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Auditor Report of Vardhman Holdings Ltd.

Mar 31, 2016

To

The Members of

Vardhman Holdings Limited

1. Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Vardhman Holdings Limited (''the Company'') which comprise the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. 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.

3. Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. 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 there under.

5. 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.

6. 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. 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.

7. 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.

8. 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, 2016 and its profits and its cash flows for the year ended on that date.

9. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2016 ("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, which forms part of this report, a statement on the matters specified in the paragraph 3 and 4 of the Order.

10. 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 purpose of our audit;

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

c. the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. on the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of sub-section (2) of section 164 of the Act; and

f. with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure- B"; 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 explanations given to us;

(i) the Company has no pending litigations which would impact its financial position;

(ii) the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) there are no amounts required to be transferred to the Investor Education and Protection Fund . by the Company.

Annexure - A to the Auditors'' Report

The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31st March 2016, we report that:

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

b) According to information and explanations given to us, Fixed Assets are verified by rotation every year. No discrepancies were observed in the Fixed Assets physically verified during the financial year.

c) According to information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of immovable properties are held in the name of the company.

(ii) The company has not held any inventory during the year, therefore, the provisions of clause 3(ii) of the Order are not applicable to the company.

(iii) According to the information and explanations given to us we report that the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnership or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore the provisions of paragraph 3(iii) (a), (b) and (c) of the Order are not applicable to the Company.

(iv) According to the information and explanations given to us, the Company has complied with the requirements of the section 186 of the Companies Act, 2013 pursuant to loans granted and investments made. The company has not granted loans to directors or to the person in whom directors are interested. Therefore, the provisions of the section 185 of the Companies Act, 2013 are not applicable to the company.

(v) According to the information and explanations given to us, the Company has not accepted deposits covered under the provisions of sections 73 to 76 and other relevant provisions of the Companies Act, 2013 and the rules framed there under. According to the information and explanations given to us, no order under the aforesaid sections has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

(vi) The provisions of Clause 3(vi) of the Order regarding maintenance of cost records is not applicable to the company

(vii) (a) According to the information and explanations given to us and on the basis of the records of the Company examined by us, in our opinion, the Company has been regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts in respect of statutory dues payable were outstanding as on the last day of the financial year concerned 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 duty of custom, which have not been deposited with the appropriate authorities on account of any dispute. However according to information and explanations given to us, the following dues of Income Tax has not deposited by the company on account of dispute:

Nature of Dues/ Name of Statue

Disputed Amount (in )

Forum where dispute is pending

Income Tax Act, 1961

3,625,730/-

A.Y. 2013-14 CIT (Appeal)

(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to a financial institution bank or government. The Company has not issued any debentures during the year or in the preceding year.

(ix) In our opinion and according to the information and explanations given to us, the company has not taken any term loan. The company has not raised money by way of initial public offer of further public offer (including debt instruments) during the year.

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

(xi) According to the information and explanations given to us and based on our examination of records of company, the company has not paid the managerial remuneration.

(xii) According to the information and explanation given to us, the company is not a Nidhi Company. Therefore the provisions of paragraph 3(xii) of the Order are not applicable.

(xiii) According to the information and explanations given to us, and based on our examination of the records of the company, transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 where applicable and the details of the transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us, the company has not made preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Thus the provisions of paragraph 3(xiii) of the Order are not applicable.

(xv) According to information and explanations given to us, and based on our examination of the records of the company, the company has not entered into non-cash transactions with director or person connected with him. Accordingly, provisions of paragraph 3 (xv) of the Order are not applicable.

(xvi) The company is registered as a Non-Banking Financial Company (''NBFC'') as defined under section 45-IA of the Reserve Bank of India (''RBI'') Act, 1934.

