Auditor Report of Subhash Silk Mills Ltd.

Mar 31, 2024

We have audited the accompanying Standalone Financial Statements of Subhash Silk Mills
Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2024, the
Statement of Profit and Loss (including Other Comprehensive Income), the Statement of
Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes
to financial statement, including a summary of the significant accounting policies and other
explanatory information (hereinafter referred to as “the Standalone Financial Statements”).

In our opinion and to the best of our information and according to the explanations given to
us, the aforesaid Standalone 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, as amended, (“Ind AS”)
and other accounting principles generally accepted in India, of the state of affairs of the
Company as at March 31, 2024, the profit and total comprehensive income, changes in
equity and its cash flows for the year ended on that date

2. Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with the
Standards on Auditing (SAs) specified under section 143(10) of the Act (SAs). Our
responsibilities under those Standards are further described in the Auditor’s Responsibilities
for the Audit of the Standalone 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 independence requirements that are
relevant to our audit of the financial statements under the provisions of the Act and the Rules
made thereunder, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion on the
Standalone Financial Statements.

3. Key Audit Matters

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. These
matters were addressed in the context of our audit of the Standalone Financial Statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. We have determined the matters described below to be the key audit matters
to be communicated in our report:

Revenue Recognition under IND AS 115: Revenue from contract with customers: Fixed price contracts

How our audit assessed the key matter

The company has let-out its warehouse to various tenants under leave and license agreement We identified revenue recognition of rental income as a Key Audit Matter since: a. the major income of the company is through the rental income

Our audit procedures on revenue recognized from fixed price contracts includes: • Obtained an understanding of the system processes and controls implemented by company for recording and computing revenue. • Analyzed various leave and license agreement with the various tenants • With regards to information technology: o Assessed the IT environment which the business system operates in and tested the system controls over which the revenue is recognized;

o Tested IT controls over appropriateness of cost and revenue reports generated by the system; o Tested controls pertaining to allocation of resources and budgeting systems which prevent unauthorized recording or changes to costs incurred and controls relating to the estimation of contract costs required to complete the respective projects

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

The Company’s Board of Directors is responsible for the preparation of the other
information. The other information comprises the information included in the Management
Discussion and Analysis, Board’s Report including Annexures to Board’s Report, Business
Responsibility Report, Corporate Governance and Shareholder’s Information, but does not
include the Standalone Financial Statements and our auditor’s report thereon. Our opinion
on the standalone 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 standalone 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, 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.

5. Management''s Responsibility for the Standalone 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 Standalone 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. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act for
safeguarding the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the standalone financial statements that give a true and fair
view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone 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 are responsible for overseeing the Company’s financial reporting
process.

6. Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone 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
Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

i) Identify and assess the risks of material misstatement of the standalone 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.

ii) 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

iii) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management

iv) 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 Standalone 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

v) Evaluate the overall presentation, structure and content of the Standalone Financial
Statements, including the disclosures, and whether the Standalone Financial
Statements represent the underlying transactions and events in a manner that achieves
fair presentation

Materiality is the magnitude of misstatements in the Standalone Financial Statements that,
individually or in aggregate, makes it probable that the economic decisions of a reasonably
knowledgeable user of the Standalone Financial Statements may be influenced. We consider
quantitative materiality and qualitative factors in

i) Planning the scope of our audit work and in evaluating the results of our work; and

ii) To evaluate the effect of any identified misstatements in the Standalone Financial
Statements.

We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the Standalone Financial Statements of
the current period and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication

II. Report on Other Legal and Regulatory Requirements

1. 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.

C. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income,
Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are
in agreement with the relevant books of account

D. In our opinion, the aforesaid standalone 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 March 31, 2024
taken on record by the Board of Directors, none of the directors is disqualified as on March
31, 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 with reference to financial
statements of the Company and the operating effectiveness of such controls, refer to our
separate Report in “Annexure B”. Our report expresses an unmodified opinion on the
adequacy and operating effectiveness of the Company’s internal financial controls with
reference to financial statements.

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

In our opinion and to the best of our information and according to the 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.

