Auditor Report of Vippy Spinpro Ltd.

Mar 31, 2018

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VIPPY SPINPRO LTD.

Report on the Audit of the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of VIPPY SPINPRO LTD. (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards)Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS 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 Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of Ind As financial statements 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 Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS 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 March 31, 2018, its profit (including other comprehensive income) its cash flows and changes in equity for the year ended on that date.

Other Matter

The Comparative financial information of the Company for the year ended March 31,2017 and the transition date opening balance sheet as at April 01, 2016 included in these Ind AS financial statement are based on the previously issued statutory financial statements for the year ended March 31,2017 and March 31,2016 prepared in accordance with the Companies (Accounting Standards) Rules,2006 (as amended) which were audited by the predecessor auditor who expressed an unmodified opinion vide reports dated May 27, 2017 and May 23, 2016 respectively. The adjustment to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of section 143(11) of the Act, we enclose in the “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2) As required by Section 143 (3) of the Act, based on our audit we report that:

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

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

(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards)Rules, 2015, as amended.

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B” to this report.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements [Refer Note 32(b)];

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

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

Annexure A to the Independent Auditor’s Report of even date on the Ind AS financial statements of VIPPY SPINPRO LIMITED for the year ended March 31, 2018

(Referred in paragraph 1 under the heading “Report on other Legal and Regulatory Requirement” of our report of even date to the members of VIPPY SPINPRO LIMITED for the year ended 31^st March 2018)

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

b) As informed to us, the management of the Company has physically verified the fixed assets at reasonable intervals, which in our opinion is reasonable, having regards to the size of the Company and nature of its assets and no material discrepancies were noticed on such verification.

c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

II. a) The inventory of the Company has been physically verified during the year by the management at regular intervals.

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

c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of its inventories. No material discrepancies have been noticed on physical verification of inventories.

III. As per the information and explanation given to us, the Company has not granted any secured/ unsecured loans to companies, firms, LLP or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

IV. As per information and explanation given to us, the Company has not granted any loan or given any guarantee on such loans covered under section 185 and neither it has made any investment covered under section 186 of the Companies Act, 2013.

V. The Company has not accepted any deposits from the public within the meaning of section 73 to 76 of the Act and the rules framed there under to the extent notified.

VI. We have broadly reviewed the books of accounts maintained by the Company in respect of products where, pursuant to the rule made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, and 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 determine whether they are accurate or complete.

VII. a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has been generally regular in depositing undisputed dues relating to Provident Fund, Employees’ State Insurance, Income-tax, Sales tax, Service tax, Duties of Customs, Duties of Excise, Value Added Tax, Goods and Service tax (w. e.f. July 01, 2017), Cess and other material statutory dues applicable to it with appropriate authorities. There are no undisputed statutory dues payable which are outstanding as at March 31, 2018 for a period of more than 6 months from the date they became payable.

b) According to the information and explanations given to us, there are no dues of VAT, Income-tax, Customs Duty, Excise Duty, Goods and Service Tax and Cess which have not been deposited on account of any dispute, except the following:

S. No.	Name of the Statute (Nature of the Dues)	Forum where Matter is pending	Period to which the amounts relates	Amount (in ''
1.	Entry Tax Act	M.P. Tax Tribunal Board, Bhopal	2007-08	6,31,496

VIII. Based on our audit and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of any loan to Banks. No debentures have been issued by the Company till date and hence there are no debenture holders.

IX. According to the information and explanations given to us, and based on documents provided to us, term loans availed by the Company were, prima-facie, applied by the Company for the purposes for which the loans were obtained. Further, during the year the Company has not raised any money by way of further public offers.

X. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year nor have we been informed of such case by the management.

XI. According to the information and explanation given to us, and based on documents provided to us, the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act, 2013.

XII. As explained and informed to us, the Company is not a Nidhi Company and hence paragraph 3(xii) of the Order is not applicable on it.

XIII. According to the information and explanation given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and section 188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under section 133 of the Act.

XIV. According to the information and explanation given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment, private placement of shares and fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable.

XV. According to the information and explanation given to us and based on audit procedures performed, the Company has not entered into any non-cash transactions with Directors or Persons connected with them.

