Auditor Report of Gem Spinners India Ltd.

Mar 31, 2025

We have audited the standalone financial statements of M/s. Gem Spinners India Limited
("the Company*), which comprise the Balance Sheet as at March 31. 2025. the Statement of
Profit and Loss (including other comprehensive income), 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 the significant accounting policies and other explanatory
information (hereinafter 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 ("the Act*) in the manner so required and give a true and fair view in conformity with
the Indian Accounting Standards prescnbed under Section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules. 2015, ("Ind AS") as amended and other
accounting pnnciples generally accepted in India, of the state of affairs of the Company as at
March 31. 202S and its Profit and Other total Comprehensive Income, Changes in Equity and
Cash Flows for the year ended on that date.

Basis of Opinion

We conducted our audit in accordance with the Standards on Auditing (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 (ICAO together with the ethical requirements that
are relevant to our audit of the financial statements under the provisions of the Companies
Act. 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in
accordance with the requirements and the ICA1 s Code of Ethics We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion on the financial statements.

Key Audit Matter

Key audit matters are those matters that in our professional judgment were of most
significance m our audit of the standalone financial statements of the current period FM?
have determined that no fair value measurements were made in respect of
assets/habiltties as required under Ind AS 1 f3. Accordingly, the values stated are as pet
books of accounts and not fair values

Our report on the standalone financial statements is not modified no adjustments are
considered necessary by the Management in the standalone financial statements.

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

The Company''s Board of Directors is responsible for the other information. The other
information comprises the Director''s report including Annexure to Board Report and
Shareholders Information but does not include the financial statements and our auditor''s
report thereon

Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained during the course of
our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, on the other information obtained prior to the date
of this auditor''s report, 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.

Responsibility of Management for the Financial Statements

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, total
comprehensive income, changes in equity and cash flows of the Company in accordance with
the Ind AS and other accounting principles generally accepted in India.

The Company''s Board of Directors is responsible for 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, the 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 the management
either intends to liquidate the Company or to cease operations, or has no realistic alternative
but to do so. Those Board of Directors are also responsible for overseeing the ^Company''s
financial reporting process.

Auditor''s 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 scepticism throughout the audit We also:

• Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section
143(B>(t) of the Act. we are also responsible for expressing our opinion on whether the
Company has adequate internal financial controls with reference to financial statements
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 basts of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor''s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor''s
report However, future events or conditions may cause the Company to cease to
continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.

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 lear^-t^njy
independence, and where applicable, related safeguards. k©"

Report on Other Legal and Regulatory Requirements

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

2. 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 of the
aforesaid financial statements.

(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 Cash Flow Statement 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 31st
March, 2025, taken on record by the Board of Directors, none of the directors is
disqualified as on 31st 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 financial reporting
of the company and other operating effectiveness of such controls, refer to our
separate report in ‘Annexure B‘.

With respect to the other matters to be included in the Auditors Report in accordance with

the requirements of section 197(16) of the Act, as amended:

(g) In our opinion and to the best of our information and according to the explanations
given to us, no remuneration was paid by the Company to its directors during the year.

(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 me:

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

ii. The Company did not have any long-term contracts including derivative
contracts for which there were any material foreseeable losses,

iii There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company, v''CoAN">j_!w

iv. Management has represented that to the best of its knowledge and belief, other
than as disclosed in the notes to the accounts, no funds have been advanced or
loaned or invested (either from borrowed funds or any other sources or kind of
funds) by the company to or in any other person(s) or entityfis), including
foreign entities (''Intermediaries''), with the understanding, whether recorded in
writing or otherwise, that the Intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the company (‘Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.

v Management has represented that to the best of its knowledge and belief, other
than as disclosed in the notes to the accounts no funds have been received by
the Company from any person(s) or entity(ies), including foreign entities
("Funding Parties''), with the

understanding, whether recorded in writing or otherwise, that the Company
shall, whether, directly or indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Funding Party
("Ultimate Beneficianes'') or provide any guarantee, security or the like on behalf
of the Ultimate Beneficiaries, and Based on the audit procedures adopted by me.
nothing has come to my notice that has caused me to believe that the
representations made by the management under sub clause (i) and (ii) above,
contain any material Misstatement

vi. In our opinion and according to the information and explanations given to us,
the no remuneration was paid by the Company to its directors.

vii. Based on our examination which included test checks and in accordance with
requirements of Implementation Guide on Reporting on Audit Trail under the
rule 11 (g) of the Companies (Audit and Auditors) Rule,2014 the company has not
maintained the audit trail (edit log) in the accounting software.