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, as amended in our opinion and
to the best of our information and according to the explanations given to us:

i) The Company does not have pending litigations having impact on its financial position
in its Standalone Financial Statements

ii) The Company does not have any material foreseeable losses, if any, on long-term
contracts including derivative contracts

iii) There are no amounts that are required to be transferred, to the Investor Education
and Protection Fund by the Company.

a) The management has represented that, to the best of its knowledge and belief,

iv) other than as disclosed in the notes to the accounts, 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, 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;

b) The 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

c) Based on audit procedures which we 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 mis-statement.

v) The company has not declared or paid any dividend during the year in contravention
of the provisions of section 123 of the Companies Act, 2013.

vi) Based on our examination, which included test checks, the Company has used
accounting softwares for maintaining its books of account for the financial year ended
March 31, 2024 which has a feature of recording audit trial (edit log) facility and the
same has operated throughout the year for all relevant transactions recorded in the
softwares. Further during the course of our audit we did not come across any instance
of the audit trial feature being tempered with.

vii) As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from
April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014 on preservation of Audit trial as per the statutory requirements for record
retention is not applicable for the financial year ended March 31, 2024.

2. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central
Government in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the
matters specified in paragraphs 3 and 4 of the Order.

For Govind Prasad and Co.

Chartered Accountants
FRN: 114360W

Place : Mumbai
Date : 30^th May 2024

UDIN: 24047948BKAILM6913 Sd/-

CA Govind Prasad
Partner
M. No.: 047948

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Mar 31, 2015

We have audited the accompanying financial statements of SUBHASH SILK MILLS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information..

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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 (thereunder. 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 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 financial control relevant to the Company's preparation of the financial statements that give true and fair view 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 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 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

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

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

Emphasis of Matters

In our opinion and the best of our information and according to the explanation given to us, there is no matter which may have an adverse effect on the functioning of the company.

Report on other Legal and Regulatory Requirements As required by section 143(3) of the Act, we report that:

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

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

c) The Balance Sheet, the 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 aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

f) With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us :

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

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

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

(Annexure to Auditor's Report)

(i) In respect of its fixed assets:

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

(b) The Company has physically verified certain assets during the year in accordance with a programme of verification, which in our opinion provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to no material discrepancies were noticed on such verification.

In our opinion fixed assets have been properly dealt with in the books of accounts

(ii) In respect of its Inventories:

(a) In our opinion, the management at reasonable intervals has physically verified the inventories and the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedure for 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) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) 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 and hence clause (iii) sub-clauses (a), (b), (c) and (d) of para 4 not applicable.

(e) In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956, according to of the information and explanations given to us, the Company has taken interest free loans from 3 parties covered in register u/s 301 aggregating to Rs. 48,31,316.

(f) The terms and conditions of the loans are, in our opinion, prima facie not prejudicial to the interests of the company.

(g) The payment of principal amount to the parties from whom loans given by the company is regular as per the mutual understanding between the parties.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanation given to us, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public as per section 73 to 76 or any other relevant provisions of the Companies Act, 2013.

(vi) According to information and explanation given to us, the maintenance of cost records has not been prescribed by the Central Government sub section (1) of section 148 of the Companies Act 2013.

(vii) According to the information and explanations given to us in respect of statutory and other dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, cess and any other statutory dues with the appropriate authorities during the year, whenever there is delays in payment dues are paid along with interest as per rules and regulation under respective act except Income Tax dues for the Financial Year 2013-14 of Rs. 1.2 crores

(b) There are no disputed dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty, Value Added Tax, Cess and any other statutory dues with the appropriate authorities during the year.

(viii) The Company does not have accumulated losses which are more than 50% at the end of the year. Further the company did not have cash losses in the current financial year however incurred cash loss in the preceding financial year.

(ix) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(x) According to the information and explanations given to us, the company has not given any guarantee for loan taken by others from banks or financial institutions.

(xi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained, other than temporary deployment pending application.

(xii) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

for S.M. Kapoor & Co. Chartered Accountants

(Shekhar Gupta) Partner Membership No. 15622 Firm Regn. No. 104809 W Place: Mumbai Date: 6th August, 2015

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Mar 31, 2014

We have audited the accompanying financial statements of Subhash Silk Mills Ltd. (''the Company'') which comprise the Balance Sheet as on 31st March 2014, the Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date 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-secion (3C) of Section 211 of the Companies Act, 1956 (''the Act''). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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 misstatements of the financial statements, whether due to fraud or error. In making those risks 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 given 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, subject to the :

Note No. (x) to the notes to the accounts regarding non-provision for leave encashment and gratuity.