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (''the act'')

1. We have audited the internal financial controls over financial reporting of Vardhman Holdings Limited (''the Company'') as of 31st March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

2. Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

3. Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

6. Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

7. Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

8. Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For R. Dewan & Co;

Chartered Accountants

Firm Reg. No. 017883N

(Rajiv Dewan)

Place : Ludhiana Partner

Date : 20th May, 2016 M. No. 084718


Mar 31, 2015

We have audited the accompanying financial statements of Vardhman Holdings Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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 for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under 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 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 true and fair view 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 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 financial statements.

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section 11of section 143 of the Act, we give in the Annexure a statement on the matters prescribed in paragraphs 3 and 4 of the Order.

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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of accounts;

d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

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

f) With respect to the other matters included in the Auditor's Report and to the best of our information and according to the explanations given to us :

I. The Company does not have any pending litigations which would impact its financial position;

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

III. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

The Annexure referred to in paragraph 1 of our Report of even date to the members of Vardhman Holdings Limited on the accounts of the Company for the year ended 31st March, 2015.

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

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

(b) As explained to us, Fixed Assets are verified by rotation every year. No discrepancies were observed in the Fixed Assets physically verified during the financial year.

2. The company has not held any inventory during the year, therefore, the provision of clause 3(ii)(a), 3(ii)(b) and 4(ii)(c) of the Order are not applicable to the Company.

3. The Company has neither granted nor taken loans, secured or unsecured to or from companies, firm or other parties covered in the register maintained under section 189 of the Companies Act, 2013 therefore provision of 3(iii)(a) & (b) of the Companies (Auditors Report), Order, 2015 are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and for sale of goods & services. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have been informed of any instance of major weaknesses in the aforesaid internal control procedures.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed thereunder. We have been explained that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal against the Company during the year.

6. The provision of Clause 3(vi) of the Order regarding maintenance of cost records is not applicable to the company

7. (a) According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, Employees' State Insurance, Income-Tax, Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues applicable to it. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, no undisputed amounts payable in respect of provident fund, Employees' State Insurance, Income- Tax, Wealth Tax, Service Tax, Sales Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other statutory dues were outstanding, as at 31.03.2015 for a period of more than six months from the date they became payable.

(b) According to the records of the Company examined by us and the information and explanations given to us, in our opinion, there are no dues of sale tax, income- tax / wealth tax / service tax / customs duty / excise duty / Value Added Tax / cess which have not been deposited on account of any dispute, except the following:

Nature of Dues / Disputed Amount Forum where dispute Name of Statue (in Rs) is pending

Income Tax Act, 1961 410324/- A.Y. 2008-09 CIT (Appeal)

Income Tax Act, 1961 43000/- A.Y. 1997-98 CIT(Appeal)

(c) According to the records of the Company examined by us and the information and explanations given to us, in our opinion, no amount was required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

8. The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

9. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution or bank during the period. As the Company has not issued debentures during the Financial Year 2014-15, clause regarding default to debenture holders does not apply to the Company.

10. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

11. The Company has not raised any term loans during the year. Accordingly, the provisions of clause 3(xi) of the Order are not applicable to the Company.

12. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the period, nor have we been informed of such case by the management.

For R. Dewan & Co.

Chartered Accountants FRN 017883N

Rajiv Dewan

Place: Ludhiana (Partner)

Date : May 25, 2015 M.No.: 084718


Mar 31, 2014

We have audited the accompanying financial statements of Vardhman Holdings 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 Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

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

b) in the case of the Profit and Loss Account, of the profit/ 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 Government of India in terms

of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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 (1) of section 274 of the Companies Act, 1956.

The Annexure referred to in paragraph 1 of Section "Report on other Legal and Regulatory Requirements" of Our Report of even date to the members of Vardhman Holdings Limited on the accounts of the company for the year ended 31st March, 2014.

