Auditor Report of RCL Foods Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of RCL FOODS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, and the Cash Flow Statement for the year then ended, and a summary of the 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 stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

Emphasis of Matter:

The company has not made provision of Rs. 1945005/- (Rs 958037/- included under "Long Term Advances" Rs 986,968/- included under "Other Non Current Assets") which in our opinion is doubtful of recovery (Refer Note 15 & 16)

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements subject to our observations in Emphasis of Matters, 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 case of Balance sheet, of the state of affairs of the Company as at 31 st March, 2015;

b) In case of Statement of Profit and Loss, of the Loss for the year ended date; and

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

1. As required by the companies (Auditor's Report) Order, 2015 ("The Order") issued by the central government of India in terms of section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order.

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 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 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 will have impact on its financial position in its financial statements

ii. The Company does not have any long term contracts including forward exchange contracts.

iii. The company is not required to transfer any amounts to the Investor Education and Protection Fund.

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

1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. All the assets have been physically verified by the management during the year which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No serious discrepancies were noticed on such verification.

2. In respect of clause (3) (ii) (a), (b) and (c), we report that the company is engaged in manufacturing and trading of foods and processed foods. The company has not maintained day to day stock records. However the closing stocks have been certified by the management which has been relied upon and duly incorporated in the accounts.

3. The company has not advanced any amount to any party covered in the register maintained U/S 189 of the Companies Act,2013. Hence clause (iii) is not applicable to the company .

4. In our opinion and according to the information and explanations given to us, though there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of Inventory and fixed assets and with regard to the sale of goods, the company is yet to introduce the system of internal audit.

5. The Company has not accepted any deposits in contravention of Section 73 of the Companies Act, 2013 and the rules framed there under. Hence clause (v) is not applicable.

6. According to the information and explanations given to us, the Central government has not prescribed for the maintenance of cost records required to be maintained under section 148(1) of the Companies Act ,2013.

7. In respect of Statutory dues

a. According to the information and explanations given to us, we have been informed that the provisions of Employees Provident Fund & Miscellaneous Provisions Act, 1952 are not applicable to the company. In respect of Employees State Insurance dues, the same have been remitted belatedly in a few cases.

b. Further according to the information and explanations given to us, excepting income tax dues of Rs. 5,77,280/- for Assessment year 2014-15 and Rs. 23,010/- for Assessment year 2012-13, and TDS of Rs.62,496/- there are no other arrears of undisputed statutory dues including Income Tax, Sales Tax, Customs Duty, Provident Fund and Employees' State Insurance outstanding as on 31st March, 2015 for a period of more than six months from the date they became payable.

c. Further according to the information and explanations given to us, there are no disputed demands nor is the company required to transfer any amount to the investor education and protection fun d.

8. The company has an accumulated loss of Rs.1,99,45,910/- as at the end of the year and has incurred cash loss both in the financial year under report and the immediately preceding financial year.

9. In our opinion and according to the information and explanation given to us, the company has not defaulted in the repayment of dues to financial institutions and bank.

10. Accordingly to the information and explanation given to us, the company has not given any Corporate guarantee to any party.

11. The company has not taken any term loan during the year and hence clause 11 of para 3 is not applicable.

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

For KRISHNAN & GIRI

Chartered Accountants

(FRN: 001512S)

Chennai (M JAYANTILAL JAIN)

Dated:28.10.2015 Partner

(M No.029712)

---

Mar 31, 2013

We have audited the accompanying financial statements of RCL FOODS LIMITED, (Formerly Known as Passari Cellulose Limited), which comprise the Balance Sheet as at March 31, 2013, 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 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 principles generally accepted in India including Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

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

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 :

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

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

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

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

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

f) 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.

Annexure referred to in paragraph 1 of the Our Report of even date to the members of RCL FOODS LIMITED on the accounts of the company for the year Ended 31st March, 2013

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

1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. All the assets have been physically verified by the management and no serious discrepancies were noticed on such verification of the Fixed Assets.

2. The stock of raw materials, packing materials and finished goods has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable and adequate in relation to the size of the company and nature of its business.