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 (''the Order'') as amended, 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 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 representation received from the Directors as on 31st March, 2014, and taken on record by the Board of Directors, none of the Directors are 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 Companies Act, 1956.

Annexure to the Auditor''s Report

The Annexure referred to in our report to the members of Subhash Silk Mills Limited (''the Company'') for the year ended 31st March, 2014. We report that:

(i) The nature of the Company''s business/activities during the is such that clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the ended.

(ii) In respect of its fixed assets:

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

(b) In our opinion, the procedures followed by the Management, were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has made substantial disposals during the which has not affected the going concern.

(iii) In respect of its Inventories:

(a) stores, spare parts and raw materials and the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedure for 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) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) 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 and hence clause (iii) sub-clauses (a), (b), (c) and

(d) of para 4 not applicable.

(a) In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956, according to of the information and explanations given to us, the Company has taken interest free loans from 2 parties covered in register u/s 301 aggregating to Rs.50,37,196.

(b) The terms and conditions of the loans are, in our opinion, prima facie not prejudicial to the interests of the company.

(c) The payment of principal amount to the parties from whom loans taken by the company is regular as per the mutual understanding between the parties.

(v) 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 for the purchase and sale of inventory.

(vi) In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956;

(a) To the best of our knowledge and belief and according the information and explanations given to us, transactions that needed to be entered into the register have been so entered.

(b) According to the information and explanations given to us, transactions in excess of Rs.5 lakhs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public as per the provisions of Sections 58A and 58AA of Companies Act, 1956.

(viii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business

(ix) In our opinion and according to the information and explanation given to us, the maintenance of cost records have not been prescribed by the Central Government under clause (d) of sub-section 1 of section 209 of the Act.

(x) In our opinion and according to the information and explanations given to us in respect of statutory and other dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Income-tax, Salestax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues to the extent of applicability to the Company with the appropriate authorities during the year.

(b) There is no disputed dues of Sale Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess other than ESIC of Rs.2,28,952 against which an appeal is pending before the Hon''ble High Court.

(xi) According to the information and explanation given to us, the company does not have accumulated losses at the end of the financial, which is more than 50% of its net worth. However, the company has no cash losses in the current financial year or in the preceding financial year.

(xii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xiii) According to the information and explanations given to us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) 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.

(xv) According to the information and explanations given to us, the company has not taken any term loans during the year.

(xvi) According to the cash flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa, other than temporary deployment pending Application.

(xvii) The Company has not made any preferential allotment during the year.

(xviii) The company has not issued any debentures during the year under review.

(xix) The Company has not raised any money by public issue during the year.

(xx) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

for S.M. Kapoor & Co. Chartered Accountants

(Shekhar Gupta) Place: Mumbai Partner Date: 30th May, 2014 Membership No. 15622

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Subhash Silk Mills Ltd. (''the Company'') which comprise the Balance Sheet as on 31st March 2013, the Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date 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-secion (3C) of Section 211 of the Companies Act, 1956 (''the Act''). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor''s Responsibility

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 misstatements of the financial statements, whether due to fraud or error. In making those risks 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 given 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, subject to the : Note No. (vi) to the notes to the accounts regarding non-provision for leave encashment and gratuity.

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

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

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 (''the Order'') as amended, 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 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 representation received from the Directors as on 31st March, 2013, and taken on record by the Board of Directors, none of the Directors are disqualified as on 31st March, 2013, from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

The Annexure referred to in our report to the members of Subhash Silk Mills Limited (''the Company'') for the year ended 31st March, 2013. We report that:

(i) The nature of the Company''s business/activities during the is such that clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the ended.

(ii) In respect of its fixed assets:

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

(b) In our opinion, the procedures followed by the Management, were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has made substantial disposals during the which has not affected the going concern.

(iii) In respect of its Inventories:

(a) stores, spare parts and raw materials and the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedure for 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) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) 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 and hence clause (iii) sub- clauses (a), (b), (c) and (d) of para 4 not applicable.

(a) In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956, according to of the information and explanations given to us, the Company has taken interest free loans from 3 parties covered in register u/s 301 aggregating to Rs.1,92,60,825.

(b) The terms and conditions of the loans are, in our opinion, prima facie not prejudicial to the interests of the company.

(c) The payment of principal amount to the parties from whom loans taken by the company is regular as per the mutual understanding between the parties.

(v) 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 for the purchase and sale of inventory.

