Auditor Report of Jayatma Industries Ltd.

Mar 31, 2015

(i) We have audited the financial statements of Santaram Spinners Limited ("the Company") which comprise the Balance Sheet as at 31st March, 2015 and Profit and Loss Account and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information on that date annexed thereto.

(ii) 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 these financial statements that give true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud 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 accounting records, relevant to the preparation and presentation of the financial statements that give true and fair view and are free from material misstatement, whether due to fraud or error.

(iii) 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, 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.

(iv) 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 assessment, the auditor considers internal financial 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, but not for the purpose of expressing an opinion on whether the Company has in place adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Director, as well as evaluating the overall presentation of the financial statements.

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

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

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

(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 Cash Flow statement, of the cash flows for the year ended on that date.

(vii) 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, 2013 we hereby provide the details as required in the paragraph 3 and 4 of the said Order in Annexure to Independent Auditor's Report.

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

1. 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 ;

2. 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;

3. The Balance Sheet, Statement of Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

5. On the basis of written representation received from the directors, as on 31st March 2015 and 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 sub-section (2) of section 164 of the Act;

6. 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 ;

(a) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 30(A) to the financial statements.

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

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

Annexure to the Auditors' report

(Referred to in paragraph 6 of the Auditors' Report of even date to the members of SantaramSpinners Limited on the financial statements for the year ended 31st March, 2015.)

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

(b) As explained to us, a substantial portion of the fixed assets have been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

2. (a) As per information and explanation given to us, inventory of raw materials/finished goods/traded goods/spares and consumables has been physically verified by the management at regular intervals. In our opinion the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records produced before us and in our opinion the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in books of accounts.

3. (a) The Company has granted an interest free unsecured loan to the Companies covered in the register maintained under section 189 of the Companies Act, 2013. The company has not granted loans secured or unsecured to firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(b) In respect of the interest free loans granted to Companies covered in the register maintained under section 189 of the Companies Act, 2013. The principal amounts, are repayable on demand and there is no repayment schedule.

(c) In respect of said loans specified in 3(a) above, the same are repayable on demand and therefore the question of overdue amount does not arise.

4. In Our opinion and according to the information and explanations given to us there exists adequate Internal Control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of components, plant and machinery, equipments and other assets and with regard to service provided by the Company, Further on the basis of our examination of the books and records of the Company, carried out in accordance with the auditing standards generally accepted in India, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted Deposits during the year and consequently directives issued by Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provision of the Companies Act and rules framed there under are not applicable to the Company.

6. We are informed that maintenance of cost records as prescribed by the Central Government of India under subsection (1) of Section 148 of the Companies Act, 2013 in respect of the Company products are not applicable. Hence, the provisions of Clause (vi) of paragraph 3 of the Order are not applicable to the Company.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing 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 material statutory dues to the extent applicable with the appropriate authorities in India. However, in case of delays in few instances the same has been deposited along with interest due thereon.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax as on 31st March,2015 which have not been deposited on account of dispute are as under:

Name of the Nature of Dues Amount Period to Statue (Rs. In which Lacs) amount relates

Central Sales Sales Tax Including 956900/- A.Y. 2007-08 Tax Act and Interest and Penalty, 914477/- A.Y. 2007-08 Local Sales Tax as applicable 9794377/- A.Y. 2011-12 Act

Name of the Forum where the Statue the dispute is pending



Central Sales Sales Tax Tribunal (Vat) Tax Act and Sales Tax Tribunal (Vat) Local Sales Tax Sales Tax Tribunal (Vat) Act

(c) In our opinion and according to the information and explanations given to us, there is no 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 does not have accumulated losses as at 31st March, 2015 and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution/bank/debenture holders.

10. In our opinion and according to information and explanation given to us, the Company has not given guarantee for any loan taken by others from any bank/ Financial Institutions which are prejudicial to the interest of the Company.

11. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the term loans & other facilities obtained during the year were, applied by the Company for the purpose for which they were obtained.

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

DATE: 25th MAY, 2015 FOR, FOR AND ON BEHALF OF PLACE: AHMEDABAD JAYESH M. SHAH & CO. CHARTERED ACCOUNTANTS F.R.N. 104173W SD/- JAYESH M. SHAH [PROPRIETOR] M. NO. 30638

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Mar 31, 2014

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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 13''" September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 materia! 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 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the Profit and Loss Account, of the 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 exami nation of those books

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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

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.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Santaram Spinners Limited. on the accounts of the company for the year ended 31" March, 2014.

