Auditor Report of Hisar Spinning Mills Ltd.

Mar 31, 2024

Basis for Opinion ,

Key Audit Matters

When we read the Company''s Annual Report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the Company''s Board of Directors and those charged with governance and
describe actions applicable under the applicable laws and regulations.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to
the preparation of these financial statements that give a true and fair view of the financial position, financial
performance including other comprehensive income, changes in equity and cash flows of the Company in
accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards
(Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,
2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds
and other irregularities; selection and application of appropriate accounting policies; making judgments and
estimates that are reasonable and prudent; and the 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:

1. 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.

2. Obtain an understanding of internal control 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 the financial
statements in place and the operating effectiveness of such controls.

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

4. 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’sability to continue as a going concern. If we cpnclude 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.

5. 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 for the financial year ended 31st March, 2024 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.

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, to the extent applicable.

2. As required by Section 143(3) of the Act, based on our audit, 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 except for the matters stated in the paragraph 2(i)(vi)
below on reporting under Rule 11(g).

(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the
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 Indian Accounting Standards specified
under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as
amended.

(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) The modification relating to the maintenance of accounts and other matters connected therewith are as
stated in the paragraph 2(b) above on reporting under Section 143(3)(b) and paragraph 2(i)(vi) below on
reporting under Rule 11(g);

(g) With respect to the adequacy of the internal financial controls with reference to the financial statements of
the Company and the operating effectiveness of such controls, refer to our separate report in ''Annexure
B''.

(h) 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 explanations 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 to the Act.

(i) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended, 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 litigations as at 31st March, 2024 on its financial
position in its financial statements - Refer note no. 36 to the financial statements;

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

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

iv. (a) The management has represented that, to the best of its knowledge and belief as disclosed in

the Note no. 43(i) to the financial statements, no funds 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(s) or entity(ies), including foreign entities
(“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 by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that, to the best of its knowledge and belief as disclosed in
the note no. 43(j) to the financial statements, 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, directly or indirectly, lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Parties (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf
of the Ultimate Beneficiaries; and

(c) Based on the audit procedures performed that have been 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 has neither declared nor paid any dividend during the year. .

vi. The Company has used accounting software for maintaining its books of account for the financial
year ended 31st March, 2024 which has a feature of recording audit trail (edit log) facility that has
been enabled by the Company with effect from 01st April, 2023 at 13:52 hours 1ST. Based on our
examination, which included test checks, this feature of recording audit trail (edit log) facility has
operated throughout the year for all relevant transactions recorded in the software. During the course
of our audit, we did not come across any instance of the audit trail feature being tampered with.

Further, the Company maintains stock records for raw materials, finished goods and saleable waste;
cost records as prescribed under Section 148(1) of the Act; and records showing full particulars,
including quantitative details and situation of Property, Plant and Equipment and Capital work-in¬
progress manually. Accordingly, reporting under Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014 is not applicable to the Company in respect of such books of account.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from 01st April, 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 31st March, 2024.

for JAIN & ANIL SOOD
Chartered Accountants
Firm''s Registration No. 010505N

r vt»|^{RAjESH kumar jain}>

Place of Signature: Chandigarh Partner

Date: 30.05.2024 Membership No. 088447

UD)N; Mo&€W7BkEJyq f£fS2-

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Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Hisar Spinning Mills Limited ("the Company") which comprise the Balance Sheet as at 31st March 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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 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 31st March 2014;

(b) in the case of the Statement of Profit and Loss, of the profit 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, 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, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT

(Annexure referred to in paragraph 1 under the heading Report on Other Legal and Regulatory Requirements of our Report of even date to the members of Hisar Spinning Mills Limited for the year ended 31st March 2014)

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

(b) The Company has a program for the physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its fixed assets. No significant discrepancies were noticed on such verification.

(c) Based on our scrutiny of the records of the company and the information and explanations given to us, we report that there was no sale of fixed assets during the financial year ended 31st March 2014. substantial or otherwise. Hence, the question of reporting whether the sale of any substantial part of fixed assets has affected the going concern of the company does not arise.

2. (a) The inventory has 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) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, paragraphs 4(iii)(a) to 4(iii)(d) of the Order are not applicable to the Company.

