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Auditor Report of Talwalkars Better Value Fitness Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Talwalkars Better Value Fitness 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 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 profit 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. In our opinion the accounting impact of Company's policy on Impairment of Assets, needs to be reviewed;

(e) As mentioned in note 16 to the financial statements, the balances of certain receivables are subject to confirmations and reconciliations;

(f) 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

(g) 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 on its financial position in its financial statements - Refer Note 31 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the standalone 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 fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified at periodic intervals. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were 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 fixed assets.

(ii) (a) As explained to us, inventories have been physically verified during the period by the management at reasonable intervals. In our opinion, the frequency of such verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, 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 has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on such physical verification as compared to the book records.

(iii) The Company has granted interest free loan to its subsidiaries which are covered in the register maintained under section 189 of the Companies Act, 2013('the Act'). and these loans have been recovered as on Balance Sheet date.

The terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 4(iii)(a) and (b) of the Order is not applicable to the Company in respect of receipt/recovery of the principal and interest amount.

(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 fixed assets, inventory and 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 as per the provisions of section 73 and 76 of the Companies Act, 2013. Accordingly, the reporting requirement under paragraph 4(v) of the Order is not applicable to the Company.

(vi) The Central Government of India has not prescribed the maintenance of cost accounting records under sub-section (1) of section 148 of the Companies Act, 2013 for any of the services rendered 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, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of excise, duty of customs, value added tax, Cess 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, duty of excise, duty of customs, 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 dues of income tax, sales tax, wealth tax, service tax, duty of excise, duty of customs, value added tax and cess which have not been deposited with the appropriate authorities on account of any dispute.

(c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

(viii) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(ix) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof is prejudicial to the interest of the Company.

(xi) According to the information and explanations given to us, the term loans have been applied for the purposes for which they were raised.

(xii) During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the period, nor have we been informed of any such case by the management.

For M.K.Dandeker & Co., Chartered Accountants (ICAI Reg. No. 000679S)

Date: 7th May, 2015 S. Poosaidurai Place: Mumbai Partner Membership No. 223754




Mar 31, 2014

We have audited the accompanying financial statements of TALWALKARS BETTER VALUE FITNESS LIMITED, which comprise the Balance Sheet as at 31st March 2014, and the statement of Profit and Loss and Cash Flow Statement for the year 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 givea trueand fairview of the financial position, financial performance and cash flows of the company in accordance with accounting standards referred to in sub section (3Q 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 financial statements that g we a trueand 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 auditing 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 judgement, including the assessment of the risks of material misstatements 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 gwen to us, the said account give the information required by the Companies Act, 1956, in the manner so required and gives a trueand fairview 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 31 st March 2014,

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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.

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 purposes of our audit;

ii. In our opinion, proper books of account as required bylaw have been kept by the company so far as appears from our examination of those books;

iii. The Balance Sheet and Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

n. In our opinion, the Balance Sheet and Statement of Profit and Loss dealt with by this report comply with the Accounting Standards referred to in sub-section (3Q of section 211 of the Companies Act, 1956. In our opinion the accounting impact of company''s policy on impairment as per AS 28 on Impairment of Assets, needs to be reviewed on a regular basis.

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

Annexure to the Independent Auditors'' Report With reference to the Annexure referred to paragraph 1 of the report of Auditors to the Members of TALWALKARS BETTER VALUE FITNESS LIMITED on the accounts for the year ended 31st March 2014, we report that

1. Fixed Assets:

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

(b) We are informed that the management of the Company has physically verified during the year all its fixed assets and no material discrepancies were noticed on such verification.

(c) The Company has not disposed of any of its fixed assets so as to affect the going concern status.

2.Inventory:

(a) The physical verification of inventory has been conducted at reasonable intervals by the Management.

(b) The procedures for 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 any discrepancies noticed on physical verification are being properly dealt in the books of accounts.

3.Loans:

(a) The Company has granted loans to its Subsidiary Companies (Four Companies) listed in the register maintained u/s. 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of the said loans was Rs.21.16 Millions (prev. yr. Rs. 21.54 Millions) and at the year end the balance outstanding of the said loans granted was Rs.49.49 Millions (prev. yr. Rs. 44.54 Millions). Other than the above, the Company has not granted any loans, secured or unsecured to companies, parties or firms covered in the register maintained u/s. 301 of the Act.

(b) In our opinion, prima facie, the interest and other terms and conditions of the aforesaid loan granted are not prejudicial to the interest of the Company.

