Hindustan Breweries & Bottling Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2011

We have audited the attached Balance Sheet of HINDUSTAN BREWERIES & BOTTLING LIMITED as at 31st March 2011 and the related Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosure 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. 2 As Required by the companies (Auditor's Report) Order, 2003, and amended by companies (Auditor Report ) (Amended ) Order 2004, issue by the Central Government of India, in terms the of Sections 227(4A) of the Companies Act, 1956,on the basis of such checks of the books of the records as we considered appropriate and the information and explanations given to us during the course of the audit, we annex hereto a statement on the matter specified in paragraph 4 and 5 the said Order.

3. 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, proper books of accounts as required by law have been kept by the Company, so far as appears from our examination of the books.

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

iv) In our opinion and subject to our observation in para (vi) below the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with this report comply with the Accounting Standards referred to in sub section 3(c) of section 211 of the Companies Act, 1956.

v) According to the information and explanations given to us and on the basis of written representations from the directors of the company and taken on record by the Board of the Company, none of the directors is disqualified as on 31st March, 2011 from being appointed as a director under section 274(1 )(g) of the Companies Act, 1956.

vi) i) The Company has not provide accrued liability towards gratuity amounting to Rs. 1,83,74,026/= and Liability towards leave encashment amounting to Rs. 45,55,960/= (Refer Note No 4)

ii) The company has not adopted 'Accounting Standard 22-Accounting for Taxes on Income'. Consequently no provision has been made for Deferred Tax Liability

iii) The Company has not provided for doubtful debts of Rs. 64,70,769/-

iv) The Company has not provide of Managing Director Remuneration amounting to Rs. 900000/=

v) In our opinion and to the best of our information and according to the explanations given to us, subject to our observations in paras (vi) above, the said accounts read together with the significant accounting policies and the notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view

a) In the case of the Balance Sheet of the state of affairs of the Company as at 31st March,2011,

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

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

The Annexure referred to in the auditors' report to the members of HINDUSTAN BREWERIES & BOTTLING LIMITED (the Company) for the year ended March 31,2011. We report that:

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, the management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification.

(c) No fixed assets were disposed off during the year. Accordingly Clause 4(i)(c) of the Order is not applicable.

2. (a) Inventory has been physically verified by the Management during the year in our opinion the frequency of verification is reasonable.

(b) In our opinion, 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) On the basis of our examination of inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to books records were not material.

3. (a) The Company had not granted any unsecured loan to the companies/person covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clause 4 (iii) (b) to (d) of the Order are not applicable to the company.

(e) The company has taken interest free unsecured loan from three other companies/persons covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs 574 lakhs and the year end balance of loans taken from such parties was Rs. 574 lakhs.

(f) In our opinion the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the registers maintained under section 301 are not, prima facie, prejudicial to the interest of the company.

(g) The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest wherever applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and 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, no major weakness has been noticed in the internal control.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into 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 to contracts or arrangements entered in the register maintained under section 301 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. Based on our scrutiny of the company's records and according to the information and explanations provided by the management, in our opinion, the company has not accepted any public deposits so far up to 31st March, 2011.

7. In our opinion, the company does not have any formal internal audit system commensurate with the size of the company and the nature of its business.

8. According to the information and explanations provided by the management, the company has not been prescribed any cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of products manufactured by the company.

9. (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including income tax and other statutory dues applicable to it.

(b) According to the information and explanation given, no undisputed amounts payable in respect of income tax, wealth - tax, service, custom duty and excise duty were outstanding, as at 31st March, 2011 for a period of more than six months from the date they become payable.

(c) According to the records of the company, there are no dues of sales tax, income tax, custom tax, wealth tax, excise duty/cess which have been deposited.

10. The Company does not have accumulated losses as on the date of balance sheet. The accumulated losses are more than 50% of the company's net worth. The Company has not incurred any cash losses during the year covered by our audit and the immediately preceding financial year.

11. According to the records of the company, the company has not borrowed from financial institutions or banks or issue debentures during the financial year ended 31st March, 2011.

12. According to the records of the company, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

13. In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is neither a Chit Fund nor a nidhi / mutual benefit society. Accordingly clause 4 (xiii) of the Order is not applicable.

14. On the basis of our examination of the companies records we are of the opinion that the company is maintaining adequate records regarding transaction and contracts regarding trading activities in shares, securities, debentures and other investments, have been held by the company in its own name except to the extent of exemption granted under section 49 of the Companies Act, 1956.

15. According to the records of the company and the information and explanations provided by the management, the company has not given any guarantee for loans taken by other from bank or financial institutions.