(b) The Company has taken unsecured loans from two parties covered in the register maintained under section 301 of the Act. The maximum amount involved during the year from these parties was Rs. 4236500/- but there was no year end balance of loans taken from such parties.

(c) In our opinion, the rate of interest and other terms and conditions on which unsecured loans have been taken from parties covered in the register maintained under section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(d) The loans accepted by the Company from parties covered in the register maintained under section 301 of the Act are interest free loans. There is no amount outstanding as on the balance sheet date against such loans. Henceforth, paragraph 4(iii){g) of the Order is not applicable to the Company in respect of regularity of payment of the principal amount and interest.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. The activities of the company do not involve the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Act and exceeding the value of five lakh rupees in respect of any party during the financial year under consideration.

6. The Company has not accepted any deposits from the public within the meaning of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed thereunder.

7. In our opinion, the Company has an internal audit system commensurate with the size and the 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 under Section 209 (1) (d) of the Act and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determining whether they are accurate or complete.

9. (a) The Company is generally regular in depositing the undisputed statutory dues including employees'' state insurance, provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities, though there has been slight delay in a few cases. No undisputed amounts payable in respect thereof were outstanding at the year end for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income tax/sales tax/wealth tax/service tax/custom duty/excise duty/cess which have not been deposited with the appropriate authorities on account of any dispute.

10. The Company does not have any accumulated losses as at 31st March 2014 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. 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 or bank. According to records of the Company, the Company did not have any outstanding debentures 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.

13. In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/ mutual benefit fund/ society.

14. The Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of paragraph 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 guarantee for loans taken by others from banks or financial institutions.

16. According to the records of the Company, the Company has not obtained any fresh term loan during the year under consideration. Hence, comments under para 4 (xvi) of the Companies (Auditor''s Report) Order, 2003 are not called for.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion, 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 Act.

19. The Company has not issued any debentures.

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

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



for JAIN & ANIL SOOD Chartered Accountants Firm Registration No.010505N



(RAJESH KUMAR JAIN) Place: Chandigarh Partner Date : 27.05.2014 Membership No. 088447

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Mar 31, 2012

1. We have audited the attached balance sheet of Hisar Spinning Mills Limited (the "company") as at 31st March 2012, the related statement of profit and loss and cash flow statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 mis-statement. 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 princip es used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor s Report) Order, 2003, as amended by the Companies (Auditor s Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the "Act") and on the basis of such checks of the books and records of the company as we considered appropriate and sccofiifv1 t/j tho information given to us, we enclose in the Annsxyrs, a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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, statement of profit and toss 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 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;

(ej Oh the basis of written representations renewed.from tt]f directors as on & taken on record by the board of directors, none of the directors is disqualified as on 31st March 2012; from being appointed as a director in terms of clause^) of sob-section (1) df5 gectioh!274 of the Act;

(f) In otir opinion and to the best of our informatidn and according to, t|ieexp^natioris given,to us, the said financial statements together with the notes thereon and attached ^hereto,/, 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 (ndia:

(i) in the case of the balance sheet, of the state of affairs or the company as at 3ist March 2012;

(ii) in the case of the statement of profit and loss, of the profit for the year ended on that date;

(ii) inthe case of the cash flow statement, of the cash flows for the year ended on that date

ANNEXURETO THE AUDITORS REPORT

(referred to in paragraph 3 of the Auditor s Report of even date to the members of Hisar Spinning Mills Limited on the financial statements for the year ended 31st March 2012)

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

(b) The company has a program for the physical verification of fixed assets at perbdic intervals. In our opinion, the period of verification is reasonable having regard to the size of the company and the nature of its fixed assets. No significant discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

2. (a) The inventory has 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) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, paragraphs 4(iii)(a) to 4(iii)(d) of the Order are not applicable to the company.

(b) The company has taken unsecured loans from three parties covered in the register maintained under section 301 of the Act. The maximum amount involved during the year from these parties was rupees 6511500/- and the year end balance of loans taken from such parties was rupees 6511500/-.

(c) In our opinion, the rate of interest and other terms and conditions on which unsecured loans have been taken from parties covered in the register maintained under section 301 of the Act are not, prima facie, prejudicial to the interest of the company.

