Auditor Report of Padam Cotton Yarns Ltd.

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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 ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Report on other legal and regulatory requirements

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 Companies Act, 2015, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. As required by Section 143(3) of the Act, we report that:

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

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

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in is financial statements -Refer Note 2.14 to the financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

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

The Annexure referred to in Paragraph of the Our Report of even date to the members of M/s Padam Cotton Yarns Limited, on the accounts of the company for the year ended 31S March, 2015.

(i) (a) Not Applicable as the company is not having any fixed assets as on 31.03.2015.

(b) Not Applicable.

(ii) (a) The stocks of Finished Goods, spare parts and raw materials have been physically verified during the year by the management at reasonable intervals.

(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 is business.

(c) The company has maintained proper records of inventory and the discrepancies noticed on verification between the physical stocks and the book records were not material

(iii) (a) The Company has granted loans, secured or unsecured, to companies firm or other parties covered in the register maintained 189 of the Companies Act, 2013. The number of parties is one and amount involved is Rs. 1,76,95,000.00 According to the information and explanations given to us no principal as well as interest was due to the company which was to be paid.

(b) According to the information and explanations given to us there is no overdue amount of more than one lakh owed by the company.

(iv) 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 inventory and fixed assets and for the sale of goods and services. According to the information and explanations given to us there is no visible continuing failure to correct major weaknesses in internal control system.

(v) The company has not accepted the deposits and in our opinion and according to the information and explanation given to us, the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under, where applicable, have been complied with.

(vi) According to information and explanations given to us the Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the Companies Act in case of Company.

(vii) (a) According to the records of the company, the company has generally complied with in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax. duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities during, the year

(b) According to the records of the company there is no dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess etc in disputes.

(c) According to the information's and explanations given to us and records of the company the company is not required to be transfer any funds 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 during the year.

(viii) According to the records of the company, the company has not incurred any cash loss during the current financial year or its proceeding year. Further the company has no accumulated losses.


(x) According to the records of the company and information's and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) The company has applied the term loans taken for the purpose for which the loans were obtained;

(xii) According to the information and explanations given to us, the company has not noticed or reported any fraud on or by the company during the year

FOR VINEY GOEL & ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Reg. No. 012188N

Sd-

(VINEYA GOEL)

PLACE : KARNAL PARTNER

DATED : 29.05.2015 M. No. 090739

---

Mar 31, 2014

We have audited the accompanying financial statements of M/S Padam Cotton Yarns Limited, Delhi, which comprise the Balance Sheet as at 31st March 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 read with the General Circular 15/2013 dated 13th. 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 entity''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by managements, 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 as basis four our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanation 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 31st , 2014;

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

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

1. As required by the Companies (Auditor report) Order 2003 issued by the Central Government of India in terms of sub-section (4 A of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said 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 the Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

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

e) On the basis of written representations received by us from the directors of the Company as at 31st March, 2014 and taken on record by the Board of Directors,. We report that no director is disqualified from being appointed as director of the Company under clause

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

(g) of sub-section (I) of section 274 of the Companies Act, 1956.

i ) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014; and

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

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

Re : PADAM COTTON YARNS LIMITED

The Annexure referred to in Paragraph 1 of the Report of even date to the members of M/S Padam Cotton Yarns Limited, Delhi on the accounts of the company for the year ended 31st March, 2014

1. (a) Not Applicable as the company is not having any fixed assets as on 31.03.2014.

(b) Not Applicable.

(c) According to information and explanations given to us, the Company has been awarded insurance claim by the National Consumer Redressal Commission, the insurance company has preferred an appeal before Hon,ble Supreme Court against the same. Though the company and its management is hopeful to get its claim from Insurance Company in finality and shall commence commercial operations immediately after receipt of final claim amount. The Company is doing wholesale its trading operations on scattered the basic during the year. In our considered view the going concern of the Company shall be affected in view of changed circumstances, after closure of the trading operations also by the company.

2. (a) The stocks of Finished Goods, spare parts and raw materials have been physically verified during the year by the management at reason -able intervals.

(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 has maintained proper records of inventory and the discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The Company has granted loans, secured or unsecured to companies, firms or other parties listed in the register maintained U/S 301 of the Companies Act, 1956 and from the companies under the same management. The number of parties is one and amount involved is Rs. 17425000

(b) According to the information and explanations given to us the rate of interest and other terms & conditions of loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

(c) According to the information and explanations given to us no Principal as well as interest was due to the company which was to be paid.

(d) According to the information and explanations given to us there is no overdue amount of more than one Lac owed by the company

(e) The Company has not taken any loans, secured or unsecured, from companies firm or other parties listed in the register maintained U/S 301 of the Companies Act, 1956, and from the companies under the same management .

(f ) According to the information & explanations given to us the rate of interest & terms & conditions of loans taken by the company, are not prejudicial to the interest of the company.

(g) According to the information & explanations the company is regular in repayment of interest & Principal.

4. 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 inventory and Fixed assets and with For the sale of goods & services. According to the information and explanations given to us there is no visible continuing failure to correct major weaknesses in internal control system.