XVI. The Company is a manufacturing concern and therefore, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable.

Annexure B to the Independent Auditor’s Report of even date on the Ind AS financial statements of VIPPY SPINPRO LIMITED for the year ended March 31, 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls with reference to Ind AS financial statements of Vippy Spinpro Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to Ind AS financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls with reference to Ind AS financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to Ind AS financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls with reference to Ind AS financial statements included obtaining an understanding of internal financial controls with reference to Ind AS financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system with reference to Ind AS financial statements.

Meaning of Internal Financial Controls with reference to Ind AS financial statements

A company’s internal financial control with reference to Ind AS financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control with reference to Ind AS financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to Ind AS financial statements

Because of the inherent limitations of internal financial controls with reference to Ind AS financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to Ind AS financial statements to future periods are subject to the risk that the internal financial control with reference to Ind AS financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to Ind AS financial statements and such internal financial controls with reference to Ind AS financial statements were operating effectively as at March 31, 2018, based on the internal control criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the ICAI.

For R. S. Bansal & Company

Chartered Accountants

FRN 000939C

Vijay Bansal

Place : Dewas Partner

Dated: May 26, 2018 Membership No. 075344

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Mar 31, 2015

1. We have audited the accompanying financial statements of VIPPY SPINPRO LIMITED, ("the Company") which comprises the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. 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 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

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

4. 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.

5. 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.

6. 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 the internal financial controls 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.

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

Opinion

8. 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 March31, 2015, and its profit and its cash fows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of sub section (11) of section 143 of the Act, 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 paragraphs 3 and 4 of the Order.

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

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

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

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

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

e) On the basis of written representations received from the directors as on March 31, 2015 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) Act.

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

i. The Company has disclosed the impact of pending litigations as at March 31, 2015 on its financial position in its financial statements included in note no. 27.

ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses; and

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

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under 'Report on other Legal and Regulatory Requirements' section of our report of even date)

(i) In respect of its fixed assets

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

b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of fixed assets has been physically verified by the Management during the year and according to the information and explanations give to us no material discrepancies have been noticed on such verification.

(ii) a) As explained to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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) The Company is maintaining proper records of inventory. As explained to us, the discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the company and the same have been properly dealt with.

(iii) The Company has not granted any secured or unsecured loans to Companies, firms or other parties covered in the register maintained under Section 189 of the Act.

(iv) In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weakness in the aforesaid internal control system.

(v) The Company has not accepted any deposits from the public within the meaning of sections 73 to 76 of the Act and the rules framed there under to the extent notified.

(vi) We have broadly reviewed the books of accounts maintained by the Company in respect of products where, pursuant to the rule made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, and 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 determine whether they are accurate or complete.

(vii) a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of accounts in respect of undisputed statutory dues, including Provident fund, Employees' state insurance, Income tax, Sales tax, Service tax, Custom duty, Excise duty, Value added tax, Cess, Professional tax and other statutory dues, as applicable, have been regularly deposited during the year by the company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employees' state insurance, Income tax, Sales tax, Service tax, Custom duty, Excise duty , Value added tax, Cess, Professional tax and other statutory dues, as applicable, were in arrears as at March 31, 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 are no dues of Income tax, Sales tax, Service tax, Custom duty, Excise duty, Value added tax, Cess, and Professional tax as at March 31, 2015 which have not been deposited with appropriate authorities on account of any dispute other than those mentioned below :

Name of the Amount Period to which the Forum where dispute is Nature of dues Statue (in lacs) amount relates pending

M.P.Tax Tribunal Board, Entry Tax Act Entry Tax 6,31,496/- 2007-08 Bhopal

c) The Company has transferred the amount required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and the rules made there under within time.

(viii) The Company does not have any accumulated losses at the end of the financial year and it has not incurred any cash losses during the financial year and in the immediately preceding financial year.

(ix) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to its banker. The company does not have any dues to any financial institutions and has not issued any debentures.

(x) In our opinion, and according to the information and explanations given to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

(xi) In our opinion, and according to the information and explanations given to us, the term loans obtained have been applied, on an overall basis, for the purposes for which they were obtained.