(d) The loans accepted by the company from parties covered in the register maintained under section 301 of the Act are interest free loans. In the case of loans accepted from the parties covered in the register maintained under section 301 of the Act, no principal amount was due for payment to the said parties during the financial year under consideration. Accordingly, paragraph 4(iii)(g) of the Order is not applicable to the company in respect of regularity of payment of the principal amount and interest.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. According to the information given to us, tftereafe no contracts or arrangements during the year that need to be entered into a register in pursuance of section 301 tif the Act. therefore; the provisions of clause 4 (v) of the Order are not applicable to the company.

6. "The company has hot accepted any depasjts from the public witninth,e,meaningo^ sections 58A, 58AA or arty dther relevant provisions of the Act and the rules framed thereunder.

7; In 6Ur opinion, the company has an internal,audjt.system cqnyriensu[Pate,with the size and the nature of its business.

We haweotooadJyreviewedthe cosffecibi^ maintained by the cbrripa ny pursuant to the Companies (Cost Accounting Records) Rutes,2flM,pre^ri^ 209 (1)

(d) of the Act and are of the opinion that prima facie the prescribed cost records have maintained we have how ever not made a detailed examination of the cost records with a view to derermining whether they are accurate or compete

9. (a) The company is generally regular in depositing the undispted statutor dues including exployees state insureance provided fund investor education and protection fund income tax sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities though there has been slight delay in a few cases. No undisputed amounts payable in respect thereof were outstanding at the year end for a period of more that six months from the date they become payable How ever a cheque of rupees 105617/- issued by the company in favour or Punjab National Bank for payment of custom duty during Judy 2011 was presented for payment by the bank after the balance sheet date .

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of income tax/sales tax/wealth tax/service tax/custom duty exorse duty/ cess which have not been deposited with the appropriate authorities on account of any-dispute.

10. In our opinion, the accumulated losses of the company are not more than fifty per cent of its net worth as on 31st March 2012. The company also has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year. In arriving at the accumulated losses net worth and cash tosses as above, we have considered the qualifications, if anyt,whicji,are quantifiable in the audit reports of the years to which these pertain.

11. In our opinion and according to the information and explanations given to us, the company has not pdefaulted in repayment of dues to a financial institution or bank. According to records of the company, the company did not have any outstanding debentures 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.

13. In our opinion and according to the information and explanations given to us, the company is not a chit fund/ nidhi/ mutual benefit fund/ society.

14. The company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of paragraph 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 guarantee for bans taken by others from banks or financial institutions.

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

17. On the basis of an overall examination of the balance sheet of the company, in our opinion, 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 albtment of shares to parlies and companies covered in the register maintained under section 301 of the Act.

19. The company has not issued any debentures.

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

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

for JAIN & ANIL SOOD Chartered Accountants Firm Registration No. 010505N

(RAJESH KUMAR JAIN) Place: Chandigarh Date : 30.082012

Partner

Membership No. 088447

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Mar 31, 2011

1. We have audited the attached balance sheet of Hisar Spinning Mills Limited, as at 31st March 2011, the profit and loss account and also the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

i) 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;

ii) 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;

iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv) 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 Companies Act, 1956;

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

vi) 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 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 31st March 2011;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITOR'S REPORT

(referred to in our report of even date to the members of Hisar Spinning Mills Limited on accounts for the year ended 31st March 2011)

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

(b) The company has a program for the physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the company and the nature of its fixed assets. No significant discrepancies were noticed on such verification.

(c) Based on our scrutiny of the records of the company and the information and explanations given to us, we report that there was sale of fixed assets during the year but the fixed assets disposed of did not constitute a substantial part of the fixed assets of the company. Hence, the question of reporting whether the sale of any substantial part of fixed assets has affected the going concern of the company does not arise.

2. (a) The inventory has 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) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The company has taken unsecured loan from one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year from the said party was Rs. 11000/- and the year end balance of loan taken from such party was Rs. 11000/-. The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion, the rate of interest and other terms and conditions on which unsecured loan has been taken from party covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(c) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest wherever applicable.

(d) There is no overdue amount of loan taken from party covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5. (a) According to the information and explanations given to us, we are of the opinion that the

transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. Based on our scrutiny of the company's records and according to the information and explanations given to us, in our opinion, the company has not accepted any deposits from public which are 'deposits' within the meaning of the Companies (Acceptance of Deposits) Rules, 1975.

