Auditor Report of Yarn Syndicate Ltd.

Mar 31, 2023

YARN SYNDICATE LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Yarn Syndicate Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2021, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, the Profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters are addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sl. No.	Key Audit Matters	Auditor''s Response
1.	Going Concern assumption	As per our observation of the Financial Statements of the Company it is seen that the Company has accumulated losses and its net worth has become negative as on the Balance Sheet date. These conditions, along with other

matters, indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis as the management is exploring new business opportunities to sustain the Company and is of the view that the promoters have agreed to infuse funds as and when required in the foreseeable future.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexure to Board''s Report, Business Responsibility Report, Corporate Governance and Shareholder''s Information, but does not include the standalone financial statements and our auditor''s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omission ns, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope

and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. 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, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2021.

e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) 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, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has no pending litigations as on the Balance Sheet date.

ii. The Company has no material foreseeable losses on any long-term contracts including derivative contracts.

iii. No amount was required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v) As stated in Notes to the standalone financial statements

(a) No Dividend was proposed in the previous year.

(b) No interim dividend declared and paid by the Company during the year

(c) The Board of Directors of the Company have not proposed any dividend for the year .

2) As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

For S P Sarda & Co,

Ch artered Accountan ts Firm''s registration No. 323054E

Ankit Agarwal Partner

Membership No. 305132 UDIN: 23305132BGUABH8731 Date: 12/05/2023 Place: Kolkata

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Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of YARN SYNDICATE LIMITED ("the Company"), which comprise of the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss, the Cash Flow Statement , significant accounting policies and other notes for the year ended on that date.

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 section 211 (3C) of the Companies Act, 1956 ("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. 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.

Auditors'' 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 but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 qualified audit opinion.

Basis for Qualified Opinion

I. Attention is invited to the following Notes regarding:

a. Certain debts from overseas buyers are overdue and have not been confirmed. However the extent of amount recoverable out of the balance and provision there against if any as presently not ascertainable. (Note 12)

b. Non-provisioning of certain balances in loan given to companies, advance to others, sundry deposits, tax deducted at source. (Note 26.6)

II. We further report that impact with respect to the Notes given in paragraph I above cannot be ascertained and commented by us.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 Statement of Profit and Loss, of the profit of the company for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s Report Order, 2004) (the Order) issued by the Central Government of India in terms of Section 227 (4A) of the Act and according to the information and explanations given to us and also on the basis of such checks as we considered appropriate, we enclose in the Annexure a statement on the matters specified in the said order.

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 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, except for the effects of the matter described in the Basis for Qualified opinion paragraph, the Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of 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 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 section 274 (1) (g) of the Act.

YARN SYNDICATE LIMITED

Annexure referred to in paragraph 6 of our report of even date.

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

(b) All the assets have not been physically verified by the management during the year but there is regular program of verification, which, in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed on such verifications were not material.

(c) The company has not disposed off a substantial part of its fixed assets during the year, which affect its going concern status.

ii. (a) The Company is trading in textile yarn. Orders for procurement are directly dispatched to customers and goods are generally dispatched from the place of procurement itself. Hence inventory only represents goods in transit for which sales has not been completed keeping in view the same, the inventory is not verified by the management.

(b) Read with our comments in Para (a) above, 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) Read with our comments in Para (a) above, the Company is maintaining proper records of inventories and no discrepancies were noticed on physical verification.

iii. (a) According to the information and explanations given to us the company has not granted any loans, secured or unsecured, to Companies, firms or other parties covered in the register maintained under Section 301 of the Act. Therefore the provisions of the clause 4 (iii) (b) of the order, 2004 are not applicable to the company.

(b) According to information and explanations given to us, interest amounting to Rs.31,507 in respect of loans granted earlier where principal has been repaid is outstanding.

(c) As informed to us, having regard to the terms and conditions to the loans granted in earlier years overdue interest is outstanding in respect of such loan.

(d) As informed to us, the Company has taken interest free unsecured loans from a company and the directors, which is covered in the register maintained under section 301 of the Act. The maximum amount of such loans during the year was Rs. 22,21,130 lacs and Rs. 1,83,43,584 lacs whereas the year-end balances were Rs. 22,12,130 lacs and Rs. 1,26,10,044 lacs respectively.

(e) In our opinion, the loan is interest free and other terms and conditions of such loan are not prima facie prejudicial to the interest of the company.