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

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

(b) As explained to us, substantial portion of the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) As per information and explanation given to us, inventories of raw materials/finished goods/traded goods/spares and consumables have been physically verified during the year by the management at reasonable intervals.

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

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

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

a) During the year, the company has granted unsecured loan to company of Rs.235 Lacs. In respect of the said loan the maximum amount outstanding at any time during the year was Rs. 246 lacs and the year end balance is Rs. 246 lacs. The Company has not granted any secured loan to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In our opinion and according to the information and explanations given to us, the rate of interest, wherever applicable and other terms and conditions on which loan have been granted to the companies, firm or other parties listed in the registers maintained under section 301 are not prima facie prejudicial to the interest of the Company.

c) In respect of interest free loans granted by the Company to parties are repayable on demand. In respect of interest free loans taken by the Company the question of interest payments are not arise and the principal amount is repayable on demand.

d) In respect of loans taken by the Company and loans given by the Company are repayable on demand and therefore, the question of overdue amounts does not arise.

e) The company has not taken any seeured/unsecured loan from the parties covered in the register maintained u/s. 301 of the Companies Act, 1956 during the year under review,

4. in our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. Further on the basis of our examination of the books and records of the Company, during the course of our audit, no major instance of any continuing failure to correct any weaknesses in the internal controls has been noticed.

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

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

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956 and the Rules framed there under. Therefore the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Companies Act,1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained, We have not however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

i. According to the records of the Company undisputed statutory dues including Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid, dues were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable.

ii. According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax as at March 31,2014 which have not been deposited on account of dispute are as follows:

Name of the Nature of Dues Amount Period to Statute (Rs. in which the Lakhs) amount relates

Central Sales tax 9,56,900/- AY 2007-2008 Sales Tax including Act and Interest and Local Sales Penalty, as 9,14,477/- AY 2007-2008 (CST) Tax Act applicable 9,700/- AY 2009-2010

Name of the Nature of Dues Forum where the dispute Statute is pending Central Sales tax Sales Tax Tribunal (Vat) Sales Tax including Act and Interest and Local Sales Penalty, as Sales Tax Tribunal (CST) Tax Act applicable Sales Tax Tribunal (VAT) 10. The Company does not have any accumulated losses and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. The other loan given by the Company are prima - facie not prejudicial to the interest of the Company.

13. The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us and on the basis of our examination of the books of account, proper records have been maintained of the transactions and contracts & timely entries have been therein in respect of shares, securities, debentures and other investments dealt with or traded by the Company & further investments specified are held in its own name.

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

16. To the best of our knowledge and belief and according to the information and explanation given by the management, in our opinion, the term loans & other facilities obtained during the year were applied by the Company for the purpose for which they were obtained.

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

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

19. The Company has not issued any debentures during the period under audit.

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

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

For Jayesh M. Shah and Co. Chartered Accountants FRN: 104173W

Jayesh M.Shah Place: Ahmedabad (Proprietor) Date : 29.05.2014 Membership No.: 030638

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Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statement of SANTARAM SPINNERS LTD. (''the company"), which comprise Balance Sheet as at 31st March 2013, the statement of Profit & Loss and Cash Flows Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. 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 principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditors'' Responsibility

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

An audit involves performing procedure 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 errors. In making those risk assessments, the auditor considers internal controls relevant to the Company''s preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluation the appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting polices 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.

4. 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 Balance Sheet of the state of affairs of the Company as at 31 st March £013;

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

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

Report on other Legal & Regulatory Requirements

5. 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 Companies Act, 1956, we enclose in the annexure hereto a statement on the matters specified in paragraph 4 &5 of the said order.

a) Further to our comments in the Annexure referred to above, we report that.

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

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

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

d) In our opinion, the Balance sheet, the statement of Profit & Loss and the 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 representation received from the directors as on 31st March 2013, taken on record by the Board of Directors, none of the directors of the company are prima facie, disqualified from being appointed as directors of the company in terms of clause (g) of sub-section (1) of section 274 of the CompaniesAct, 1956.

Referred to in Paragraph 3 of our report of even date

[1] In respect of its fixed assets:

a). The 6ompany has 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 according to phased programme designed to cover all the items over a period of three years in our opinion, is reasonable, having regard to the size of the Company and nature of its assets. Pursuant to the programme, a portion of fixed assets has been physically verified by the Management during the year and we have been informed that no material discrepancies were noticed between the book records and the physical verification.

c). In our opinion, and according to the information and explanation given to us, 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 inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, frequency of the verification is reasonable.