5. (a) According to the information and explanations given to us, no transaction of purchase of goods and materials and sale of goods, materials and services, made in pursuance of contracts or arrangements entered in the registers maintained under section 301 of the companies act, 1956.

(b) No such transaction has been made by the company during the year.

6. The Company has not accepted the deposits and in our opinion and according to the information and explanations given to us, the provisions of section 58A & 58AA or Any other relevant provision of Act and the companies (Acceptance of Deposits) Rules 1975 as well as relevant directives of the Reserve Bank of India are not applicable to the company.

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

8. The Company has maintained cost records as required under section 209(1)(d) of the Companies Act 1956 for the product of the company.

9. (a) According to the records of the company, the company has generally complied with in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance Dues, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess & other statutory dues with the appropriate authority during the year.

(b) According to the records of the company, the company has not deposited disputed excise duty of Rs. 3360128. which is pending in appeal before central Excise Service tax appellate tribunal.

10. According to the records of the company, the company has not incurred any cash loss during the current financial year. Further the company has no accumulated losses.

11. According to the records of the company has not defaulted in repayment of dues to any financial situation or bank or debentures holders.

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

13. According to the information and Explanation given to us, the nature of the activities of the company does not attract any special statute Applicable to chit fund and Nidhi/ Mutual benefit fund/Socities

14. According to information and explanations given to us, the company is not dealing in or trading of shares, securities, debentures and other investments. Accordingly, the previous of the clause (xiv) of the company (Auditors report) order 2003 as amended by the companies (Auditors Report) amendment order 2004 are not applicable to the company.

15. According to information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The company has applied the term loan taken for the purpose for which the loans are obtained.

17. According to the information and explanation given to us, the company has not raised funds on short term basis for long term investments.

18. According to the information and explanation given to us, the company has not issued any preferential allotment during the year to the shares to parties and companies covered in the register maintained U/S 301 of the Act.

19. The company has not issued any debenture neither any security or charge has been created.

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

21. According to the information and explanation given to us, the company has not noticed or reported any fraud on or by the company during the year.

FOR VINEY GOEL & ASSOCIATES CHARTERED ACCOUNTANTS

Sd/- PLACE : KARNAL (VINEYAGOEL) DATE : 11.07.2014 PARTNER

---

Mar 31, 2013

We have audited the attached Balance Sheet of M/S PADAM COTTON YARNS LIMITED as at 31st March, 2013, the Profit & Loss A/c and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company''s Management.

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

1. As required by the Companies (Auditor''s Report) Order 2004 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,

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

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

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

iii) The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account,

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

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

(1) of section 274 of the Companies Act, 1956. vi) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company. vii) 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 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 31.3.2013 and

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

Re : PADAM COTTON YARNS LIMITED

Annexure ''A* to Auditor''s Report dated 30.05.2013 on the accounts for the year ended 31.03.2013

1(a) Not Applicable as the company is not having any fixed assets as on 31.03,2013.

(b) Not Applicable.

(c) According to information and explanations given to us, the Company has been awarded insurance claim by the National Consumer Redressal Commission, the insurance company has preferred an appeal before Hon.ble Supreme Court against the same. Though the company and its management is hopeful to get its claim from Insurance Company in finality and shall commence commercial operations immediately after receipt of final claim amount. The Company has also discontinued its trading operations during the year. In our considered view the going concern of the Company shall be affected in view of changed circumstances, after closure of the trading operations also by the company.

2, (a) The stocks of Finished Goods, spare parts and raw materials have been physically verified during the year by the management at reasonable intervals.

(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 has maintained proper records of inventory and the discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The Company has granted loans, secured or unsecured to companies, firms or other parlies covered in the register maintained U/S 301 of the Companies Act, 1956. The number of parties is one and the maximum outstanding amount was Rs. 870000.

(b) According to the information and explanations given to us the rate of interest and other terms & conditions of loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

(c)Nol Applicable.

(d)Not Applicable.

(e)The Company has not taken loans, secured or unsecured, from companies firm or other parties listed in the register maintained U/S 301 of the Company Act, 1956. and from the companies under the same management during the year.

(OAccording to the information and explanations given to us the rate of interest and other terms & conditions of loans taken by die company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

(g)According to the information and explanations given to us no principal as well as interest was due against the company which was to be paid.

4. 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 stores and other assets and with regard to the sale of goods & services. According to the information and explanations given to us there is no visible continuing failure to correct major weaknesses in internal control system.

5.(a) According to the information and explanations given to us, no transaction of purchase of goods and''materials and sale of goods, materials and services, made in pursuance of contracts or arrangements entered in the registers maintained under section 301 of the companies act. 1956. (b) No such transaction has been made by the company during the year.

6. The Company has not accepted the deposits and in our opinion ''and according to the information and explanations given to us. the provisions of section 58A & 58AA of the Companies Act 1956 and the companies (Acceptance of Deposits) Rules 1975 as well as relevant directives of the Reserve Bank of India are not applicable to the company.