(xii) 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 according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management.

For: SODANI & COMPANY

Chartered Accountants

(FRNo.- 000880C)

Rajesh Sodani

Date : May 25th, 2015 (Partner)

Place: Dewas M.No.F-77005

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Mar 31, 2014

We have audited the accompanying financial statements of VIPPY SPINPRO LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2014 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 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 notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the of Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend 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 the internal controls 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 the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

(i) In the case of the Balance Sheet, of the State of affairs of the Company as at March 31,2014;

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

(iii) In the case of the Cash Flow Statement, of the cash flows of the Company 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 Section 227(4A) 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 purposes 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 those books;

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

d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e) On the basis of the written representations received from the Directors as on March 31, 2014 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 section 274(1)(g) of the Act.

ANNEXURE TO THE AUDITOR''S REPORT

(Referred to in our report of even date)

(i) In respect of its Fixed assets:

a) The company 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 assets have been physically verified by the management during the year in accordance with a phased program of verification, which in our opinion is reasonable, considering size and the nature of the Company. The frequency of verification is reasonable and no material discrepancies have been noticed on such physical verification.

c) The Company has not disposed off any substantial part of fixed assets during the year.

(ii) In respect of its Inventory:

a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were 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 explanation given to us, the Company is maintaining proper records of inventory and the discrepancies noticed between the physical verification of inventories as compared to book records, wherever physical verification have been conducted, adjusted to material consumption account at the year end and no material discrepancies noticed on physical verification.

(iii) As informed to us the company has neither granted nor taken any loans, secured or unsecured, to/from companies, firm or other parties listed in register, maintained under section 301 of the Companies Act, 1956 and as such clauses 4 (iii) (a) to (g) of the order not applicable.

(iv) There are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control systems.

(v) In respect of the contracts or arrangement referred to in Section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us, there is no transactions made in pursuance of contracts or arrangements that need to be entered 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, there is no transactions made in pursuance of Contracts or Arrangements, that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of '' 5,00,000 during the year as per information available with the company.

(vi) According to the information and explanations given to us, the Company has not accepted any deposit from the public. Accordingly the provisions of clause 4(vi) of the Order are not applicable to the Company.

(vii) In our opinion, the Company has an internal audit system commensurate with the size & nature of its business.

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

(ix) (a) According to the record of the company and information and explanations given to us, the Company have been generally regularly in depositing with appropriate authorities undisputed Statutory dues including Provident fund, Employees'' Estate Insurance, Income Tax, Sales Tax, Service Tax, Custom duty, Excise duty, Cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid statutory dues were outstanding as at 31st March, 2014 for a period of more than six months from the date they becoming payable.

(b) According to the record of the Company as on 31st March, 2014 outstanding dues to Sales tax on account of any dispute is as follows:

Forum where Name of the Nature of the Amount Outstanding Period to which disputes is Statue dues as on 31.03.2014 amount relates pending M.P.Tax Entry Tax Entry Tax 6,31,496/- 2007-08 Tribunal Act Board, Bhopal

(x) The company has no accumulated losses at the end of the financial year ended March 31,2014 and it has not incurred cash loss in the current financial year and immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of its dues to banks.

(xii) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the order are not applicable to the company.

(xiii) In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/society. Accordingly, the provisions of clause 4(xiii) of the order are not applicable to the company.

(xiv) The company has maintained proper records of transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the company in its own name.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks and financial institutions. Accordingly the provisions of the clause 4(xv) of the Order are not applicable to the company.

(xvi) According to the information and explanation given to us, the company has not obtained any new term loan during the year from bank and financial institutions. The term loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.

(xviii) 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 during the year. Accordingly, the provision of clause 4(xviii) of the order not applicable to the company.

(xix) The company has not issued any debentures during the year. Accordingly, the provisions of clause 4(xix) of the order are not applicable to the Company.

(xx) The company has not raised any money through public issue during the year. Accordingly the provisions of the clause 4(xx) of the order are not applicable to the company.

(xxi) 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, which causes us the financial statements to be materially misstated.

