Auditor Report of Advance Lifestyles Ltd.

Mar 31, 2025

We have audited the accompanying Financial Statements of Advance Lifestyles Limited ("the
Company"), which comprise the Balance Sheet as at 31st March, 2025, the Statement of Profit and
Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement
of Cash Flows for the year ended on that date and notes to the Financial Statements, including a
summary of material accounting policies and other explanatory information (herein after referred to
as "the Financial Statements").

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 (herein after
referred to as "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 (herein after referred as "the Ind AS") and
other accounting principles generally accepted in India, of the state of affairs of the Company as at
31st March, 2025 and its profit, total comprehensive income, changes in equity and its cash flows for
the year ended on that date.

Basis of Our Opinion

We conducted our audit of Financial Statements in accordance with the Standard on Auditing (herein
after referred to as "SAs") specified under section 143(10) of the Act. Our responsibilities under those
standards are further described in the auditor''s responsibilities 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 (herein after referred as "ICAI")
together with ethical requirements that are relevant to our audit of Financial Statements under the
provisions of the Act and Rules made thereunder, and we have fulfilled our ethical responsibilities in
accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the Financial Statements of the current year. These matters were addressed in the context
of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do
not provide separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated
in our report.

Sr. No.	Key Audit Matter	Auditor''s Response
1.	Liability towards the Employees: The company has recognized liabilities toward the employees, including provisions for benefits such as Gratuity, Retrenchment Compensation, and others. Management''s estimation of these liabilities involves significant judgments and assumptions, particularly regarding the measurement of future cash outflows, discount rates, and demographic factors. The liability toward the employees constitutes a substantial portion of the company''s obligations and is inherently complex due to the long-term nature of employee benefit arrangements and the uncertainty surrounding future events. The measurement of such liabilities involves inherent subjectivity, and the outcomes are sensitive to changes in key assumptions. Moreover, given the lack of definitive measures and reliance on management''s judgments and estimates, it needs to be tested appropriately and should also conform to Ind AS covenants. It is therefore key audit matter. Refer Note Nos. 17, 34 & 35.	The audit procedures adopted to test the judgements of the management, the appropriateness of historical data for quantification and application of Ind AS covenants are: • Review of past practices supported by factual evidence that the company''s previous actions have given rise to expectations in the market leading to a constructive/legal obligation as of the date of the balance sheet • Review of relevant documents that support the management Judgement that an obligation exists and that will entail the outflow of the company''s economic resources • Assessment of past practices and historical data as being eligible to form the basis for the provision/ accounting estimates • Assessment of adequacy of disclosures made and compliance with Ind AS covenants. Our review of the provisions created by the company does not reveal any material discrepancy in the provisioning as well as their quantification.
2.	Liability towards the Borrowings: As of March 31st, 2025, the Company''s current financial liabilities encompass unsecured borrowings from two entities, totaling Rs. 462.69 Lakhs (compared to Rs. 462.69 Lakhs as of March 31st, 2024). Notably, confirmations/ statements from these entities have not been received due to	In response to this matter, we have performed alternative audit procedures to gather sufficient appropriate audit evidence to address the risks associated with these borrowings. These procedure include, but are not limited to: • Evaluation of Internal Controls:

	their current involvement in the Corporate Insolvency Resolution Process (CIRP). These liabilities have remained outstanding for a considerable period. Consequently, we cannot provide any comment on any necessary adjustments to the carrying value of these balances and any potential impact on the accompanying financial results.	We have assessed the effectiveness of the Company''s internal controls over the recording and measurement of these liabilities, including procedures related to monitoring and evaluating the financial health of the entities. • Review of Events Subsequent to the Reporting Period: We have considered events occurring after the reporting period, including any developments in the CIRP process, to determine the appropriateness of the carrying value of these balances as of the reporting date. Despite these procedures, due to the inherent limitations associated with the absence of external confirmations and the uncertainty surrounding the payment of the borrowings, we are unable to assure the accuracy and completeness of the carrying value of these liabilities and any potential impact on the accompanying financial results.
3.	Contingent Liabilities: Contingent Liabilities are for ongoing litigations and claims before various authorities and third parties. These relate to indirect tax and claims not acknowledge as debt. Contingent liabilities are considered as key audit matters as the amount involved is significant and it also involves significant management judgement to determine possible outcome and future cash outflows of these disputes.	In the course of performing our audit procedure in relation to this matter, we: • Obtained details of disputed claims from the management as on March 31, 2025. • Discussed with the management about the significant judgment considered in determining possible outcome and future cash outflows of these disputes. • Verified relevant documents related to the disputes. • Evaluated the appropriateness of the accounting policies, related disclosure made and overall presentation in the Standalone Financial Statements in terms of Ind AS 37.

