Source Industries (India) Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2024

We have audited the accompanying financial statements of Source Industries (India) Limited ("the
Company"), which comprise the Balance Sheet as on March 31, 2024 and 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 a summary of significant accounting policies and other explanatory
information.

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 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,
2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2024, and its loss, its cash flows and the changes in equity for the
year ended on that date.

Basis for Opinion

We conducted our audit of the 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 Responsibility for the Audit of the 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 ethical requirements that are relevant to our audit of the financial statements
under the provisions of the Act and the Rules made thereunder, 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 obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the
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 were 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 do not have any key audit matters that needs to be communicated in our report.

Information Other than the Financial Statements and Auditor''s Report thereon

• The Company''s Board of Directors is responsible for the other information. The other information
comprises the information included in the Directors report, but does not include the financial statements
and our auditor''s report thereon.

• Our opinion on the 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 financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the 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 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 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 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 financial
statement that give a true and fair view and are free from material misstatement, whether due to fraud or
error.

In preparing the 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.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

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

• Identify and assess the risks of material misstatement of the 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 omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Undersection 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 the 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 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 financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the 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 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. From the matters communicated
with those charged with governance, we determine those matters that were of most significance in the
audit of the 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 auditwe 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) During the year, the company has no branch offices hence reporting under section 143(8) of the
act is not applicable to the company.

d) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other
Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt
with by this Report are in agreement with the books of account.

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

f) On the basis of the written representations received from the directors as on March 31, 2024
taken on record by the Board of Directors, none of the directors is disqualified as on March 31,
2024 from being appointed as a director in terms of Section 164(2) of the Act.

g) 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 B". Our report expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over financial reporting.

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

In our opinion and based upon the audit procedures performed and the information and
explanation given by the management, the provisions of section 197 read with Schedule V to
the Act is compiled by the company.

i) 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 does not have any pending litigations which would impact its financial position.

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.

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 entities
("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; and

(c) Based on such audit procedures that were 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 (a) and (b) contain any material misstatement.

v. During the year the company has not declared any dividend. Therefore compliance with
section 123 of the act was not applicable.

vi. Based on our examination, which included test checks, the Company has used accounting
software''s for maintaining its books of account for the financial year ended March 31, 2024,
which has a feature of recording audit trail (edit log) facility and the same has operated
throughout the year for all relevant transactions recorded in the software''s. Further, during
the course of our audit we did not come across any instance of the audit trail feature being
tampered with.

“As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April
1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on
preservation of audit trail as per the statutory requirements for record retention is not
applicable for the financial year ended March 31, 2024.

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 A" a statement on the matters
specified in paragraphs 3 and 4 of the Order.

For M N Rao & Associates

Chartered Accountants
FRN.No. 005386S

Sd/-

(M V Ratnam)

Partner

Place: Hyderabad Membership No.008314

Date : 28-05-2024 UDIN: 24008314BKAILX3267

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Mar 31, 2015

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

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Principles generally accepted in India including Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also 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 under Section 143(10) 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 misstatements.

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

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

Opinion

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

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) order, 2015 ("the order") issued by the Central Government of India in terms of Sub-Section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order.

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

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

b) In our opinion, proper Books of Accounts, as required by law, have been kept by the Company so far as appears from our examination of 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, Statement of Profit and Loss and the Cash Flow Statement 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, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2015, from being appointed as a Director in the terms of Section 164(2) of the Act.

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

(i) The Company does not have any pending litigations which would impact its financial position

(ii) In our opinion and as per information and explanations provides to us, the company has not entered into any long term contracts including derivatives contracts requiring provisions under applicable laws or accounting standards, for material foreseeable losses and

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

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT SOURCE INDUSTRIES (INDIA) LIMITED

[Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date]

1. According to the information and explanations furnished to us, the company does not have any Fixed Assets. Hence the provision of clauses (i) (a )and (b ) are not applicable.

2. According to the information and explanations furnished to us, the company does not have any Inventory. Hence the provision of clauses (ii) (a ) (b) and (c ) are not applicable.

3. 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 189 of the Companies Act, 2013.

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 for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5. According to the information and explanations given to us, The Company has not accepted any deposits in terms of Directives issued by the Reserve Bank of India and provision of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.

6. During the year Company has not carried any manufacturing operations, hence as informed to us The maintenance of cost records under section 148(1) of the Companies Act, 2013 is not applicable

7. a.) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund,, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, Value Added tax , cess and any other material statutory dues applicable to it and we have been informed that there are no arrears of outstanding statutory dues as at the last day of the financial year under audit 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, Wealth tax, Service tax, Custom Duty , Excise duty, Value Added tax and cess which are not deposited on account of dispute.

c. ) According to the information and explanations given to us , there are no amounts required to be transferred to the investor education and protection fund by the Company.

