing an opinion on the effectiveness of the entity''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 but subject to confirmation of balances of all debtors, creditors and other advances 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 the Company as at 31st March, 2014.

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

(c) In the case of the Cash Flow Statement, of the cash 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 Governments 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 forthe purpose of our audit.

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

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of The Ministry of Corporate Affairs in respect of section 133 of Companies Act, 2013 and e. on the basis of written representations received from the directors as on March 31,2014 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014 from being appointed as a director in terms of clause(g) of sub-section(l) of section 274 of the Companies Act, 1956.

ANNEXURETO INDEPENDENT AUDITORS'' REPORT Re: SRI VAJRA GRANITES LIMITED Referred to in our Audit Report of even date,

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals of time and no discrepancy was noticed on such verification.

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

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

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

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

iii) (a) 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.

Therefore sub- clauses(b),(c) and (d) of clause iii)are not applicable. e),f)&g) The company has taken unsecured interest free loans from directors of the company during the year. The amount involved Rs. 83,80,300. The amount repaid during the year is Rs. 34,50,000. The amounts outstanding on the above account at the end of the year is Rs. 64,69,006. The terms and conditions for the loan are prime facie not prejudicial to the interest of the company.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need 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 explanations given to us, there are no transactions during the year with the parties whose names are entered in the register maintained under Section 301 of the Companies Act, 1956 for an amount exceeding the value of rupees five lakhs in respect of any party.

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

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

viii) We have broadly reviewed the 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 records have been maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) (a)The Company is regular in depositing with appropriate authorities undisputed statutory dues including, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Material statutory dues except Provident Fund and Service Tax which have not been paid Regularly.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears, as at 31.03.2014 for a period of more than six months from the date they became payable. However, Service Tax in arrears for more than six months as on 31.03.2014 is Rs. 9,99,233.

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

x) The accumulated losses of the company as at 31.03.2014 is not more than 50% of its net worth and the company has incurred cash loss during the financial year covered by our audit but there was no cash loss during the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions or banks during the year.

xii) The company has not granted loans and advances on the basis of security.

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

xiv) 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 (Auditor''s Report) Order, 2003 are not applicable to the company.

xv) In our opinion, the company has not given guarantees for loans taken by others from banks or financial institutions.

xvi) In my opinion the Term loans taken by the company have been applied for the purpose for which they were obtained.

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

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

xix) The company did not issue debentures.

xx) The company did not raise any money byway of public issue during the year.

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

For I. SUDHAKER & CO, Chartered Accountants FR No 006271S

Sd/- I. SUDHAKER Place: Hyderabad (Proprietor) Date: 24th May, 2014 Membership No. 023904


Mar 31, 2012

1. We have audited the attached Balance Sheet of Sri Vajra Granites Limited, Hyderabad, A.P as at 31-03-2012 and the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion based on our audit.

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

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

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

(i) 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.

(ii) 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.

(iii) The Balance Sheet, The Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of Account.

(iv) In our opinion, the Balance Sheet, The Statement of Profit & Loss and cash flow statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of Companies Act, 1956.

(v) On the basis of the written representations received from the directors taken on record by the Board of Directors, we report that none of them is disqualified as on 31st March, 2012 from being appointed as director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion, and to the best of our information and according to the explanations given to us the accounts read in conjunction with the notes thereon give the information as 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 as at 31st March, 2012.

(ii) In the case of The Statement of Profit and Loss, of the loss for the year ended on that date.

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



ANNEXURE TO AUDITORS' REPORT.

Re: SRI VAJRA GRANITES LIMITED

Referred to in paragraph 3 of our report of even date,

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals of time and no discrepancy was noticed on such verification.

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

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

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

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

iii) The company has not granted or taken any loans to/from any party covered in the register maintained under section 301 of the Companies Aet, 1956 during the year.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need 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 explanations given to us, there are no transactions during the year with the parties whose names are entered in the register maintained under Section 301 of the Companies Act, 1956 for an amount exceeding the value of rupees five lakhs in respect of any party.

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

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

viii) We have broadly reviewed the 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 records have been maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Material statutory dues applicable to it.

(b) According to the information and explanations 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 31.03.2012 for a period of more than six months from the date they became pavable.

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

x) The company does not have accumulated losses as at 31.03.2012. The company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions or banks during the year.

xii) The company has not granted loans and advances on the basis of security.

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

xiv) 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 (Auditor's Report) Order, 2003 aj£ hot applicable to the company.

xv) In our opinion, the company has not given guarantees for loans taken by others from banks or financial institutions.

xvi) In my opinion the Term loans taken by the company have been applied for the purpose for which they were obtained.

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

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

xix) The company did not issue debentures.

xx) The company did not raise any money by way of public issue during the year.