(f) The above interest free loan was not due for repayment during the year.

iv. In our opinion there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. In our opinion and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

vi. The Company has not accepted any deposits from the public during the year within the meaning of the provisions of Section 58A, 58 AA or any other relevant provision of the Act and rules made thereunder.

vii. There is no internal audit system in the company.

viii. As informed, the Central Government has not prescribed maintenance of cost records under Section 209 (1) (d) of the Act, for the product of the company. Accordingly provision of the Para (vii) of the order is not applicable to the company.

ix. (a) According to the information and explanations given to us and as per the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues applicable to it. According to the information and explanations given to us, there are no material undisputed statutory dues payable in respect of aforesaid dues 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 Service Tax, Sales Tax, Income Tax, Wealth Tax, Custom Duty, Excise Duty and Cess that has not been deposited as on 31.03.2014 on account of dispute

x. The Company has accumulated losses at the end of the financial year which has not exceeded fifty percent of its Networth. However, the effect of the unqualified qualification has not been taken into consideration for the purpose of making our comments in this clause. The Company has not incurred cash losses during the financial year covered by our audit. However the Company had incurred cash loss in the immediately preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders..

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

xiii. The Company is not a Chit fund or a Nidhi / Mutual benefit fund / society. Accordingly, the provisions of the clause 4(xiii) of the Order are not applicable to the Company.

xiv. According to the information and explanation to us, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Order are not applicable to the company.

xv. According to the information and explanations given to us, the company has not given any guarantees for loans taken by others from bank or financial institution.

xvi. In our opinion and according to the information and explanations given to us, the Company has not availed fresh term loan during the year.

xvii. According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we have not come across any cases where fund raised on short-term basis have been utilized for long-term investments.

xviii. 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.

xix. According to information and explanations given to us, 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 by public issue during the year.

xxi. During the course of our examination of the books of account carried out in accordance with generally accepted auditing practices in India, we have neither come across any incidence of fraud on or by the Company nor have we been informed of any such case by the Management.

For LODHA & CO. Chartered Accountants Firm ICAI Registration No. 301051E H. K. VERMA Partner Place : Kolkata Membership No. 055104 Dated : 30th May, 2014.

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Mar 31, 2012

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

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

1. As required by the Companies (Auditor's Report) Order, 2003 ("the order') as amended by the Companies (Auditor's Report)(Amendment) Order, 2004 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 ("the Act") and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we report that;

i) a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets.

b) All the fixed assets have not been verified by the management during the year but according to the information and explanation given to us, there is a regular program of verification, which in our opinion is reasonable having regard to the size of the Company and nature of its' business. No material discrepancies in respect of the assets verified during the year were noticed.

c) During the year, the Company has not disposed off substantial part of its fixed assets, which could effect the going concern status of the Company.

ii) a) The company is trading in textile yarn. Orders for procurement are directly dispatched to customers and goods are generally dispatched from the place of procurement itself. Hence inventory only represents goods in transit for which sales has not been completed keeping in view the same, the inventory is not verified by the management.

b) Read with our comments in Para (a) above, the procedure 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) Read with our comments in Para (a) above, the Company is maintaining proper records of inventories and no discrepancies was noticed on physical verification..

iii) a) According to information and explanations given to us the company had not granted any loans, secured and unsecured, from/to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, Para 4 (iii) b) of the Order are not applicable.

c) According to information and explanation give to us, interest amounting to Rs. 115 (000) in respect of loans granted earlier were principal has been repaid is outstanding.

d) As inform to us, having regards to terms and condition to the loans granted in earlier year overdue interest is outstanding in respect of such loan.

e) The company has taken interest free unsecured loan from a director which is covered in the register maintained under section 301 of the Act.

f) The loan is interest free and other terms and conditions of the aforesaid loans, are prima facie not prejudicial to the interest of the company.

g) The above interest free loan was not due for repayment during the year.

iv) In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and for sale of good. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system. v) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that there is no transaction that needs to be entered into the register maintained under section 301 of the Act. vi) The Company has not accepted any deposits under section 58A,58AA or other relevant provisions of the Act. vii) There is no internal audit system in the Company.

viii) As informed, the Central Government has not prescribed maintenance of cost record under Section 209 (1)(d) of the Act, for the product of the company. Accordingly provision of the Para (viii) of the order is not applicable to the company.

ix) a) According to information and explanations given to us, Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth tax, Service Tax, Custom Duty, and other material statutory dues applicable to it. According to the information and explanation given to us, there is no undisputed amounts payable in respect of aforesaid dues for a period of more than six months from the date they became payable.

b) According to information and explanations given to us, there are no dues of Sales Tax, Income Tax, Service tax, Customs Duty, Wealth Tax, Excise duty and Cess that have not been deposited with the appropriate authorities on account of any dispute.

x) The Company has accumulated losses at the end of the financial year. The company has incurred cash losses during the financial year but not incurred the same in the immediately preceding financial year. The effect of unqualified qualification has not been taken into consideration for the purpose of making comment in respect of this clause.

xi) According to the information and explanation given by the management, the Company has not defaulted in repayment of dues to the financial institutions and banks. There were no debenture holders during the year.

xii) According to the information and explanation given to us, and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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 is not dealing/trading in securities.