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

8. The Company has maintained cost records as required under section 209(1 )(d) of the Companies Act 1956.for the product of the company.

9.(a) According to the records of the company, the company has generally complied with in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee''s Stale Insurance Dues. Income Tax, Sales Tax, Wealth Tax. Custom Duty, Excise Duty. Service Tax, Cess & other statutory dues with the appropriate authority during the year.

10. According to the records of the company, the company has not incurred any cash loss during the current financial year.

11. Aceording.lo the records of the company, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

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

13. Not Applicable.

14. Not Applicable.

15. According to information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

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

17. According to the information and explanation given to us, the company has not raised funds on short term basis for long term investments.

18. According to the information and explanation given to us. the company has nol made any preferential allotment of shares to parties and companies covered in the register maintained U/S 301 of the Act.

19. The company has not issued any debenture neither any security or charge have been created.

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

21. According to the information and explanation given to us, the company has not noticed or reported any fraud on or by the company during the year.

PLACE : KARNAL FOR VINEY GOEL & ASSOCIATES

DATE : 30.05.2013 CHARTERED ACCOUNTANTS

Sd/-

(VINEYAGOEL) PARTNER

---

Mar 31, 2010

We have audited the attached Balance Sheet of M/S PADAM COTTON YARNS LIMITED as at 31st. March, 2010. the Profit & Loss A/c and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conduct 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.

1. As required by the Companies (Auditors Report) Order 2004 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.

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

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

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

iii) The Balance Sheet, Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account.

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

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

vi) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company, vii) 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 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 31.3.2010 and

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

Annexure A to Auditors Report dated 28.07.2010 on the accounts for the year ended 31.03.2010

1. (a) Not Applicable as the company is not having any fixed assets as on 31.03.2010..

(b) Not Applicable.

(c) According to information and explanations given to us, the Company has been awarded insurance claim by the National Consumer Redressal Commission, the insurance company has preferred an appeal before Hon,ble Supreme Court against the same. Though the company and its management is hopeful to get its claim from Insurance Company in finality and shall commence commercial operations immediately after receipt of claim amount. Hence, the going concern of the Company shall not be affected in view of changed circumstances.

2. (a) There being no stock during the year.

(b) Not Applicable.

(c) Not Applicable.

3. (a) The Company has granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained U/S 301 of the Companies Act, 1956. The number of parties is one and amount is Rs. 19850000.00

(b) According to the information and explanations given to us the rate of interest and other terms & conditions of loans taken by the company, secured or unsecured, are not primafacie prejudicial to the interest of the company.

(c) Not Applicable.

(d) Not Applicable.

(e) The Company has not taken loans, secured or unsecured, from companies firm or other parties listed in the register maintained U/S 301 of the Company Act, 1956, and from the companies under the same management.

(f) According to the information and explanations given to us the rate of interest and other terms & conditions of loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

(g) According to the information and explanations given to us no principal as well as interest was due against the company which was to be paid.

4. 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 stores and other assets and with regard to the sale of goods & services. According to the information and explanations given to us there is no visible continuing failure to correct major weaknesses in internal control system.

5. (a) According to the information and explanations given to us, no transaction of purchase of goods and materials and sale of goods, materials and services, made in pursuance of contracts or arrangements entered in the registers maintained under section 301 of .the companies act, 1956.

(b) No such transaction has been made by the company during the year.

6. The Company has accepted the deposits and In our opinion and according to the information and explanations given to us, the company has generally complied with the provisions of section 58A & 58AA of the Companies Act 1956 and the companies (Acceptance of Deposits) Rules 1975 as well as relevant directives of the Reserve Bank of India

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

8. The Company has not maintained any cost records required under section 209(1 )(d) of the Companies Act 1956for the product of the company.

9. (a) According to the records of the company, the company has generally complied with in depositing undisputed statutory dues including Provident Fund Investor Education and Protection Fund, Employees State Insurance Dues Income Tax, Sales Tax, Wealth Tax, Custom Duty Excise Duty, Service Tax, Cess & other statutory dues with the appropriate authority during the Year.

(b) According to the records of the company, the company has not deposited disputed Excise Duty of Rs. 33,60,128.00 which is pending in appeal before Central Excise Service Tax Appellate Tribunal.

10. According to the records of the company, the company has not incurred any cash loss during the current financial year. Further the company has no accumulated losses

11. According to the records of the company, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

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

13. Not Applicable.

14. No tApplicable.

15. According to information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

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

17. According to the information and explanation given to us, the company has not raised funds on short term basis for long term investments.

18. According to the information and explanation given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained U/S301 of the Act.

19. The Company has not issued any debenture neither any security or charge have been created.

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

21. According to the information and explanation given to us, the Company has not noticed or reported any fraud on or by the company during the year.

PLACE: KARNAL FORVINEYGOEL& ASSOCIATES

DATE: 28th. July, 2010 CHARTERED ACCOUNTANTS

Sd/-

(VINEYAGOEL)

PARTNER