Auditor Report of Sturdy Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Sturdy Industries Ltd.('the Company'), which comprise the balance sheet as at 31 March 2015, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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.

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 give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its Loss and its 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 sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

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

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

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

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

d) in our opinion, the aforesaid financial statement comply with the Accounting Standards specified under Section 133 of the companies Act, 2015,read with Rule 7 of the Companies (Accounts)rules 2014.

e) on the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act

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

i. The Company does not have any pending litigations which would impact its Financial position.

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

iii No amount is required to be transferred to the Investor Education and Protection Fund by the Company as on 31 March, 2015.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of STURDY INDUSTRIES LIMITED on the accounts of the company for the year ended 31st March, 2015.

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 on the basis of information available .

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

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

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

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

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

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, during the year Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Consequently, the provisions of clauses iii(a) and iii(b) of the order are not applicable to the Company.

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

5. In our opinion, and according to the information and explanation given to us, during the year company has not accepted any deposits; hence, clause (v) is not applicable to the company. Accordingly, directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under are not applicable.

6. We have broadly reviewed the cost records maintained by the company pursuant to the companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the central Government under sub-section (1) of section 148 of the companies Act,2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

7. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales- tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

(c) Company does not have any amount 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 have accumulated loss at the end of the Financial Year which are more than 50% of its net worth and has incurred cash losses in the Financial Year and in the financial year immediacy preceding Financial Year.

9 . Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, & banks.

10. In our opinion and according to the information given to us, the terms and condition of the guarantees given by the company for loans taken by others from banks and financial institution are not, prima facie, prejudicial to the interest of the Company

11. In our opinion and according to the information given to us ,the term loan s have been applied by the Company during the year for the purposes for which they were obtained.The Company has not raised any fresh term loan during the period.

12. To the best of our knowledge and according to the information and explanations given to us ,no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

for B.M.VARMA AND CO. CHARTERED ACCOUNTANTS Firm Registration No 001099N

CA Gurdev Bassi PLACE: Chandigarh Partner DATED: 30/05 /2015 Membership No 092009

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Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

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

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

b) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and he case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

Annexure to the Auditors'' Report Referred to in paragraph 1 of our Report of even date on the accounts for the year ended on 31st March, 2014 of STURDY INDUSTRIES LIMITED.

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

b) The Company has verified all its fixed assets during the period. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its business.

c) The company has not disposed off any fixed assets during the year.

2. a) As explained to us, the physical verification of the inventory has been conducted by the management at reasonable intervals during the year.

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

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

3. The Company has not granted any loans secured or unsecured during the year to the companies firm or other parties covered in the register maintained under section 301 of the companies Act, 1956.

4. The company has not taken/accepted loan , secured or unsecured during the year to the companies ,firm or other parties covered in the register maintained under section 301 of the companies Act, 1956..

5. In our opinion and according to the information and explanations given to us, there exists adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

6. a)According to information and explanations given to us, we are of the opinion that the transactions that need to be entered has been so entered in the register maintained U/s 301 of the Companies Act, 1956.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956, aggregating during the year of 500,000/- or more in respect of each party have been made at prices which in our opinion, are reasonable having regard to prevailing market price at the relevant time.

7. In our opinion and according to the information and explanations given to us, the Company has not accepted any public deposit accordingly provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Rules framed there under.

8. In our opinion and according to the information and explanations given to us, the Company has in general adequate internal audit system commensurate with the size and the nature of the business of the Company.

9. We have been informed that the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

10. a) According to the information and explanations given to us and on the basis of records produced before us, the Company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues with appropriate authorities applicable to it.

b) In our opinion and according to the information and explanations given to us, there are no undisputed and outstanding amount payable in respect of Income Tax, Wealth Tax, Fringe Benefit Tax, Sales Tax , Service Tax, Custom Duty and Excise Duty as on 31st March, 2014 for a period of more than six months from the date they became payable.

11. The Company does not have any accumulated losses at the end of the financial year & has not incurred cash losses in the immediately proceeding Financial Year but has incurred cash loss amounting to Rs 15.08 crores in the current Financial Year.

12. In our opinion and according to the information and explanations given to us the Company has not defaulted in repayment of dues to banks and financial institutions.

