Auditor Report of Super Spinning Mills Ltd.

Mar 31, 2025

1. We have audited the Financial Statements of Super Spinning Mills Limited (‘the Company’), which comprise
the Balance Sheet as at 31 March 2025, the statement of Profit and Loss including other comprehensive
income, the statement of changes in equity, the Cash flow statement, and notes to the financial statements for
the year then ended, including a summary of significant accounting policies and other explanatory information
(hereinafter referred to as “the Financial Statements”).

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
Financial Statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so
required and give a true and fair view in conformity with the accounting principles generally accepted in India,
of the state of affairs of the Company as at 31 March 2025, its loss and other comprehensive income, changes
in equity, and its cash flows for the year ended on that date.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (“SAs”) specified under section 143(10)
of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company in accordance with
the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical
requirements that are relevant to our audit of the financial statements under the provisions of the Act and the
Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to
provide a basis for our opinion on the financial statements.

Key audit matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the financial year ended 31 March 2025. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
financial statements. The results of our audit procedures, including the procedures performed to address the
matters below, provide the basis for our audit opinion on the accompanying financial statements.

Key Audit Matters	How the key audit matter was addressed in our audit
4.1 Impact on Going Concern Assumption as a result of discontinuation of Textile Activity and evaluation of impairment on the textile activity assets
The Textile segment has incurred losses for various years and had been functioning below rated capacities and with varying revenue year to year. The Company has discontinued the textile segment activity and has also re-classified the Property, Plant and Equipment specifically related to textile segment activity as Investment Property during the financial year 2023¬ 24. Considering the fact that the assets and liabilities of such discontinued activity (textile segment) have significant impact on the overall assets of the entire company and therefore affect the going concern principles. Considering the existence of doubt related to the conditions which cast significant doubt on going concern assumption and further the consequential assessment of impairment of such assets related to the discontinued activity as a cash generating unit, this has been considered as a key audit matter.	We have evaluated the management''s assessment of the Company''s ability to continue as a Going Concern, which included Financial, Operational and other events/conditions. Our Evaluation of the assessment of Going Concern assumption included the following: • Evaluation of the process, the management followed to make its assessment • Assumptions on which the assessment is based and management''s plans for future action and alternate business plans available to the management • Feasibility of management''s plans in the circumstances. • Medium and long-term financing ability of the Company and management/group''s ability to fund and meet the company''s obligations under support arrangement. • Past practices followed, strategies and alternate usage of assets of the company by the management, and Cash flow forecasts prepared by the management. • Inquiries with the management of events or conditions beyond management''s assessment • Reviewed subsequent events and facts that become known to us occurring between the date of the financial statements and the date of auditor''s report. Based on the above assessment we have obtained sufficient appropriate audit evidence about the appropriateness of the management''s use of Going Concern assumption and concluded that there is no material uncertainty about the Company''s ability to continue as Going concern. Further we have also evaluated the management''s estimate of the recoverable amount of the assets of the textile activity and the management''s conclusion and impairment provision arrived thereon. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. Our Opinion is not modified in respect of this matter.