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

c). On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventories. As informed, there was no material discrepancies noticed on such physical verification as compared to the books records.

[3] In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

a). The company has granted unsecured loan to two companies of Rs. 0.51 Lacs. In respect of the said loan the maximum amount outstanding at any time during the year was Rs. 1.31 Lacs not to be shown and the yearend balance is Rs. 0.51 during the year under review.

b). In our opinion and according to the information and explanations given to us, the rate of interest, wherever applicable and other terms and conditions on which loan have been granted to the companies, firm or other parties listed in the registers maintained under section 301 are not prima facie prejudicial to the interest of the Company.

c). In respect of interest free loans granted by the Company to parties are repayable on demand. I n respect of interest free loans taken by the Company the question of interest payments are not arise and the principal amount is repayable on demand.

d). In respect of loans taken by the Company and loans given by the Company is repayable on demand and therefore, the question of overdue amounts does not arise.

e) The company has taken unsecured loan of Rs. 3 Lakhs from the parties covered in the register maintained u/s. 301 of the Companies Act, 1956 during the year under review.

[4] In our opinion and according to 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 for the purchase of inventory, fixed assets and also for the sale of goods. Further on the basis of our examination of books and records during the course of our audit of the company and according to the information and explanation given to us, we have neither come across nor informed of, any continuing failure to correct major weakness in the aforesaid internal control system.

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

a). In our opinion and according to information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered. b). In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts/ arrangements entered in the Register maintained under Section 301 and exceeding the value of Rs.5,00,000 in respect of each party during the year have been made at prices which appear reasonable having regard to prevailing market price at the relevant time as per information available with the company.

[6] According to information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of sections 58Aand 58AAof the Companies Act, 1956 and the Rules framed there under.

[7] In our opinion that, the internal audit functions carried out by the by the management is commensurate with the size of the company and the nature of its business.

[8] We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of detailed examination of the records with a view to determine whether they are accurate or complete.

[9] In respect of statutory dues:

According to the records of the Company, undisputed statutory dues including Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31 st March, 2013 for a period of more than six months from the date of becoming payable.

[10] The Company does not have any accumulated losses and has not incurred any cash losses during tne financial year covered by our audit or in the immediately preceding financial year.

[11] Based on our examination and as per the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayments of dues to the financial institutions or Bank.

[12] In our opinion and according to information and explanations 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 is not dealing in or trading in shares, securities, debentures or other investments. Therefore, the provisions of clause -4 (XIV) of the Companies (Auditor''s Report) order, 2003 are not applicable to the Company.

[15] As per the information and explanation given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

[16] The Company has raised new term loans during the year. The term loans raised during the year were applied for the purposes for which they were raised.

[17] In our opinion and according to the information and explanations given to us and on and overall examination of the Financial Statements no funds raised on short term basis have been used for long term investments and vice-versa.

[18] During the year, the Company has not made any preferential allotment of Shares to the 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] Based upon the audit procedures performed and as per the information and explanations given to us by the management no fraud on or by the Company has been noticed or reported during the course of our audit

For RRS & Associates

Chartered Accountants

Sd/-

CA. Rajesh Shah

(Partner)

Place : Ahmedabad Membership No. 34549

Date :30th May, 2013 Firm Registration No. 118336W

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Santaram Spinners Limited as at 31st March 2012 and also the statement of Profit & Loss and the Cash Flow Statement for the year ended on that date annexed there to. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have 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.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 of India, and on the basis such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the annexure, a statement on the matters specified in the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

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

(d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in 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 of the Company, we report that none of the directors is 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 with the notes thereon, give the information required by the Companies Act, 1S56 in the manner so required and subject to give a true and fair view in conformity with the accounting principles generally accepted io India:

i. in the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2012,

ii. in the case of statement of Profit and Loss, the profit of the Company for the year ended on that date and

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

ANNEXURE TO THE AUDITORS' REPORT: 2011-12

(Referred to In paragraph 3 of our report of even date!

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

b) The Fixed Assets have been physically verified by the management during the year. We have also been informed that no material discrepancies were noticed on such verification.

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

d) As explained to us, the inventory has been physically verified at the year-end by the management. We rely on the frequency of verification and stocks physically verified by the management.

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

f) In our opinion and according to the information and explanations given to us and on the basis of our examination of the stock statements of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of accounts.