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

i) a) The company is maintaining records showing full particulars including quantitative details and situation of fixed assets.

b) According to the information and explanation given to us the company has physically verified the fixed assets at the close of the year. No discrepancies were noticed on such verification. In our opinion the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its business.

c) According to the information and explanation given to us, the company has not disposed of substantial part of fixed asset during the year. No material disposal of fixed assets were made, which does not affect the company as going concern.

ii) The company has not held any inventory during the year, therefore, the provision of clause 4(ii)(a), 4(ii)(b) and 4(ii)(c) of

the Order are not applicable to the company.

iii) The company has neither granted nor taken loans, secured or unsecured to or from companies, firm or other parties covered in the register maintained under section 301 of the Act, 1956 therefore provision of 4(iii)(a), (b), (c) and (d) of the Companies (Auditors Report), Order, 2003 are not applicable to the company.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for purchases of fixed assets. During the course of audit, we have not observed any continuing failure to correct major weakness in internal control system. There were no transactions in respect of purchase of inventory and sale of goods during the year.

v) In our opinion and according to the information and explanation given to us, there are no contracts or arrangement, the particulars of which need to be entered in the register maintained under section 301 of the Companies Act, 1956.

vi) According to the information and explanation given to us, the Company has not accepted any deposits covered under the provisions of section 58-A and 58-AA or any other relevant provision of the Companies Act, 1956. And the Companies (Acceptance of Deposits) Rules, 1975. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

viii) The provision of Clause 4(viii) of the Order regarding maintenance of cost records is not applicable to the company.

ix) a) According to the records of the company, statutory dues including Provident fund, Investors Education and Protection fund, Income Tax, Wealth tax, Service tax and other material statutory dues applicable to the company, if any, have been regularly deposited with appropriate authorities. According to the information and explanation given to us, no undisputed amount payable in respect of aforesaid dues were outstanding as at 31st March, 2014, for a period of more than six months from the date they become payable.

b) According to the records of the company, the details of disputed statutory dues aggregating to Rs. 1638152/- that have not been deposited on account of matter pending before the Appellate Authorities in respect of Income Tax are given below:

Nature of Dues / Disputed Forum where Name of Statute Amount (in Rs) dispute is pending

Income Tax Act, 1961 410324/- A.Y. 2008-09 CIT(Appeal)

Income Tax Act, 1961 6748/- A.Y. 2009-10 CIT(Appeal)

Income Tax Act, 1961 1178080/- A.Y. 2011-12 CIT(Appeal)

Income Tax Act, 1961 43000/- A.Y. 1997-98 CIT(Appeal)

x) In our opinion and according to the information and explanation given to us, the company neither has any accumulated losses nor it has incurred any cash losses in the current financial year covered under audit and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanation given to us, the company neither has any loan from the banks nor any debenture. Accordingly the provisions of clause 4(xi) of the Order are not applicable to the Company.

xii) According to the information & explanations given to us the company has not granted loans or advances on the basis of security by way of pledge of shares, debenture and other securities. Accordingly the provisions of clause 4(xii) of the Order are not applicable to the Company.

xiii) The company is not engaged in the business of any Chit fund/ nidhi/ mutual benefit fund or society. Accordingly the provisions of clause 4(xiii) of the Order are not applicable to the Company.

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

xv) The company has not given any guarantee for loans taken by others from bank or financial institutions. Accordingly, the provisions of clause 4(xv) of the Order are not applicable to the Company.

xvi) The company has not raised any term loans during the year. Accordingly, the provisions of clause 4(xvi) of the Order are not applicable to the Company.

xvii) The company has not raised any loan on short term basis during the year. Accordingly, the provisions of clause 4(xvii) of the Order are not applicable to the Company.

xviii) According to the information & explanations given to us, the company has not made any preferential allotment of shares during the year to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) According to the information & explanations given to us, the company has not issued any debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable to the Company.

xx) According to the information & explanations given to us, the company has not raised any money by way of public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable to the Company.

xxi) According to the information & explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For R. Dewan & Co., Chartered Accountants,

Place: Ludhiana (Rajiv Dewan) Date: 17/05/2014 Partner M. No.084718


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Vardhman Holdings Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, 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 Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

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

b) in the case of the Profit and Loss Account, of the profit/ 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 Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books 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 sub-section (3C) of section 211 of the Companies Act, 1956;

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

The Annexure referred to in paragraph 1 of Section "Report on other Legal and Regulatory Requirements" of Our Report of even date to the members of Vardhman Holdings Limited on the accounts of the company for the year ended131 st March, 2013.