16. According to the record of the company, the company has not obtained any term loans from bank or financial institutions. Accordingly clause 4 (xvi) of the Order is not applicable.

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

18. According to the records of the company and the information and explanations provided by the management, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. According to records of the Company, the company has not issued any debentures.

20. The Company has not raised any money by public issues during the period covered by our audit report.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For Rajiv Pethkar & Associates

Chartered Accountants

(Reg. No. 112738W)

Rajiv Pethkar

Proprietor

(M.N. 046027)

Mumbai; 16th August, 2011.

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Mar 31, 2010

We have audited the attached Balance Sheet of HINDUSTAN BREWERIES & BOTTLING LIMITED as at 31st March 2010 and the related Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosure 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As Required by the companies (Auditor''s Report) Order, 2003, and amended by companies ( Auditor Report) (Amended ) Order 2004, issue by the Central Government of India, in terms the of Sections 227(4A) of the Companies Act, 1956,on the basis of such checks of the books of the records as we considered appropriate and the information and explanations given to us during the course of the audit, we annex hereto a statement on the matter specified in paragraph 4 and 5 the said Order.

3. We invite attention to : -

i) Note no. 4 relating to non provision of (a) accrued liability towards gratuity amounting to Rs. 1,78,89,0501= and (b) Liability towards leave encashment amounting to Rs. 42,58,394/=

ii) Note no.5 regarding balance of secured loans, unsecured loans, creditors, current liabilities, debtors, loans and advance and certain bank balance being subject to confirmation, reconciliation and adjustment.

iii) Note no. 6 & 7 to non provision of doubtful debts of Rs. 102,13,581/=

iv) Note no .9 relating to suits filed by and against the company.

v) Note no. 10 relating to secured loans being partly secured.

vi) Note no. 18 relating to non provision of Managing Director''s Remuneration amounting to Rs. 900000/=

vii) Note no. 19 relating to non provision of Interest on Loan from Bank of Baroda We further report that without considering items mentioned in paragraph f(ii), f(iv) and f(v) above the effect of which could not be determined and ascertained, had the observations made by us in paragraphs f(i), f (iii) and f(vi) above been considered the loss for the year would have been Rs. 3,62,30,474/=(As against the reported figure of Loss of Rs. 29,69,449/=) Debit balance in profit & loss account would have been Rs. 12,99,53,515/= (as against the reported figure of Rs.9,66,92,490/=) Liabilities would have been Rs.23,56,45,895/= (as against the reported figure of Rs.21,25,98,451/=) sundry debtors would have been Rs.5,45,10,324/ =(as against the reported figure of Rs. 6,47,23,905/=)

4. Further to our comments referred to in paragraph (3) above we report that:

A] We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our Audit; except as stated in paragraph 3

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 the books; except as stated in paragraph 3

C] The Balance sheet and the Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the books of Account;

D] In view of our comments in paragraph 4 above we are unable to express our opinion about the compliance with the mandatory Accounting standards referred to in Section 211 (3C) of the companies Act, 1956 in respect of Balance Sheet and Profit and Loss Account

E] On the basis of written representations received from the directors of the company and taken on record by the Board of Directors of the Company, we report that none of the Directors is disqualified as on March 31st'' 2010, from being appointed as Director in term of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

F] In view of our comments in paragraph 4 above and uncertainties arising therefrom, we are unable to express our opinion about the 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 31 March, 2010

ii] In the case of profit and Loss Accounts, of the "Loss" for the year ended on that date; and

iii] In the case of the cash flows statement, of the cash flows for the year ended on that date.

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

(b) All the assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) In our opinion, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) Inventory has been physically verified by the Management during the year in our opinion the frequency of verification is reasonable.

(b) In our opinion, 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) On the basis of our examination of inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to books records were not material.

3. (a) According to the information and explanations given to us the company has taken loans from three parties listing in the register maintained under section 301 of the Companies Act and the total amount outstanding at the end of the year was Rs. 5,74,00,000/- and other term and condition on which such loan are taken are not prima facie prejudicial to the interest of the company.

(b) According to the information and explanation given to us the Company has not granted any loans to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods and no major weakness has been noticed in this regard.

5. In respect of contracts or arrangements to be to be entered in the register maintained in pursuance of section , 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered into the register, maintained under the said section have been so entered.

b) When each of such transactions is in excess of Rupees Five lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regards to the prevailing market prices at the relevant time.