For SODANI & COMPANY Chartered Accountants (FRNo.:000880C)

Date : May 24th, 2014 Place : Dewas

Rajesh Sodani (Partner) M.No.F-077005

---

Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

The Company''s 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 Section 211(3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal controls 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 the internal controls 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 the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluation 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 unqualified 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:

(i) In the case of Balance Sheet, of the State of affairs of the Company as at March 31, 2013;

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

(iii) In the case of the Cash Flow Statement, of Cash Flow for the year ended on that date Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) (Amendment) 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;

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

II. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books of the Company;

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

IV. In our opinion, the Balance Sheet, Statement of Profit and Loss Account and the Cash Flow Statements dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

V. On the basis of written representations received from the Directors as on March 31, 2013 and taken on record by the Board of Directors, we report that 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.

(i). In respect to Fixed assets:

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

b) As explained to us, the assets have been physically verified by the management during the year in accordance with a phased program of verification, which in our opinion is reasonable, considering size and the nature of the company. The frequency of verification is reasonable and no material discrepancies have been noticed on such verification.

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

(ii) In respect of inventory:

a) As explained to us, the inventories were physically verified during the year by the management at reasonable intervals.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management were 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 explanation given to us, the company is maintaining proper records of inventory and the discrepancies noticed between the physical stocks and book records, wherever physical verification have been conducted, adjusted to material consumption account at the year end. No material discrepancies were noticed on physical verification.

(iii) As informed to us, the company has neither granted nor taken any loans, secured or unsecured, to/from companies, firm or other parties listed in the register, maintained under section 301 of the Companies Act, 1956 and as such clauses 4 (iii)(a) to (g) of the order are not applicable .

(iv) There are adequate internal control systems commensurate with the size of the company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls systems.

(v) In respect of the contracts or arrangement referred to in Section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered 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, there is no transaction made in pursuance of contracts or arrangements, that need to be entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of '' 5,00,000 during the year as per information available with the company.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public. Hence, the compliance with the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable to the company.

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

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

(ix) a) According to the information and explanations given to us and the records examined by us, the company have been generally regularly in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, custom duty, excise duty, cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2013 for a period of more than six month from the date they became payable.

b) According to the records of the company, outstanding dues of sales tax, income tax, custom duty, excise duty and cess on the account of any dispute are as follows : -

Forum where Name of the Nature of the Amount Period to which disputes is Statue dues Outs tanding the amount pending as on relates 31.03.13

M.P. Tax Entry Tax Act Entry Tax 6,31,496/- 2007-08 Tribunal Board Bhopal

Income Tax Income tax Act, Income Tax 1,65,272/- 1996-97 Department 1961

(x) The company has no accumulated losses at the end of the financial year ended March 31, 2013 and it has not incurred cash loss in the current financial year and immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of opinion that the company has not defaulted in repayment of dues to any bank.

(xii) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the order are not applicable to the company.

(xiii) In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/society. Accordingly, the provisions of clause 4 (xiii) of the order are not applicable to the company.

(xiv) The company has maintained proper records of transactions and contracts in respect of dealing in shares, securities and other investments and timely entries have been made therein. All shares and other securities have been held by the company in its own name, except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the order are not applicable to the company.

(xvi) According to the information and explanation given to us, the company has raised new term loan during the year. The term loans outstanding at the beginning of the year and those taken during the year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanation given to us and on examination of the books of accounts 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 of shares to the parties and companies listed in the register maintained under section 301 of the Companies Act, 1956 during the year. Accordingly, the provision of clause 4(xviii) of the order not applicable to the company.

(xix) The company has not issued any debentures during the year. Accordingly, the provisions of clause 4(xix) of the order are not applicable to the company.

(xx) The company has not raised any money through public issue during the year. Accordingly the provisions of the clause 4 (xx) of the order are not applicable to the company.

(xxi) 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, which causes the financial statements to be materially misstated.