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

The Company''s Board of Directors are responsible for the preparation of the other information. The
other information comprises the information included in the Management Discussion and Analysis,

Board''s Report, Business Responsibility and Sustainability Report, Corporate Governance and
Shareholder''s Information, but does not include the Financial Statements, Consolidated Financial
Statements and our auditors'' 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 in the 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.

Responsibilities of Management and Those Charged with Governance 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, total comprehensive income, changes in equity and cash
flows of the Company in accordance with the Indian Accounting Standards (Ind AS) specified under
the Section 133 of the Act 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 Statements 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.

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

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

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

• Conclude on the appropriateness of management''s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the ability of the Company 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.

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.

Report on Other Legal and Regulatory Requirements

1. A. As required by Section 143(3) of the Act, we report that:

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

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

c) The balance sheet, the Statement of profit and loss including Other Comprehensive Income,
Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are
in agreement with the books of account.

d) In our opinion, the aforesaid Financial Statements comply with the Ind AS specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on 31^st March, 2025,
taken on record by the Board of Directors, none of the directors is disqualified as on 31^st
March, 2025, from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over the financial reporting of
the Company and the operating effectiveness of such controls, refer to our separate Report
in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial control over with reference to the Financial
Statements of the Company.

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

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

h) With respect to the other matters to be included in the Auditor''s Report in accordance with
Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of
our information and according to the explanations given to us:

i. The company has disclosed the impact of pending litigation on its Financial Statement. Refer
Note - 30 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. During the year, there were no amounts which are required to be transferred, to the Investor''s
Education and Protection Fund by the company.

iv. i) The management has represented that, to the best of its knowledge and belief, no funds
(Which are material either individually or in the aggregate) have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of funds)
by the Company to or in any other person or entity, including foreign entity ("Intermediaries"),
with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

• directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Holding

Company or its subsidiary companies incorporated in India or

• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

ii) 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 to or any other person or entity, including foreign entities ("Funding Parties"), with
the understanding, whether recorded in writing or otherwise, that the Company shall:

• directly or indirectly, lend or invest in other person or entities identified in any manner
whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Parties or

• provide any guarantee, security or the like from or on behalf of the Ultimate
Beneficiaries

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

v. The company or its holding company has not declared and paid any dividend during the year.

vi. Based on our examination which included test checks, the company has used accounting
software for maintaining its books of account 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. Further, during the course of our audit we did not come across any
instance of audit trail feature being tampered with. The audit trail has been preserved by the
Company as per the statutory requirements for record retention

2. As required by the Companies (Auditor''s Report) Order, 2020 ("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 B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to
the extent applicable.

For Piyush J. Shah & Co.

Chartered Accountants

FRN: 121172W

Viral R. Sanghvi

Partner

M. No: 191046

UDIN: 25191046BMHXFG5741

Place: Ahmedabad

Date: 27^th May, 2025

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Mar 31, 2024

To the Members of Advance Lifestyles Limited Report on the Audit of Financial Statements Opinion

We have audited the accompanying Financial Statements of Advance Lifestyles Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and notes to the Financial Statements, including a summary of material accounting policies and other explanatory information (herein after referred to as “the Financial Statements”).

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 (herein after referred to as “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 (herein after referred as “the IND AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2024 and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis of Our Opinion