8. In our opinion, the company has accumulated losses as at 31.03.2015 which is more than 50% of its net worth. It has incurred cash losses in the financial year ended on that date and also in the immediately preceding financial year. .

9. According to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, bank and debenture holders as at balance sheet date.

10. 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 during the year.

11. According to information and explanations given to us, no term loan were obtained during the year under audit.

12. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For RAKESH S JAIN & ASSOCIATES CHARTERED ACCOUNTANTS Firm Registration Number: 010129S

Sd/- (B. RAMESH KUMAR) PARTNER MEMBERSHIP NO. 200304

Place : Hyderabad Date : 28-05-2015

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Mar 31, 2014

We have audited the accompanying financial statements of SOURCE INDUSTRIES (INDIA) LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and 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 General Circular 15/2013 dated 13th September,2013 of the Ministry Of Corporate Affairs in respect of Section 133 of Companies Act,2013 and in accordance with accounting principle 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 ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

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 effectiveness of company''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 audit opinion.

Opinion

In our opinion, and to the best of information and according to the explanations given to us, the aforesaid financial statements gives 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 loss of the company for the year ended on that date; and

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

Emphasis of Matter

We draw attention to Note No. 13.6 to the financial statements regarding non confirmation / reconciliation of balances of

Trade payables, other current liabilities, trade receivable and Loans and Advances, the impact of which is unascertained.

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, 2003 ("the order") issued by the Central Government of India in terms of Sub-Section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the order.

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

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

b) In our opinion proper books of 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, Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Act read with General Circular 15/2013 dated 13th September, 2013 of Ministry of Corporate Affairs in respect of Section 133 of 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 the terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT SOURCE INDUSTRIES (INDIA) LIMITED [Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date]

(i) . a. The company does not have any Fixed Assets. Hence provisions of clause 4(i) of the order are not applicable to the company.

(ii) . a. The company does not have any Inventories Hence provisions of clause 4(ii) of the order are not applicable to the company.

(iii) . (a) According to the information and explanations given to us during the year the company has not granted/ accepted , any loans secured or Unsecured to/from the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence clause 4(iii) of the order is 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 the sale of goods and services During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) . a. According to the information and explanations given to us, 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, there are no transactions made during the year in pursuance of contracts or arrangements entered in the register maintained under sec.301 of the Companies act 1956 and exceeding the value of rupees Five Lakhs in respect of any party during the year.

(vi) . In our opinion and according to the information and explanations given to us and the records of the company examined by us, During the year the Company has not accepted deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

(vii) . In our opinion, the company does not have internal audit system commensurate with the size and nature of its business.

(viii) . During the Year Company has not carried any manufacturing operations. Hence as informed to us the maintenance of cost records is not applicable for this year.

(ix) . a. According to the information and explanations given to us and the records of the company examined by us, the 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, customs duty, excise duty, cess and other material statutory dues applicable to it.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, wealth tax, custom duty, excise duty and cess were in arrears, as at 31.03.2014 for a period of more than six months from the date they became payable.

c. According to the information and explanations given to us, there are no dues of sales tax, income tax, wealth tax, custom duty, excise duty and cess which are not deposited on account of dispute.

(x) . In our opinion, the company''s accumulated losses are more than fifty percent of its Net worth as on 31.03.2014. It has incurred cash losses in the financial year ended on that date. However, it has not incurred cash losses in the immediately preceding financial year.

(xi) . According to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions and bank as at balance sheet date.

(xii) . In our opinion and according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 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. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the company.

(xiv) . In our opinion, the company is not dealing in or trading in Shares, Securities debentures and other investments. Accordingly, the provision of Clause 4(xiv) of the Order is not applicable to the company.

(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 during the year.

(xvi) . During the year the company has not taken any term loan and hence the provisions of clause 4 (xvi) of the Order are not applicable to the company.

(xvii) . According to the information and explanations given to us and on the 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 investments.

(xviii) . According to the information and explanations given to us, the company has not made preferential allotment of shares during the year to the parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (xviii) of the order are not applicable to the company.

(xix) . According to the information and explanations given to us, the Company has not issued any secured debentures. Therefore, the provisions of clause 4(xix) of the Order are not applicable to the Company.

(xx) . According to the information and explanations given to us, the company has not raised any money by public issues during the year. Accordingly, the provisions of 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.