(vi) In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956;

(a) To the best of our knowledge and belief and according the information and explanations given to us, transactions that needed to be entered into the register have been so entered.

(b) According to the information and explanations given to us, transactions in excess of Rs.5 lakhs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time, (vii) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public as per the provisions of Sections 58A and 58AA of Companies Act, 1956.

(viii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business

(ix) In our opinion and according to the information and explanation given to us, the maintenance of cost records have not been prescribed by the Central Government under clause (d) of sub-section 1 ofsection209ofthe Act.

(x) In our opinion and according to the information and explanations given to us in respect of statutory and other dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Income-tax, Salestax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues to the extent of applicability to the Company with the appropriate authorities during the year.

(b) There is no disputed dues of Sale Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess other than ESIC of Rs.2,28,952 against which an appeal is pending before the Hon''ble High Court.

(xi) According to the information and explanation given to us, the company does not have accumulated losses at the end of the financial, which is more than 50% of its net worth. However, the company has no cash losses in the current financial year or in the preceding financial year.

(xii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xiii) According to the information and explanations given to us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) 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.

(xv) According to the information and explanations given to us, the company has not taken any term loans during the year.

(xvi) According to the cash flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa, other than temporary deployment pending Application.

(xvii) The Company has not made any preferential allotment during the year.

(xviii) The company has not issued any debentures during the year under review.

(xix) The Company has not raised any money by public issue during the year.

(xx) To the best of our knowledge and belief and according to the information and explanations

given to us, no fraud on or by the Company was noticed or reported during the year.

for S.M. Kapoor&Co.

Chartered Accountants

(Shekhar Gupta)

Place: Mumbai Partner

Date: 22nd May, 2013 Membership No. 15622

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Subhash Silk Mills Ltd. as on 31st March 2012 and also the Profit & Loss Account of the Company and 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 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 section 227(4A) of the Companies Act' 1956' we give in the Annexure a statement on the matters specified in paragraph 4 of the said 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 explanation' which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) The Balance Sheet and Profit & Loss Account 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 and the profit and loss account subject to note No. (vi)' regarding non provision of leave encashment complies with the mandatory accounting standards referred in Section 211 (3C) of the Companies Act' 1956.

(e) On the basis of the written representation received from the directors as on 31st March' 2012 and taken on record by the Board of Directors' we report that none of the directors is disqualified as on 31 st March' 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act' 1956.

5. In our opinion and to the best of our information and according to the explanation given to us' the said accounts read subject to the:

Note No.(iii) to the notes to the accounts regarding non-provision for leave encashment and gratuity.

The said accounts read with significant accounting policies and other notes thereon' give the information required by the Companies Act' 1956' in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(i) in the case of the Balance Sheet of the state of affairs of the Company as at 31st March' 2012;

(ii) in the case of Profit & Loss Account of the Profit for the year ended on that date.

(iii) in the case of the cash flow statement for the year ended on that date.

Re: Subhash Silk Mills Ltd.

(Referred to inparagraph 3 of our report of even date)

(i) The nature of the Company's business/activities during the is such that clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor's Report) Order' 2003 are not applicable to the Company for the ended' (ii) In respect of its fixed assets:

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

(b) In our opinion' the procedures followed by the Management' were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us' the Company has made substantial disposals during the which has not affected the going concern' (iii) In respect of its Inventories:

(a) stores' spare parts and raw materials and the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us' the procedure for 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) In our opinion and according to the information and explanations given to us' the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) 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 and hence clause (iii) sub-clauses (a)' (b)' (c) and (d) of para 4 not applicable.

(a) In respect of loans' secured or unsecured' taken by the Company from companies' firms or other parties covered in the register maintained under section 301 of the Companies Act 1956' according to of the information and explanations given to us' the Company has taken interest free loans from 3 parties covered in register u/s 301 aggregating to Rs.2'00'50'060.

(b) The terms and conditions of the loans are' in our opinion' prima facie not prejudicial to the interests of the company.

(c) The payment of principal amount to the parties from whom loans taken by the company is regular as per the mutual understanding between the parties.

(v) 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 for the purchase and sale of inventory.

(vi) In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956;

(a) To the best of our knowledge and belief and according the information and explanations given to us' transactions that needed to be entered into the register have been so entered.

(b) According to the information and explanations given to us' transactions in excess of Rs.5 lakhs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us' the Company has not accepted any deposit from the public as per the provisions of Sections 58A and 58AA of Companies Act' 1956.