For SODANI & COMPANY

Chartered Accountants

(FRN 000880C)



Dewas Rajesh Sodani

May 30th, 2013 (Partner)

M.No. 077005

---

Mar 31, 2012

We have audited the accompanying financial statements of VIPPY SPINPRO LTD., ("the Company") which comprises the Balance Sheet as at March 31, 2012 the statement of Profit and Loss and the Cash Flow Statement for the year ended and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's 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 Section 211(3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal controls 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgement, 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 the internal controls 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 the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluation 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 unqualified 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:

(i) In the case of Balance Sheet, of the State of affairs of the Company as at March 31, 2012;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) (Amendment) 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;

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

II. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books of the Company;

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

IV. In our opinion, the Balance Sheet, Statement of Profit and Loss Account and the Cash Flow Statements dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

V. On the basis of written representations received from the Directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 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 AUDITOR'S REPORT

(Referred to in our report of even date)

(i). In respect to fixed assets:

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

b) As explained to us, the assets have been physically verified by the management during the year in accordance with a phased program of verification, which in our opinion is reasonable, considering size and the nature of the company. The frequency of verification is reasonable and no material discrepancies have been noticed on such verification.

c) The company has not disposed off any substantial part of fixed assets during the year. (ii) In respect of inventory:

a) As explained to us, the inventories were physically verified during the year by the management at reasonable intervals.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management were 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 explanation given to us, the company is maintaining proper records of inventory and the discrepancies noticed between the physical stocks and book records, wherever physical verification have been conducted, adjusted to material consumption account at the year end. No material discrepancies were noticed on physical verification.

(iii) As informed to us, the company has neither granted nor taken any loans, secured or unsecured, to/from companies, firm or other parties listed in the register, maintained under section 301 of the Companies Act, 1956 and as such clauses 4 (iii)(a) to (g) of the order are not applicable .

(iv) There are adequate internal control systems commensurate with the size of the company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls systems.

(v) In respect of the contracts or arrangement referred to in section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered 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 or arrangements, that need to be entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respective of one party amounting to Rs. 52,57,980/- During the year have been made at prices which appear reasonable as per information available with the company.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public. Hence, the compliance with the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable to the company.

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

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

(ix) a) According to the information and explanations given to us and the records examined by us, the company have been generally regularly in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, custom duty, excise duty service tax, cess and other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2012 for a period of more than six month from the date they became payable.

b) According to the records of the company, outstanding dues of sales tax, income tax, custom duty, excise duty and cess on the account of any dispute are as follows :-



(x) The company has no accumulated losses at the end of the financial year ended March 31, 2012 and it has

not incurred cash loss in the current financial year and immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of

opinion that the company has not defaulted in repayment of dues to any bank.

(xii) The company has not granted loans and advances on the basis of security by way of pledge of shares,

debentures and other securities. Accordingly, the provisions of clause 4(xii) of the order are not applicable to the company.

(xiii) In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/society. Accordingly, the

provisions of clause 4 (xiii) of the order are not applicable to the company.

(xiv) The company has maintained proper records of transactions and contracts in respect of dealing in

shares, securities and other investments and timely entries have been made therein. All shares and other securities have been held by the company in its own name, except to the extent of the exemption granted under section 49 of the Companies Act, 1956.

(xv) According to the information and explanations given to us, the company has not given any guarantee for

loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the order are not applicable to the company.

(xvi) According to the information and explanation given to us, the company has raised new term loan during the

year. The term loans outstanding at the beginning of the year and those taken during the year have been applied for the purposes for which they were raised.

(xvii) According to the information and explanation given to us and on examination of the books of accounts 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 of shares to the parties and companies listed in the

register maintained under section 301 of the Companies Act, 1956 during the year. Accordingly, the provision of clause 4 (xviii) of the order not applicable to the company.

(xix) The company has not issued any debentures during the year. Accordingly, the provisions of clause 4(xix) of

the order are not applicable to the company.

(xx) The company has not raised any money through public issue during the year. Accordingly the provisions of

the clause 4 (xx) of the order are not applicable to the company.

(xxi) 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, which causes the financial statements to be materially misstated.

For SODANI & COMPANY

Chartered Accountants

(FRN 000880C)

Dewas Rajesh Sodani

May 30th, 2012 (Partner)

M.No. F-77005

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of VIPPY SPINPRO LTD., DE WAS as at 31st March, 2010, the related Profit & Loss Account of the Company for the year ended on that date annexed thereto, and Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards requires 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 and the Companies (Auditors Report) (Amendment) order, 2004 issued by the Central Government of India in term of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we consider appropriate and according to the information and explanation given to us, we enclose in the Annexure, a statement on the matters specified in paragraph 4 and 5 of the said order.