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

i) a) The company is maintaining records showing full particulars including quantitative details and situation of fixed assets.

b) According to the information and explanation given to us, the company has physically verified the fixed assets at the close of the year. No discrepancies were noticed on such verification. In our opinion the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its business.

c) According to the information and explanation given to us, the company has not disposed of substantial part of fixed asset during the year. No material disposal of fixed assets were made, which does not affect the company as going concern.

ii) The company has not held any inventory during the year, therefore, the provision of clause 4(ii)(a), 4(ii)(b) and 4(ii)(c) of the Order are not applicable to the company.

iii) The company has neither granted nor taken loans, secured or unsecured to or from companies, firm or other parties covered in the register maintained under section 301 of the Act, 1956 therefore provision of 4(iii)(a), (b), (c) and (d) of the Companies (Auditors Report), Order, 2003 are not applicable to the company.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for purchases of fixed assets. During the course of audit, we have not observed any continuing failure to correct major weakness in internal control system. There were no transactions in respect of purchase of inventory and sale of goods during the year.

v) In our opinion and according to the information and explanation given to us, there are no contracts or arrangement, the particulars of which need to be entered in the register maintained under section 301 of the Companies Act, 1956. .

vi) According to the information and explanation given to us, the Company has not accepted any deposits covered under the provisions of section 58-A and 58-AA or any other relevant provision of the Companies Act, 1956. And the Companies (Acceptance of Deposits) Rules, 1975. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

viii) The provision of Clause 4(viii) of the Order regarding maintenance of cost records is not applicable to the company.

ix) a) According to the records of the company, statutory dues including Provident fund, Investors Education and Protection fund, Income Tax, Wealth tax, Service tax and other material statutory dues applicable to the company, if any, have been regularly deposited with appropriate authorities. According to the information and explanation given to us, no undisputed amount payable in respect of aforesaid dues were outstanding as at 31 st March, 2013, for a period of more than six months from the date they become payable.

b) According to the records of the company, the details of disputed statutory dues aggregating to Rs. 1,476,302/- that have not been deposited on account of matter pending before the Appellate Authorities in respect of Income Tax are given below:

Nature of Dues / Disputed Forum where dispute Name of Statue Amount CmRs.) is pending

Income Tax Act, 1961 410,324/- A.Y. 2008-09 CIT (Appeal)

Income Tax Act, 6,748/- A.Y. 2009-1 0 CIT (Appeal)

Income Tax Act, 1961 1,016,230/- A.Y. 2010-2011 CIT (Appeal)

Income Tax Act, 1961 43,000/- A.Y. 1997-98 CIT (Appeal)""

x) In our opinion and according to the information and explanation given to us, the company neither has any accumulated losses nor it has incurred any cash losses in the current financial year covered under audit and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanation given to us, the company neither has any loan from the banks nor any debenture. Accordingly the provisions of clause 4(xi) of the Order are not applicable to the Company.

xii) According to the information & explanations given to us, the company has not granted loans or advances on the basis of security by way of pledge of shares, debenture and other securities. Accordingly the provisions of clause 4(xii) of the Order are not applicable to the Company.

xiii) The company is not engaged in the business of any Chit fund / nidhi / mutual benefit fund or society. Accordingly the provisions of clause 4(xiii) of the Order are not applicable to the Company.