(c) In case of the loan granted to the Subsidiary Company listed in the register maintained u/s. 301, the terms of arrangement do not stipulate any repayment schedule and the loan is repayable on demand. Accordingly paragraph 4(iii)(c) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company in respect of repayment of the principal amount.

(d) There are no overdue amounts of more than rupees one lakh in respect of the loan granted to the subsidiary Company.

(e) The Company has not taken unsecured loans from companies & related parties listed in the register maintained u/s. 301 of the Companies Act, 1956. However, the maximum amount involved during the previous year in respect of the said loans was Rs. 1.54 millions. Other than the above, the Company has not taken any loans, secured or unsecured from companies, parties or firms covered in the register maintained u/s. 301 of the Act.

(f) The Company has not taken any loans, secured or unsecured from companies, parties or firms covered in the register maintained u/s. 301 of the Companies Act, 1956 during the year. Accordingly paragraph 4(iii) (f) and (g) of the Companies (Auditor''s Report) Order, 2003 is not applicable.

4.In our opinion and based on the information and explanations given to us, the internal controls are generally adequate and are commensurate with the size of the Company and the nature of its business. We have not observed any other major weakness in the internal control system during the course of the audit.

5.Transactions:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered in the register maintained u/s. 301 of the Companies Act, 1956 have been so entered.

(b) Based on the information and explanations given to us, in our opinion these transactions have been made at reasonable prices having regard to the prevailing market prices at the relevant time of transactions.

6.The Company has not accepted any deposits from public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the rules made under Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of clause (vi) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003, in our opinion are not applicable to the Company for the year under review.

7.In our opinion, the scope and coverage of internal audit system need to be increased to make it commensurate with the size and nature of business of the company.

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-clause (1) of section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9.Statutory Dues:

(a) According to the records of the Company, Provident Fund, Employees State Insurance, Income tax, Sales tax, Customs Duty, Service Tax, Excise Duty, Cess and other statutory dues to the extent applicable to the Company, they have been generally deposited regularly during the year, with the appropriate authorities with the exception of certain instances of late remittances of statutory dues noticed towards Income Tax, VAT and Service Tax, since remitted.

(b) According to the information and explanations given to us, the following are the particulars of disputed statutory dues which have not been deposited as at 31st March 2014

Name of Nature of AmountRs Period to Forum the Statute the Dues (Millions) which the where amount dispute is relates Pending Income Tax Income Tax 80.63 Assessment CIT Appeals Act,1961 demand Year 2010-11

10.The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. Accordingly, paragraph 4(x) of the Companies (Auditor''s Report) Order, 2003 is not applicable.

11. Based on the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution and banks.

12. In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security byway of pledge of shares, debentures and other securities.

13. 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.

14. 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.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for the loans taken by others from banks or financial institutions are not prima facie prejudicial to the interests of the Company.

16. According to the information and explanations given to us, term loans raised by the Company have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on the overall examination of the Balance sheet of the Company, we report that the Company has not used funds raised on short term basis for long term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies / firms covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

19. In our opinion and according to the information and explanations given to us, the Company has created security or charge in respect of the debentures issued and outstanding at the year end.

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

21. According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year under review.

For M.K. Dandeker & Co., (ICAI FIRM REG.NO.000679S)

K.J.Dandeker Partner Dated:8th May,2014 Chartered Accountants Place:Mumbai Membership No.018533


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of TALWALKARS BETTER VALUE FITNESS LIMITED, which comprise the Balance Sheet as at 31st March 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year 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 and cash flows of the Company in accordance with 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 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 misstatements 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 said account give the information required by the Companies Act, 1956, in the manner so required and gives 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 31 st March 2013;

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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.

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 purposes of our audit;

ii. 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;

iii. The Balance Sheet and Statement of Profit and Loss dealt with by this report are in agreement with the books of account;

iv In our opinion, the Balance Sheet and Statement of Profit and Loss dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. In our opinion the accounting impact of company''s policy on impairment as per AS 28 on Impairment of Assets, needs to be reviewed on a regular basis;

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

1. Fixed Assets :

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

(b) We are informed that the management of the Company has physically verified during the year all its fixed assets and no material discrepancies were noticed on such verification.

(c) The Company has not disposed of any of its fixed assets so as to affect the going concern status.

2. Inventory :

(a) The physical verification of inventory has been conducted at reasonable intervals by the Management.

(b) The procedures for 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 any discrepancies noticed on physical verification are being properly dealt in the books of accounts.