6. The company has not accepted any deposit from the public.

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

8. The Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for the products of the Company.

9. (a) As per the information and explanations given to us, the company has been regular in depositing undisputed statutory dues Excise Duty, Income Tax, and other statutory dues as applicable except Service Tax of Rs. 29,22,964/- Employee''s & Employer''s contribution to ESIC of Rs.1,433,78l/=(Since Paid Rs nil/=) Profession Tax Rs 749,720/= (Since Paid Rs.nil) sales tax ofRs. 32,203,781/=(Since Paid Rs nil/=), with the appropriate authorities in India.

(b) According to records of the company examine by us, there are no dues of customs duty, Wealth Tax, Excise Duty and Sales Tax, which have not been deposited on account of any dispute. The Particulars of dues as at 31.03.201 0a which have not been deposited on accounts of dispute, are as follows

Nature of Nature of Amount Periods to Forum where the statute Dues Rs. which the the dispute is amount relates pending

The Income Tax Income Tax 2,30,000/- A.Y 2001-02 Appeal Pending Act, 1961 with ITAT

The Sales Tax Act, Sales Tax 6,40,000/- A.Y 1995-96 Matter Pending with High Court

The Sales Tax Act, Sales Tax 19,32,440/- A.Y 2003-04 Appeal Pending with Deputy Commissioner sales tax Mumbai

The Sales Tax Act, Sales Tax 4,60,000/- A.Y 2008-09 Appeal Pending with Assistant Commissioner sales tax Mumbai

10. The Company has accumulated losses at the end of the financial year which are more than 50%of its net worth. The Company has not incurred cash losses during the year however has incurred cash loss in the immediately preceding financial year.

11. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities. .

12. The provisions of any special statute applicable to Chit Fund, Nidhi or Mutual Fund Benefit Fund/ Societies are not applicable to the Company.

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

14. 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.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

16. Fund raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa.

17. The Company has not made any preferential allotment.

18. The Company has not issued any debentures.

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

20. On the basis of our examination of records and according to the information and explanation given to us, no fraud, on or by the Company, has been noticed or reported during the year.

For SUREN SHAH & CO.

Chartered Accountant

Place: Mumbai (Suren Shah)

Date : 30th September,2010 Proprietor

M.N. 9295

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Mar 31, 2009

We have audited the attached Balance Sheet of HINDUSTAN BREWERIES & BOTTLING LIMITED as at 31st March 2009 and the related Profit & Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosure 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As Required by the companies (Auditor''s Report) Order, 2003, and amended by companies ( Auditor Report ) (Aemnded ) Orde 2004, issue by the Central Government of India, in terms the of Sections 227(4A) of the Companies Act, 1956,on the basis of such checks of the books of the records as we considered appropriate and the information and explanations ginev to us during the course of the audit, we annex hereto a statement on the matter spesified in paragraph 4 and 5 the said Order.

3. We invite attention to : -

i) Note no. 4 relating to non provision of (a) accrued liability towards gratuity amounting to Rs. 1,25,58,704/= and (b) Liability towards leave encashment amounting to Rs. 38,84,966/=

ii) Note no.5 regarding balance of secured loans, unsecured loans, creditors, current liabilities, debtors, loans and advance and certain bank balance being subject to confirmation, reconciliation and adjustment.

iii) Note no. 6 & 7 to non provision of doubtful debts of Rs. 102,13,581/=

iv) Note no .9 relating to suits filled by and against the company.

v) Note no. 10 relating to secured loans being partly secured.

vi) Note no. 18 relating to non provision of Managing Director Remuneration amounting to Rs. 900000/=

vii) Note no. 19 relating to non provision of Interest on Loan from Bank of Baroda

We further report that without considering items mentioned in paragraph f(ii), f(iv) and f(v) above the effect of which could not be determine, had the observation made by us in paragraphs f(i), f (iii) and f(vi) above been considered the loss for the year would have been Rs. 170,53,058/=(As against the reported figure of Loss of Rs. 3,54,55,542/=) Debit balance in profit & loss account would have been Rs. 12,12,79,663/= (as against the reported figure of Rs.9,37,23,042/=) Liabilities would have been Rs.23,92,14,915/= (as against the reported figure of Rs.22,18,71,875/=) sundry debtors would have been Rs. 3,37,66,948/=(as against the reported figure of Rs.4,39,80,529/=)

4. Further to our comments referred to in paragraph (3) above we report that:

A] We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our Audit; except as stated in paragraph 3

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 the books; except as stated in paragraph 3

C] The Balance sheet and the Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the books of Account;

D] In our opinion, the Balance Sheet and the Profit & Loss Account comply with the mandatory Accounting standards referred to in Section 211 (3C) of the companies Act, 1956. except as stated in paragraph 3

E] On the basis of written representations received from the directors of the company and taken on record by the Board of Directors of the Company, we report that none of the Directors is disqualified as on March 31st, 2009, from being appointed as Director in term of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

F] In our opinioitand to the best of our information and according to the explanations given to us, subject to our comments in paragraph 4 and 5 above the said accounts give the 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;

i] in the case of the Balance Sheet, of the state of affairs of the company as at 31 March, 2009

ii] in the case of profit and Loss Accounts, of the "Loss''1 for the year ended on that date; and

iii] in the case of the cash flows statement, of the cash flows for the year ended on that date.