We conducted our audit of Financial Statements in accordance with the Standard on Auditing (herein after referred to as “SAs”) specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the auditor’s responsibilities 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 ofIndia (herein after referred as “ICAI”) together with ethical requirements that are relevant to our audit of Financial Statements under the provisions of the Act and Rules made thereunder, and we have fulfilled our ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements of the current year. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No.	Key Audit Matter	Auditor’s Response
1.	Liability towards the Employees: The company has recognized liabilities toward	The audit procedures adopted to test the
	the employees, including provisions for benefits	judgements of the management, the
	such as Gratuity, Retrenchment Compensation,	appropriateness of historical data for
	and others. Management''s estimation of these	quantification and application of Ind AS
	liabilities involves significant judgments and	covenants are:
	assumptions, particularly regarding the	• Review of past practices supported by
	measurement of future cash outflows, discount	factual evidence that the company''s
	rates, and demographic factors. The liability	previous actions have given rise to
	toward the employees constitutes a substantial	expectations in the market leading to a
	portion of the company''s obligations and is	constructive/legal obligation as of the date
	inherently complex due to the long-term nature	ofthe balance sheet
	of employee benefit arrangements and the	• Review of relevant documents that
	uncertainty surrounding future events. The	support the management Judgement that an
	measurement of such liabilities involves inherent	obligation exists and that will entail the
	subjectivity, and the outcomes are sensitive to	outflow of the company''s economic
	changes in key assumptions. Moreover, given the	resources
	lack of definitive measures and reliance on	• Assessment of past practices and
	management''s judgments and estimates, it needs	historical data as being eligible to form the

	to be tested appropriately and should also	basis for the provision/ accounting
	conform to Ind AS covenants. It is therefore key	estimates
	audit matter. Refer Note Nos. 17 & 33 and	• Assessment of adequacy of disclosures
	Accounting Policy No. 20.	made and compliance with Ind AS covenants. Our review of the provisions created by the company does not reveal any material discrepancy in the provisioning as well as their quantification.
2.	Asset Classified as Held for Sale: We draw attention to Note no. 11 and 20 of the	In performing our audit procedures related
	financial statements regarding, “Assets Held for	to assets held for sale and associated
	Sale (AHS)” along with liabilities associated	liabilities, we evaluated the management''s
	with assets classified as held for sale. The	assessment of the property''s classification
	management has decided to sell its property in	as held for sale in accordance with Ind AS
	Mumbai, Maharashtra in its present condition.	105. We obtained an understanding of the
	The company has found a buyer and an active	criteria for classification, assessed the
	programme to complete the plan has been	documentation supporting the classification
	initiated.	decision, and evaluated the value of the property.
3.	Liability towards the Borrowings: As of March 31st, 2024, the Company''s current	In response to this matter, we have
	financial liabilities encompass unsecured	performed alternative audit procedures to
	borrowings from two entities, totalling Rs.	gather sufficient appropriate audit evidence
	462.69 Lakhs (compared to Rs. 462.69 Lakhs as	to address the risks associated with these
	of March 31st, 2023). Notably,	borrowings. These procedure include, but
	confirmations/statements from these entities have	are not limited to:
	not been received due to their current	• Evaluation of Internal Controls: We
	involvement in the Corporate Insolvency	have assessed the effectiveness of the
	Resolution Process (CIRP). These liabilities have	Company''s internal controls over the
	remained outstanding for a considerable period.	recording and measurement of these
	Consequently, we cannot provide any comment	liabilities, including procedures related to
	on any necessary adjustments to the carrying	monitoring and evaluating the financial
	value of these balances and any potential impact	health of the entities.
	on the accompanying financial results.	• Review of Events Subsequent to the Reporting Period: We have considered events occurring after the reporting period, including any developments in the CIRP process, to determine the appropriateness of the carrying value of these balances as of the reporting date.
		Despite these procedures, due to the inherent limitations associated with the absence of external confirmations and the uncertainty surrounding the payment of the borrowings, we are unable to assure the accuracy and completeness of the carrying value of these liabilities and any potential impact on the accompanying financial results.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder’s Information, but does not include the Financial Statements, Consolidated Financial Statements and our auditors’ 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 in the 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.

Responsibilities of Management and Those Charged with Governance 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, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Indian Accounting Standards (IND AS) specified under the Section 133 of the Act 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 Statements 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.

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

Auditor’s Responsibilities 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 skepticism 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 controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequateinternal financial controls system in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company 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 the 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.

Report on Other Legal and Regulatory Requirements

1. A. As required by Section 143(3) of the Act, we report that:

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

b) In our opinion, proper books of account as required by law have been kept by the Companyso far as it appears from our examination of those books.

c) The balance sheet, the Statement of profit and loss including Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid Financial Statements comply with the IND AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

f) With respect to the adequacy of the internal financial controls over the financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial control over with reference to the Financial Statements of the Company.