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

xv) The company has not given any guarantee for loans taken by others from bank or financial institutions. Accordingly, the provisions of clause 4(xv) of the Order are not applicable to the Company.

xvi) The company has not raised any term loans during the year. Accordingly, the provisions of clause 4(xvi) of the Order are not applicable to the Company.

xvii) The company has not raised any loan on short term basis during the year. Accordingly, the provisions of clause 4(xvii) of the Order are not applicable to the Company.

xviii)According to the information & explanations given to us, the company has not made any preferential allotment of shares during the year to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) According to the information & explanations given to us, the company has not issued any debentures during the year. Accordingly, the provisions of clause 4(xix) of the Order are not applicable to the Company.

xx) According to the information & explanations given to us, the company has not raised any money by way of public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable to the Company.

xxi) According to the information & explanations given to us, no fraud on or by the company has been noticed or reported during the year.

for R. Dewan& Co.,

Chartered Accountants, (Rajiv Dewan)

Place: Ludhiana Partner

Date: 23rd May, 2013 M. No. 084718


Mar 31, 2012

1. We have audited the attached balance sheet of Vardhman Holdings Limited as at 31st March, 2012, and also the statement of 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 on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on 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 paragraph 4 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 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, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the balance sheet, statement of profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in the Companies (Accounting Standard) Rules, 2006 read together with sub section (3C) of section 211 of the Companies Act, 1956;

e) on the basis of the 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 read together with the significant accounting policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of balance sheet, of the state of affairs of the Company as at 31st March, 2012;

ii) in the case of statement of profit and loss account, of the profit for the year ended on that date; and

iii) in the case of cash flow statement, of the cash flows for the year ended on that date.

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

b) According to the information and explanations given to us, the Company has physically verified the fixed assets at the close of the year. No discrepancies were noticed on such physical verification. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the Company and nature of its business.

c) According to the information and explanations given to us, the Company has not disposed off substantial part of its fixed assets during the year.

ii. The Company has not held inventories during the year, therefore, the provisions of clause 4(ii)(a), 4(ii)(b) and 4(ii)(c) of the order are not applicable to the Company.

iii. The Company has not granted or taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, provisions of 4(iii)

(a), (b), (c) and (d) of Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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 nature of its business, for the purchase of fixed assets. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control. There were no transactions in respect of purchase of inventory and sale of goods during the year.

v. In our opinion and according to the information and explanations given to us, there are no contracts or arrangements, the particulars of which need to be entered in the register maintained under section 301 of the Companies Act, 1956.

vi. According to the information and explanations given to us, the Company has not accepted deposits covered under the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

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

viii. The provisions of clause 4(viii) of the order regarding maintenance of cost records are not applicable to the Company.

ix. a) According to the records of the Company, statutory dues including provident fund, investor education and protection fund, income tax, wealth tax, service tax and other material statutory dues applicable to the Company, if any, have been regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2012, for a period of more than six months from the date they became payable.

b) According to the records of the Company, the details of disputed statutory dues aggregating to Rs. 4,60,072/- that have not been deposited on account of matters pending before the appellate authorities in respect of income tax are given below.

Nature of Dues/ Disputed Forum where dispute is Name of Statute Amount (Rs.) pending

Income Tax Act, 4,60,072/- Commissioner of Income 1961 Tax (Appeals)

According to the information and explanations given to us, there are no disputed dues in respect of wealth tax and cess.

x. In our opinion and according to information and explanation given to us, the Company neither has accumulated losses nor it has incurred cash losses during the financial year covered under audit and in the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the Company neither has any loans from banks nor any debentures. Accordingly, the provisions of clause 4(xi) of the order are not applicable to the Company.

xii. 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. Therefore, the provisions of clause 4(xii) of the order are not applicable to the Company.

xiii. The Company is not a chit fund or a nidhi mutual benefit fund/society. Accordingly, the provisions of clause 4(xiii) of the order are not applicable to the Company.

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

xv. The Company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the order are not applicable to the Company.

xvi. The Company has not raised any term loan during the year. Accordingly, the provisions of clause 4(xvi) of the order are not applicable to the Company.

xvii.The Company has not raised any loans on short-term basis during the year. Accordingly, the provisions of clause 4(xvii) of the order are not applicable to the Company.

