Yenepoya Minerals and Granites Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2015

1. I have audited the accompanying financial statements of M/s Yenepoya Minerals & Granites Limited, P.O. Jodumarga - 574219, which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

3. My responsibility is to express an opinion on these financial statements based on my audit.

I have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

I have conducted my audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion on the financial statements.

Opinion :

6. In my opinion and to the best of my information and according to the explanations given to me, the a for said 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 Profit and Loss Account, of the Profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements;

7. This Report does not include a statement on the matters 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, since in my opinion and according to the information and explanations given to me, the said order is not applicable to the company.

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

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

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

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

(g) On the basis of the written representations received from the directors as on 31 st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of Section 164 (2) of the Act.

(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, in my opinion and to the best of my information and according to the explanations given to me:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements in note 13 to the financial statements.

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's Education and Protection Fund by the Company.

S/d

Place : Mangalore K.R.SHETTY B.Com., FCA Date : 31.07.2015 Chartered Accountant

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Mar 31, 2014

1. I have audited the accompanying financial statements of M/s Yenepoya Minerals & Granites Limited, P.O. Jodumarga - 574219, which comprise the Balance Sheet as at March 31,2014, and the Statement of Profit and Loss for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements;

2. Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility;

3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion ;

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014; and

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

Report on Other Legal and Regulatory Requirements ;

7. This Report does not include a statement on the matters specified in paragraph 4 of the Companies (Auditor''s Report) Order, 2003, issued by the by the Department of Company Affairs, in terms of section 227(4A) of the Companies Act, 1956, since in my opinion and according to the information and explanations given to me, the said order is not applicable to the company.

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

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

b) in my opinion proper books of account as required by law have been kept by the Company so far as appears from my examination of those books

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

d) in my opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Sd/- Place : Mangalore K.R.SHETTY B.Com., FCA Date : 31.07.2014 Chartered Accountant

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Mar 31, 2012

I have audited the attached Balance Sheet of Yenepoya Minerals & Granites Limited, P.O. Jodumarga - 574219, as at 31st March 2012 and the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with auditing standards generally accepted in India. Those Standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 issued i by the Central Government of India in terms of sub-section (4A) of '] section 227 of the Companies Act, 1956, I enclose in Annexure, a statement on the matters specified in paragraph 4 and 5 of the said { order. ;

2. Further to my comments in the Annexure referred to above, I report that:

3 a) I have obtained all the information and explanations, which to the best of my knowledge and belief were necessary for the purpose of my audit '

b) In my opinion proper books of account as required by law have been kept by the Company so far as appears from my examination of those books and proper returns adequate for the purposes of my audit have been received from the branches not visited by me.

c) The balance Sheet and profit & Loss Account dealt with by this report are in agreement with the books of account and with the audited returns from the branches.

d) In my opinion, subject to clause 18(c) in Notes to Balance Sheet regarding non provision of interest, the Balance Sheet and Profit & Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) Based on representations made by the Directors of the Company and taken on record by the Board of Directors and the information & explanations given to me, the Directors of the company are not prima- facie, as at 31st March 2012, disqualified from being appointed as Director of the company in terms of Clause (g) of Sub Section (1) of Section 274 of the Companies Act 1956.

(f)(i) As stated in clause 18(c) in Notes to Balance Sheet no provision has been made for the interest payable on loan borrowed from M/s. Mazda Enterprises Ltd, an overseas corporate body.

(ii) As stated in clause 18(h) in Notes to Balance Sheet no confirmation has been produced in the case of loan mentioned therein.

Subject to the above, in my opinion and to the best of my information and according to the explanations given to me, the said Balance Sheet and the Profit and Loss Accounts read together with the notes thereon, give the information as required by the Companies Act, 1956, in the matter so required and give a true and fair view -

a) insofar as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March 2012, and

b) insofar as it relates to the Profit & Loss Account, of the Company for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 2 of our report of even date)

To The Members of Yenepoya Minerals & Granites Limited,

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

(b) The management informs me that all the fixed assets have been physically verified during the year. No material discrepancies were noticed on such verification.

(c) During the year, According to the information and explanations given to me, i am of the opinion that the sale of the said part of plant and machinery has affected the going concern status of the company.

(ii) (a) The Inventory of Minerals & Granites has been physically verified during the year by the management at reasonable intervals.

