Sri Vasavi Industries Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. Sri Vasavi Industries Limited as at 31st March, 2011 and the Profits Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditors' Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 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. Our comments on the accounts are given below:

a) Sundry Creditors, Sundry Debtors, Loans and advances are subject to confirmation and reconciliation. In the absence of such confirmation, we are unable to determine the effect, if any on the accounts of the Company.

5. Further to our comments in the annexure referred to Paragraph 3 and Para 4 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 purposes of our audit;

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

c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and Profit and Loss Account comply with the Accounting Standards referred to in Sub section (3C) of Section 211 of the Companies Act, 1956 except sub-Para (a) of Para 4 above..

e) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, subject to comments given in Para 4 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 31st March, 2011;

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

iii) In so far it relates to Cash flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE:

i a The Company is maintaining the Fixed Assets register showing full particulars, including quantitative details and situation, of fixed assets.

b Physical verification of fixed assets is done in a cyclical manner, once in every three years, and the frequency of verification is adequate with respect to the size of the business.

ii a Physical verification of Inventory have been conducted at reasonable intervals during the year by the Management.

b The procedure of physical verification of stocks followed by the management is reasonable and adequate having regard to the size of the company, the nature and volume of its business.

c The Company is maintaining proper records of inventory and the discrepancies noticed on verification between the physical stocks and the book records were not material and the same have been properly dealt with in the books of accounts.

iii. In our opinion and according to the information and explanations given to us, internal control system for the purchase of inventory, services and fixed assets and for the sale of goods and services needs improvement considering the size of the company and nature of its business.

iv Based on the audit. procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that contracts or arrangements have not been entered into with the companies appearing in the register maintained U/s. 301 as required under that section.

v In our opinion and according to the information and explanation given to us, the company has not accepted any deposits from the public with in the meaning of Section 58A and 58AA of the Act and rules framed there under.

vi The company is having an internal audit system commensurate with its size and nature of its business.

vii The Company has accumulated losses as at 31st March, 2011 and it has incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

viii Based on our audit procedures and on the information and explanations given by management, we are of the opinion that the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

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

x In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable to the company.

xi In our opinion and according to the information given to us, 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 is not applicable to the company.

xii In our opinion and according to the information and explanations given to us, the company has not given any guarantees

xiii In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained.

xiv In our opinion and 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.

xv The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xvi The Company has not issued any Debentures during the year.

xvii The Company has not raised any funds on public issue and hence disclosure on the end use of money raised by the public issue is not applicable to the company.

xviii 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 NEKKANTISRINIVASU & Co.,

Chartered Accountants

FRN.008801S

N.SRINIVASU

Partner

M.No.209453

Place: Hyderabad

Date: 01.09.2011

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Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s Sri Vasavi Industries Ltd., as at 31st March 2010 and Profit and Loss Account of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by COMPANIES (AUDITORS REPORT) ORDER 2003 issued by the Central Government of India in terms of sub section (4A) of Section 227 of The Companies Act, 1956 we enclose the Annexure hereto a statement on the matters specified in the paragraphs 4 & 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 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 the law have been maintained by the Company so for as it appears from our examination of the books.

c. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the Books of Account.

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

e. In our opinion and to the best of our information and according to the explanations given to us and on the basis at the written representations from the directors, taken on record by the Board of Directors, none of the Directors is disqualified as at March 31,2010 from being appointed as a Director U/s 274(i) (g) of the Companies Act, 1956.

f. Reference is invited to the following notes on accounts under Schedule" 17":

i. Note No. 6 to Notes on Accounts, regarding valuation of investments and non-provision of diminution in the value of the investments (un quoted) for the reasons stated therein.

We are unable to express an opinion on the impact on the financial statements and impact on Profit for the year in respect of the matters stated at paras f(i)

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

i. In the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2010 ;

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

iii. In so far it relates to Cash Row Statement of the cash-flows of the Company for the year ended on that date.

Annexure to Auditors' Report Referred to in Paragraph 3 of our report of even date

I. In respect of its fixed assets:

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

b. As explained to us the fixed assets have been physically verified by the management during the year, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets No material discrepancies were noticed on such Physical verification.

c. The Company has disposed off some of the fixed assets during the year.

II. In respect of Inventories:

a. As explained to us, the management at regular intervals during the year has physically verified inventories.

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

c. The Company has maintained proper records of inventories. As explained to us there were no material discrepancies noticed an physical verification on ' inventory as compared to the book records.

III. In respect of loans, secured or unsecured, granted or taken by the Company to/ from Companies, Firms or other Parties covered in the register maintained Under Section 301 of the Companies Act, 1956:

a. The Company has not granted/taken loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained U/s 301 of the Act.

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 nature of its business for the purchase of inventory, fixed assets and also for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls,

V. In respect of transactions covered Under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us there are no Transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained Under Section 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, there are no transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000/- (Rupees Five Laks only) or more during the year are taken at market rates as stated in note No. 4 to notes on accounts in respect of one party for value of Rs. 1286 laks

VI. The Company has not accepted any deposits from the public. Hence the provisions of Sec. 58 A of the companies Act, 1956 and the companies (Acceptance of Deposits) Rules 1975 do not apply to the company.

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

VIII. The Central Government has not prescribed maintenance of Cost Records Under Section 209 (1) (d) of the Companies Act 956 for the products of the company.

IX. In respect of Statutory Dues:

(a) According to the records of the Company undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess, FBT and Other statutory dues have been generally/regularly deposited with the appropriate authorities.

(b) The disputed Statutory dues relating to central Excise, sales tax Rs 544.22 lacs

X. The Company has accumulated losses as at March 31, 2010, and has incurred cash losses during the financial year ended on that date or in the immediately preceding financial year.

XI. In our opinion and according to the information and explanations given to us the company on the basis of Security by way of pledge of shares, debentures and other securities has granted no loans and advances.

XII. In our opinion, the company is not a chit fund or a Nidhi/Mutual benefit fund/society. Therefore, clause 4 (xiii) of the Companies (Auditor's Report) Order 2003 is not applicable to the company.

XIII. 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 is not applicable to the company.

XIV. The Company has not given Corporate Guarantees for loans taken over by others, from Banks and Financial Institutions.

XV. The Company has not raised any new term loans curing the year.

XVII. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the company has used no funds raised on short-term basis for long-term investment.

XVII. During the year, the Company has not made any preferential allotment of shares.

XVIII. According to the information and explanations given to us the company is not having any debentures. Therefore, the provisions of clause 4 (xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

XIX. The Company has not raised any money by way of Public issue during the year.

XX. In our opinion and according to the information and explanations given to us no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.



For NEKKANTI SRINIVASU & Co., Chartered Accountants

(M. SRINIVASU) PARTNER M.No.209453

Place : Hyderabad Date : 01.09.2010