3. Loans :

(a) The Company has granted loans to its Subsidiary Company listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of the said loans was X 44.54 millions (previous year X 33.54 millions) and at the year end the balance outstanding of the said loans granted was X 44.54 millions (previous year X 33.54 millions). Other than the above, the Company has not granted any loans, secured or unsecured to companies, parties or firms covered in the register maintained under Section 301 of the Act.

(b) In our opinion, prima facie, the interest and other terms and conditions of the aforesaid loan granted are not prejudicial to the interest of the Company.

(c) In case of the loan granted to the Subsidiary Company listed in the register maintained under Section 301, the terms of arrangement do not stipulate any repayment scheduleandtheloanisrepayableondemand.Accordingly paragraph 4(iii)(c) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company in respect of repayment of the principal amount.

(d) There are no overdue amounts of more than rupees one lakh in respect of the loan granted to the Subsidiary Company.

(e) The Company has not taken unsecured loans from companies & related parties listed in the register maintained under Section 301 of the Companies Act, 1956. However, the maximum amount involved during the previous year in respect of the said loans was X 2.79 millionsandatthepreviousyear end the balance outstanding of the said loans was X 53.08 millions. Other than the above, the Company has not taken any loans, secured or unsecured from companies, parties or firms covered in the register maintained under Section 301 of the Act.

(f) The Company has not taken any loans, secured or unsecured from companies, parties or firms covered in the register maintained under Section 301 of the Companies Act, 1956 during the year. Accordingly paragraph 4(iii) (f) and (g) of the Companies (Auditor''s Report) Order, 2003 is not applicable.

4. In our opinion and based on the information and explanations given to us, the internal control procedures need to be strengthened to be commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of services. We have not observed any major weakness in the internal control system during the course of the audit.

5. Transactions :

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) Based on the information and explanations given to us, in our opinion these transactions have been made at reasonable prices having regard to the prevailing market prices at the relevant time of transactions.

6. TheCompanyhasnotacceptedanydepositsfrom public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the rules made under Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of clause (vi) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003, in our opinion are not applicable to the Company for the year under review.

7. In our opinion, the scope and coverage of internal audit system need to be increased to make it commensurate with the size and nature of business of the company.

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-clause (1) of Section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9. Statutory Dues :

(a) According to the records of the Company, Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Customs Duty, Service Tax, Excise Duty, Cess and other statutory dues to the extent applicable to the Company, have been generally regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us, there are no disputed amounts payable in respect of Income Tax, Customs Duty, Service Tax, Excise Duty, Cess and other statutory dues outstanding as at 31st March 2013, for a period more than six months from the date they become payable.

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. Accordingly, paragraph 4(x) of the Companies (Auditor''s Report) Order, 2003 is not applicable.

11. Based on the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution and banks.

12. In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. 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.

14. 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.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for the loans taken by others from banks or financial institutions are not prima facie prejudicial to the interests of the Company.

16. According to the information and explanations given to us, term loans raised by the Company have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on the overall examination of the Balance Sheet of the Company, we report that the Company has not used funds raised on short term basis for long term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies / firms covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

19. In our opinion and according to the information and explanations given to us, the Company has created security or charge in respect of the debentures issued and outstanding at the year end.

20. The Management has disclosed the end use of money raised by public issue at Note 41 of Notes to Accounts. We have verified the same to the extent of utilisation by the Company.

21. According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year under review.

For M. K. Dandeker & Co.,

(Firm Reg. No. 000679S)

K. J. Dandeker

Partner

Dated : 8th May, 2013 Chartered Accountants

Place: Mumbai Membership No. 018533


Mar 31, 2012

We have audited the attached Balance Sheet of TALWALKARS BETTER VALUE FITNESS LIMITED as at 31st March, 2012, and also the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In accordance with the provisions of Section 227 of the Companies Act,1956,we report that:

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 Companies Act,1956, we enclose in the Annexure a Statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph (3) 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 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 appears from our examination of the books;

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

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

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

(f) In our opinion and to the best of our information and according to the explanations given to us,the said accounts,together with the other notes appearing 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 the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; and

ii) in the case of the Statement of Profit and Loss, of the profit 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.

With reference to the Annexure referred to paragraph 1of the report of Auditors to the Members of TALWALKARS BETTER VALUE FITNESS LIMITED on the accounts for the year ended 31st March, 2012, we report that

1. Fixed Assets

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

(b) We are informed that the management of the Company has physically verified during the year all its fixed assets and no material discrepancies were noticed on such verification.

