Auditor Report of Aurangabad Paper Mills Ltd.

Mar 31, 2015

1. We have audited the accompanying Standalone Financial Statements of AURANGABAD PAPER MILLS LIMITED ("the Company"), which comprises the Balance Sheet as at March 31st, 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

2. 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 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 judgment and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate 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

3. 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 Audit Report under the provisions of the Act and the Rules made there under.

We conducted our Audit in accordance with the Standards on Auditing specified under Section 143(10) of the Companies Act, 2013. 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 misstatements.

4. 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. 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.

5. 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

6. In our opinion and to the best of our information and according to the explanations given to us, the 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 March 31st, 2015 and its loss and its cash flows for the year ended on that date..

Report on other Legal and Regulatory Requirements

7. 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 paragraphs 3 and 4 of the said Order.

8. 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 Accounts as required by law have been kept by the Company so far as appears from our examination of those Books;

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

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

f) With respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of 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 does not have any pending litigations which would impact its financial position.

ii) The Company did not have any long term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.

iii) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring sums does not arise.

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 have been physically verified by the Management at regular intervals; as informed to us no material discrepancies were noticed on such verification;

2. (a) As explained to us, inventories have been physically verified during the year by the Management at reasonable intervals.

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

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the Management as compared to book records.

3. According to the information and explanations given to us and on the basis of our examination of the Books of Accounts, the Company has not granted any Loans, Secured or Unsecured, to Companies, Firms or other parties listed in the Register maintained under Section 189 of the Act.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of Fixed Assets & for the sale. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness has not been noticed or reported.

5. The Company has not accepted any deposits from the Public covered under Section 73 and 76 of the Companies Act, 2013.

6. In our opinion and as per information & explanation given by the Management, maintenance of cost records under sub- Section (1) Section 148 are not applicable to the Company.

7. (a) According to the information and

explanations given to us and based on the records of the Company examined by us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales- tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities in India;

(b) According to the information and explanations given to us and based on the records of the Company examined by us, there are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes.

(c) There has not been an occasion in

case of the Company during the year under report to transfer any sum to the Investor Education and Protection Fund. The question of reporting the delay in transferring such sums does not arise.

8. In our Opinion, the Company has accumulated losses at the end of the Financial Year which is more than 50% of its Net Worth as at 31st March, 2015 and has incurred cash losses during the current 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, Bank or Debenture Holders during the Financial Year covered by our Audit.

10. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from a Bank or Financial Institutions.

11. Based on our Audit procedures and on the information given by the Management, we report that the Company has not raised any term loans during the year.

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

For Sunil Adavade & Co.

Chartered Accountants

FRN: 121360W



-Sd/-

Sunil Shivram Adavade

(Proprietor)

Membership No. :109964

Place: Mumbai

Date: 29th May, 2015

---

Mar 31, 2014

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

Management's Responsibility 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") read with General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 Statement of Profit and Loss Account, of the LOSS for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003("the Order") issued by the Central 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 read with General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e) on the basis of written representations received from the Directors as on March 31, 2014, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2014, from being appointed as a Directors 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 our Report of even date to the Members of AURANGABAD PAPER MILLS 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:

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 have been physically verified by the Management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) The fixed assets disposed of during the period, in our opinion, do not constitute a 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. (a) As explained to us, inventories have been physically verified during the year by the Management at reasonable intervals.

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

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the Management as compared to book records.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to Companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the other sub clauses 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 payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the Management, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section.

(b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

6. The Company has not accepted any deposits from the public covered under Section 58A and 58AAof the Companies Act, 1956.

7. As per information & explanations given by the Management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. In our opinion and as per information & explanation given by the Management, maintenance of cost records provisions of clauses (a) and (b) are not applicable to the Company.

9. (a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate Authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 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 amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

10. In our Opinion, the Company has accumulated losses at the end of the Financial Year and has incurred cash loss during the Financial Year covered by our audit as well as in the immediately preceding the financial year.

11. 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, Bank or Debenture holders during the Financial Year covered by our audit.

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

13. The Company is not a Chit Fund or a Nidhi /Mutual Benefit Fund/Society. Therefore, the provision of this clause of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments. Therefore, the provisions of the clauses are not applicable to the Company.

15. 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.

16. Based on our audit procedures and on the information given by the Management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the Management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period Under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the Management.

For Sunil Adavade & Co.

Chartered Accountants

FRN:121360W

-Sd/-

Sunil Shivram Adavade

(Proprietor)

Membership No. :109964

Place: Mumbai

Date : 30th May, 2014

---

Mar 31, 2012

We have audited the attached Balance Sheet of M/s Aurangabad Paper Mills Ltd. as at 31st March, 2012 and also the Profit and Loss Account and the Cash Flow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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.

1. As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in paragraph 4 & 5 of the said order.

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

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

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

c) The Balance Sheet, Profit & Loss Account and Cash Flow statement referred to in this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this Report have been prepared in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

e) On the basis of the written representations from the Directors as on 31.3.2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31.3.2012 from being appointed as Directors in terms of clause (g) of Sub-Section (I) 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 give the information required by the Companies Act, 1956 in a manner so required and subject to the notes thereon give a true and fair view :- i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012. ii) In case of Profit & Loss Account, of the LOSS for the year ended on that date.

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

ANNEXURE TO THE AUDITORS' REPORT 31ST MARCH, 2012 REFERRED TO IN THE PARAGRAPH 1 OF OUR REPORT OF EVEN DATE ON THE ACCOUNTS AS AT 31ST MARCH, 2012

1. In Respect of its Fixed Assets :

(a) The Company has maintained records showing full particulars including quantitative details and situation of its fixed assets on the basis of available information.