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

In our opinion, the company has maintained proper records of its inventory. No material discrepancies have been noticed on verification between physical stock and book records.

3. In our opinion, the terms and conditions on which loans have been taken from a party listed in the register maintained under Sec. 301 of the Companies Act, 1956, are prima facie not prejudicial to the interests of the Company. The balance outstanding at the end of the year is Rs.7,25,000/-. The company has not advanced amounts to any party listed in the register maintained under Section 301 of the Companies Act, 1956.

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 nature of its business, for purchase of inventories, fixed assets and for the sale of goods.

5. In our opinion, and according to the information and explanations given to us, we are of the opinion that the contracts and agreements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered. In our opinion and according to the information and explanations given to us, 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. In our opinion, and according to the information and explanations given to us, the company has not accepted any deposit within the meaning of provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. We have been informed that the Company is in the process of setting up an internal audit system, which would be in operation from the next year.

8. According to the information and explanations given to us, the Central Government has not prescribed for the maintenance of cost records required to be maintained Under Section 209(1)(d) of the Companies Act, 1956.

9. According to the information and explanations given to us, the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Employees State Insurance Act, 1948 are not applicable to the company

According. to the information and explanations given to us and on the basis of our examination of books of account , the Company is regular in depositing undisputed material statutory dues including Income tax, sale tax , VAT, cess with appropriate authorities during the year.

According. to the information and explanations given to us and on the basis of our examination of books of account , there are no undisputed material statutory dues payable in respect of Income tax, sale tax , VAT, cess and others which are in arrears as on 31st March, 2013.

10. On the basis of the audited financial statements, the accumulated loss of the company at the close of the year is not more than 50% of its net worth. The Company has incurred cash loss in the financial year and in the immediately preceding financial year.

11. The company has not issued any debentures and has not taken any loan from any financial institution. In respect of loan taken from a Bank, the company has not defaulted in repayment of installments during the year.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the Order is not applicable.

13. The company is not a Chit fund, Nidhi, Mutual benefit fund or a Society. Accordingly, clause 4(xiii) of the Order is not applicable.

14. According to the information and explanations given to us, the company has maintained proper records in respect of the transactions for shares and has been duly entered into on a timely basis. Further on verification, it is observed that the investments have been held by the company in its own name.

15. On the basis of information and explanations given to us, the company has not given guarantee to any Bank on behalf of other parties.

16. The company has not taken any term loans during the year. Hence clause 4(xvi) is not applicable to the company.

17. In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements, the funds raised on short term basis have not been used for long term investment.

18. The company has not any made preferential allotment of shares during the year.

19. The company has not issued debentures. Hence, clause 4(xix) of the Order is not applicable to the company.

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

21. As represented to us by the management and based on our examination in the normal course of audit, no fraud on or by the company has been noticed or reported during the year.

For KRISHNAN & GIRI Chartered Accountants

Firm Regn No. 001512S

Place :CHENNAI Sd/-

Dated : 30.05.2013 (M.JAYANTILAL JAIN)

Partner

Membership No: 029712

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Mar 31, 2011

We have audited the attached Balance Sheet of RCL FOODS LIMITED (Formerly Known as Passari Cellulose Limited), as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit.

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

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Department of company affairs in June 2003 in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

2. Further to our comments in the annexure referred to in paragraph 1 above :-

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 maintained by the Company so far as it appears from our examination of such books.

c. The Balance Sheet and the Profit and Loss Account and the Cash Flow Statement referred to in this report are in agreement with the books of account and comply with the Accounting Standards specified in Sec. 211(3A) of the Companies Act, 1956.

d. On the basis of written representation received from the Directors as on March 31,2011, and taken on record by the Board of Directors, we report that none of the directors are disqualified as at March 31, 2011 from being appointed as a director u/s 274 (1) (g) of the Companies Act, 1956.

In our opinion and to the best of our information and explanations given to us, the said accounts read 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 :

i. in the case of Balance Sheet of the state of affairs of the company as at 31st March 2011 and

ii. in the case of Profit and Loss Account the PROFIT for the year ended as on that date; and

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

ANNEXURE RE : RCL FOODS LIMITED REFERRED TO IN PARAGRAPH (1) OF OUR REPORT OF EVEN DATE

1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. All the assets have been physically verified by the management and no serious discrepancies were noticed on such verification of the Fixed Assets.

