Auditor Report of Indo Cotspin Ltd.

Mar 31, 2015

Report on Financial Statements

We have audited the accompanying financial statements of Indo Cotspin Limited ("the company") which comprise of the Balance Sheet as at 31 March, 2015, the Profit & Loss Statement, Cash Flow Statement for the year ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors are responsible for the matters stated in section 134(5) of the Company's Act, 2013 ("The Act") with respect to the preparation and presentation of these financial statements that give a true and fair view of financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these 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 there under.

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 the 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 upon the auditor's judgments, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place and adequate internal financial controls system over financial reporting and the operating the effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

(i) In the case of Balance Sheet, of state of affairs of the Company as at 31st March, 2015.

(ii) In the case of Profit & Loss Account, of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Matters

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

2. As required by section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which, to the best of our knowledge and belief were necessary for the 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 it appears from our examination of those books;

c) The Balance Sheet, the Profit & Loss Statement 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 31 March, 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015 from being appointed as a director in terms of Section 164(2) of the Act ; and

f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company 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 question of commenting on any material foreseeable losses thereon does not arise.

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

Annexure to Auditor's Report

1. In respect of its Fixed Assets:

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

(b) As explained to us, the fixed assets have been physically verified by the management during the year, in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its fixed assets. No material discrepancies were noticed on such physical verification.

2. In respect of its Inventories:

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

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

(c) The company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of Loans:

(a) As per the information furnished, the company has not granted any loans, secured or unsecured, to the company, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore, the provisions of clause 3(iii)(a) to 3(iii)(b) of the Companies (Auditor's Report) Order, 2015 are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods. During the course of audit, we have not observed any major weaknesses in internal controls.

5. The company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Companies Act, 2013 and the rules made there under.

6. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 148 (1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7. In respect of Statutory Dues:

(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 and other Statutory Dues have been generally regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no disputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2015 for a period of more than six months from the date of becoming payable.

(c) According to the information and explanations given to us and the records of the company examined by us, there is no such amount which is 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 there under.

8. The company has no accumulated business losses as on 31st March, 2015 and the company has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

9. Based on our audit procedure and according to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks or any other organization.

10. The company has not given any guarantee for loan taken by others from bank or financial institutions.

11. The Company has not taken any term loans during the year.

12. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For Manish Jain & Associates.

Chartered Accountants

FCA Parveen Bansal

Partner

M.No. 097408

Firm Regd. No. 015680N

Panipat: April 30, 2015

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Mar 31, 2014

1. We have audited the accompanying financial statements of Indo Cotspin Limited, which comprise of the Balance Sheet as at 31 March, 2014 and the Statement of Profit & Loss and the Cash Flow Statement for the year ended 31 March, 2014 and summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements in accordance with the provisions of Companies Act, 1956. This responsibility includes the design, implementation and maintenance of Internal Control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the 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 state of affairs of the company as at 31 March, 2014.

(ii) In the case of Profit & Loss Account , of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Matters

7. The Balance Sheet and the Profit & Loss Account have been drawn up in accordance with the provisions of section 211 of the Companies Act, 1956.

8. We report that:

(i) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory.

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

9. In our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement comply with the Accounting Standards referred to in sub -section (3C) of Section 211 of the Companies Act, 1956.

10. We further report that:

(i) The Balance Sheet and the Profit & Loss Account dealt with by this report are in agreement with the books of accounts.

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

Annexure to Auditor's Report

1. In respect of its Fixed Assets:

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

(b) As explained to us, the fixed assets have been physically verified by the management during the year, in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its fixed assets. No material discrepancies were noticed on such physical verification. (c) In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its Inventories:

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

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

(c) The company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of Loans:

(a) As per the information furnished, the company has not granted any loans, secured or unsecured, to the company, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) As the party has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (iii) (b) of the order is not applicable.

(c) As 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 clause (iii) (c) of the order is not applicable.

(d) As 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 clause (iii) (d) of the order is not applicable.

(e) As per the information furnished, the company has not taken any loans, secured or unsecured, from the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(f) As the company has not taken any loans, secured or unsecured from the companies, firms or the other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (f) of the order is not applicable.

(9) As the company has not taken any loans, secured or unsecured from the companies, firms or the other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (g) of the order is not applicable.

(h) There is no overdue amount outstanding regarding loans.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods. During the course of audit, we have not observed any major weaknesses in internal controls.

5. In respect of the transactions covered under Section 301 of the Companies Act, 1956.

(a) In our opinion and according to the information and explanations given to us, 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, and

(b) The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public and therefore section 58A, 58AA or any other relevant provisions of the Companies Act, do not apply.

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (CostAccounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of Statutory Dues:

(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, Gess and other Statutory Dues have been generally regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no disputed amounts payable in respect of the aforesaid dues were outstanding as at 3P March, 2014 for a period of more than six months from the date of becoming payable.