For RAKESH S JAIN & ASSOCIATES CHARTERED ACCOUNTANTS Firm Registration Number: 010129S

Sd/- (SURESH KUMAR JAIN) PARTNER MEMBERSHIP NO. 018465

Place : Hyderabad Date : 30-05-2014

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of SOURCE INDUSTRIES (INDIA) LIMITED ("the Company"), which comprise the Balance Sheet as at March 31st, 2013, and the Statement of Proft and Loss and the Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Principles generally accepted in India including Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial 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 fnancial 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 fnancial statements are free from material misstatements.

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 fnancial 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 fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fnancial statements.

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

Opinion

In our opinion, and to the best of information and according to the explanations given to us, the aforesaid financial statements gives 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, 2013;

b) In the case of the Statement of Proft and Loss, of the Proft for the year ended on that date; and

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

Emphasis of Matter

We draw attention to Note No. 13.6 to the fnancial statements regarding non confrmation / reconciliation of balances of Loan and Advances, the impact of which is unascertained. Our opinion is not qualifed in respect of this matter.

We draw attention to Note No. 13.7 to the financial statements regarding regrouping / reclassifying/ rearranging/ modifying wherever necessary according to the scheme of demerger.Our opinion is not qualifed in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) order, 2003 ("the order") issued by the Central Government of India in terms of Sub-Section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specifed 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 knowledge and belief, were necessary for the purpose of our audit.

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

c) The Balance Sheet, the Statement of Proft & 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, Statement of Profit and Loss and the Cash Flow Statement complying with the accounting standards referred to in Sub-Section (3C) of Section 211 of the Act.

e) On the basis of written representations received from the Directors, as on March 31, 2013, and taken on record by the Board of Directors, none of the Directors is disqualifed as on March 31, 2013, from being appointed as a Director in the terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO THE

INDEPENDENT AUDITOR''S REPORT

SOURCE INDUSTRIES (INDIA) LIMITED

[Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date]

(i). a. The company does not have any Fixed Assets. Hence provisions of clause (i) of the CARO 2003 are not applicable to the company.

(ii). a. The company does not have any Inventories Hence provisions of clause (ii) of the CARO 2003 are not applicable to the company.

(iii). (a) According to the information and explanations given to us during the year the company has not granted/ accepted , any loans secured or Unsecured to/from the companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence clause 4(iii) of the order is 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 the sale of goods and services During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v). a. According to the information and explanations given to us, 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, there are no transactions made during the year in pursuance of contracts or arrangements entered in the register maintained under sec.301 of the Companies act 1956 and exceeding the value of rupees fve lakhs in respect of any party during the year.

(vi). In our opinion and according to the information and explanations given to us and the records of the company examined by us, During the year the Company has not accepted deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

(vii). In our opinion, the company does not have internal audit system commensurate with the size and nature of its business.

(viii). During the year Company has not carrying any manufacturing operations. Hence as informed to us the maintenance of cost records is not applicable for this year.

(ix). a. According to the information and explanations given to us and the records of the company examined by us, the 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, customs duty, excise duty and other material statutory dues applicable to it except TDS..

b. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, and excise duty were in arrears, as at 31.03.2013 for a period of more than six months from the date they became payable except TDS amounting to Rs. 4,05,000/-.

c. According to the information and explanations given to us, there are no dues of sales tax, income tax and excise duty which are not deposited on account of dispute.

(x). In our opinion, the company accumulated losses are more than ffty percent of its Net worth as on 31.03.2013. It has not incurred any cash losses in the fnancial year ended on that date. However, it has incurred cash losses in the immediately preceding fnancial year.

(xi). According to the information and explanation given to us, the company has not defaulted in repayment of dues to fnancial institutions and bank as at balance sheet date.

(xii). In our opinion and according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4(xii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

(xiii). In our opinion, the company is not a chit fund or a nidhi/mutual beneft fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the company.

(xiv). In our opinion, the company is not dealing in or trading in Shares, Securities debentures and other investments. Accordingly, the provision of Clause 4(xiv) of the Companies (Auditor''s Report) Order is not applicable to the company.

(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 fnancial institutions during the year.

(xvi). During the year the company has not taken any term loan and hence the provisions of clause 4 (xvi) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the company.

(xvii). According to the information and explanations given to us and on the 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 investments.

(xviii). According to the information and explanation given to us, the company has not made preferential allotment of shares during the year to the parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (xviii) of the Companies (Auditors report) order 2003 are not applicable to the company.

(xix). According to the information and explanation given to us, the Company has not issued any secured debentures. Therefore, the provisions of clause 4(xix) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

(xx). According to the information and explanation given to us, the company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Companies (Auditors'' Report) Order, 2003 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.