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

xvi) According to the information and explanations given to us, no fresh term loans have been taken during the year.

xvii) According to the information and explanations given to us and on overall examination of the Balance Sheet of the Company, we have not come across any cases where fund raised on short term basis have been utilized for long term investments.

xviii) The company has not made any preferential allotment of shares during the year to parties or companies covered in the register maintained under section 301 of the Act.

xix) According to the information and explanations given to us the company has not issued any debentures during the year. Accordingly, the provision of clause 4(xix) of the order is not applicable to the company.

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

xxi) During the course of our examination of books of accounts carried out in accordance with generally accepted auditing practices in India, we have neither come across any incidence of fraud on or by the company nor have been informed of any such case by the management.

2. Attention is invited to the following Notes regarding:

(a) Certain debts from overseas buyers are overdue. However, the extent of amount recoverable out of the balance and provision there against if any is presently not ascertainable (Note 13)

(b) Confirmation and reconciliation in respect of long term trade receivable (Note 13) and certain cash and bank balances (Note 16) are not available.

(c) Non provision of certain unmoved balances in loan given to companies, advance to others, sundry deposits, tax deducted at source. (Note 29)

3. We further report that overall impact with respect to the notes given in para 2 above cannot be ascertained and as such cannot be commented upon by us.

4. Further to the above, we report that :

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

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

(c) Except as given in Note 11.1 regarding non ascertainment and consequential adjustments regarding impairment of fixed assets and Note 1 (I) (ii) regarding accounting of sales on the date of negotiation/collection and accordingly the foreign exchange fluctuation remaining included in sales, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Sub- section 3 ( c) of Section 211 of the Act.

(d) On the basis of written representations received from the directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March 2012 from being appointed as a director of the Company in terms of clause (g) of sub section (1) of Section 274 of the Act;

(e) In our opinion and to the best of our information and according to the explanations given to us, subject to our remarks as given in Para 2 above whereby excepting as given in Para 3 above we are unable to ascertain the impact on these accounts and Note 8 regarding non availability of details regarding Micro, Small and Medium

Enterprises Development Act, 2006 and read together with the other notes thereon, these accounts 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 31st March, 2012

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

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

For LODHA & CO

Chartered Accountants

Firm's ICAI Registration Number : 301051E

Place:Kolkata H.S.JHA

Dated:The 30th day of May, 2012. Partner

Membership No. 55854

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Mar 31, 2010

We have audited the attached Balance Sheet of YARN SYNDICATE LIMITED (the Company) as at 31st Marcn, 2010, the Profit and Loss Account and also the Cash Fiow Statement for the year ended on the date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonaole assurance about whether the financial statements are free of material misstatements. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2004 ("the order") issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956. ("the Act") and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we report that:

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

b) Aii the fixed assets have not been verified by the management during the year but according to the information and explanation given to us, there is a regular programme of verification which, in our opinion, is reasonable having regara to the size and the nature of its assets. In respect of assets verified during the year, no material discrepancies have been noticed.

c) During the year the Company has not disposed off substantial part of its fixed assets which could affect the going concern status of the Company.

ii) a) The company is trading is textile yarn. Order for procurement are directly dispatched to customers and goods are generally dispatched from the place of procurement itself. Hence inventory only represents goods in transit for which sales has not been completed keeping in view the same, the inventory is not verified by the management.

b) Read with cur comments in para (a) above, the procedures of physical verification of inventory followed by the management are reasonable and adeauate in relation to the size of the company and the nature of its business.

c) Read with our comments in para (a) above, the company is maintaining proper records of inventories and discrepancies notified on physical verification of inventory, as explained, were not material as compared to the book records.

iii) a) According to information and explanations given to us the company had given unsecured loans to companies listed in register maintained under Section 301 of the Act. The maximum amount involved during the year was Rs. 17000 (000) and the year-end balance of such loans was Rs. 5000 (000)

b} In our opinion, the rate of interest and other terms and conditions on which the unsecured loans as mentioned tn(a) above were given are prima facie not prejudicial to the interest of the Company.

c) According to the information and exolanations given to us, the principal amount and interest in respect of loans granted as mentioned in (a) above are repayable on demand. These loans are being repaid as and when recalled.