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

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

h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The company has disclosed the impact of pending litigation on its Financial Statement. Refer Note - 32 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. During the year, there were no amounts which are required to be transferred, to the Investor’s Education and Protection Fund by the company.

iv. i) The management has represented that, to the best of its knowledge and belief, no funds (Which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Holding Company or its subsidiary companies incorporated in India or

provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

ii) 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 to or any other person or entity, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall:

• directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Parties or

• provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries

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

v. The company or its holding company has not declared and paid any dividend during the year. vi. Based on our examination which included test checks, the company has used accounting software for maintaining its books of account 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. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with.

As provision 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 of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

For Piyush J. Shah & Co.

Chartered Accountants FRN: 121172W

Viral R. Sanghvi

Partner

M. No: 191046

UDIN: 24191046BKAFHJ6750

Place: Ahmedabad Date: 30th May, 2024

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Mar 31, 2014

Report on the Financial Statements:

We have audited the accompanying financial statements of Advance Lifestyles Limited (Formerly Known as The Ahmedabad Advance Mills Limited) ("the Company"), which comprise the Balance Sheet as at March 31, 2014 the Statement of Profit and Loss and 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (which for the time being, are deemed to be the Accounting Standards prescribed under Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material 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 the effectiveness of the company 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 our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the Statement of Profit and Loss, of the 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, 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 account as required by law have been kept by the Company so far as appears from our examination of those books

c) the Balance Sheet, 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, the Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 (which for the time being, are deemed to be the Accounting Standards prescribed under Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

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 Act.

The Annexure referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date

1. In respect of its Fixed Assets:

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. In respect of its inventories:

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, 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) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. 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 given unsecured loans to its subsidiary company. In respect of the said loans, the maximum amount outstanding at any time during the year was Rs. 55,76,12,719/- and the year end balance is Rs. 55,66,35,658/-.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given by the Company are, prima facie, not prejudicial to the interest of the Company.

(c) As per the information and explanations give to us, there are no stipulation for receipt of principal amount of loans or interest. However, the Company is charging the interest at the year end.

(d) Since, there are no stipulations in respect of receipt of principal amount of loans, we are not in a position to comment whether any amount is over due or not.

(e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken unsecured loans from 3 companies listed in the register maintained under Section 301 of the Companies Act, 1956. In respect of the said loans, the maximum amount outstanding at any time during the year and the yearend balance is as follows:

Sr. Particulars Maximum Amt. No. O/s at any Closing balance time during the Year

1. Prateek Spintex Ltd. 31,51,36,357 30,12,89,458

2. Advance Spacelink Pvt. Ltd. 3,53,66,242 NIL

3. Phulchand Exports Pvt. Ltd. 9,46,23,524 NIL

(f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans taken by the Company are, prima facie, not prejudicial to the interest of the Company.

(g) As per the information and explanations give to us, there are no stipulation for repayment of principal amount of loans or interest.

(h) Since, there are no stipulations in respect of repayment of principal amount of loans, we are not in a position to comment whether any amount is over due or not.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assets and payment for expenses and for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. In our opinion and according to the information and explanations given to us, the Company has not carried out any contract or arrangements referred to in Section 301 of the Companies Act, 1956. Hence, Clause 4(v) of the Order is not applicable to the Company.

6. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

7. Company''s internal audit is carried out by a Chartered Accountant. In our opinion and according to the information & explanations given to us, the Company has an internal audit system commensurate with its size and the nature of its business.

8. In our opinion and according to the information and explanations given to us, the cost records as prescribed under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 have not been maintained by the Company during the year, as there was no manufacturing activity except trading of cloth and property development activities.

9. In respect of statutory dues:

(a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess other statutory dues to the extent applicable have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, there were no outstanding statutory dues as on 31st of March, 2014 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 is no amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty.

10. In our opinion, the company has accumulated losses at the end of the financial year, which are not more than its net worth and has incurred cash losses during the financial year covered by our audit and has not incurred any cash losses during the immediately preceding financial year.

11. The Company has not taken loan from bank or financial institutions and has also not issued debenture. Hence, clause 4(xi) of the Order is not applicable to the Company.

12. 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.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Order is not applicable to the Company.

14. According to information and explanations 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 Order are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. The Company has not taken any term loan during the year under audit. Accordingly, the provisions of clause 4(xvi) of the Order are not applicable to the Company.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debenture. Accordingly, the provisions of clause 4(xix) of the Order are not applicable to the Company.

20. The Company has not raised any money by way of public issue during the year.

21. 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, nor have we been informed of such case by the management.