For RAKESH S JAIN & ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration Number: 010129S

Sd/-

(SURESH KUMAR JAIN)

PARTNER

MEMBERSHIP NO. 018465

Place : Hyderabad

Date : 30-05-2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. SOURCE INDUSTRIES (INDIA) LIMITED (FORMERLY TIRUMALA SEUNG HAN TEXTILES LIMITED), Hyderabad, as at 31st March 2012 and the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed there to. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit included examining on test basis evidence supporting the amounts and disclosures in the financial statement. 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we state that:

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

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

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

d) In our opinion, the Balance sheet, Statement of Profit and Loss and Cash Flow 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.

e) On the basis of written representations received from the Directors as on 31.03.2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31.03.2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the said date.

() Our comments on financial statements:

i) Non confirmation/reconciliation of Balances of Loan and advances and Bank Balances refer Note No 14.8, the impact of which is unascertained.

ii) The provisions for interest on unsecured loans is not made, as the request for waiver of interest/ reduction in the rate of interest is made - RefNote No 14.9, the impact of which could not be ascertained.

Hi) Impairment loss, if any on assets of the company which could not be ascertained in absence of technical evaluation from experts, refers Note no. 14.11

g. In our opinion and to the best of our information and according to the explanations given to us, the said account read with the Accounting Policies and notes forming part of accounts appearing in notes and subject to matters referred in Para (f) above, gives the information required by the Companies Act 1956 in the manner so required and give 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 31st March 2012.

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

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

ANNEXURE TO THE AUDITOR'S REPORT SOURCE INDUSTRIES (INDIA) LIMITED

(FORMERLY TIRUMALA SEUNG HAN TEXTILES LIMITED)

[Referred to in paragraph 3 of our report of even date]

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situations of Fixed Assets.

(b) These assets have been physically verified by the management during the year through a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year the company has not disposed off any fixed assets.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the management is 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. According to the information and explanations given to us during the year the company has not granted any loans secured or unsecured to the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, hence clause (a) to (d) of the order are not applicable.

(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act.

4. In our opinion and according to the information and explanation 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 the purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our Audit, we have not observed any continuing failure to correct major weakness in internal controls.

5. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to enter in the registers 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 are no transactions made during the year, in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956.

6. During the year, the company has not accepted deposits from the public within the meaning of Section 58 A and 58 A A and other relevant provisions of the Companies Act, 1956. However with regard to the Deposits accepted in earlier years, according to the information and explanations given to us, no order has been passed by the Company law board or National Company law tribunal or Reserve Bank of India or any court or any other tribunal on the company in respect of those Deposits accepted by the company.

7. According to the information and explanations given to us, the Company has an internal audit system commensurate with its size and nature of its business.

8. During the year Company has not carried any manufacturing operations. Hence as informed to us the maintenance of cost records is not applicable for this year.

9. (a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, and Employees State Insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it. A sum of Rs. 71392/- required to be transferred to Investor and protection fund is yet to be transferred by the company to the above fund.

(b) According to the information and explanations given to us, there are dues of sales tax, income tax, wealth tax, service tax, custom duty, central excise duty and cess which are not deposited on account of dispute are as follows:

Name of Amount Forum The Statute (Rs.)

The A P C T O General 462,454 Sec'bad Sales Tax

The Central C T O Sales Tax 756,519 Sec'bad Act

The Central Appellate Excise Act, Authorities 1944 2,78,27,332 of Customs & Central Excise.

10. The Company's accumulated losses are more than fifty percent of its net worth as on 31.3.2012 and it has incurred cash losses in the financial year ended on that date and also in the immediately preceding financial year.

11. According to the information and explanations given to us, the company has not defaulted in repayment dues to any debenture holders / financial institutions / bank during the year.

12. In our opinion and according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4 (xii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

13. 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 Companies (Auditor's Report) Order, 2003 are not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

15. 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 during the year.

16. During the year the company has not taken any term loan and hence the provisions of clause 4 (xvi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

17. According to the information and explanations given to us and on the 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 investments.

18. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly the provisions of clause 4 (xviii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

19. According to the information and explanations given to us, the company has not issued any secured debentures during the year.