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

xix. According to the information and explanations given to us, the Company has not issued debentures during the year. Accordingly, the provisions of clause 4(xix) of the order are not applicable to the Company.

xx. According to the information and explanations given to us, the Company has not raised any money by way of public issue during the year. Accordingly, the provisions of clause 4(xx) of the order are not applicable to the Company.

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

For S.C. VASUDEVA & CO.,

Chartered Accountants

Firm Registration No.: 000235N

Place : Ludhiana (SANJIV MOHAN)

Dated : 15th May, 2012 Partner

Membership No. 86066


Mar 31, 2011

1. We have audited the attached balance sheet of Vardhman Holdings Limited as at 31st March, 2011, and also 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 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. 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 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 enclosed in the annexure a statement on the matters specified in paragraph 4 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 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, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in the Companies (Accounting Standard) Rules, 2006 read together with sub section (3C) of section 211 of the Companies Act, 1956;

e) on the basis of the 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 read together with the significant accounting policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of balance sheet, of the state of affairs of the company as at 31st March, 2011;

ii) in the case of profit and loss account, of the profit for the year ended on that date; and

iii) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph 3) i. a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b) According to the information and explanations given to us, the company has physically verified the fixed assets at the close of the year. No discrepancies were noticed on such physical verification. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its business.

c) According to the information and explanations given to us, the company has not disposed off substantial part of its fixed assets during the year.

ii. The company has not held inventories during the year, therefore the provisions of clause 4(ii)(a), 4(ii)(b) and 4(ii)(c) of the order are not applicable to the company.

iii. The company has not granted or taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, provisions of 4(iii) (a), (b), (c) and (d) of Companies (Auditors Report) Order, 2003 are not applicable to the company.

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 nature of its business, for the purchase of fixed assets. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control. There were no transactions in respect of purchase of inventory and sale of goods during the year.

v. In our opinion and according to the information and explanations given to us, there are no contracts or arrangements the particulars of which need to be entered in the register maintained under section 301 of the Companies Act, 1956.

vi. According to the information and explanations given to us, the company has not accepted deposits covered under the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

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

viii. The provisions of clause 4(viii) of the order regarding maintenance of cost records are not applicable to the company.

ix. a) According to the records of the company, statutory dues including provident fund, investor education and protection fund, income tax, wealth tax, service tax and other material statutory dues applicable to the company, if any, have been regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2011, for a period of more than six months from the date they became payable.

b) According to the records of the Company, the details of disputed statutory dues aggregating to Rs. 7,25,41 3/- that have not been deposited on account of matters pending before the appellate authorities in respect of income tax are given below.

Nature of Dues/ Disputed Forum where dispute is Name of Statute Amount (Rs.) pending

Income Tax

Income Tax Act, 6,82,413/- Commissioner of Income 1961 Tax (Appeals)

Income Tax Act, 43,000/- Commissioner of Income 1961 Tax (Appeals)

According to the information and explanations given to us, there are no disputed dues in respect of wealth tax and cess.

x. In our opinion and according to information and explanation given to us, the company neither has accumulated losses nor it has incurred cash losses during the financial year covered under audit and in the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company neither has any loans from banks nor any debentures. Accordingly, the provisions of clause 4(xi) of the order are not applicable to the company.

xii. 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. Therefore, the provisions of clause 4(xii) of the order are not applicable to the company.

xiii. The company is not a chit fund or a nidhi mutual benefit fund/society. Accordingly, the provisions of clause 4(xiii) of the order are not applicable to the company.

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

xv. The company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the order are not applicable to the company.

xvi. The company has not raised any term loan during the year. Accordingly, the provisions of clause 4(xvi) of the order are not applicable to the company.

xvii. The company has not raised any loans on short-term basis during the year. Accordingly, the provisions of clause 4(xvii) of the order are not applicable to the company.

xviii.According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, the company has not issued debentures during the year. Accordingly, the provisions of clause 4(xix) of the order are not applicable to the company.

xx. According to the information and explanations given to us, the company has not raised any money by way of public issue during the year. Accordingly, the provisions of clause 4(xx) of the order are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.