For Vivekanandan Associates

Firm Reg No 005268S

W

\MV fr/cnarrer.sYA

» llpy. lttim^ecountantslj:J

i\ r

S. De ha lee sap. Partner

M. No: 027312

UDIN: 25027312BMITGE51S8

Date: 30-05-202S

Place: Chennai

---

Mar 31, 2024

We have audited the standalone financial statements of M/s. Gem Spinners India Limited (“the Company”), which comprise the Balance Sheet as at March 31,2024, the Statement of Profit and Loss (including other comprehensive income), 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 the significant accounting policies and other explanatory information (hereinafter 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 (“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, (“Ind AS”) as amended and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2024 and its Profit and Other total Comprehensive Income, Changes in Equity and Cash Flows for the year ended on that date. Basis of Opinion

We conducted our audit in accordance with the Standards on Auditing (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 (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with the 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 audit opinion on the financial statements.

Emphasis of Matter

Our report on the standalone financial statements is not modified no adjustments are considered necessary by the Management in the standalone financial statements.

Key Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. We have determined that no fair value measurements were made in respect of assets/liabilities as required under Ind AS 113. Accordingly, the values stated are as per books of accounts and not fair values.

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

The Company''s Board of Directors is responsible for the other information. The other information comprises the Director''s report, including Annexure to Board Report, and Shareholders Information but does not include the financial statements and our auditor''s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, on the other information obtained prior to the date of this auditor''s report, 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.

Responsibility of Management for the Financial Statements

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, total comprehensive income, changes in equity and cash flows of

the Company in accordance with the Ind AS and other accounting principles generally accepted in India.

The Company''s Board of Directors is responsible for 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, the 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 the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor’s 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 scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial 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 with reference to financial statements 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 Company''s ability to continue as a going concern. If we conclude

that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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 my independence, and where applicable, related safeguards. report on other Legal and regulatory requirements

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

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

(a) We have 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 of the aforesaid financial statements.

(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 Cash Flow Statement 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 31st March, 2024, taken on record by the Board of Directors, none of the directors is disqualified as on 31st 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 financial reporting of the company and other operating effectiveness of such controls, refer to our separate report in “Annexure B”.

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

(g) In our opinion and to the best of our information and according to the explanations given to us, no remuneration was paid by the Company to its directors during the year.

(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 me:

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

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. Management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds have been advanced or loaned or invested (either from borrowed funds or any other sources or kind of funds) by the company to or in any other person(s) or entity(is), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

v. Management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries, and Based on the audit procedures adopted by me, nothing has come to my notice that has caused me to believe that the representations made by the management under sub clause (i) and (ii) above, contain any material Misstatement.

vi. In our opinion and according to the information and explanations given to us, the no remuneration was paid by the Company to its directors.

vii. Based on our examination which included test checks and in accordance with requirements of Implementation Guide on Reporting on Audit Trail under the rule 11(g) of the Companies (Audit and Auditors) Rule,2014 the company has not maintained the audit trail (edit log) in the accounting software.

For Vivekanandan Associates

Firm Reg No: 005268S V. Vivekanandan (Partner) Place: Chennai M. No: 027204

Date: 29-05-2024 UDIN: 24027204BKEZFG1174

---

Mar 31, 2015

We have audited the accompanying financial statements of Gem Spinners India Limited, ("the Company") which comprise the Balance Sheet as at March 31, 2015, 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.

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 and presentation 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 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 the design, implementation and maintenance of adequate 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

Our responsibility is to express an opinion on these financial statements based on our audit. We 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.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143 (10) of the act. Those standards require that we comply that 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 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 control system over financial reporting and operating effectiveness of the such control. An audit also includes evaluating the appropriateness of 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.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the company as at 31st March 2015, its Profit / loss and its cash fl ow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

2. As required by section 143(3) of the Companies Act 2013, 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 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, Statement of Profit and Loss & the Cash Flow Statement comply with the Accounting Standards specified under the Section 133 of the act, read with rule 7 in Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of sub- section (2) of section 164 of the act.

f) 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 is not having any pending litigations on its financial position in its financial statements for the year ending 31st March 2015;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

The Annexure referred to in Our Independent Auditors' Report to the members of the company on the financial statements for the year ended 31st March 2015, we report that

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

(b) The company has a regular program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner at reasonable intervals by the management. According to the information and explanations given to us, no material discrepancies where observed by the management on such verification.

(ii) (a) The stock of inventory has been physically verified by the management at reasonable intervals during the year. In our opinion the frequency of Verification is reasonable.