I. According to the information and explanations given to us, the Company has not taken unsecured loan from any party listed in the Register maintained u/s.301 of the Companies Act 1956 as detailed below:

a) The maximum amount involved during the year was NIL (P.Y. Rs. 267712/-) and the year- end balance of loans taken from such party was NIL (P.Y Rs. 267712/-)

b) In our opinion and according to the information and explanation given to us, the rate of interest, wherever applicable and other terms & conditions are prima facie not prejudicial to the interest of the Company.

c) In our opinion and according to the information and explanation given to us, the interest payments are regular and the principal amount is repayable on demand.

II. According to the information and explanations given to us, the Company had not given any amount in the nature of loan to parties listed in the Register maintained u/s.301 of the Companies Act 1956. So other information under this Para is not required.

III. In our opinion and according 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 with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

IV. In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956,

a) Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered.

b) According to the information and explanations given to us, there were no transactions in excess of Rs. 5 lakhs in respect of any party entered in register maintained under section 301 of the companies Act.

V. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public hence the question of complying with the provisions of section 58Aand 58AAof the Companies Act, 1956 and rules there under does not arise.

VI. In our opinion, the Company has an in- house internal audit system, being carried out by Audit Team, commensurate with the size and nature of its business. However, it needs to be further strengthened.

VII. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the .Company Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

VIII.

a) According to the records of the Company and information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Income Tax. Sales Tax, Wealth Tax, Excise Duty. Cess and other Statutory dues with the appropriate authorities during the year. As inform to us Provident Fund is not applicable to the Company.

b) According to the information and explanations given to us and the records of the Company examined by us, there is no undisputed statutory due at the year end outstanding for more that 6 months from the date they become payable.

c) According to the records of the Company and information and explanations given to us, there is no disputed dues at the year end, except as mention hereunder, which have been not deposited on account of disputes are as under:

Name of Nature of dues Amount Period to which Forum where dispute the statute Rs. amount relates is pending

Sales Tax Act Sales Tax Demand 36189/- 1993-94 Sales Tax Tribunal

Income Tax Act Income Tax Demand 223046/- AY 2008-09 Income Tax Tribunal

IX. The company does not have accumulated losses as at the end of the year and the company has not incurred cash losses during current and the immediately preceding financial year.

X Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institutions and banks,

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

XII. The provisions of any Special Statute applicable to Chit Funds, Nidhi or mutual Benefit Fund/ Societies are not applicable to the company.

XIII. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

XIV. According to the information and explanations given to us, the company has not given any guarantee for loan taken by others from Banks or Financial Institutions.

XV. The Company has not availed any term loan during the year hence question of application of term loan does not arise.

XVI. According to the information and explanations given to us and on an overall examinations . of the balance sheet of the Company, we report that no funds raised on short-term basis. have been used for-long term investment by the Company and vice versa.

XVII. The Company has not made any preferential allotment to parties and companies covered under register maintained under section 301 of the companies Act 1956, during the year and the question of whether the price at which the shares have been issued is prejudicial to the interest of the Company does not arise.

XVIII. According to the information and explanations given to us and the records examined by us, no debentures have been issued hence question of creating security does not arise.

XIX The company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of money does not arise.

XX During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and to the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year, nor we have been informed of such case by the management. For, R R S & ASSOCIATES

Chartered Accountants

Sd/-

Place: Ahmedabad RAJESH R. SHAH Partner

Date: 30-5-2012 Membership Number: 34549

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Mar 31, 2010

1. We have audited the attached Balance Sheet of Santaram Spinners Limited as at 31st March 2010 and also the Profits Loss Account and the Cash Flow Statement for the year ended on that date .annexed there to. These financial statements are the responsi- bility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have 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 assurence about whether the financial statements are free of material mis- statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assess- ing the accounting principles used and significant estimates made by management, as well as evaluating the ovarall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A}of the Companies Act, 1956 of India, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the Information and explanations given to us, we give in the annexure, a statement on the matters specified in the said Order,

4, Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

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

(d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow State- ment dealt with by this report comply with the accounting standards referred to in section211(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 of the Company, we report that none of the directors is 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, 1968.

(f) in our opinion and to the best of our information and according to the explana- tions given to us the said accounts read with the notes thereon, give the informa- tion required by the Companies Act, 1956 in the manner so required and subject to give a true and fair view in conformity with the accounting principles generally accepted in India:

I. In the case of Balance Sheet, of the state of affairs of the Com- pany as at 31st March 2010,

11 |n the case of Profit and Loss Account, of the profit of the Com- pany for the year ended on that date and

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

ANNEXURE TO THE AUDITORS REPORT: 2009-10 (Referred to in. paragraph 3 of our report of even date)

I.