Sd/- For, Dhiren Shah & Co. Chartered Accountants FRN: 114633W

Sd/- Dhiren Shah Place: Ahmedabad (Partner) Date: 11-08-2014 Membership No. : 035824

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Mar 31, 2010

1. We have audited the attached Balance Sheet of The Ahmedabad Advance Mills Limited as at March 31, 2010 and also the Profit and Loss account and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 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) 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 to the extent applicable to the Company.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) The company has made the provision ofRs. 4, 73, 83,235- for retrenchment compensation and salary for the closure period of employees during the year.

The provisions ofRs. 4, 73, 83,235/- relate to previous year and thcx•fore, the profit for the year under report has been understated by that amount.

(b) During the year, the Company has given Inter Corporate Deposits (ICD.f) to one Company (in which a director of the Company is interested) aggregating to Rs. 3,07,50,000/-. Approval of the Central Government in respect of the ICD given has not been obtained as required by Section 295 of the Companies Act 1)56. Out of the aforesaid ICD whole amount is repaid during the year, (as indicated in Note 2 of Schedule 18). Do application has been made by the Company to the Central Government under Section 295.

(c) The management has represented that the market value of its freehold land is adequate to meet its contingent and ascertained liabilities. The Company has also received an undertaking from its promoters to support the Company to meet its obligations. However in view of suspension of operations as described in note 1-B on Schedule 18, " provision for retrenchment compensation as described in 4(a) above and in the absence of any formal business plan (as during the year the Company has carried out activity of trading of cloths only), we are unable to state whether the Company will be able to continue in operation as a going concern in the foreseeable future.

5. Subject to the matters referred to in paragraph (4) above:

a. we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet Profit and Loss Account and Cash Flow statement dealt with by this report are in agreement with the books of account;

d. in our opinion, and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit and Loss Account and Cash Flow Statement, except for prior years provision of retrenchment compensation in paragraph 4(a) above and for our comments on the appropriateness of the going concern assumption under Accounting Standard 1 in paragraph 4(c) above, 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. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give tire information required by the Companies Act, 1956, in the manner so required except for prior years provision of retrenchment compensation in paragraph 4(a) above and our inability to assess if the going concern assumption has been followed appropriately as stated in paragraph 4(c) above, and its impact on these accounts, if any, not ascertainable and read togeti/cr with other notes, the financial statements 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 March 31, 2010;

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

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

6. We further report that, on the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being . appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in paragraph 3 of our report of even date to the members of The Ahmedabad Advance Mills Limited on the financial statements for the year ended March 31, 2010.

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

(b) Fixed assets have been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

(c) During the year, the Company has disposed off 7931.69 sq. mtrs. of land which has the approval of B1FR under the revival scheme. According to the information and explanations given to us, we are of the opinion that the sale of said part of land has affected the going concern status of the Company.

(ii) (a) The inventories have been physically verified during the year by the management. In our opinion, the fiequency of verification is reasonable.

(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) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventories and there were no discrepancies noticed on physical verification.

(iii) (a) As per information and explanations given to us, the Company has granted unsecured loans aggregating Rs. 3,07,50,000/- to one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the period was Rs. 2.43,00,000 and the year end balance of such loans was Rs. 21,08,75 1/- (Cr.).

(b) As per the information and explanations given to us, the rate of interest and other terms and conditions at which the loans have been given to the Company covered in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company having regard to the market yields.

(c) As per information and explanations given to us. the Company is regular in receipt of the principal amount and interest thereon.

(d) As per the information and explanations given to us, the Company has taken reasonable steps for the recovery of the principal amount and interest thereon.

(e) The Company has taken unsecured loans aggregating to Rs. 12,43,62,491/- from two companies covered in the register maintained under section 301 of the Companies Act, 1956, which were repaid in full and only interest portion is outstanding at the year end. The maximum amount involved during the year was Rs. 13, 21, 60,220 and the year end credit balance is Rs. 40,92,492/-.

(f) As per the information and explanation given to us, the rate of interest and other terms and conditions on which loans have been taken from companies, covered in the register maintained under section 301 of the Companies Act, 1956 are prima facie not prejudicial to the interest of the Company having regard to the market yields.

(g) As per the information and explanation given to us, the Company is regular in payment of the principal amount and interest thereon.

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

(v) According to the information and explanation given to us. company has not carried out any contract or arrangements referred to in Section 301 of the Act, hence Clause 4(v) of the Order is not applicable to the company.