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

(c) The Company is maintaining proper records of inventory and according to the information and explanations given to me, no material discrepancies were noticed on physical verification,

(iii) (a) The company has not granted any loans, secured or unsecured to the companies, firm or other parties covered in the register maintained under section 301 of the Act. However Company had taken loans from Directors, which is outstanding during the year as disclosed in the Schedule A to the this Report.

(b)In my opinion the rate of interest and other terms and conditions on which the said loans are granted to the company, are not prima facie prejudicial to the company.

(c) No interest has been provided on loan taken from the directors.

(d) No over due amount outstanding in respect of the said loans taken by the company.

(iv) In my opinion, and according to the information and explanations given to me, there is adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to the purchase of inventory, and fixed assets. During the course of my audit, I have not observed any continuing failure to correct major weakness in internal controls.

(v) The transaction that need to be entered into the register maintained under section 301 of the Companies Act, 1956 in respect of the services aggregating during the financial year to Rs 500,000/- or more in respect of any party in pursuance of contracts or arrangement have been so entered and in my opinion, and according to the information and explanations given to me, each of these transactions have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) The Company does not have internal audit system commensurate with the size of its business.

(viii) Provision of section 209 (l)(d) of the Companies Act,1956, regarding maintenance of the cost records are not applicable to the Company.

(ix) (a) There are no undisputed statutory dues amount payable in respect Providence Fund, Income Tax, Custom Duty, Excise Duty and Wealth Tax to the Government outstanding in the book as at 31st March, 2012 which were outstanding for a period of more than six months from the date they become payable.

(b) According to the information given to me, no disputed amounts payable in respect of Income Tax and Wealth Tax were in arrears, as at 31 march 2012 for a period of more than six months from the date they become payable.

(x) The accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by my audit and the immediately preceding financial year.

(xi) One Time Settlement Scheme(OTS) proposal offered by the company in respect of the loans was accepted by the lenders and the payments were made by the company accordingly.

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

(xiii) The company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provision of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiv) The company is not dealing or trading in shares, securities, debenture and other investments. Accordingly, the provision clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable to the company.

(xv) The Company has not given any guarantees for loans taken by others from the bank or financial institutions.

(xvi) The company has not raised new term loans during the year.

(xvii) According to the information and explanations given to me and on an overall examination of balance sheet of the Company, I report that no funds raised on Short-term basis have been used for long-term investment and vice versa.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

(xix) The Company has not issued debentures.

(xx) The Company has not raised any money by public issue.

(xxi) According to the information and explanation given to me, no fraud on or by the Company has been noticed or reported during the year.

S/d

Place: Mangalore K.R.SHETTY B.Com., FCA

Date : 31.07.2012 Chartered Accountant

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Mar 31, 2011

I have audited the attached Balance Sheet of Yenepoya Minerals & Granites Limited, P.O. Jodumarga - 574219, as at 31st March 2011 and the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with auditing standards generally accepted in India. Those Standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956,1 enclose in Annexure, a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to my comments in the Annexure referred to above, I report that:

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

b) In my opinion proper books of account as required by law have been kept by the Company so far as appears from my examination of those books and proper returns adequate for the purposes of my audit have been received from the branches not visited by me.

c) The balance Sheet and profit & Loss Account dealt with by this report are in agreement with the books of account and with the audited returns from the branches.

d) In my opinion, subject to Note No. 3 in Schedule 12 to the Accounts regarding non provision of interest, the Balance Sheet and Profit & Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) Based on representations made by the Directors of the Company and taken on record by the Board of Directors and the information & explanations given to me, the Directors of the company are not prima-facie, as at 31st March 2011, disqualified from being appointed as Director of the company in terms of Clause (g) of Sub Section (1) of Section 274 of the Companies Act 1956.

(f) (i) As stated in Note No. 3 in Schedule 12 to the Accounts, no provision has been made for the interest payable on loan borrowed from M/s. Mazda Enterprises Ltd., an overseas corporate body.

(ii) As stated in Note No. 8 in Schedule 12 to the accounts, no confirmation has been produced in the case of loan mentioned therein. Subject to the above, in my opinion and to the best of my information and according to the explanations given to me, the said Balance Sheet and the Profit and Loss Accounts read together with the notes thereon, give the information as required by the Companies Act, 1956, in the matter so required and give a true and fair view -

a) insofar as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March 2011, and

b) insofar as it relates to the Profit & Loss Account, of the Company for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT (Referred to in paragraph 2 of our report of even date) To The Members of Yenepoya Minerals & Granites Limited,

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

(b)The management informs me that all the fixed assets have been physically verified during the year. No material discrepancies were noticed on such verification.