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

b) The fixed assets have been physically verified by the management of the Company. We are informed that no material discrepancies were noticed on such verification.

c) According to information and explanations given to us, during the year, Company has not disposed of any substantial major pert of fixed assets.

II

a) As explained to usr the inventory has been physically verified at the year-end by the management. We rely on the frequency of verification and stocks physically verified by the management.

b) In our opinion and according to the Information and explanations given to us, the procedures of physical verification of inventory followed by the management era reasonable and adequate In relation to the size of the company and the nature of its business

c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the stock statements of Inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of Inventory as compared to the book records were not material and have been property dealt with in the books of accounts.

III. According to the information and explanations given to us, the Company has not taken or granted unsecured loan during the year from parties listed in the Register maintained u/s,301 of the Companies Ad 1956 as detailed below

a) In our opinion and according to the information and explanation given to us, the rate of Interest, wherever applicable and other terms & conditions are prima facie not prejudicial to the Interest of the Company.

b) In our opinion and according to the information and explanations given to us, the interest payments are regular and the principal amount is repayable on demand,

IV. According to the Information and explanations given to us. the Company has not given any amount in the nature of loan to parties listed in the Register maintained u/s.301 of the Companies Act 1856, So other Information under this Para is not required.

V. In our opinion and according the information and explanations given to us.the re are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods, During the course of our audit, no major weekness has been noticed in the internal controls.

VI. In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956.

a) Based on audit procedures applied by us. to the best of our knowledge and to belief and according to the information and explanations given to us we are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered.

b) According to the information and explanations given to us, there were no transactions in excess of Rs. 5 lakhs is respect of any party entered in register maintained under section ¦ 301 of the companies Act

VlI. in our opinion and according to the information- and explanations given to us, the Company has not accepted deposits from public hence the question of complying with the provisions of section 58A and 58 AA of the Companies Act, 1956 and rules there under does not arise.

Viii). In our opinion, the Company has an in house internal audit system, being carried our by audit team, commensurate with the size and nature of the business. However, It needs to be further strengthened.

IX. We have broadly reviewed the books of account relating to materials. labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (l)(d) of the Company Act, 1956 and we are of the opinion that prime facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to detemining whether they are accurate or complete.

X a) According to the records of the Company and information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues including Income Tax, Sales Tax. Wealth Tax, Excise Duty, Cess and other Statutory dues with the appropriate authorities during the year. As inform to us Provident Fund is not applicable to the Company.

b) According to the information and explanations given to us and the records of the Company examined by us, there is no undisputed statutory due at the year end outstanding for more that 6 months from the date they become payable.

c) According to the records of the Company and information and explanations given to us, there is no disputed dues at the year end. except as mention hereunder, which have been not deposited on account of disputes are as under

Name of Nature of dues Amount Period to which Forum where dispute

the statute Rs. amount relares is pending ,

Sales Tax Sales Tax Demand 36189/- 1993-94 Sales Tax Tribunal

xi. The company does not have accumulated Josses as at the end of the year and the company has not incurred cash tosses during current and the Immediately preceding financial year

Xii Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repay. ment of dues to financial institutions and banks,

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

XIV The provisions of any Special Statute applicable to Grounds. Nidhi or mutual Benefit Fund/ Societies are not applicable to the company.

XV In our opinion, the company is not a dealer or trader in shares, securities, debentures and other Investments.

XVI. According to the information and explanations given to us. the company has not given any guarantee for loan taken by others from Banks or Financial institutions.

xvii. The Company has not availed any term loan during the year hence question of application of term loan does not arise.

XVlII. According to the information and explanations given to us and on an overall examinations of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for Jong term investment by the Company and vice versa.

IX The Company has not made any preferential allotment to parties and companies covered under register maintained under section 301 of the companies Act 1956, during the year and the question of whether the price at which the shares have been issued is prejudicial to the interest of the Company does not arise.

XX According to the information and explanations given to us end the records examined by us, 110 debentures have been issued hence question of creating security does notarise,

XXI The company has not raised money by any public issues during the year and hence the qurstion of disclosure and verification of end use of money does not arise.