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

(b) All the assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) In our opinion, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) Inventory has been physically verified by the Management during the year ireful opinion the frequency of verification is reasonable.

(b) In our opinion, 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) On the basis of our examination of inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to books records were not material.

3. (a) According to the information and explanations the company has taken loans from three parties listing in the register maintained under section 301 of the Companies Act and the total amount outstanding at the end of the year was Rs. 4,59,00,000/- and other term and condition on which such loan are taken are not prima facie prejudicial to the interest of the company.

(b) According to the information and explanation given to us the Company has not granted any loans to firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(c) The company has given interest free loans and advances in the nature of loans to its employees and these are being repaid as stipulated.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and for the sale of goods and no major weakness has been noticed in this regard.

5. In respect of contracts or arrangements to be to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

a) the particulars of contracts or arrangements referred to Section 301 that needed to be entered into the register, maintained under the said section have been so entered.

b) When each of such transactions is in excess of Rupees Five lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regards to the prevailing market prices at the relevant time.

6. The company has not accepted any deposit from the public.

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

8. The Central Government has not prescribed maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for the products of the Company.

9. (a) As per the information and explanations given to us, the company has been regular in depositing undisputed statutory dues Excise Duty, Income Tax, and other statutory dues as applicable except Employee & Employer contribution to ESIC of Rs.1,81,284= Profession Tax Rs7,59,090/= sales tax of Rs. 3,77, 22,280/= Providenr Fund Rs.227027/= with the appropriate authorities in India.

(b) According to records of the company examine by us, there are no dues of customs duty, Wealth Tax, Excise Duty and Sales Tax, which have not been deposited on account of any dispute. The Particulars of dues of income tax as at 31.03.2009 which have not been deposited on accounts of dispute, are as follows

INCOME TAX

Nature of Nature of Amount Periods to Forum where the statute Dues Rs. which the the dispute is amount relates pending

The Income Tax Income Tax - A.Y 1998-99 Tribunal Appeal Act, 1961 Pending with CIT (A)

The Income Tax Income Tax - A.Y 2000-01 Appeal Pending Act, 1961 with ITAT

The Income Tax Income Tax - A.Y 2001-02 Appeal Pending Act, 1961 with ITAT

The Income Tax Income Tax - A.Y 2001-02 Appeal Pending Act, 1961 with CIT (A)

The Income Tax Income Tax - A.Y 2002-03 Appeal Pending Act, 1961 with CIT (A)

SALES TAX : -

Nature of Nature of Amount Periods to Forum where the statute Dues Rs. which the the dispute is amount relates pending

The Sales Tax Act, Sales Tax - A.Y 1995-96 Matter Pending with High Court

The Sales Tax Act, Sales Tax - A.Y 1998-99 Appeal Pending with Deputy Commissioner sales tax Mumbai

The Sales Tax Act, Sales Tax - A.Y 2003-04 Appeal Pending with Deputy Commissioner sales tax Mumbai

The Sales Tax Act, Sales Tax - A.Y 2004-05 Appeal Pending with Deputy Commissioner sales tax Mumbai

10. The Company has accumulated losses of Rs.9,37,23,042/= at the end of the year. Which is mere than 50%of its net worth and the Company has incurred cash loss of Rs.2,47,06,067/= during the year but has not incurred any cash loss in the immediately preceding financial year.

11. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

12. The Provisions of any special statute applicable to Chit Fund, Nidhi or Mutual Fund Benefit Fund/ Societies are not applicable to the Company.

13. The Company is not dealing or trading in shares, securities, Debentures.

14. 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.

15. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

16. Fund raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa.

17. The Company has not made any preferential allotment.

18. The Company has not issued any debentures.

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

20. On the basis of our examination of records and according to the information and explanation given to us, no fraud, on or by the Company, has been noticed or reported during the year. ,

For SUREN SHAH & CO.

Chartered Accountant

Place: Mumbai (Suren Shah)

Date : 27th September,2009 Membership No. 9295