Key Audit Matters	How the key audit matter was addressed in our audit
4.2 Disputed tax & other liabilities (Refer Note No:3(q) & 37 (a)(i),(ii) and (iii) to the Financial Statements)
The Company is required to discharge direct and indirect tax obligations under various legislations, as may be applicable. The tax authorities have raised certain tax demands on the Company in respect of the past periods. The Company has disputed such demands and has appealed/ contested against them at appropriate forums. As at March 31, 2025 the Company has an amount of Rs. 681.55 Lakhs (Previous Year- Rs. 670.33 Lakhs) determined pertaining to various pending tax litigations. Ind AS 37 requires the Company to perform an assessment of the probability of economic outflow on account of such disputed tax matters and determine whether any particular obligation needs to be recorded as a provision in the books of account or to be disclosed as a contingent liability. Considering the significant degree of judgement applied by the management in making such assessments and the resultant impact on the financial statements, we have considered it to be a key audit matter.	In assessing the exposure of the Company for the tax litigations, we have performed the following procedures: • Obtained an understanding of the process laid down by the management for performing their assessment taking into consideration past legal precedents, changes in laws and regulations etc. • Assessed the processes and entity level controls established by the Company to ensure completeness of information with respect to tax litigations. • Obtained suitable representations from the management with respect to tax litigations and the forum where they are pending including the issues under litigation. • The grounds of dispute taken by Management were considered to enable us to take a judgement. These matters continue to remain in the same status as in the previous year. Our Opinion is not modified in respect of this matter.
4.3 Fair value measurement of Investment in Equity Shares of Andhra Pradesh Gas Power Corporation Limited (Refer Note 6 to the Financial Statements)
As at 31 March 2025, the cost of investment in 9,38,000 Equity Shares of Andhra Pradesh Gas Power Corporation Limited amounted to Rs. 1326.05 lakhs (Previous Year - Rs. 1326.05 Lakhs). The investment was remeasured at its fair value, which stood at Rs.Nil as at 31 March 2025 (Rs.Nil as at 31 March 2024) The fair value of the investment in such investment are assessed based on assumptions that require the management to exercise their judgement. As a result, the company recorded a total fair value adjustment for the year ended 31 March 2025 amounting to Rs. Nil Lakhs (for the year ended 31 March 2024 Rs.403.59 Lakhs). We focussed on this area due to significant carrying amount of the investment and the significant management judgement and estimates involved in measuring the fair value.	We performed the following principal audit procedures in relation to the management''s estimation of the fair value of the investments: a) Evaluated the design and implementation and tested the operating effectiveness of the controls (including techniques) relating to management''s assessment of fair value amount of investment. b) Evaluated the Disclosures made in the financial statements and the related compliance with the requirements of the applicable accounting standards. Our Opinion is not modified in respect of this matter.

Key Audit Matters	How the key audit matter was addressed in our
	audit
4.4 Provision for Electricity Claims (Refer Note 23 & Note 37(a)(iv) to the Financial Statements)
The Company is a shareholder of Andhra Pradesh Gas Power Corporation Limited (APGCL) and has been consuming power from the corporation in the past. The Company is also a power consumer with Southern Power Distribution Company Limited (SPDCL). There are several power disputes between APGCL, SPDCL and the Company (both in the capacity as shareholder of APGCL and as a power consumer	We have evaluated the following principal audit procedures in relation to the management''s estimation of the amount payable in this regard. Our Evaluation of the provision for electricity claims included the following: • Obtained an understanding of the filed court cases and the issues pending in various forums.
of SPDCL) relating to past several years pending in	• Assessed the controls established by the
different forums. The issues under dispute range from	Company to ensure completeness of information
tariff rates, levy of wheeling charges, monthly rent	with respect to litigations.
consumption, peak hour energy allocation, surplus allocation charges, amongst others. Both APGCL and	• Obtained suitable representations from the
the Company have filed court cases against SPDCL	management with respect to litigations and the
and the issues are pending in various forums. The	forum where they are pending including the
Company has obtained information that APGCL has	issues under litigation.
suspended its operations as on date. Meanwhile an	• The grounds of dispute taken by Management
amount of Rs. 8,114.17 Lakhs (Previous Year - Rs.	were considered to enable us to take a
6,957.64 Lakhs) [Current Consumption Charges	judgement.
Rs.3,663.08 Lakhs (Previous Year - Rs. 3,574.25 Lakhs) and Surcharge Rs.4,451.08 Lakhs (Previous	• The Company’s representation that APGCL
Year - Rs. 3,383.39 Lakhs)] appears as arrear	was permitted to generate power and sell
outstanding in the electricity bills of SPDCL during the	independently without depending on SPDCL
year. Despite the management''s best effort to obtain	and further that the claims from SPDCL is for the
the details and basis of charge of such unilateral claim	same supply of power from APGCL for which
made by SPDCL, the company has not been able to	due charges have been paid.
obtain any information from SPDCL and APGCL. The	• Our conclusions are based on the audit evidence
management has made an overall assessment of all such claims. The management has also considered	obtained up to the date of our auditor''s report.
the fact that some of the claims by SPDCL have been settled by the Company to APGCL and may not fall back on the Company. The management has also reviewed the status of the various disputes pending in different forums. The management has also taken note of APGCL''s ability to timely defend legal cases considering that the corporation has suspended operations. Considering all the above factors, the management has estimated on the basis of available data an amount of Rs.1,907.56 Lakhs (Previous Year - Rs. 1,055.32 Lakhs) as Electricity Payables and such amount has been provided in the books of account as at 31 March, 2025. The balance of the disputed claim is disclosed as contingent liability in Note 37 (a) (iv) of the financial statements. Considering the significant degree of judgement applied by the management in making such assessments and the resultant impact on the financial statements, we have considered it to be a key audit matter.	Our Opinion is not modified in respect of this matter.