(b) We are informed that the Fixed Assets have been physically verified by the Management during the year. There is regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification as compared with the book records.

(c) In our opinion and according to the information and explanations given to us, the Company has not disposed off a substantial part of fixed assests during the year.

2. In Respect Of Inventories :

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

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

(c) The Company is maintaining proper records of inventory. According to information and explanations given to us, no material discrepancies were noticed on physical verification of inventory.

3. Related Party Transactions :

(a) The Company has not granted any loans Secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has taken loan from parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information explanation given to us, terms and conditions are not prima-facie prejudicial to the interest of the company.

(c) The loan is interest free and is repayable on demand. Therefore, no interest has been provided on the said loans.

(d) As the loans taken by the company are repayable on demand the question of overdue amounts does not arise.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contacts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees 5 lacs in respect of any party during the year have been made at prices at the relevant time.

Internal Controls :

5. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets. During the course of our audit, no major weakness has been noticed in the internal controls.

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

Deposits :

7. The Company has not accepted any deposits from the public attracting the provisions of Section 58A and 58B of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

Taxation :

8. In our opinion and according to the information and explanations give to us, the provisions of clause (a) and (b) are not applicable to the Company.

Miscellaneous :

9. The clause relating to maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956, is not applicable to the Company for the year under reference.

10. In our opinion, the Company has accumulated losses at the end of the Financial year and the company has not incurred cash losses during the current financial year covered by our audit. However the Company had incurred cash losses in the immediately preceding Financial year.

11. According to information & explanations give to us, the Company has not defaulted in repayment of dues to Banks, Financial Institutions or Debenture holders during the financial year covered by our audit.

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

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

14. In our opinion, the Company is not dealing or trading in shares, debentures, securities and other investment. Therefore, 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 Company has not given guarantee for loans taken by others from Banks or Financial Institutions.

16. In our opinion, term loans have been applied for the purpose for which they were raised, other than temporary deployment pending application.

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

18. The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 and therefore the question of the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

19. The Company has not issued debentures and therefore the question of creation of security in respect of debentures does not arise.

20. The Company has not raised monies by public issues during the year and therefore the question of disclosure and verification of end use of such monies does not arise.

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

FOR SUNIL ADAVADE & CO.

CHARTERED ACCOUNTANTS

- Sd -

(SUNIL ADAVADE)

PROPRIETOR

MEMBERSHIP NO. 109964

PLACE : MUMBAI

Date : 4th September, 2012

---

Mar 31, 2010

We have audited the attached Balance Sheet of M/s Aurangabad Paper Mills Ltd., Mumbai as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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.

1. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matter specified in paragraph 4 & 5 of the said order.

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

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

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

c) The Balance Sheet, Profit & Loss Account and Cash Flow statement referred to in this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this Report have been prepared in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

e) On the basis of the written representations from the Directors as on 31.3.2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31.3.2010 from being appointed as Directors in terms of clause (g) of Sub-Section (I) of Section 274 of the Companies Act, 1956.

0 In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in a manner so required and subject to the notes thereon give a true and fair view :-

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.

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

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

ANNEXURE TO THE AUDITORS REPORT 31st MARCH, 2010 REFERRED TO IN THE PARAGRAPH OF OUR REPORT OF EVEN DATE

Fixed Assets :

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

(b) We are informed that the Fixed Assets have been physically verified by the Management during the year. There is regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification as compared with the book records.

(c) The fixed assets disposed off during the year are not substantial and therefore do not affect the going concern status of the Company.

Inventories:

2. (a) The Inventories have been physically

verified during the year by the Management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

Related Party Transactions:

3. (a) The Company has not granted any loans

Secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has taken loan from parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information explanation given to us, terms and conditions are not prima-facie prejudicial to the interest of the company.

(c) The loan is interest free and is repayable on demand. Therefore, no interest has been provided on the said loans.

(d) As the loans taken by the company are repayable on demand the question of overdue amounts does not arise.

4. (a) According to the information and

explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contacts or arrangemens entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees 5 lacs in respect of any party during the year have been made at prices at the relevant time.

Internal Controls :

5. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipments and other assets and to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

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

Deposits:

7. The Company has not accepted any deposits from the public attracting the provisions of Section 58A and 58B of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

Taxation :

8. In our opinion and according to the information and explanations give to us, the provisions of clause (ix) (a) and (b) are not applicable to the Company.

Miscellaneous :

9. We are informed that the Central Government has not prescribed the maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956, for the product manufactured by the Company.

10. The Company has accumulated losses as at the end of the year. The Company has not incurred cash losses during the financial year covered by our audit. However, the Company had incurred cash losses in the immediately preceding financial year.

11. In our opinion and according to the information and explanations give to us, the Company has not defaulted in repayment of dues to Banks.

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

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

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investment. 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 Company has not given guarantee for loans taken by others from Banks or Financial Institutions.

16. In our opinion, the term loans have been applied for the purpose for which they were raised, other than temporary deployment pending application.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that the no funds raised on short-term basis have been used for long-term investment.

18. The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 and hence the issue price of shares affecting interest of the Company does not arise.

19. The Company has not issued debentures and therefore the question of creation of security in respect of debentures does not arise.

20. The Company has not raised monies by public issues during the year and therefore the question of disclosure and verification of end use of such monies does not arise.

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

FOR SUNIL ADAVADE & CO.

CHARTERED ACCOUNTANTS

Place : MUMBAI (SUNIL ADAVADE)

Date: 30th August, 2010 PROPRIETOR

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