(b) In our opinion and according to the information and explanations given to us the procedures of physical Verification of inventory followed by the management are reasonable and adequate in relation to the size and nature of its business.

(c) The company is maintaining proper records of inventory. No material discrepancy was noticed on such physical verification.

(iii) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013. Consequently the provisions of clause (iii) (a) (b) and (c) are not applicable to the company.

(iv) In our opinion and according to the explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The company has not accepted any deposits from the Public during the year.

(vi) Central Government has prescribed maintenance of cost records under sub- section (1) of section 148 of the Companies Act and such accounts and records have been prepared and maintained by the company.

(vii)(a)According to the information and explanations given to us and on the basis of our examination of the records of the company, amount deducted or accrued in the books of account in respect of undisputed statutory dues including provident fund, income-tax, sales tax, wealth tax, service tax, value added tax, cess and other material statutory dues have been regularly deposited by the Company with the

appropriate authorities. As explained to us, the Company is having the following dues:

Name of Nature of Amount Period to Forum where the Statute dues which the dispute is amount pending relates

ESIC ESI 0.12 2014-15 ESIC

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax wealth tax, service tax, value added tax, cess and other material statutory dues were in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable.

(b) However, according to the information and explanations given to us, the following dues of income tax and employees' state insurance have not been deposited by the company on account of disputes.

Name of Nature of Amount Period to Forum where the Statute dues which the dispute is amount pending relates

Service Service Tax 58.60 2004-07, CESTAT Tax 2008-09, 2010-11 2011-12

Sales Tax Sales Tax 11.42 2005-06 Commercial to Tax 2009-10

(c) According to the information and explanations given to us, the amounts which were required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

(viii) The Company has accumulated losses of Rs. 3262.15 lakhs as at March 31, 2015 and 3252.29 lakhs as at March 31, 2014 and has incurred cash Profit of Rs. 816.88 lakhs in the financial year ended March 31, 2015 as against a cash Profit of Rs, 220.47 lakhs in the immediately preceding financial year.

(ix) The company did not have any outstanding dues to financial institutions, banks during the year.

(x) In our opinion and according to the information and explanations given to us the company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) The Company did not have any term loans outstanding during the year.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported, during the course of our audit.

For Vijay Sarathy & Co.,

Chartered Accountants

Firm Registration No: 004695S



P.Srikanth

Place: Chennai Partner

Date: 14.08.2015 M. No: 204279

---

Mar 31, 2014

We have audited the accompanying financial statements of Gem Spinners India Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the 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 disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s

preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 of the Company for the year ended on that date; and

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

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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet & Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; and

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.

Annexure to the Independent Auditors'' Report

Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements'' section of our report of even date

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

1. (i) the company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(ii) the fixed assets are being physically verified under a phased programme of verification, which, in our opinion, is reasonable having regard to the nature and value of its fixed assets. However, no material discrepancies have been noticed during the year on such verification.

(iii) the company has not disposed off substantial part of its fixed assets during the year.

2. (i) inventories have been physically verified during the year by the management at reasonable intervals.

(ii) in our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(iii) in our opinion, the company is generally maintain- ing proper records of its inventories and no material discrepancies were noticed on physical verification.

3. On the basis of our examination of the books of account, the Company has taken unsecured loan

from companies, firms or other parties covered in the register maintained under section 301 of the Act.

4. In our opinion, there is generally an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (i) Based on the audit procedures applied by us, the particulars of contracts or arrangements referred to in Section 301 of the Act that needed to be entered into the register, maintained under the said section have been so entered.

(ii) Where each of such transactions is in excess of Rs.5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. The company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 1975 with regard to deposits accepted from public.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the

Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government of India under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (i) The Company is generally regular in depositing

undisputed statutory dues including provident fund, investor education and provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities during the year.

(ii) No undisputed amounts payable in respect of statutory dues were outstanding as at March 31, 2014 for a period of more than six months from the date they became payable.

(iii) There are no dues of Income tax, wealth tax, excise duty, service tax, customs duty which have not been deposited on account of any dispute. Details of dues towards sales / service tax that have not been deposited on account of any dispute, for which stay has been obtained, are (Nature of dues, dues, period to which the amount relates, forum where dispute is pending) - Service tax Rs. 50.10 Lakhs, Financial year 2004-07, 2008-09 & 2010-11, CESTAT. Sales tax 11.42 Lakhs, Financial year 2005-06 to 2008-09. Commercial tax.