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

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. (a) According to the information and explanations given to us and records of the company examined by us, the company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales- tax and other material statutory dues applicable to it. Further according to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income- tax, sales-tax and other material statutory dues were in arrears as at 31st March 2011 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales tax/income-tax/ custom duty/wealth-tax/ excise duty/ cess which have not been deposited on account of any dispute.

10. In our opinion, the accumulated losses of the company are not more than fifty per cent of its net worth as on 31st March 2011. The company also has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year. In arriving at the accumulated losses, net worth and cash losses as above, we have considered the qualifications, if any, which are quantifiable in the audit reports of the years to which these pertain.

11. 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 or bank. Further according to records of the company, the company has not issued any debentures till 31st March 2011.

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

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

15. According to the records of the company and the information and explanations provided by the management, the company has not given any guarantee for loans taken by others from bank or financial institutions.

16. According to the records of the company, the company has not obtained any fresh term loan during the financial year covered by our report. Hence, comments under the clause are not called for.

17. 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. No long term funds have been used to finance short term assets except permanent working capital.

18. According to the records of the company and the information and explanations provided by the management, 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.

19. According to the records of the company, the company has not issued any debentures.

20. The company has not raised any money by public issues during the period covered by our audit report.

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

for JAIN & ANIL SOOD

Chartered Accountants

Firm Registration No.010505N

Place: Chandigarh (RAJESH KUMAR JAIN)

Date : 31.08.2011 Partner

Membership No. 088447

---

Mar 31, 2010

1. We have audited the attached balance sheet of Hisar Spinning Mills Limited, as at 31st March 2010, the profit and loss account and also 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 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 mis-statement. 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 above, we report that:

i) 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;

ii) 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;

iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv) 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 Companies Act, 1956;

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

vi) 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 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 31st March 2010;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT

(referred to in our report of even date to the members of Hisar Spinning Mills Limited on accounts for the year ended 31st March 2010)

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

(b) The company has a program for the physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the company and the nature of its fixed assets. No significant discrepancies were noticed on such verification.

(c) Based on our scrutiny of the records of the company and the information and explanations given to us, we report that there was no sale of fixed assets during the financial year ended 31st March 2010, substantial or otherwise. Hence, the question of reporting whether the sale of any substantial part of fixed assets has affected the going concern of the company does not arise.

2. (a) The inventory has 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) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) The company has taken unsecured loan from one party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year from the said party was Rs. 11000/- and the year end balance of loan taken from such party was Rs. 11000/-. The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion, the rate of interest and other terms and conditions on which unsecured loan has been taken from party covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(c) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest wherever applicable.

(d) There is no overdue amount of loan taken from party covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. Based on our scrutiny of the companys records and according to the information and explanations given to us, in our opinion, the company has not accepted any deposits from public which are deposits within the meaning of the Companies (Acceptance of Deposits) Rules, 1975.

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

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. (a) According to the information and explanations given to us and records of the company examined by us, the company is generally regular in depositing with the appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax and other material statutory dues applicable to it. Further according to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, sales-tax and other material statutory dues were in arrears as at 31st March 2010 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales tax/income-tax/ custom duty/wealth-tax/ excise duty/ cess which have not been deposited on account of any dispute.

10. In our opinion, the accumulated losses of the company have exceeded fifty per cent of its net worth as on 31st March 2010. The company, however, has not incurred any cash losses in the financial year under consideration and in the financial year immediately preceding such financial year. In arriving at the accumulated losses, net worth and cash losses as above, we have considered the qualifications, if any, which are quantifiable in the audit reports of the years to which these pertain.

11. 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 or bank. Further according to records of the company, the company has not issued any debentures till 31st March 2010.

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

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

15. According to the records of the company and the information and explanations provided by the management, the company has not given any guarantee for loans taken by others from bank or financial institutions.

16. The term loans obtained by the company have been applied for the purpose for which they were raised.

17. 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. No long term funds have been used to finance short term assets except permanent working capital.

18. According to the records of the company and the information and explanations provided by the management, 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.

19. According to the records of the company, the company has not issued any debentures.

20. The company has not raised any money by public issues during the period covered by our audit report.

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



for JAIN & ANIL SOOD Chartered Accountants Firm Registration No. 010505N

Place: Chandigarh (RAJESH KUMAR JAIN)

Date : 03.09.2010 Partner

Membership No. 088447