20. According to the information and explanations given to us, the company has not raised any money by public issue during the year. Accordingly the provisions of clause 4 (xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For LAXMINIWAS & JAIN

CHARTERED ACCOUNTANTS

Firm Reg. No. 001859

Sd/-

(SURESH KUMAR JAIN)

PARTNER

MEMBERSHIP NO. 018465

Place: Hyderabad

Date :14-08-2012

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. TIRUMALA SEUNG HAN TEXTILES LIMITED, Hyderabad, as at 31st March 2010 and the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed there to. 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 require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit included examining on test basis evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we state that:

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

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

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

d) In our opinion, the Balance sheet, Profit and Loss account and Cash Flow 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.

e) On the basis of wri tten representations received from the Directors as on 31.03.2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31.03.2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the said date.

f) Our comments on financial statements:

i) Debtors include Rs. 13.87 Lakhs Long pending for which no provision is made in the accounts;

ii) Loans and advances included Rs.7 Lakhs Long pending for which no provision is made in the accounts;

iii) Non confirmation reconciliation of Balances of Creditors, Debtors, Bank Balances, other Liabilities, Unsecured loans and Loan and advances, refer Note No 11(6) in Schedule 16, the impact of which is unascertained.

iv) The provisions for interest on unsecured loans is not made, as the request for waiver of interest / reduction in the rate of interest is made - RefNote No 11(8) in Schedule 16, the impact of which could not be ascertained.

v) Impairment loss, if any on assets of the company which could not be ascertained in absence of technical evaluation from experts, refer Note no. 11(10) in Schedule 16.

g. In our opinion and to the best of our information and according to the explanations given to us, the said account read with the Accounting Policies and notes forming part of accounts appearing in Schedule no. 16 and subject to matters referred in Para ((f) above, gives the information required by the Companies Act 1956 in the manner so required and give 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 31st March 2010.

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

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

ANNEXURE TO THE AUDITORS REPORT TIRUMALA SEUNG HAN TEXTILES LIMITED [Referred to in paragraph 3 of our report of even date]

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situations of Fixed Assets which requires to be updated for some particulars, which are to be gathered from financial books.

(b) These assets have been physically verified by the management during the year through a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year the company has not disposed off any fixed assets.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the management is 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) According to the information and explanations given to us during the year the company has not granted any loans secured or unsecured to the companies firms or other parties covered in the register maintained, under section 301 of the Companies Act, 1956, hence clause (a) to (d) are not applicable.

(b) During the year the company has taken unsecured loans from two parties covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs. 3.50 lakhs. The maximum amount involved during the year and year end balance amounts to Rs. 63.82 lakhs payable to eleven parties.

(c) In our opinion, the rate of interest and other terms and conditions on which loan have been taken from companies, firms, or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(d) As the terms and conditions for repayment of loans taken are not stipulated, we are unable to comment whether the Company is regular in payment or otherwise.

4. In our opinion and according to the information and explanation 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 the purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our Audit, we have not observed any continuing failure to correct major weakness in internal controls.

5. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to enter in the registers 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 are no transactions made during the year, in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 which are exceeding the value of Rs. Five Lakhs in respect of each party.

6. During the year, the company has not accepted any deposits from the public within the meaning of Section 58A and 58AA any other relevant provisions of the Companies Act, 1956 and rules framed there under.

7. According to the information and explanations given to us, in our opinion, the company does not have any internal audit system during the year.

8. During the year Company has not carried any manufacturing operations. Hence it is informed to us that the cost records maintenance required is not applicable for this year.

9. (a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, investor education and protection fund, and Employees State Insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, there are dues of sales tax, income tax, wealth tax, service tax, custom duty, central excise duty and cess which are not deposited on account of dispute are as follows:

Name of Amount (Rs.) Forum The Statute

The AP CTO General Secbad Sales Tax 462,454

The Central CTO Sales Tax Secbad. Act 756,519

The Central Appellate Excise Act, Authorities 1944 2,14,69,042 of Customs & Central Excise.

10. The Companys accumulated losses are more than fifty percent of its net worth as on 31.3.2010 and it has incurred cash losses in the financial year ended on that date and immeditly in preceeding year

11. According to the information and explanations given to us, the company has not defaulted in repayment of its dues to any debenture holders / financial institutions / bank during the year.

12. In our opinion and according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4 (xii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

13. 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 Companies (Auditors Report) Order, 2003 are not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

15. 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 during the year.

16. During the year the company has not taken any term loan and hence the provisions of clause 4 (xvi) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

17. According to the information and explanations given to us and on the 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 investments.

18. According to the information and explanations given to us, the company has not made preferential allotment of snares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly the provisions of clause 4 (xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

19. According to the information and explanations given to us, the company has not issued any secured debentures during the year.

20. According to the information and explanations given to us, the company has not raised any money by public issue during the year. Accordingly the provisions of clause 4 (xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

21. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For LAXMINIWAS & JAIN

CHARTERED ACCOUNTANTS Firm Reg. No. 001859 S

Sd/- (SURESH KUMAR JAIN)

PARTNER MEMBERSHIP NO. 018465

Place: Hyderabad Date :05-08-2010