10. The Company have an accumulated losses of Rs.3252.29 lakhs as at March 31, 2014 and Rs. 3242.10 lakhs as at March 31, 2013 and has incurred a cash profit of Rs.220.47 lakhs during the financial year ended March 31, 2014 and has incurred a cash loss of Rs.32.33 lakhs in the immediately preceding financial year.

11. In our opinion, the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holders during the year.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year.

13. The Company is not a chit fund or Nidhi / mutual benefit fund/society. Accordingly the provisions of Clause 4(xiii) of the CARO are not applicable to the company.

14. The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the CARO are not applicable to the company.

15. The Company has not given any guarantees for loans taken by others from banks or financial institutions.

16. The term loans availed by the company were, prima facie, applied for the purpose for which they were obtained.

17. On an overall examination of the financial statements of the company, funds raised on short term basis have prima facie, not been used for long term investment.

18. 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 during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year.

21. Based on the audit procedures performed and considering the size and nature of the company''s operations, no fraud of material significance on or by the company has been noticed or reported during the year.

For Vijai Sarathy & Co., For CNGSN & Associates Chartered Accountants Chartered Accountants Firm Regn. No. 004695S Firm Regn. No. 004915S

Place : Chennai - 17 P.Srikanth C.N.Gangadaran Date : 12.08.2014 Partner Partner M. No. 204279 M. No. 11205

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Gem Spinners India Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement ¦ for .the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 t of the Companies Act, 1956 ("the Act") and in accordance with.the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the 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 disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of "the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. ^ '',

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 31,2013;

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

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

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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet & Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; and

Annexure to the Independent Auditors'' Report

Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date.

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

1. (i) the company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(ii) the fixed assets are being physically verified under a phased programme of verification , which, in our opinion, is reasonable having regard to the nature and value of its fixed assets. However, no material discrepancies have been noticed during the year on such verification.

(iri) the Company has not disposed off substantial part of its fixed assets during the year.

2. (i) inventories have been physically verified during the year by the management at reasonable intervals. ,

(ii) in our opinion, the procedures of physical verification of inventory.followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(iii) in our opinion, the company is generally maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

e. on the basis of written representations received from the Directors as on March 31,2013, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31,2013, from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

3.- On the basis of our examination of the books of account, the Company has neither granted nor taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under section 301 of the Act.

4. In our opinion, there is generally an adequate'' internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventories and fixed assets and for. the sale of goods and services. Further, on the basis of our examination of the books 2nd records of the company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (i) based on the audit procedures applied by us, the particulars of contracts or arrangements referred to in Section 301 of the Act that needed to be entered into the register, maintained under the said section have been so entered.

(ii) where each of such transactions is, in excess of Rs.5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. The company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules," 1975 with regard to deposits accepted from public.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government of tndia under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (i) the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess arid other material statutory dues as applicable with the appropriate authorities during the year.

(ii) no undisputed amounts payable in respect of statutory dues were outstanding as at March 31, 2013 for a period of more than six months from the date they became payable.

(iii) there are no dues of Income tax, wealth tax, excise- duty, service tax, customs duty which have not been deposited on account of any dispute. Details of dues towards sales tax that have not been deposited on account of any dispute, for which stay has been obtained, are (Nature of dues, dues, period to which the amount relates, forum where dispute is pending) Service Tax, Rs. 40.11 Lakhs, Financial year 2004 - 2007 & 2008 - 2009, CESTAT.

10. The Company have an accumulated losses of Rs.3242.10 lakhs as at March 31, 2013 and Rs. 3180.16 lakhs as at March 31,2012 has incurred cash loss of Rs. 32.33 Lakhs during the financial year ended March 3t, 2013 and has incurred a cash loss of Rs. 366.60 Lakhs in the immediately preceding financial year.

11. In our opinion, the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holders during the year.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year.

13. The Company is not a chit fund or Nidhi / mutual benefit fund/society. Accordingly the provisions of Clause 4(xiii) of the CARO are not applicable to the company.

14. The Company is not dealing'' or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the CARO are not applicable to the company.

15. The Company has not given any guarantees for loans taken by others from banks or financial institutions.

16. The term loans availed by the company were, prima facie, applied for the purpose for which they were obtained.

17. On an overall examination of the financial statements of the company, funds raised on short term basis have prima facie, not been used for long term investment.

18. The Company has made a preferential allotment of Rs. 2 Crores equity shares during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year.

21. Based on the audit procedures performed and considering the size and nature of the company''s operations, no fraud of material significance on or by the company has been noticed or reported during the year.