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

5. The Company’s management and Board of Directors are responsible for the preparation of other information.
The other information comprises the information in the Company’s Annual Report, but does not include the
Financial Statements and our auditor’s report thereon.

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

7. In connection with our audit of the Financial Statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

8. 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 hve nothing to report in this regard.

Management’s and Board of Directors’ Responsibilities for the Financial Statements

9. The Company’s management and Board of Directors are 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, cash flows and changes in equity 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.

10. 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.

11. In preparing the Financial Statements, the management and Board of Directors are 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 and the board of directors either intends
to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor’s Responsibility for the Audit of the Financial Statements

13. 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.

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

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

• Obtain an understanding of internal 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 system with
reference to financial statements in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management and the board of director''s use of the going concern
basis of accounting in preparation of financial statements and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Company to cease to continue as a going concern.

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

15. 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.

16. 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.

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

Report on Other Legal and Regulatory Requirements

18. 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 the paragraph 3 and 4 of the order, to the extent applicable.

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

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

(b) In our opinion, proper books of account as required by law have been kept by the Company, in electronic
mode on servers physically located in India, so far as it appears from our examination of those books except
for the matters stated in the paragraph 19 B (f) below on reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014. Management has represented to us that the process of taking daily
backups is in place, however, we are unable to comment on the same due to absence of backup logs.
Refer Note 47 (ii) to the Financial Statements.

(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 Accounting Standards specified under
Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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

(f) The modifications relating to the maintenance of accounts and other matters connected therewith are as
stated in the paragraph 19(A)(b) above on reporting under Section 143(3)(b) of the Act and paragraph

19(B)(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our separate report in “Annexure B”;

(B) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the

Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to

the explanations given to us:

a) The Company has disclosed the impact of pending litigations as at 31 March 2025 on its financial position
in its financial statements, wherever applicable - Refer Note No:37 to the Financial Statements.

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

c) On the basis of the declarations made to us by the management, which is relied upon by us, we report that
there has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Company

d) (i) The Management has represented that, to the best of its knowledge and belief (as disclosed in Note

No: 47(xii)(A) 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 (“Ultimate Beneficiaries”) by
or on behalf of the Company or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries

(ii) The Management has represented that, to the best of its knowledge and belief (as disclosed in Note

No: 47(xii)(B), 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
person(s) or entity(ies) identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on
behalf of the Funding Parties or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.

(iii) Based on the audit procedures that have been considered reasonable and appropriate in the
circumstances, performed by us, nothing has come to our notice that has caused us to believe that the
representations under paragraph 19 (B) (d) (i) and 19 (B) (d) (ii) contain any material mis-statement.

e) The company has not declared or paid any dividend during the year. Hence reporting in respect of
compliance with section 123 of the Companies Act, is not applicable.

f) As stated in Note 45 of the Financial Statements and based on our examination which included test checks,
except for instances mentioned below, the Company, in respect of financial year commencing from 01
April 2024, has used accounting software for maintaining its books of accounts, which have a feature
of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant
transactions recorded in the respective software. Further, during the course of our audit, we have not
come across any instance where the audit trail (edit log) facility has been tampered with, other than the
consequential impact of the exception given below:

Nature of exception noted:	Details of Exception:
1. Instances of accounting software(s) for maintaining books of account which did not have a feature of recording audit trail (edit log) facility for all relevant transactions recorded in the software.	The software/application used for maintaining Payroll and Property, Plant and Equipment & Intangible Assets does not have a feature of recording audit trail (edit log) facility both at the application level and database level.

2. Instances of accounting software(s) for maintaining books of account for which the feature of recording audit trail (edit log) facility was not operated throughout the year for all relevant transactions recorded in the software.