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



For I. SUDHAKER & CO, Chartered Accountants FR No 006271S



Sd/- I. SUDHAKER (Proprietor) Membership No. 023904

Place: Hyderabad Date: 28th May, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of Sri Vajra Granites Limited, Hyderabad, A.P as at 31 -3-2011 and the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion based on our audit.

2. We have conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement(s). 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 overall 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 issued by the Central Government of India in terms of sub-section (4A) of section 227 of The Companies Act, 1956 we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(i) 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.

(ii) 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.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of Account.

(iv) In our opinion, the Balance Sheet, Profit & 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 Companies Act, 1956.

(v) On the basis of the written representations received from the directors taken on record by the Board of Directors, we report that none of them is disqualified as On 31st March, 2011 from being appointed as director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

(vi) In our opinion, and to the best of our information and according to the explanations given to us the accounts read in conjunction with the notes thereon and schedules attached therewith give the information as 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 as at 31st March, 2011. (ii) In the case of Profit and Loss Account, of the loss for the year ended on that date. (ii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURETO AUDITORS' REPORT Re: SRI VAJRA GRANITES LIMITED Referred to in paragraph 3 of our report of even date,

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

(b) The fixed assets have been physically verified by the management at reasonable intervals of time and no discrepancy was noticed on such verification.

(c) The company has not disposed off any fixed asset during the year.

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

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

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

iii) The company has not granted or taken any loans to/from any party covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need 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 explanations given to us, there are no transactions during the year with the parties whose names are entered in the register maintained under Section 301 of the Companies Act, 1956 for an amount exceeding the value of rupees five lakhs in respect of any party.

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

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

viii) On clarification, as informed by the company, maintenance of cost records has not been prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956.

ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Material statutory dues applicable to it.

(b) According to the information and explanations 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 31.03.2011 for a period of more than six months from the date they became payable.

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

x) The company does not have accumulated losses as at 31.03.2011. The company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions or banks during the year.

xii) The company has not granted loans and advances on the basis of security.

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

xiv) 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 (Auditor's Report) Order, 2003 are not applicable to the company.

xv) In our opinion, the company has not given guarantees for loans taken by others from banks or financial institutions.

xvi) In my opinion the Term loans taken by the company have been applied for the purpose for which they were obtained.

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

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

xix) The company did not issue debentures.

xx) The company did not raise any money by way of public issue during the year.

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

for I . SUDHAKER & CO., CHARTERED ACCOUNTANTS, FR No. 006271S

Sd/- I. SUDHAKER, (PROPRIETOR) Membership No. 023904

PLACE: HYDERABAD, DATE : 21st May, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Sri Vajra Granites Limited, Hyderabad, A.P as at 31-3-2010 and the Pre fit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion based on our audit.

2. We have conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement(s). 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 overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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

(i) 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.

(ii) 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.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with byThis report are in Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of Account.

(iv) In our opinion, the Balance Sheet, Profit & 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 Companies Act, 1956.

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

(vi) In our opinion, and to the best of our information and according to the explanations given to us the accounts read in conjunction with the notes thereon and schedules attached therewith give the information as 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 as at 31st March, 2010.

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

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

ANNEXURETO AUDITORS REPORT Re: SRI VAJRA GRANITES LIMITED Referred to in paragraph 3 of our report of even date,

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

(b) The fixed assets have been physically verified by the management at reasonable intervals of time and no discrepancy was noticed on such verification.

(c) The company has not disposed off substantial part of any fixed assets during the year.

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

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

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

iii) The company has not granted or taken any loans to/from any party covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

iv) In our opinion and according to the information and explanations given to us, there areadequate internal control systems commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Sectiorv 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, there are no transactions during the year with the parties whose names are entered in thes register maintained under Section 301 of the Companies Act, 1956 for an amount exceeding the value of rupees five lakhs in respect of any party.

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

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

viii) On clarification, as informed by the company, maintenance of cost records has not been prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956.

ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Material statutory dues applicable to it.

(b) According to the information and explanations 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 31.03.2010 for a period of more than six months from the date they became payable.

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

x) The company does not have accumulated losses as at 31.03.2010. The company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions or banks during the year.

xii) The company has not granted loans and advances on the basis of security.

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

xiv) 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 are not applicable to the company.

xv) In our opinion, the company has not given guarantees for loans taken by others from banks or financial institutions.

xvi) In our opinion the Term loans taken by the company have been applied for the purpose for which they were obtained.

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

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

xix) The company did not issue debentures.

xx) The company did not raise any money by way of public issue during the year.

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

for i . SUDHAKER & CO.,

CHARTERED ACCOUNTANTS,

FR No. 006271S

PLACE: HYDERABAD,

DATE : 12th August, 2010 Sd/-

I. SUDHAKER,

(PROPRIETOR)

Membership No. 23904

 
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