By Order of the Board

For Gem Spinners-jndia Ltd

Place : Chennai - 86 A. Vani

Date : 27.05.2013 Company Secretary

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Gem Spinners India Ltd, as at March 31, 2012 and the related Profit and Loss Account and Cash Flow Statement for the year ended on the date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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

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

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

e. On the basis of written representations received from the directors, as on March 31, 2012 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2012 from being appointed as a Director in terms of Clause (g) of sub-section (I) of Section 274 of the Act;

f. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India;

i. in the case of the Balance Sheet, of the state of affairs of the Company as at March 2012.

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 Cash Flow Statement, of the cash flow for the year ended on that date. ANNEXURE 'A' TO THE AUDITORS' REPORT

Referred to in paragraph 4 of the Auditors' Report of even date to the members of Gem Spinners India Ltd on the financial statements for the year ended 31st March, 2012.

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

(b) The fixed assets are physically verified by the management during the year and no material discrepancies were noticed on such verification as compared to the available records, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year and in our opinion, the frequency of verification was reasonable.

(b) In our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) (c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records which has been dealt with in the books of account were not material.

3. (a) The Company has not granted any loans, secured or unsecured from Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has not taken any loans secured or unsecured from Companies covered in the register maintained under Section 301 of the Companies Act, other than interest free unsecured loan from the Directors of the Company.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased/sold are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance of Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time or the prices at which the transactions for similar goods have been made with other parties.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (I) of Section 209 of the Companies Act, 1956 and are of the opinion that Prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, VAT, wealth tax, customs duty, excise duty, Service Tax, cess and other material statutory dues as applicable with the appropriate authorities.

10. The Company has accumulated losses as at March 31, 2012 and it has incurred cash losses in the financial year ended on that date but not incurred cash losses in the immediately preceding financial year.

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

12. The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

13. In our opinion the Company is not a dealer or trader in shares, securities, debentures and other investments.

14. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

15. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

16. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short- term basis, which have been used for long-term investment.

17. 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 during the year.

18. The Company has not raised any money by public issue during the year

19. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.



For Vijai Sarathy & Co., For CNGSN & Associates

Chartered Accountants Chartered Accountants

R. Parthasarathy C.N. Gangadaran Partner Partner

Place : Chennai - 600 017 Date : 06.08.2012

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Gem Spinners India Ltd, as at March 31, 2010 and the related Profit and Loss Account and Cash Flow Statement for the year ended on the 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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

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

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

e. On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, 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 (I) of Section 274 of the Act;

f. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India;

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 2010

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 Cash Flow Statement, of the cash flow for the year ended on that date.

ANNEXURE A TO THE AUDITORS REPORT

Referred to in paragraph 4 of the Auditors Report of even date to the members of Gem Spinners India Ltd on the financial statements for the year ended 31st March , 2010.

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

(b) The fixed assets are physically verified by the management during the year and no material discrepancies were noticed on such verification as compared to the available records, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year and in our opinion, the frequency of verification was reasonable.

(b) In our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records which has been dealt with in the books of account were not material.

3. a) The Company has not granted any loans, secured or unsecured from Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

b) The Company has not taken any loans secured or unsecured from Companies covered in the register maintained under Section 301 of the Companies Act, other than interest free unsecured loan from the Directors of the Company.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased/sold are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register in pursuance of Section 301 of the Companies Act , 1956, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance of Section 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time or the prices at which the transactions for similar goods have been made with other parties.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under.

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

8: We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (I) of Section 209 of the Companies Act, 1956 and are of the opinion that Prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, VAT, wealth tax, customs duty, excise duty, Service Tax, cess and other material statutory dues as applicable with the appropriate authorities.

10. The Company has accumulated losses as at March 31,2010 and it has incurred cash losses in the financial year ended on that date but not incurred cash losses in the immediately preceding financial year.

11. According to the records of the company examined by us and the information and explanations given to us, the Company has defaulted in repayment of dues to Financial Institution as at the balance sheet date.

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

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

14. In our opinion the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

18. 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 during the year.

19. The Company is a sick company within the meaning of 3(1) (o) the Sick Industrial Companies (Special Provisions) Act 1985. As the networth of the company is fully eroded the Company made a reference to the Board for Industrial and Financial Reconstructions for registering the unit as "Sick" under the Sick Industrial Companies (Special Provisions) Act 1985.

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

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For Vijai Sarathy & Co., For CNGSN & Associates

Chartered Accountants Chartered Accountants

Place: Chennai - 17 R. Parthasarathy C.N.Gangadaran

Date : 12.08.2010 Partner Partner