10. The company has no accumulated business losses as on 3P' March, 2014 and the company has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

11. Based on our audit procedure and according to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks or any other organization.

12. In our opinion and according to the information and explanation given to us, no loans & advances have been granted by the company 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 clause 4(xiii) of the Companies (Auditor's Report) Order 2003 is not applicable.

14. In our opinion, the company is not engaged in trading of securities, debentures and other investments, etc. Therefore clause 4(xiv) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

15. The company has not given any guarantee for loan taken by others from bank or financial institutions.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us, on overall basis, funds raised on short term basis have, prima facie, not been used during period for long term investments.

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

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

20. The company has not raised any money by way of public issue during the year.

21. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For Manish Jain & Associates. Chartered Accountants

FCA Manish Jain Partner M.No. 096014 Firm Regd. No. 015608N Panipat : May 30, 2014

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Mar 31, 2013

1. We have audited the accompanying financial statements of Indo Cotspin Limited, which comprise of the Balance Sheet as at 31 March, 2013 and the Statement of Profit & Loss and the Cash Flow Statement for the year ended 31 March, 2013 and summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements in accordance with the provisions of Companies Act, 1956. This responsibility includes the design, implementation and maintenance of Internal Control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the 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 state of affairs of the company as at 31 March, 2013.

(ii) In the case of Profit & Loss Account , of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Matters

7. The Balance Sheet and the Profit & Loss Account have been drawn up in accordance with the provisions of section 211 of the Companies Act, 1956.

8. We report that:

(i) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory.

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

9. In our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

10. We further report that:

(i) The Balance Sheet and the Profit & Loss Account dealt with by this report are in agreement with the books of accounts.

(ii) On the basis of written representations received from the directors, as on 31 March, 2013 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2013 from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the Companies Act, 1956. 132 103.

Annexure to Auditor''s Report

1. In respect of its Fixed Assets:

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

(b) As explained to us, the fixed assets have been physically verified by the management during the year, in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its fixed assets. No material discrepancies were noticed on such physical verification.

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

2. In respect of its Inventories:

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

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

(c) The company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of Loans:

(a) As per the information furnished, the company has not granted any loans, secured or unsecured, to the company, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) As the party has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (iii) (b) of the order is not applicable.

(c) As 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 clause (iii) (c) of the order is not applicable.

(d) As 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 clause (iii) (d) of the order is not applicable.

(e) As per the information furnished, the company has not taken any loans, secured or unsecured, from the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(f) As the company has not taken any loans, secured or unsecured from the companies, firms or the other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (f) of the order is not applicable.

(g) As the company has not taken any loans, secured or unsecured from the companies, firms or the other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (g) of the order is not applicable.

(h) There is no overdue amount outstanding regarding loans.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business for the purchase of inventory fixed assets and also for the sale of goods. During the course of audit, we have not observed any major weaknesses in internal controls.

5. In respect of the transactions covered under Section 301 of the Companies Act, 1956.

(a) In our opinion and according to the information and explanations given to us, 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, and

(b) The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public and therefore section 58A, 58AA or any other relevant provisions of the Companies Act, do not apply.

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of Statutory Dues:

(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 and other Statutory Dues have been generally regularly deposited with the appropriate authorities, except the fees of Rs. 2,18,273.00 payable to Stock Exchange regarding previous years.

(b) According to the information and explanations given to us, no disputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2013 for a period of more than six months from the date of becoming payable.

10. The company has accumulated business losses of Rs. 93,75,360.18 as on 31st March, 2013 and the company has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

11. Based on our audit procedure and according to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks or any other organization.

12. In our opinion and according to the information and explanation given to us, no loans & advances have been granted by the company 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 clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable.

14. In our opinion, the company is not engaged in trading of securities, debentures and other investments, etc. Therefore clause 4(xiv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

15. The company has not given any guarantee for loan taken by others from bank or financial institutions.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us, on overall basis, funds raised on short term basis have, prima facie, not been used during period for long term investments.

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

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

20. The company has not raised any money by way of public issue during the year.

21. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For Anil Aviral & Co. Chartered Accountants

FCA Anil Kumar Proprietor M.No. 82187 Firm Regd. No. 007733N Panipat : May 15, 2013

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Mar 31, 2012

We have audited the attached Balance Sheet of INDO COTSPIN LIMITED as at March 31st, 2012 and the Profit and Loss Account for the year ended on that date annexed thereto and the cash flow statement for the period ended on that date. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

3. Further to our comment in the annexure referred to in paragraph 2 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, the company has kept proper books of accounts as required by law so far, as appears from our examination of such 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 accounts.

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

e) On the basis of written representations received from the directors, as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors are being disqualified as on 31st March, 2012 from being appointed as directors 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 the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

(ii) In the case of the 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 Auditors'' Report

1. In respect of its fixed assets:

a. The Company had maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, 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 physical verification.