(vi) The Company has not accepted any deposits from the public to which the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply.

(vii) Companys internal audit is carried out by a Chartered Accountant. In our opinion and 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.

(viii) In our opinion and according to the information and explanations given to us. the cost records as prescribed under clause (d) of sub- section (I) of section 209 of the Act. have not been maintained by the Company during the period, as there was no manufacturing activity except trading of cloth.

(ix) (a) According to the records of the Company and information and explanations given to us, statutory dues including provident fund, employees state insurance (E.S.l.C), income tax, sales tax. service tax, cess and other material statutory dues as applicable to it have generally been regularly deposited during the year under audit with the appropriate authorities. As explained to us. the Company did not have any dues on account of investor education and protection fund, customs duty, excise duty and wealth tax.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance (E.S.l.C), income tax, sales tax, service tax, cess and other material statutory dues as applicable were in arrears, as at March 31, 2010 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 Income Tax/ Sales Tax/ Service Tax/ Customs Duty/ Wealth Tax/ Excise Duty or Cess that have not been deposited on account of any dispute, except the amount & details shown as per chart given below:

Details of Tax demand raised Amount Rs. Remarks

For the A.Y.2007-08 demand for 4,08,07,057 Appeal preferred" income tax has been raised by the before CIT Assessing Office while passing order (Appeals) u/s. 143(3) of the Act

(x) In our opinion, there are no accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by our audit. The Company had incurred cash losses during the immediately preceding financial year.

(xi) The company has not taken loan from bank or financial institution and has also not issued debentures. Hence, clause 4(xi) of the order is not applicable to the company.

(xii) Based on the examination of our records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) 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 provisions of clause 4 (xiv) of the Order are not applicable to the Company.

(xv) According to information and explanations given to us. the Company has not given guarantee for loans taken by others from banks or financial institutions. According!); the provisions of clause 4 (xv) of the Order are not applicable to the Company.

(xvi) The Company has not taken any term loans during the year under audit. Accordingly. 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 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.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures. Accordingly, the provisions of clause 4 (xix) of the Order are not applicable to the Company.

(xx) The Company has not raised any money by way of public issues. 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, DHIREN SHAH & CO., Chartered Accountants


Membership No. 35824 Firm Reg. No. 114633W

Place: Ahmedabad Date : 31-05-2010

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Mar 31, 2009

1. We have audited the attached Balance Sheet of The Ahmedabad Advance Mills Limited as at March 31, 2009 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date both annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 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 (the Order), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that:

a) Provision for retrenchment compensation and compensation for closure period aggregating to Rs. 47,383,235/ in respect of employees who have yet to tender their resignation, has not been made in view of the obligating event having taken place by way of the order of Honorable High Court of Gujarat which held that closure declared by the management is legal and valid. Had the provision been made for this amount, loss for the year and adverse balance carried forward in the profit and loss account would have been higher by Rs. 47,383,235 (see Note 6 of Schedule 18).

b) The Company had given Inter Corporate Deposits (ICD) up to March 31, 2008 to two Companies and a partnership firm ( in which a director of the Company is interested) aggregating Rs. 36,250,000 and fresh ICD of Rs.5,500,000 during the current year. Approval of the central government in respect of the aggregating ICD amounting to Rs.41,750,000 has not been obtained as required by Section 295 of the Companies Act 1956. Out of the aforesaid, ICDs aggregating to Rs.40,800,000 has been repaid upto 31.3.09. The amount of ICDs outstanding as at March 31, 2009 is Rs. 950,000. (as indicated in Note 2(a) of Schedule 18). No- application has been made by Company to the Central Government under section 295.

c) There are no approval given by the Board of Directors authorizing the ICD given aggregating to Rs.80,528,050 during the year ended March 31, 2009 as required under section 292(1 )(e) of the Companies Act, 1956 (see Note 2(b) of Schedule 18).

d) The management has represented that the market value of its freehold land is adequate to meet its contingent and ascertained liabilities. The Company has also received an undertaking from its promoters to support the Company to meet its obligations. However in view of suspension of operations as described in note 1-B on Schedule 18, the significant loss made by the Company during the year, negative net worth (after considering the non-provisioning of retrenchment and closure compensation as described in 4(a) above) and the absence of any formal business plan, we are unable to state whether the Company will be able to continue in operation as a going concern in the foreseeable future.