(viii) In our opinion' the Company has an adequate internal audit system commensurate with the size and the nature of its business

(ix) In our opinion and according to the information and explanation given to us' the maintenance of cost records have not been prescribed by the Central Government under clause

(d) of sub-section 1 of section 209 of the Act.

(x) In our opinion and according to the information and explanations given to us in respect of statutory and other dues:

(a) The Company has been regular in depositing undisputed statutory dues' including Income-tax' Salestax' Wealth Tax' Service Tax' Custom Duty' Excise Duty' cess and any other statutory dues to the extent of applicability to the Company with the appropriate authorities during the year.

(b) There is no disputed dues of Sale Tax' Custom Duty' Wealth Tax' Service Tax' Excise Duty and Cess other than ESIC of Rs.2'28'952 against which an appeal is pending before the Hon'ble High Court.

(xi) According to the information and explanation given to us' the company has accumulated losses at the end of the financial' which is more than 50% of its net worth. However' the company has no cash losses in the current financial year or in the preceding financial year.

(xii) Based on our audit procedures and on the information and explanations given by the management' we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions' banks and debenture holders.

(xiii) According to the information and explanations given to us' the Company has not given any loans and advances on the basis of security by way of pledge of shares' debentures and other securities.

(xiv) 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.

(xv) According to the information and explanations given to us' the company has not taken any term loans during the year.

(xvi) According to the cash flow statement and other records examined by us and the information and explanations given to us' on an overall basis' funds raised on short term basis have' prima facie' not been used during the year for long term investment and vice versa' other than temporary deployment pending Application.

xvii) The Company has not made any preferential allotment during the year.

(xviii) The company has not issued any debentures during the year under review.

(xix) The Company has not raised any money by public issue during the year.

(xx) To the best of our knowledge and belief and according to the information and explanations given to us' no fraud on or by the Company was noticed or reported during the year.

for S.M. Kapoor & Co.

Chartered Accountants

(Shekhar Gupta)

Place: Mumbai Partner

Date: 31 st July' 2012 Membership No. 15622

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Subhash Silk Mills Ltd. as on 31st March 2011 and also the Profit & Loss Account of the Company and 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 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 section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraph 4 of the said 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 explanation, which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) The Balance Sheet and Profit & Loss Account 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 and the profit and loss account subject to note No. (vi), regarding non provision of leave encashment complies with the mandatory accounting standards referred in Section 211 (3C) of the Companies Act, 1956.

(e) On the basis of the written representation 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.

5. In our opinion and to the best of our information and according to the explanation given to us, the said accounts read subject to the:

Note No.(iii) to the notes to the accounts regarding non-provision for leave encashment and gratuity.

The said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(i) in the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2011;

(ii) in the case of Profit & Loss Account of the Profit for the year ended on that date.

(iii) in the case of the cash flow statement for the year ended on that date.

(Referred to in paragraph 3 of our report of even date)

(i) The nature of the Company's business/activities during the is such that clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company for the ended,

(ii) In respect of its fixed assets:

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

(b) In our opinion, the procedures followed by the Management, were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has made substantial disposals during the which has not affected the going concern.

(iii) In respect of its Inventories:

(a) stores, spare parts and raw materials and the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedure for 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) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) 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 and hence clause (iii) sub-clauses (a), (b), (c) and

(d) of Para 4 not applicable.

(a) In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956, according to of the information and explanations given to us, the Company has taken interest free loans from 3 parties covered in register u/s 301 aggregating to Rs.1,65,45,148.

(b) The terms and conditions of the loans are, in our opinion, prima facie not prejudicial to the interests of the company.

(c) The payment of principal amount to the parties from whom loans taken by the company is regular as per the mutual understanding between the parties.

(v) 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 for the purchase and sale of inventory.

(vi) In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956;

(a) To the best of our knowledge and belief and according the information and explanations given to us, transactions that needed to be entered into the register have been so entered.

(b) According to the information and explanations given to us, transactions in excess of Rs.5 lakhs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public as per the provisions of Sections 58A and 58AA of Companies Act, 1956.

(viii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business

(ix) In our opinion and according to the information and explanation given to us, the maintenance of cost records have not been prescribed by the Central Government under clause (d) of sub-section 1 of section 209 of the Act.

(x) In our opinion and according to the information and explanations given to us in respect of statutory and other dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Income-tax, Sales tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues to the extent of applicability to the Company with the appropriate authorities during the year.