XXII. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in (character not visible) and to the bast of our Knowledge and belief and according to the information and explantion given to us, no fraud on or by the Company was noticed or reported during the year not we have been Informed of such case by the management.

For, R R S & ASSOCIATES

Chartered Accountants

Sd/-

Place: Ahmadabad RAJESH H SHAH Partner

Date: 30-6-2010 Membership Number: 34549

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Mar 31, 2009

1. We have audited the attached Balance Sheet of Sahtaram Spinners Limited as at 31 st March 2009 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date annexed there to. These financial statements are the responsi- bility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have 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 mis- statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assess- ing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 of India, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the annexure, a statement on the matters specified in the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

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

(d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow State- ment dealt with by this report comply with the 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, 2009, and taken on record by the Board of Directors of the Company, we report that none of the directors is disqualified as on 31st March, 2009, 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 explana- tions given to us the said accounts read with the notes thereon, give the informa- tion required by the Companies Act, 1956 in the manner so required and subject to give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of Balance Sheet, of the state of affairs of the Com- pany as at 31st March 2009,

ii. in the case of Profit and Loss Account, of the profit of the Com- pany for the year ended on that date and

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

ANNEXURE TO THE AUDITORS REPORT: 2008-09 (Referred to in paragraph 3 of Our report of even date)

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

b) The fixed assets have been physically verified by the management of the Company. We are informed that no material discrepancies were noticed on such verification.

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

a) As explained to us, the inventory has been physically verified at the year-end by the management. We rely on the frequency of verification and stocks physically verified by the management.

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

c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the stock statements of inventory, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of accounts.

III. According to the information and explanations given to us, the Company has not taken or granted unsecured loan during the year from parties listed in the Register maintained u/s.301 of the Companies Act 1956 therefore provisions of clause 4 (iii) is N.A.

IV. In our opinion and accordingthe information and explanations given to us, there are adequate internal control procedurescommensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

V. In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956,

a) Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered.

b) According to the information and explanations given to us, there were no transactions in . excess of Rs. 5 lakhs in respect of any party entered in "register maintained under section 301 of the companies Act.

VI. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public hence the question of complying with the provisions of section 58A and 58AA of the Companies Act, 1956 and rules there under does not arise.

VII. In our opinion, the Company has an in house internal audit system, being carried out by audit team, commensurate with the size and nature of the business. However, it needs to be further strengthened.

VIII. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Company Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

IX. a) According to the records of the Company and information and explanations given to us, the Company has been generally regular-in depositing undisputed statutory dues including Income Tax, Sales Tax/Wealth Tax, Excise Duty, Cess and other Statutory dues with the appropriate authorities during the year. As inform to us Provident Fund is not applicable to the Company.

b) According to the information and explanations given to us and the records of the Company examined by us, there is no undisputed statutory due at the year end outstanding for more that 6 months from the date they become payable.

c) According to the records of the Company and information and explanations given to us, there is no disputed dues at the year end, except as mention hereunder, which have been not deposited on account of disputes are as under:

Name of Nature of dues Amount the statute Rs.

Sales Tax Sales Tax Demand 36189/- Act

Name of the Statue Period to which Forum where dispute amount relates is pending

Sales Tax Act 1993-94 Sales Tax Tribunal

X The company does not have accumulated losses as at the end of the year and the company has not incurred cash losses during current and the immediately preceding financial year.

XI. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the company has not defaulted in the repay- ment of dues to financial institutions and banks,

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

XIII. The provisions of any Special Statute applicable to Chit Funds, Nidhi or mutual Benefit Fund/ Societies are not applicable to the company.

XIV In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

XV. According to the information and explanations given to us, the company has not given any guarantee for loan taken by others from Banks or Financial Institutions.

XVI. The Company has not availed any term loan during the year hence question of application of term loan does not arise.

XVII. According to the information and explanations given to u$ and on an overall examinations of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment by the Company and vice versa.

XVIII. The Company has not made any preferential allotment to parties and companies covered under register maintained under section 301 of the companies Act 1956, during the year and the question of whether the price at which the shares have been issued is prejudicial to the interest of the Company does not arise.

XIX. According to the information and explanations given to us and the records examined by us, no debentures have been issued hence question of creating security does not arise.

XX The company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of money does not arise.

XXI. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and to the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year, nor we have been informed of such case by the management.

For, R R S & ASSOCIATES Chartered Accountants

Sd/- Place: Ahmedabad RAJESH R. SHAH Partner

Date: 30-6-2009 Membership Number: 34549