We are not able to verify the effective date from which the audit trail (edit log) facility for the accounting software “Tally” (used for maintenance of the accounting records by the Company) was operated during the year. Further the audit trail feature was not enabled at the database level throughout the year to log any direct data changes, for the accounting software “Tally” used for maintenance of the accounting records by the Company.

3. Instances of preservation of the audit trail as per the statutory requirements for record retention.

In view of reporting requirement under point 2 above, we are unable to verify the preservation of the audit trail as per the statutory requirements for record retention.

(C)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 according to the information and explanations given to us, the remuneration paid/provided
by the Company to its directors during the current year wherever applicable is in accordance with the provisions
of Section 197 of the Act. The remuneration paid/provided to any director wherever applicable is not in excess
of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other
details under section 197(16) of the Act, which are required to be commented upon by us.

For C S K Prabhu and Co LLP
(formerly C S K Prabhu and Co)

Chartered Accountants
FRN:002485S/S000197

Mahesh Prabhu
Designated Partner

Coimbatore Membership number: 214194

23.05.2025 UDIN: 25214194BMOUPG3206

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Mar 31, 2024

1. We have audited the Financial Statements of Super Spinning Mills Limited (‘the Company’), which comprise the Balance Sheet as at 31 March 2024, the statement of Profit and Loss including other comprehensive income, the statement of changes in equity, the Cash flow statement, and notes to the financial statements for the year then ended, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the Financial Statements”).

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Financial Statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, its loss and other comprehensive income, changes in equity, and its cash flows for the year ended on that date.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (“SAs”) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the financial statements.

Key audit matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the financial year ended 31 March 2024. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Key Audit Matters	How the key audit matter was addressed in our audit
4.1 Impact on Going Concern Assumption as a result of discontinuation of Textile Activity and evaluation of impairment on the textile activity assets
The Textile segment has incurred losses for various years and had been functioning below rated capacities and with varying revenue year to year. The Company has discontinued the textile segment activity during the year under report. The Company has also re-classified the Property, Plant and Equipment specifically related to textile segment activity as Investment Property during the year under report. Considering the fact that the assets and liabilities of such discontinued activity (textile segment) have significant impact on the overall assets of the entire company and therefore affect the going concern principles. Considering the existence of doubt related to the conditions which cast significant doubt on going concern assumption and further the consequential assessment of impairment of such assets related to the discontinued activity as a cash generating unit, this has been considered as a key audit matter.	We have evaluated the management’s assessment of the Company’s ability to continue as a Going Concern, which included Financial, Operational and other events/conditions. Our Evaluation of the assessment of Going Concern assumption included the following: • Evaluation of the process, the management followed to make its assessment • Assumptions on which the assessment is based and management’s plans for future action and alternate business plans available to the management • Feasibility of management’s plans in the circumstances. • Medium and long-term financing ability of the Company and management/group’s ability to fund and meet the company’s obligations under support arrangement. • Past practices followed, strategies and alternate usage of assets of the company by the management, and Cash flow forecasts prepared by the management. • Inquiries with the management of events or conditions beyond management’s assessment • Reviewed subsequent events and facts that become known to us occurring between the date of the financial statements and the date of auditor’s report. Based on the above assessment we have obtained sufficient appropriate audit evidence about the appropriateness of the management’s use of Going Concern assumption and concluded that there is no material uncertainty about the Company’s ability to continue as Going concern. Further we have also evaluated the management’s estimate of the recoverable amount of the assets of the textile activity and the management’s conclusion and impairment provision arrived thereon. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. Our Opinion is not modified in respect of this matter.