For S.C. VASUDEVA & CO., Chartered Accountants Firm Registration No.: 000235N

(SANJIV MOHAN) Partner Membership No. 86066

Place : Ludhiana Dated : 21th May, 2011


Mar 31, 2010

1. We have audited the attached balance sheet of Vardhman Holdings Limited as at 31 "March, 2010, and also 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 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. 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 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 enclosed in the annexure a statement on the matters specified in paragraph 4 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 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, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

d) in our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in the Companies (Accounting Standard) Rules, 2006 read together with sub section (3C) of section 211 of the Companies Act, 1956;

e) on the basis of the written representations received from the Directors as on 31st 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 read together with the significant accounting policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of balance sheet, of the state of affairs of the company as at 31st March, 2010;

ii) in the case of profit and loss account, of the profit for the year ended on that date; and

iii) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in Paragraph 3)

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

b) According to the information and explanations given to us, the company has physically verified the fixed assets at the close of the year. No discrepancies were noticed on such physical verification. In our opinion, the frequency of physical verification of fixed assets is reasonable having regard to the size of the company and nature of its business.

c) According to the information and explanations given to us, the company has not disposed off substantial part of its fixed assets during the year.

ii. The company has not held inventories during the year, therefore the provisions of clause 4(ii)(a),4(ii)(b) and 4(ii)(c) of the order are not applicable to the company.

iii. The company has not granted or taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of

the Companies Act, 1956. Therefore, provisions of 4(iii) (a), (b), (c) and (d) of Companies (Auditors Report) Order, 2003 are not applicable to the company.

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 nature of its business, for the purchase of fixed assets. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control. There were no transactions in respect of purchase of inventory and sale of goods during the year.

v. In our opinion and according to the information and explanations given to us, there are no contracts or arrangements the particulars of which need to be entered in the register maintained under section 301 of the Companies Act, 1956.

vi. According to the information and explanations given to us, the company has not accepted deposits covered under the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

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

viii. The provisions of clause 4(viii) of the order regarding maintenance of cost records are not applicable to the company.

ix. a) According to the records of the company, statutory dues including provident fund, investor education and protection fund, income tax, wealth tax, service tax and other material statutory dues applicable to the company, if any, have been regularly deposited with appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2010, 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 were no disputed dues in respect of sales tax, income tax, service tax, custom duty, wealth tax, excise duty and cess.

x. In our opinion and according to information and explanation given to us, the company neither has accumulated losses nor it has incurred cash losses during the financial year covered under audit and in the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the company neither has any

loans from banks nor any debentures. Accordingly, the provisions of clause 4(xi) of the order are not applicable to the company.

xii. 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. Therefore, the provisions of clause 4(xii) of the order are not applicable to the company.

xiii. The company is not a chit fund or a nidhi mutual benefit fund/society. Accordingly, the provisions of clause 4(xiii) of the order are not applicable to the company.

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

xv. The company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the order are not applicable to the company.

xvi. The company has not raised any term loan during the year. Accordingly, the provisions of clause 4(xvi) of the order are not applicable to the company.

xvii. The company has not raised any loans on short-term basis during the year. Accordingly, the provisions of clause 4(xvii) of the order are not applicable to the company.

xviii.According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, the company has not issued debentures during the year. Accordingly, the provisions of clause 4(xix) of the order are not applicable to the company.

xx. According to the information and explanations given to us, the company has not raised any money by way of public issue during the year. Accordingly, the provisions of clause 4(xx) of the order are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For S.C. VASUDEVA & CO.,

Chartered Accountants

Firm Registration No.: 000235N

Place : Ludhiana (SANJIV MOHAN)

Dated : 6th May, 2010 Partner

Membership No. 86066