(c) The Company has not disposed of any of its fixed assets so as to affect the going concern status.

2. The Company is a service Company primarily rendering services in respect of health and fitness centres. Accordingly it does not hold any inventory. Thus, the provisions of Clause 4(ii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company for the year under review.

3. Loans:

(a) The Company has granted loans to its Subsidiary Company listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of the said loans was Rs 335.40 lacs (previous year Rs 75 lacs) and at the year end the balance outstanding of the said loans -granted was Rs 335.40 lacs (previous year Rs 16.17 lacs). Other than the above, the Company has not granted any loans, secured or unsecured to companies, parties or firms covered in the register maintained u/s.301of the Act.

(b) In our opinion, prima facie, the interest and other terms and conditions of the aforesaid loan granted are not prejudicial to the interest of the Company.

(c) In case of the loan granted to the Subsidiary Company listed in the register maintained under section 301, the terms of arrangement do not stipulate any repayment schedule and the loan is repayable on demand. Accordingly paragraph 4(iii)(c) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company in respect of repayment of the principal amount.

(d) There are no overdue amounts of more than rupees one lakh in respect of the loan granted to the subsidiary Company.

(e) The Company has not taken unsecured loans from companies and related parties listed in the register maintained under Section 301 of the Companies Act, 1956. However, the maximum amount involved during the previous year in respect of the said loans was Rs 2663.72 lacs and at the previous year end the balance outstanding of the said loans was Rs 530.83 lacs. Other than the above, the Company has not taken any loans, secured or unsecured from companies, parties or firms covered in the register maintained under section 301of the Act.

(f) The Company has not taken any loans, secured or unsecured from companies, parties or firms covered in the register maintained under section Section 301of the Companies Act, 1956 during the year. Accordingly paragraph 4(iii) (f) and (g) of the Companies (Auditor's Report) Order, 2003 is not applicable.

4. In our opinion and based on the information and explanations given to us, the internal control procedures need to be strengthened to be commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

5. Transactions:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered in the register maintained under Section 301of the Companies Act,1956 have been so entered.

(b) Based on the information and explanations given to us, in our opinion these transactions have been made at reasonable prices having regard to the prevailing market prices at the relevant time of transactions.

6. The Company has not accepted any deposits from public within the meaning of Section 58A and 58AA of the Companies Act,1956 and the rules made under Companies (Acceptance of Deposits) Rules, 1975.

Therefore, the provisions of Clause (vi) of paragraph 4 of the Companies (Auditor's Report) Order, 2003, in our opinion are not applicable to the Company for the year under review.

7. In our opinion, the scope and coverage of internal audit system need to be increased to make it commensurate with the size and nature of business of the Company.

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-Clause (1) of Section 209 of the Companies Act,1956 in respect of services carried out by the Company.

9. Statutory Dues

(a) According to the records of the Company, Provident Fund, Employees State Insurance, Income tax, Sales tax, Customs Duty, Service Tax, Excise Duty, Cess and other statutory dues to the extent applicable to the Company, have been generally regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us, there are no disputed amounts payable in respect of Income tax, Customs Duty, Service Tax, Excise Duty, Cess and other statutory dues outstanding as at 31st March, 2012, for a period more than six months from the date they become payable.

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. Accordingly, paragraph 4(x) of the Companies (Auditor's Report) Order, 2003 is not applicable.

11. Based on the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution and banks.

12. In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. 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.

14. 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.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for the loans taken by them from banks or financial institutions are not prima facie prejudicial to the interests of the Company.

16. According to the information and explanations given to us, term loans raised by the Company have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on the overall examination of the Balance sheet of the Company, we report that the Company has not used funds raised on short-term basis for long-term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies/firms covered in the register maintained under Section 301of the Companies Act,1956 during the year.

19. In our opinion and according to the information and explanations given to us, the Company has created security or charge in respect of the debentures issued and outstanding at the year end.

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

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under review.