Key Audit Matters	How the key audit matter was addressed in our audit
4.2 Disputed tax & other liabilities (Refer Note No:3(c	) & 36 (a)(I),(II) and (III) to the Financial Statements)
The Company is required to discharge direct and indirect tax obligations under various legislations, as may be applicable. The tax authorities have raised certain tax demands on the Company in respect of the past periods. The Company has disputed such demands and has appealed/ contested against them at appropriate forums. As at March 31, 2024 the Company has an amount of Rs. 666.60 Lakhs (Previous Year- Rs. 666.60 Lakhs) determined pertaining to various pending tax litigations. Ind AS 37 requires the Company to perform an assessment of the probability of economic outflow on account of such disputed tax matters and determine whether any particular obligation needs to be recorded as a provision in the books of account or to be disclosed as a contingent liability. Considering the significant degree of judgement applied by the management in making such assessments and the resultant impact on the financial statements, we have considered it to be a key audit matter.	In assessing the exposure of the Company for the tax litigations, we have performed the following procedures: • Obtained an understanding of the process laid down by the management for performing their assessment taking into consideration past legal precedents, changes in laws and regulations etc. • Assessed the processes and entity level controls established by the Company to ensure completeness of information with respect to tax litigations. • Obtained suitable representations from the management with respect to tax litigations and the forum where they are pending including the issues under litigation. • The grounds of dispute taken by Management were considered to enable us to take a judgement. These matters continue to remain in the same status as in the previous year. Our Opinion is not modified in respect of this matter.
4.3 Fair value measurement of Investment in Equity Shares of Andhra Pradesh Gas Power Corporation Limited (Refer Note 6 to the Financial Statements)
As at 31 March 2024, the cost of investment in 9,38,000 Equity Shares of Andhra Pradesh Gas Power Corporation Limited amounted to Rs. 1326.05 lakhs (Prev Year - Rs. 1326.05 Lakhs). The investment was remeasured at its fair value, which stood at Rs.Nil as at 31 March 2024 (Rs.403.59 Lakhs as at 31 March 2023) The fair value of the investment in such investment are assessed based on assumptions that require the management to exercise their judgement. As a result the company recorded a total fair value adjustment for the year ended 31 March 2024 amounting to Rs. 403.59 Lakhs (for the year ended 31 March 2023 Rs.923.46 Lakhs). We focussed on this area due to significant carrying amount of the investment and the significant management judgement and estimates involved in measuring the fair value.	We performed the following principal audit procedures in relation to the management’s estimation of the fair value of the investments: a) Evaluated the design and implementation and tested the operating effectiveness of the controls (including techniques) relating to management’s assessment of fair value amount of investment. b) Evaluated the Disclosures made in the financial statements and the related compliance with the requirements of the applicable accounting standards. Our Opinion is not modified in respect of this matter.

Key Audit Matters

How the key audit matter was addressed in our audit

4.4 Provision for Electricity Claims (Refer Note 22 & The Company is a shareholder of Andhra Pradesh Gas Power Corporation Limited (APGCL) and has been consuming power from the corporation in the past. The Company is also a power consumer with Southern Power Distribution Company Limited (SPDCL). There are several power disputes between APGCL, SPDCL and the Company (both in the capacity as shareholder of APGCL and as a power consumer of SPDCL) relating to past several years pending in different forums. The issues under dispute range from tariff rates, levy of wheeling charges, monthly rent consumption, peak hour energy allocation, surplus allocation charges, amongst others. Both APGCL and the Company have filed court cases against SPDCL and the issues are pending in various forums. The Company has obtained information that APGCL has suspended its operations as on date. Meanwhile an amount of Rs. 6957.64 Lakhs (Current Consumption Charges Rs.3,574.25 Lakhs and Surcharge Rs.3,383.39 Lakhs) appears as arrear outstanding in the electricity bills of SPDCL during the year. Despite the management’s best effort to obtain the details and basis of charge of such unilateral claim made by SPDCL, the company has not been able to obtain any information from SPDCL and APGCL. The management has made an overall assessment of all such claims. The management has also considered the fact that some of the claims by SPDCL have been settled by the Company to APGCL and may not fall back on the Company. The management has also reviewed the status of the various disputes pending in different forums. The management has also taken note of APGCL’s ability to timely defend legal cases considering that the corporation has suspended operations. Considering all the above factors, the management has estimated on the basis of available data an amount of Rs.1,055.32 Lakhs as Electricity Payables and such amount has been provided in the books of account as at 31 March, 2024. The balance of the disputed claim is disclosed as contingent liability in Note 36 (a) (iv) of the financial statements. Considering the significant degree of judgement applied by the management in making such assessments and the resultant impact on the financial statements, we have considered it to be a key audit matter.

k Note 36(a)(IV) to the Financial Statements) We have evaluated the following principal audit procedures in relation to the management’s estimation of the amount payable in this regard. Our Evaluation of the provision for electricity claims included the following: • Obtained an understanding of the filed court cases and the issues pending in various forums. • Assessed the controls established by the Company to ensure completeness of information with respect to litigations. • Obtained suitable representations from the management with respect to litigations and the forum where they are pending including the issues under litigation. • The grounds of dispute taken by Management were considered to enable us to take a judgement. • The Company’s representation that APGCL was permitted to generate power and sell independently without depending on SPDCL and further that the claims from SPDCL is for the same supply of power from APGCL for which due charges have been paid. • Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. Our Opinion is not modified in respect of this matter.