2. The stock of raw materials, packing materials and finished goods has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable and adequate in relation to the size of the company and nature of its business.

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

In our opinion, the company has maintained proper records of its inventory. No material discrepancies have been noticed on verification between physical stock and book records.

3. In our opinion, the terms and conditions on which loans have been taken from a party listed in the register maintained under Sec. 301 of the Companies Act, 1956, are prima facie not prejudicial to the interests of the Company. The balance outstanding at the end of the year is Rs.9,55,000/-. The company has not advanced amounts to any party listed in the register maintained under Section 301 of the Companies Act, 1956.

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 nature of its business, for purchase of inventories, fixed assets and for the sale of goods.

5. In our opinion, and according to the information and explanations given to us, the company has not entered into transactions made in pursuance of contracts and arrangements entered into in the register maintained U/S 301 of the Companies Act, 1956.

6. In our opinion, and according to the information and explanations given to us, the company has not accepted any deposit within the meaning of provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. We have been informed that the Company is in the process of setting up an internal audit system, which would be in operation from the next year.

8. According to the information and explanations given to us, the Central Government has not prescribed for the maintenance of cost records required to be maintained Under Section 209(1)(d) of the Companies Act, 1956.

9. According to the information and explanations given to us, the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Employees State Insurance Act, 1948 are not applicable to the company

According. to the information and explanations given to us and on the basis of our examination of books of account , the Company is regular in depositing undisputed material statutory dues including Income tax, sale tax , VAT, cess with appropriate authorities during the year.

According. to the information and explanations given to us and on the basis of our examination of books of account , there are no undisputed material statutory dues payable in respect of Income tax, sale tax , VAT, cess and others which are in arrears as on 31st March, 2011.

10. On the basis of the audited financial statements, the accumulated loss of the company at the close of the year is Rs.176.18 Lakhs which is not more than 50% of its net worth. The Company has not incurred cash loss during the year.

11. The company has not issued any debentures and has not taken any loan from any financial institution. In respect of loan taken from a Bank, the company has not defaulted in repayment of installments during the year.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the Order is not applicable.

13. The company is not a Chit fund, Nidhi, Mutual benefit fund or a Society. Accordingly, clause 4(xiii) of the Order is not applicable.

14. According to the information and explanations given to us, the company has maintained proper records in respect of the transactions for shares and has been duly entered into on a timely basis. Further on verification, it is observed that the investments have been held by the company in its own name.

15. On the basis of information and explanations given to us, the company has not given guarantee to any Bank on behalf of other parties.

16. The company has not taken any term loans during the year. Hence clause 4(xvi) is not applicable to the company.

17. In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements, the funds raised on short term basis have not been used for long term investment.

18. The company has not any made preferential allotment of shares during the year.

19. The company has not issued debentures. Hence, clause 4(xix) of the Order is not applicable to the company.

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

21. As represented to us by the management and based on our examination in the normal course of audit , no fraud on or by the company has been noticed or reported during the year.

For KRISHNAN & GIRI Chartered Accountants

(M. JAYANTILAL JAIN) Partner Membership No. 029712 Firm Regn No. 001512S

Place : CHENNAI Dated : 30-05-2011

---

Mar 31, 2010

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

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

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

2. Further to our comments in the annexure referred to in paragraph 1 above .-

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 maintained by the Company so far as it appears from our examination of such books.

c. The Balance Sheet and the Profit and Loss Account and the Cash Flow Statement referred to in this report are in agreement with the books of account and comply with the Accounting Standards specified in Sec. 211 (3c) of the Companies Act, 1956.

d. On the basis of written representation received from the Directors as on March 31,2010, and taken on record by the Board of Directors, we report that none of the directors are disqualified as at March 31, 2010 from being appointed as a director u/s 274 (1) (g) of the Companies Act, 1956.