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

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

ii. In our opinion, the company has kept proper books of accounts as required by law so far as appears from our examinations of those books;

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

iv. In our opinion, the Balance Sheet and the Profit and Loss Account dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

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

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

1. In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2010.

2. In the case of the Profit & Loss Account of the Profit for the year ended on that date and

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

We report that: i. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. As explained to us, the assets have been physically verified by the management in accordance with a phased programme of verification, which in our opinion, is reasonable, considering the size and the nature of its business. The frequency of verification is reasonable and no material discrepancies have been noticed on such physical verification.

c. The Company has not disposed off any substantial part of fixed assets during the year.

ii. a. As explained to us, the Management has conducted physical verification of inventory at reasonable intervals.

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

c. In our opinion and according to the information and explanation given to us, the company is maintaining proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material.

iii. As informed to us, The Company has neither granted nor taken any loans, secured or unsecured, to or from • companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956 and as such clauses 4(iii)(a) to (g) of the order are not applicable.

iv. There are adequate internal control systems commensurate with the size of the company and the nature of its business with regard to purchase of inventories, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

v. a. According to the information and explanation given to us there are no transactions of contracts or arrangements that needs to be entered into the register maintained under section 301 of the Companies Act, 1956.

b. Since the Company has not made the transactions ofcontract or arrangement exceeding the valueof Rs. 5.00 Lacs from such parties, the provisions of clause 4(v)(b) ofthe order are not applicable.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Hence, the question of compliance with the provisions of section 58 A and 58AA or any other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 does not arise.

vii. In our opinion, the Company tfas an internal audit system commensurate with the size of the Company and the nature of its business.

viii. The Central Government has prescribed maintenance of the cost records under section 209(1 )(d) of the Companies Act, 1956 with respect to the companys product. We have reviewed the books of accounts maintained by the Company in this connection. We are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix. a. According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, customs duty, excise-duty, Service Tax, Cess and other statutory dues except for Entry Tax Rs. 14 Lakhs is outstanding for the Financial Year 2007-2008 as on 31st March, 2010 for a period of more than six months from the date it became payable.

b. According to the records of the Company, the dues outstanding of sales tax, income tax, cess and other statutory liability on account of any disputes are as follows:-

Name of the Statute Nature of Amount Period to Forum where

The Dues outst anding which the dispute is

As on 31 .3.10 amount pending

relates

Entry Tax Act. Entry Tax 3,38,910 2004-05 Appeal pending with

appellate Board Bhopal Entry Tax Act. Entry Tax 1,50,082 2005-06 Appeal pending with

appellate Board Bhopal

Entry Tax Act Entry Tax Not yet 2007-08 Matter pending with

assessed High Court



x. The company has no accumulated loss at the end of the financial year 31st March, 2010 and it has not incurred cash loss in the current and immediately preceding financial year. xi. In our opinion and according to the information and explanations given to us the Company has not defaulted in re-payment of its dues to banks and debenture holders.

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence provision of clause 4(xii) of the order are not applicable.

xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the order are not applicable.

xiv. The Company has maintained proper records of transactions and contracts in respect of dealing in shares, securities and other investment and timely entries have generally been made therein. All shares and other securities have been held by the Company in its own name.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

xvi. According to the information and explanations given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

xvii. To the best of our knowledge and belief and according to the information and explanations given to us, the fund raised on short term basis have not been used for long term investment and the fund raised on long term basis have not been used for short term investment.

xviii. The Company has not made any preferential allotment of shares to the parties and companies listed in the register maintained under section 301 of the Companies Act, 1956 during the year. Accordingly, the provisions of clause 4(xviii) of the order are not applicable to the Company.

xiv. No debentures have been issued by the Company and hence, the question of creating security or charges in respect thereof does not arise.

xx. The Company has not raised any money by way of public issues during the year.

xxi. 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 year.

For Sodani & Company Chartered Accountants

Rajesh Sodani

(Partner) M.No. F-77005 FRN 000880C Dewas, May29th, 2010