(b) There is no disputed dues of Sale Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess other than ESIC of Rs.2,28,952 against which an appeal is pending before the Hon'ble High Court.

(xi) According to the information and explanation given to us, the company has accumulated losses at the end of the financial, which is more than 50% of its net worth. However, the company has no cash losses in the current financial year or in the preceding financial year.

(xii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xiii) According to the information and explanations given to us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) 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.

(xv) According to the information and explanations given to us, the company has not taken any term loans during the year.

(xvi) According to the cash flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa, other than temporary deployment pending Application.

(xvii) The Company has not made any preferential allotment during the year.

(xviii) The company has not issued any debentures during the year under review.

(xix) The Company has not raised any money by public issue during the year.

(xx) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.



for S.M. Kapoor & Co.

Chartered Accountants

(Shekhar Gupta)

Place : Mumbai Partner

Date : 28th July, 2011 Membership No. 15622

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Subhash Silk Mills Ltd. as on 31st March 2010 and also the Profit & Loss Account of the Company and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraph 4 of the said 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 explanation, which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) The Balance Sheet and Profit & Loss Account 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 and the profit and loss account subject to note No. (vi), regarding non provision of leave encashment complies with the mandatory accounting standards referred in Section 211 (3C) of the Companies Act, 1956.

(e) On the basis of the written representation 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.

5 In our opinion and to the best of our information and according to the explanation given to us, the said accounts read subject to the:

Note No.(iii) to the notes to the accounts regarding non-provision for leave encashment and gratuity.

The said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(i) in the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2010;

(ii) in the case of Profit & Loss Account of the Profit for the year ended on that date.

(iii) in the case of the cash flow statement for the year ended on that date.

(i) The nature of the Companys business/activities during the is such that clauses (xiii) and (xiv) of paragraph 4 of the Companies (Auditors Report) Order, 2003 are not applicable to the Company for the ended.

(ii) In respect of its fixed assets:

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

(b) In our opinion, the procedures followed by the Management, were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has made substantial disposals during the which has not affected the going concern.

(iii) In respect of its Inventories:

(a) In our opinion, the management at reasonable intervals has physically verified the finished goods, stores, spare parts and raw materials and the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedure for 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) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) 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 and hence clause (iii) sub-clauses (a), (b), (c) and

(d) of para 4 not applicable.

(a) In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956, according to of the information and explanations given to us, the Company has taken interest free loans from 3 parties covered in register u/s 301 aggregating to Rs. 1,33,66,795.

(b) The terms and conditions of the loans are, in our opinion, prima facie not prejudicial to the interests of the company.

(c) The payment of principal amount to the parties from whom loans taken by the company is regular as per the mutual understanding between the parties.

(v) 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 for the purchase and sale of inventory.

(vi) In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act 1956;

(a) To the best of our knowledge and belief and according the information and explanations given to us, transactions that needed to be entered into the register have been so entered.

(b) According to the information and explanations given to us, transactions in excess of Rs.5 lakhs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public as per the provisions of Sections 58A and 58AA of Companies Act, 1956.

(viii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business

(ix) In our opinion and according to the information and explanation given to us, the maintenance of cost records have not been prescribed by the Central Government under clause (d) of sub-section 1 of section 209 of the Act.

(x) In our opinion and according to the information and explanations given to us in respect of statutory and other dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Income-tax, Sales- tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues to the extent of applicability to the Company with the appropriate authorities during the year.

(b) There is no disputed dues of Sale Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess other than ESIC of Rs.2,28,952 against which an appeal is pending before the Honble High Court.

(xi) According to the information and explanation given to us, the company has accumulated losses at the end of the financial, which is more than 50% of its net worth. However, the company has no cash losses in the current financial year or in the preceding financial year.

(xii) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xiii) According to the information and explanations given to us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) 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.

(xv) According to the information and explanations given to us, the company has not taken any term loans during the year.

(xvi) According to the cash flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa, other than temporary deployment pending application.

(xvii) The Company has not made any preferential allotment during the year.

(xviii) The company has not issued any debentures during the year under review.

(xix) The Company has not raised any money by public issue during the year.

(xx) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

for S.M. Kapoor & Co. Chartered Accountants

(Shekhar Gupta)

Place: Mumbai Partner

Date: 31st July, 2010 Membership No. 15622