For M. K. Dandeker & Co.,

(ICAI Reg. No. 000679S)

Date: 22nd May, 2012 K. J. Dandeker Partner

Place: Mumbai Chartered Accountants

Membership No. 018533


Mar 31, 2011

1. We have audited the attached Balance Sheet of TALWALKARS BETTER VALUE FITNESS LIMITED as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both 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. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis 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 in paragraph (3) 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 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 appears from our examination of the books;

(c) The Balance Sheet, the Profit and Loss Account 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 Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

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

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, together with the other notes appearing thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2011;

and

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

1. Fixed Assets :

(a) The Company is in the process of re-compiling its fixed asset register with a view towards reflecting full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, physical verification of fixed assets has been carried out by the Management at most of the branches in accordance with a program of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. No material discrepancies were noticed on such physical verification as informed by the management. In view of the fact that the fixed asset register is in the process of re-compilation, the management has informed us that discrepancies, if any, arising between the assets verified and the books and records would be dealt with in the year in which such re- compilation of the register is completed

(c) The fixed assets disposed off during the year, in our opinion, do not constitute substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

2. The Company is a service Company primarily rendering services in respect of health and fitness centres. Accordingly it does not hold any inventory. Thus, the provisions of Clause 4{ii) are not applicable to the company for the year under review.

3. Loans:

(a) The Company has granted loans to its subsidiary Company listed in the register maintained under Section 301 of the Companies Act 1956. The maximum amount involved during the year in respect of the said loans was Rs 75 Lacs and at the year end the balance outstanding of the said loans taken was Rs. 16.17 Lacs. Other than the above, the Company has not granted any loans, secured or unsecured to companies, parties or firms covered in the register maintained u/s.301 of the Act.

(b) In our opinion, prima facie, the interest and other terms and conditions of the aforesaid loan granted are not prejudicial to the interest of the Company.

(c) In case of the loan granted to the subsidiary Company listed in the register maintained u/s.301, the borrower has been regular in the payment of interest as stipulated. The terms of arrangement do not stipulate any repayment schedule and the loan is repayable on demand. Accordingly paragraph 4(iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount.

(d) There are no overdue amounts of more than rupees one lacs in respect of the loan granted to the subsidiary Company.

(e) The Company has taken unsecured loans from 9 companies listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of the said loans was Rs 2663.72 Lacs and at the year end the balance outstanding of the said loans taken was Rs. 530.83 Lacs. Other than the above, the Company has not taken any loans, secured or unsecured to companies, parties or firms covered in the register maintained u/s.301 of the Act.

(f) In our opinion, prima facie, the interest and other terms and conditions of the aforesaid loan taken from the Companies listed in the register maintained under Section 301 are not prejudicial to the interest of the Company.

(g) As per the information and explanations furnished to us, for loans taken as above, repayment terms of principal amount has not been stipulated /fixed as yet and the loans are repayable on demand. The Company has been regular in the payment of interest. Accordingly paragraph 4(iii)( g ) of the Order is not applicable to the Company in respect of repayment of the principal amount.

4. In our opinion and based on the information and explanations given to us, the internal control procedures need to be strengthened to be commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

5. Transactions:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) Based on the information and explanations given to us, in our opinion these transactions have been made at reasonable prices having regard to the prevailing market prices at the relevant time of transactions.

6. The Company has not accepted any deposits from public within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the rules made under Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of clause (vi) of paragraph 4 of the aforesaid Order, in our opinion are not applicable to the Company for the year under review.

7. In our opinion, the scope and coverage of internal audit system need to be increased to make it commensurate with the size and nature of business of the company.

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-clause (1) of section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9. Statutory Dues:

(a) According to the records of the Company, Provident Fund, Employees State Insurance, Income tax, Sales tax, Customs Duty, Service Tax, Excise Duty, Cess and other statutory dues to the extent applicable to the Company, have been generally regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income tax, Customs Duty, Service Tax, Excise Duty, Cess and other statutory dues outstanding as at 31st March 2011, for a period more than six months from the date they become payable.

According to the information and explanations given to us, the following dues of Income-tax have not been deposited by the Company on account of disputes

Name of the Nature of the Amount of Tax Period to which Forum where dispute is Statute disputed dues (Rs. In Lacs) the amount pending relates_

Income Tax Act Income Tax 19.00 AY 2006- 2007 Commissioner of Income Tax- 1961 Appeals

17. According to the information and explanations given to us and on the overall examination of the Balance sheet of the Company, we report that the Company has not used funds raised on short term basis for long term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies / firms covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

19. In our opinion and according to the information and explanations given to us, the Company has created security or charge in respect of the secured debentures issued during the year.

20. The Management has disclosed the end use of money raised by public issue at note 21 of Schedule H (B). We have verified the same to the extent of utilization by the Company.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under review.