(c) During the year, the company has disposed off a substantial part of the machinery. According to the information and explanations given to me, I am of the opinion that the sale of the said part of plant and machinery has effected the going concern status of the company.

(ii)(a)The Inventory of Minerals & Granites has been physically verified during the year by the management at reasonable intervals.

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

(c)The Company is maintaining proper records of inventory and according to the information and explanations given to me, no material discrepancies were noticed on physical verification.

(iii)(a) The company has not granted any loans, secured or unsecured to the companies, firm or other par- ties covered in the register maintained under section 301 of the Act. However Company had taken loans from Directors, which is outstanding during the year as disclosed in the Schedule A to the this Report.

(b)In my opinion the rate of interest and other terms and conditions on which the said loans are granted to the company, are not prima facie prejudicial to the company.

(c)No interest has been provided on loan taken from the directors.

(d)No over due amount outstanding in respect of the said loans taken by the company.

(iv) In my opinion, and according to the information and explanations given to me, there is adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to the purchase of inventory, and fixed assets. During the course of my audit, I have not observed any continuing failure to correct major weakness in internal controls.

(v) The transaction that need to be entered into the register maintained under section 301 of the Companies Act, 1956 in respect of the services aggregating during the financial year to Rs500,000/- or more in respect of any party in pursuance of contracts or arrangement nave been so entered and in my opinion, and according to the information and explanations given to me, each of these transactions have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) The Company does not have internal audit system commensurate with the size of its business.

(viii) Provision of section 209 (l)(d) of the Companies Act,1956, regarding maintenance of the cost records are not applicable to the Company.

(ix) (a)There are no undisputed statutory dues amount payable in respect Providence Fund, Income Tax, Custom Duty, Excise Duty and Wealth Tax to the Government outstanding in the book as at 31st March, 2011 which were outstanding for a period of more than six months from the date they become payable.

(b)According to the information given to me, no disputed amounts payable in respect of Income Tax and Wealth Tax were in arrears, as at 31 march 2011 for a period of more than six months from the date they become payable.

(x) The accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by my audit and the immediately preceding financial year.

(xi) One Time Settlement Scheme(OTS) proposal offered by the company in respect of the loans was accepted by the lenders and the payments were made by the company accordingly.

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

(xiii) The company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provision of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiv) The company is not dealing or trading in shares, securities, debenture and other investments. Accordingly, the provision clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable to the company.

(xv) The Company has not given any guarantees for loans taken by others from the bank or financial institutions.

(xvi) The company has not raised new term loans during the year.

(xvii) According to the information and explanations given to me and on an overall examination of balance sheet of the Company, I report that no funds raised on Short-term basis have been used for long-term investment and vice versa.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

(xix) The Company has not issued debentures.

(xx) The Company has not raised any money by public issue.

(xxi) According to the information and explanation given to me, no fraud on or by the Company has been noticed or reported during the year.

Place : Mangalore

Date : 31.07.2011 (K.R. SHETTY, B.Com, F.C.A)

Chartered Accountant

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Mar 31, 2010

1 have audited the attached Balance Sheet of Yenepoya Minerals & Granites Limited, P.O. Jodu- marga - 574219, as at 31st March 2010 and the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. My responsibility is to express an opinion on these financial statements based On my audit.

1 conducted my audit in accordance with auditing standards generally accepted in India. Those Standards require that I plan and perform the audit to obtain reasonable assurance about whether the finan- cial 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. 1 believe that my audit provides a reasonable basis for my opinion.

1. As required by the 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, 1956,1 enclose in Annexure, a statement on the matters specified in paragraph 4 and 5of the said order.

2. Further to my comments in the Annexure referred to above, I report that:

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

b) In my opinion proper books of account as required by law have been kept by the Company so far as appears from my examination of those books and proper returns adequate for the purposes of my audit have been received from the branches not visited by me.

c) The balance Sheet and profit & Loss Account dealt with by this report are in agreement with the books of account and with the audited returns from the branches.

d) In my opinion, subject to Note No. 3 in Schedule 12 to the Accounts regarding non provision of inter- est, the Balance Sheet and Profit & Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) Based on representations made by the Directors of the Company and taken on record by the Board of Directors and the information & explanations given to me, the Directors of the company are not prima- facie, as at 31st March 2010, disqualified from being appointed as Director of the company in terms of Clause (g) of Sub Section (1) of Section 274 of the Companies Act 1956.