5. a) Subject to the matters referred to in paragraph (4) above:

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 the books;

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

d) in our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit and Loss Account and Cash Flow Statement, except for our comments on the appropriateness of the going concern assumption under Accounting Standard 1 in paragraph 4(d) above and for non-provisioning of retrenchment and closure compensation under Accounting Standard 29 in paragraph 4(a) above, comply with the Accounting Standards referred to 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, the said accounts give the information required by the Companies Act, 1956, in the manner so required and except for our inability to assess if the going concern assumption has been followed appropriately as stated in paragraph 4(d) above, and its impact on these accounts, if any, not ascertainable, 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 March 31, 2009;

(ii) in the case of the Profit and Loss Account, of the loss 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.

6. We further report that, on the basis of the written representations received from the directors as on March 31 2009, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2009 from being appointed as director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

Annexure to the Auditors report

Annexure referred to in paragraph 3 of our report of even date to the members of The Ahmedabad Advance Mills Limited on the financial statements for the year ended March 31, 2009

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

(b) Fixed assets have been physically verified by the management during the year and in our opinion the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

(c) There was no disposal of fixed assets during the year. Therefore, the provisions of clause 4(i)(c) of the Order are not applicable to the Company.

(ii) (a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(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) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventories and there were no discrepancies noticed on physical verification.

(iii) (a) As per information and explanations given to us, the Company has granted unsecured loans aggregating Rs. 5,500,000 to three parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the period was Rs. 52,337,033 and the period end balance of such loans was Rs. 950,000.

(b) As per the information and explanations given to us, the rate of interest and other terms and conditions at which the loans have been given to 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 having regard to the market yields.

(c) As per the information and explanations given to us, the Company is regular in receipt of the principal amount and interest thereon.

(d) As per the information and explanations given to us, the Company has taken reasonable steps for the recovery of the overdue principal amount and interest thereon.

(e) The Company has taken unsecured loans aggregating to Rs. 156,868,625 from four parties covered in the register maintained under section 301 of the Act, 1956. The maximum amount involved during the year was Rs. 223,092,120 and the yearend balance is Rs. 61,474,719.

(f) As per the information and explanations given to us, the rate of interest and other terms and conditions on which loans have been taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are prima facie not prejudicial to the interest of the Company having regard to the market yields.

(g) As per the information and explanations given to us, the Company is regular in payment of the principal amount and interest thereon.

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

(v) (a) According to the information and explanations given to us, we are of the opinion that the contracts or arrangements 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 an according to the information and explanations given to us, the transactions in excess of Rs. 5 lakhs made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public to which the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 apply. Accordingly, the provisions of clause 4 (vi) of the Order are not applicable to the Company. As informed 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.

(vii) In our opinion and according to the information and explanations given to us, whilst the Company has an internal audit system, the scope of which needs to be extended to make it commensurate with the size and nature its business.

(viii) In our opinion and according to the information and explanations given to us, the cost records as prescribed under clause (d) of sub- section (1) of section 209 of the Act have not been maintained by the Company during the period, as there was no manufacturing activity except on job work basis.

(ix) (a) According to the records of the Company and information and explanations given to us, provident fond, employees state insurance, income tax, sales tax, service tax, cess and other material statutory dues as applicable to it have generally been regularly deposited during the year under audit with the appropriate authorities. As explained to us, the Company did not have any dues on account of investor education and protection fund, customs duty, excise duty and wealth tax.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance (E.S.I.C), income tax, sales tax, service tax, cess and other material statutory dues as applicable were in arrears, as at March 31, 2009 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 Income Tax/ Sales Tax/ Service Tax/ Customs Duty/ Wealth Tax/ Excise Duty or Cess that have not been deposited on account of any dispute.

(x) In our opinion, the accumulated losses at the end of the financial year are more than fifty per cent of its net worth. The Company has incurred cash losses during the financial year covered by our audit.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) Based on the examination of our records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) 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 provisions of clause 4 (xiv) of the Order are not applicable to the Company.

(xv) According to information and explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4 (xv) of the Order are not applicable to the Company.

(xvi) The Company has not taken any term loans during the year under audit. Accordingly, 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 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.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures. Accordingly, the provisions of clause 4 (xix) of the Order are not applicable to the Company.

(xx) The Company has not raised any money by way of public issues. 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 DELOITTE HASKINS & SELLS Chartered Accountants A. S. Varma Partner Membership No. 15458

MUMBAI: 25 SEP 2009