For SARAF GURKAR & ASSOCIATES

Chartered Accountants FRN: 126518W

S. L Saraf Place:Mumbai Partner Dated:June 14,2011 Membership No.030866


Mar 31, 2010

1. We have audited the attached Balance Sheet of TALWALKARS BETTER VALUE FITNESS LIMITED as at 31 st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

4. Further to our comments in the Annexure referred to in paragraph (3) 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 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 appears from our examination of the books;

(c) The Balance Sheet, the Profit and Loss Account 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 Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors as on 31 st March, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, together with the other notes appearing thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2010; and

ii) in the case of the Profit and Loss Account, of the profit 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. Annexure to Auditors Report

ANNEXURE TO THE AUDITORS REPORT OF EVEN DATE ON THE ACCOUNTS OF TALWALKARS BETTER VALUE FITNESS LIMITED (FORMERLY KNOWN AS TALWALKARS BETTER VALUE FITNESS PRIVATE LIMITED) FOR THE YEAR ENDED 31 ST MARCH, 2010

(Referred to in Paragraph (3) of the above Report)

1. Fixed Assets:

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

(b) As explained to us, physical verification of fixed assets has been carried out by the Management at most of the branches in accordance with a program of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. We have been informed that the reconciliation of assets verified with the fixed assets register is still in progress at some of the branches. Discrepancies, if any, arising out of verification and reconciliation are yet to be determined.

(c) During the year no substantial parts of the fixed assets have been disposed off by the Company. Therefore, the provisions of Clause (ic) of paragraph 4 of the aforesaid Order are not applicable to the Company for the year under review.

2. The Company has no inventory hence the provisions of Clause 4(ii) are not applicable to the company for the year under review.

3. Loans:

(a) The Company has taken unsecured loans from 8 Companies & 5 related parties listed in the register maintained under Section 301 of the Companies Act, 1 956. The maximum amount involved during the year in respect of the said loans was Rs. 2,763.73 lacs and at the year end the balance outstanding of the said loans taken was Rs. 3,434.52 lacs.

The Company has not granted loans to a Company/ Party listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion, prima facie, the interest and other terms and conditions of the aforesaid loans are not prejudicial to the interest of the Company.

(c) The Company has been regular in the payment of principal amount and the interest on the aforementioned loans.

(d) There are no overdue amounts on the above loans.

4. In our opinion and according to the information and explanations given to us, the internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services need to be strengthened. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

5. Transactions:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) Based on the information and explanations given to us, in our opinion these transactions have been made at reasonable prices having regard to the prevailing market prices at the relevant time of transactions.

6. The Company has not accepted any deposits from public within the meaning of Sections 58A and 58AA of the Companies Act, 1956 and the rules made under Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of Clause (vi) of paragraph 4 of the aforesaid Order, in our opinion are not applicable to the Company for the year under review.

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

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-clause (1) of Section 209 of the Companies Act, 1956 in respect of services carried out by the Company.

9. Statutory Dues:

(a) According to the records of the Company, Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Customs Duty, Service Tax, Excise Duty, Cess and other statutory dues to the extent applicable to the Company, have been generally regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Customs Duty, Service Tax, Excise Duty, Cess and other statutory dues outstanding as at 31 st March, 2010, for a period more than six months from the date they become payable, except for liabilities on account of TDS (Tax Deducted at Source) aggregating to Rs.36.64 lacs and Service Tax aggregating to Rs.124.38 lacs. The said liabilities have been fully deposited in the Government Treasury till the date of signing these statements.

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. Accordingly, paragraph 4(x) of the Order is not applicable.

11. Based on the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution and banks.

12. In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. 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.

14. 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.

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for the loans taken by others from banks or financial institutions are not prima facie prejudicial to the interests of the Company.

16. According to the information and explanations given to us, term loans raised by the Company have been applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on the overall examination of the Balance Sheet of the Company, we report that the Company has not used funds raised on short term basis for long term investment.

18. According to the information and explanation given to us, the Company has made preferential allotment of shares to parties and Companies / firms covered in the register maintained under Section 301 of the Companies Act, 1956. The prices at which these shares have been issued are not prejudicial to the interest of the Company.

1 9. In our opinion and according to the information and explanations given to us, the Company has not issued any secured debentures during the period covered by our report. Accordingly, the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

20. The Company has not raised any money by public issues during the year. Accordingly, paragraph 4(xx) of the Order is not applicable.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under review.

For SARAF GURKAR & ASSOCIATES

Chartered Accountants

Firm Registration No.: 126518W

S. L. Saraf

Partner

Membership No. 030866

Date: 7th July, 2010

Place: Mumbai

 
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