(f) (i) As stated in Note No. 3 in Schedule 12 to the Accounts, no provision has been made for the interest payable on loan borrowed from M/s. Mazda Enterprises Ltd., an overseas corporate body.

(ii) As stated in Note No. 8 in Schedule 12 to the accounts, no confirmation has been produced in the case of loan mentioned therein.

Subject to the above, in my opinion and to the best of my information and according to the explana- tions given to me, the said Balance Sheet and the Profit and Loss Accounts read together with the notes thereon, give the information as required by the Companies Act, 1956, in the matter so required and give a true and fair view -

a) insofar as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March 2010, and

b) insofar as it relates to the Profit & Loss Account, of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 2 of our report of even date) To The Members of Yenepoya Minerals & Granites Limited,

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

(b)The management informs me that all the fixed assets have been physically verified during the year. No material discrepancies Were noticed on such verification.

(c) During the year, the company has disposed off a substantial part of the machinery. According to the information and explanations given to me, 1 am of the opinion that the sale of the said part of plant and machinery has effected the going concern status of the company.

(ii) (a)The Inventory of Minerals & Granites has been physically verified during the year by the manage- ment at reasonable intervals.

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

(c)The Company is maintaining proper records of inventory and according to the information and expla- nations given to me, no material discrepancies were noticed on physical verification.

(iii)(a) The company has not granted any loans, secured or unsecured to the companies, firm or other par- ties covered in the register maintained under section 301 of the Act. However Company had taken loans from Directors, which is outstanding during the year as disclosed in the Schedule A to the this Report.

(b)ln my opinion the rate of interest and other terms and conditions on which the said loans are granted to the company, are not prima facie prejudicial to the company.

(c)No interest has been provided on loan taken from the directors.

(d)No over due amount outstanding in respect of the said loans taken by the company.

(iv) In my opinion, and according to the information and explanations given to me, there is adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to the purchase of inventory, and fixed assets. During the course of my audit, I have not observed any continuing failure to correct major weakness in internal controls.

(v) The transaction that need to be entered into the register maintained under section 301 of the Com- panies Act, 1956 in respect of the services aggregating during the financial year to Rs 500,000/- or more in respect of any party in pursuance of contracts or arrangement have been so entered and in my opinion, and according to the information and explanations given to me, each of these transactions have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

(vi) The Company has not accepted any deposits from the public.

(vii) The Company does not have internal audit system commensurate with the size of its business.

(viii) Provision of section 209 (1 )(d) of the Companies Act, 1956, regarding maintenance of the cost records are not applicable to the Company.

(ix) (a)There are no undisputed statutory dues amount payable in respect Providence Fund, Income Tax, Custom Duty, Excise Duty and Wealth Tax to the Government outstanding in the book as at 31st March, 2010 which were outstanding for a period of more than six months from the date they become payable.

(b)According to the information given to me, no disputed amounts payable in respect of Income Tax and Wealth Tax were in arrears, as at 31 march 2010 for a period of more than six months from the date they become payable.

(x) The accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by my audit and the immediately preceding financial year.

(xi) One Time Settlement Scheme(OTS) proposal offered by the company in respect of the loans was ac- cepted by the lenders and the payments were made by the company accordingly.

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

(xiii) The company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provision of , clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xiv) The company is not dealing or trading in shares, securities, debenture and other investments. Accord- ingly, the provision clause 4(xiv) of the Companies (Auditors Report) Order, 2003 is not applicable to the company.

(xv) The Company has not given any guarantees for loans taken by others from the bank or financial institutions.

(xvi) The company has not raised new term loans during the year.

(xvii) According to the information and explanations given to me and on an overall examination of balance sheet of the Company, I report that no funds raised on Short-term basis have been used for long-term investment and vice versa.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Act.

xix) The Company has not issued debentures.

(xx) The Company has not raised any money by public issue.

(xxi) According to the information and explanation given to me, no fraud on or by the Company has been noticed or reported during the year.

Place : Mangalore

Date : 31.07.2010 (K.R. SHETTY, B.Com, F.C.A)

Chartered Accountant