13. In our opinion and according to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society.

15. The Company is not dealing or trading in shares, securities, debentures and other investments..

16. In our opinion and according to explanations given to us, the company has given guarantees in respect of loans taken by associates companies from bank/financial institution. The terms and condition of such guarantee are not prejudicial to the interest of the Company

17. The Company has not raised new term loan during the period.

18. In our opinion and according to the information n and explanations given to us as well as on the basis of our over all examination of the Cash Flow Statement and the Balance Sheet, we report that no funds raised for short term basis have been used for long term Investment and no long term funds have been used to finance short term assets.

19. Based on the examination of records and the information provided to us by management we report that the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

20. The Company has not issued debentures during the accounting year ended on 31st March, 2014.

21. As per the information and explanations given to us, the company has not raised any money by way of public issue during the year.

22. On the basis of our examination and according to the information and explanations given to us, no fraud, on or by the Company, has been noticed or reported during the course of our audit.

for B.M.VARMA AND CO.

CHARTERED ACCOUNTANTS Firm Registration No 001099N

Sd/-

CA Gurdev Bassi

PLACE: Chandigarh Partner

DATED: 14/07/2014 Membership No 092009

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Mar 31, 2013

We have audited the accompanying financial statements of STURDY INDUSTRIES LIMITED ("the Company")/ which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

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

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

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

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as atMarch31,2013;

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

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

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

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in 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.

Referred to in paragraph 1 of our Report of even date on the accounts for the year ended on 31st March, 2013 of STURDY INDUSTRIES LIMITED.

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

b) The Company has verified all its fixed assets during the period. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its business.

c) The company has not disposed off any fixed assets during the year.

2. a) As explained to us, the physical verification of the inventory has been conducted by the management at reasonable intervals during the year.

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

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

3. The Company has not granted any loans secured or unsecured during the year to the companies, firm or other parties covered in the register maintained under section 301 of the companies Act, 1956.

4. The company has not taken/accepted loan, secured or unsecured during the year to the companies , firm or other parties covered in the register maintained under section 301 of the companies Act, 1956.

In our opinion and according to the information and explanations given to us, there exists adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

6. a)According to information and explanations given to us, we are of the opinion that the transactions that need to be entered has been so entered in the register maintained U/s 301 of the Companies Act, 1956.

B) In o ur opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956, aggregating during the year of 500,000/* or more in respect of each party have been made at prices which in our opinion, are reasonable having regard to prevailing market price at the relevant time.

7. In our opinion and according to the information and explanations given to us, the Company has not accepted any public deposit accordingly provisions of Sections 58 A and 58AAor any other relevant provisions of the Act and the Rules framed thereunder.

8. In our opinion and according to the information and explanations given to us, the Company has in general adequate internal audit system commensurate with the size and the nature of the business of the Company.

9. We have been informed that the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

10. a) According to the information and explanations given to us and on the basis of records produced before us, the Company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues with appropriate authorities applicable to it.

b) In our opinion and according to the information and explanations given to us, there are no undisputed and outstanding amount payable in respect of Income Tax, Wealth Tax, Fringe Benefit Tax, Sales Tax, Service Tax, Custom Duty and Excise Duty as on 31st March, 2013 for a period of more than six months from the date they became payable.

11. The Company does not have any accumulated losses at the end of the financial year and has not incurred any cash losses in the financial year and in the immediately preceding financial year.

12. In our opinion and according to the information and explanations given to us the Company has not defaulted in repayment of dues to banks and financial institutions.

13. In our opinion and according to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

14. The company is not a Chit Fund or a N idhi/Mutual Benefit Fund/Society.

15. The Company is not dealing or trading in shares, securities, debentures and other investments..

16. In our opinion and according to explanations given to us, the company has given guarantees in respect of loans taken by associates companies from bank/financial institution. The terms and condition of such guarantee are not prejudicial to the interest of the Company

17. The Company has not raised any new term loan during the period, but has outstanding loan in the immediately preceding year.

18. In our opinion and according to the information and explanations given to us as well as on the basis of our over all examination of the Cash Flow Statement and the Balance Sheet, we report that no funds raised for short term basis have been used for long term Investment and no long term funds have been used to finance short term assets.

19. Based on the examination of records and the information provided to us by management we report that the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

20. The Company has not issued debentures during the accounting year ended on 31st March, 2013.

21. As per the information and explanations given to us, the company has not raised any money by way of public issue during the year.

22. On the basis of our examination and according to the information and explanations given to us, no fraud, on or by the Company, has been noticed or reported during the course of our audit.

For B.M.VARMAAND CO.

CHARTERED ACCOUNTANTS

Firm Registration No 001099N

CA GurdevBassi

PLACE: Chandigarh Partner

DATED: 27/08/2013 Membership No 092009