Subject to the above, In our opinion and to the best of our information and explanations given to us, the said accounts read 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:

i. in the case of Balance Sheet of the state of affairs of the company as at 31st March 2010 and

ii. in the case of Profit and Loss Account subject to Notes B1(c) and 4 of Schedule 20 to the financial statements, of the Loss for the year ended as on that date; and

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

ANNEXURE RE : PASSARI CELLULOSE LIMITED REFERRED TO IN PARAGRAPH (11 OF OUR REPORT OF EVEN DATE

1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets at Chennai Plant. All the assets have been physically verified by the management and no serious discrepancies were noticed on such verification of the Fixed Assets. The Company has fully written off the assets which are not in working conditions at Orissa Plant and also disposed off the remaining fixed assets pertaining to Orissa Plant as the Company has not been carrying on any manufacturing activity since February,2004. However the disposal of assets at Orissa Plant has not affected its going concern status, since the Company has switched over to different manufacturing activity.

2. The stock of raw materials, packing materials and finished goods at Chennai Plant has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable and adequate in relation to the size of the company and nature of its business.

The stock of raw materials at Orissa Plant has been determined by the Management after verification as unusable, and declared as Obsolete stock with no residual value and hence written off during the year.

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

In our opinion, the company has maintained proper records of its inventory. No material discrepancies have been noticed on verification between physical stock and book records.

3. In our opinion, the terms and conditions on which loans have been taken from the parties listed in the register maintained under Sec. 301 of the Companies Act, 1956, are prima facie not prejudicial to the interests of the Company. No loan is outstanding at the close of the year. The company has not advanced amounts to any party listed in the register maintained under Section 301 of the Companies Act, 1956.

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 nature of its business, for purchase of inventories, fixed assets and for the sale of goods.

5. In our opinion, and according to the information and explanations given to us, the company has not entered into transactions made in pursuance of contracts and arrangements entered into in the register maintained U/S 301 of the Companies Act, 1956.

6. In our opinion, and according to the information and explanations given to us, the company has not accepted any deposit within the meaning of provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. The Company is in the process of setting up internal audit system.

8. According to the information and explanations given to us, the Central Government has not prescribed for the maintenance of cost records required to be maintained Under Section 209(1 )(d) of the Companies Act, 1956.

9. According to the information and explanations given to us, the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Employees State Insurance Act, 1948 are not applicable to the company

According, to the information and explanations given to us and on the basis of our examination of books of account , the Company is regular in depositing undisputed material statutory dues including Income tax, sale tax , vat, cess with appropriate authorities during the year.

According, to the information and explanations given to us and on the basis of our examination of books of account, there are no undisputed material statutory dues payable in respect of Income tax, sale tax , vat, cess and others which are in arrears as on 31st March,2010.

10. On the basis of the audited financial statements, the accumulated loss of the company at the close of the year is Rs.181.36 Lakhs which is not more than 50% of its net worth. The Company has not incurred cash loss during the year.

11. The Company has not defaulted in repayment of dues to a financial Institution or Bank or debenture holders during the period.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the Order is not applicable.

13. The company is not a Chit fund, Nidhi, Mutual benefit fund or a Society. Accordingly, clause 4(xiii) of the Order is not applicable.

14. According to the information and explanations given to us, the company has maintained proper records in respect of the transactions for shares and has been duly entered into on a timely basis. Further on verification, it is observed that the investments have been held by the company in its own name.

15. On the basis of information and explanations given to us, the company has not given guarantee to any Bank on behalf of other parties.

16. The company has not taken any term loans during the year. Hence clause 4(xvi) is not applicable to the company.

17. In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements, the funds raised on short term basis have not been used for long term investment.

18. The company has not any made preferential allotment of shares during the year.

19. The company has not issued debentures. Hence, clause 4(xix) of the Order is not applicable to the company.

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

21. As represented to us by the management and based on our examination in the normal course of audit, no fraud on or by the company has been noticed or reported during the year.



For KRISHNAN & GIRI

Chartered Accountants

Sd/-

Place : CHENNAI (M. JAYANTILAL JAIN )

Dated : 29-05-2010 Partner

Membership No:29712