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

2. In respect of its inventories:

a. As explained to us, the Management at regular intervals during the year has physically verified inventories.

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

c. The company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. (a) As per the information furnished, the company has not granted any loans, Secured or unsecured, to the company, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956.

(b) As the Company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (iii)(b) of the Order is not applicable.

(c) As 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 clause (iii)(c) of the Order is not applicable.

(d) As 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 clause (iii)(d) of the Order is not applicable.

(e) As per the information furnished, the company has not taken any loans, secured or unsecured, from the company, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(f) As the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (f) of the Order is not applicable.

(g) As the Company has not taken any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (g) of the Order is not applicable.

(h) There is no overdue amount outstanding regarding loans

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 inventory, fixed assets and also for the sale of goods. During the course of audit, we have not observed any major weak- nesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, 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: and

b. the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public and therefore section 58A, 58AA or any other relevant provisions of the Companies Act, do not apply.

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies ( Cost Accounting Records ) Rules , 2011 prescribed by the Central Government under Section 209 (1) (d) of the Companies Act , 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

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 and other Statutory Dues have been generally regularly deposited with the appropriate authorities except the fees of Rs. 203273.00 payable to Stock Exchanges regarding previous years.

b. According to the information and explanations given to us, no disputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2012 for a period of more than six months form the date of becoming payable.

10. The company has accumulated losses of Rs. 9795391.14 Lacs as on 31st March 2012 and the company has not incurred any cash loss during the financial year covered by our audit or in the immediately preceding financial year

11. Based on our audit procedure and according to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks or any other organization.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company 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, clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

14. In our Opinion, the company has not engaged in trading of securities, debentures and other investments etc. Therefore, clause 4(xiv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

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

16. The company has not raised any term loan during the year.

17. According to the information and explanations given to us and on overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilized any funds raised from short-term sources towards long-term investments.

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

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

20. The company has not raised any money by way of public issue during the year.

21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated.

FOR ANIL AVIRAL & CO Chartered Accountants (Firm Regn No. 007733N)

ANIL KUMAR Proprietor M. No. 82187 Panipat: MAY 31, 2012

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Mar 31, 2011

We have audited the attached Balance Sheet of INDO COTSPIN LIMITED as at March 31st, 2011 and the Profit and Loss Account for the year ended on that date annexed thereto and the cash flow statement for the period ended on that date These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

3. Further to our comment in the annexure referred to in paragraph 2 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, the company has kept proper books of accounts as required by law so far, as appears from our examination of such books.

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in aqreement with the books of accounts.

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

e) On the basis of 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 are being disqualified as on 31st March 2010 from being appointed as directors 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 the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

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

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

Annexure to Auditors'' Report

1. In respect of its fixed assets:

a. The Company had maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management the during the year in a phased periodical manner, 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 physical verification.

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

2. In respect of its inventories:

a. As explained to us, the Management at regular intervals during the year has physically verified inventories.

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

c. The company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. (a) As per the information furnished, the company has not granted any loans, secured or unsecured, to the company, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) As the Company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (iii)(b) of the Order is not applicable.

(c) As 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 clause (iii)(c) of the Order is not applicable.

(d) As 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 clause (iii)(d) of the Order is not applicable.

(e) As per the information furnished, the company has not taken any loans, secured or unsecured, from the company, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(f) As the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (iii)(f) of the Order is not applicable.

(g) As the Company has not granted any loans, secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, the clause (iii)(g) of the Order is not applicable.

(h) There is no overdue amount outstanding regarding loans

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 inventory, fixed assets and also for the sale of goods. During the course of audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, 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: and

b. the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public and therefore section 58A, 58AA or any other relevant provisions of the Companies Act, do not apply.

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

8. The Central Government has not been prescribed any maintenance of Cost Records under section 209(1 )(d) of the Companies Act, 1956 for any of the product of the company.

9. In respect of statutory dues.

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 and other statutory dues have been generally regularly deposited with the appropriate authorities except the fees of Rs.188273.00 payable to Stock Exchanges regarding previous years.

b. According to the information and explanations given to us, no disputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2011 for a period of more than six months form the date of becoming payable.

10. The company has accumulated losses of Rs. 10379661,11 Lacs as on 31st March 2011 and the company has not incurred any cash loss during the financial year covered by our audit but or in the immediately preceeding financial year.

11. Based on our audit procedure and according to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks or any other organization.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company 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, clause 4{xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company,

14. In our Opinion, the company has not engaged in trading of securities, debentures and other investments etc. Therefore, clause 4(xiv) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

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

16. The company has not raised any term loan during the year.

17. According to the information and explanations given to us and on overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilized any funds raised from short-term sources towards long-term investments,

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

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

20. The company has not raised any money by way of public issue during the year.

21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated.

FOR ANIL AVIRAL & CO Chartered Accountants (Firm Regn No. 007773N)

ANIL KUMAR Proprietor M. No. 82187

Panipat: MAY 31,2011