d) As informed to us, having regards to terms and conditions to the loan as mentioned above, there is no overdue amount outstanding is respect of such loan and interest there on,

e) The company has not taken any secured and/or unsecured loan from companies, firms or the other parties covered in the register maintained under section 301 of the Act. Accordingly para "e" to "g" are not applicable.

iv) In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

v) To the best of our knowledge and belief and according to information and explanations provided to us we are of the opinion that there is no transaction that needs to be entered into the register maintained under section 301 of the Act.

vi) The Company has not accepted any deposits under Section 58A, 58AA or other relevant provisions of the Act.

vii) There is no iniemal audit system in the company.

viii) As informed, the Central Government has not prescribed maintenance of Cost records under Section 209(1)(d) of the Act, for the product of the Company. Accordingly provisions of Para (viii) of the order is not applicable to Company.

ix) a) According to the information and explanations given to us. the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund. Employees State Insurance dues, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty and other material statutory dues as applicable to it. According to the information and explanation given to us. there are no undisputed amounts payable in respect of aforesaid dues for a period of more than six months from the date they became payable.

b) According to the information and explanation given to us. there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess that have not been deposited with the appropriate authorities on account of any dispute.

x) The company has accumulated losses at the end of the financial year. The company has not incurred cash losses during the financial year but had incurred cash losses in the immediately preceeding financial year. The effect of unqualified qualification has not been taken into consideration for the purpose of making comment in respect of this clause.

xi) According to the information and explanations given by the management, the Company has not defaulted in the repayment of dues to the financial institutions and banks. There were no debenture holders during the year.

xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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 is dealing and trading in shares, securities and other investments. According to the information and explanation given to us and based on the documents and records produced to us, proper records have been maintained of transactions and contracts and timely entries have been made therein. The share, securities and other investments have been held by the company in its own name.

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

xvi) According to information and explanations given to us, no fresh term loans have been taken during the year.

xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet, we have not come across any cases where fund raised on short term basis have been utilized for the long term investments.

xviii) The company has not made any preferential allotment of shares during the year to parties or companies covered in the register maintained under section 301 of the Act.

xix) According to the information and explanations given to us. the Company has not issued any debentures during the year. Accordingly, the provisions of clause 4 (xix) of the Order is not applicable to the Company,

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

xxi) During the course of our examination of the Bocks of Accounts carried out in accordance with generally accepted auditing practices in India, we have neither come across any instances of fraud on or by the Company nor have we been informed of any such case oy the management.

2. Attention is invited to the following Notes of Schedule 14 regarding :

a. Certain old debts from overseas buyers amounting to Rs. 10021 thousand, the extent of amount recoverable and provision there against if any is presently not ascertainable. (Note No. 4)

b. Confirmations and reconciliation in respect of Sundry Debtors. Sundry Creditors, certain bank balances and Loans and Advances are not available. (Note No.5)

c. Non provision of certain unmoved balances in loan given to companies, advance to others, sundry deposits, tax deducted at source. (Note No. 6 )

3 We further report that, in respect of the Notes mentioned in Paragraph 2 above, the impact thereof cannot be ascertained and therefore cannot be commented upon by us.

4 Further to above, we report that :

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

b) The Balance Sheet, the Profit and Loss Account alongwith Cash Flow Statement are in agreement with the books of account;

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

d) Except as given in Note No 3 of Schedule 14 ragarding non ascertainment and consequential adjustments and impairment of fixed assets and Note No. 1 (7j (ii) of Schedule 14 regarding accouni;i;b it tales on the date of negotiation I collection and accordingly the foreign exchanger fluctuation remaining included in sales, the Profit and Loss Account, Balance Sheet and Cash Flow Statement comply with the Accounting Standards referred to in Sub-Section 3(C) of Section 211 of the Act, to the extent applicable.

e) On the basis of written representations from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2010 from being appointed as a director of the Company in terms of Clause (g) of Sub-Section (1) of Section 274 of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, subject to our remarks as given Para 2 above whereby as given in Para 4 above, we are unable to ascertain and indicate the impact thereof on these accounts and Note 8 of Schedule 14 regarding non-availability of details relating to Micro, Small and Medium Enterprises Development Act, 2006 and read together with the other notes thereon, these accounts give the information required by the Act, in the manners so required and give 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 31st March, 2010; and

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

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



For LODHA & CO Chartered Accountants Firms ICAI Registration Number: 301051E



Place : Kolkata H. S. JHA

Dated : The 31s1 day of May, 2010. Partner

Membership No. 55854