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

5. The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information in the Company’s Annual Report, but does not include the Financial Statements and our auditor’s report thereon.

6. The Other information is expected to be made available to us after the date of this auditors’ report. Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

7. In connection with our audit of the Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

8. When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the relevant laws and regulations.

Management’s and Board of Directors’ Responsibilities for the Financial Statements

9. The Company’s management and Board of Directors are 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, cash flows and changes in equity 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.

10. 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.

11. In preparing the Financial Statements, the management and Board of Directors are 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 and the board of directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor’s Responsibility for the audit of the financial statements

13. 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.

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

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

• Obtain an understanding of internal 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 system with reference to financial statements in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management and the board of director’s use of the going concern basis of accounting in preparation of financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

15. 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.

16. 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.

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

Report on Other Legal and Regulatory Requirements

18. 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 the paragraph 3 and 4 of the order, to the extent applicable.

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

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

(b) In our opinion, proper books of account as required by law have been kept by the Company, in electronic mode on servers physically located in India, so far as it appears from our examination of those books except for the matters stated in the paragraph 19 B (f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014. Management has represented to us that the process of taking daily backups is in place, however, we are unable to comment on the same due to absence of backup logs. Refer Note 46 (ii) to the Financial Statements.

(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 Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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

(f) The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 19(A)(b) above on reporting under Section 143(3)(b) of the Act and paragraph 19(B)(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”

(B) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the

Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according

to the explanations given to us:

a) The Company has disclosed the impact of pending litigations as at 31 March 2024 on its financial position in its financial statements, wherever applicable - Refer Note No:36 to the Financial Statements.

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

c) On the basis of the declarations made to us by the management, which is relied upon by us, we report that there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

d) (i) The Management has represented that, to the best of its knowledge and belief, as disclosed in Note

No: 46(xii)(A) 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 (“Ultimate Beneficiaries”) by or on behalf of the Company or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(ii) The Management has represented that, to the best of its knowledge and belief, as disclosed in Note No: 46(xii)(B), to the Financial Statements 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 directly or indirectly, lend or invest in other person(s) or entity(ies) identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Parties or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iii) 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 (i) and (ii) above, contain any material mis-statement.

e) The company has not declared or paid any dividend during the year. Hence reporting in respect of compliance with section 123 of the Companies Act, is not applicable.

f) As stated in Note 44 of the Financial Statements and based on our examination which included test checks, except for instances mentioned below, the Company, in respect of financial year commencing on 01 April 2023, has used accounting softwares for maintaining its books of accounts, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software. Further, during the course of our audit, we have not come across any instance where the audit trail (edit log) facility has been tampered with, other than the consequential impact of the exception given below:

Nature of exception noted:	Details of Exception:
1. Instances of accounting software(s) for maintaining books of account which did not have a feature of recording audit trail (edit log) facility for all relevant transactions recorded in the software.	The software/application used for maintaining Payroll and Property, Plant and Equipment & Intangible Assets does not have a feature of recording audit trail (edit log) facility both at the application level and database level.
2. Instances of accounting software(s) for maintaining books of account for which the feature of recording audit trail (edit log) facility was not operated throughout the year for all relevant transactions recorded in the software.	We are not able to verify the effective date from which the audit trail (edit log) facility for the accounting software “Tally” (used for maintenance of the accounting records by the Company) was operated. Further the audit trail feature was not enabled at the database level throughout the year to log any direct data changes, for the accounting software “Tally” used for maintenance of the accounting records by the Company.

(C) 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 according to the information and explanations given to us, the remuneration paid/provided by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid/provided to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under section 197(16) of the Act, which are required to be commented upon by us.

For CSK Prabhu & Co.

Chartered Accountants Firm’s registration number: 002485S Mahesh Prabhu

Coimbatore ^Partner

25-05-2024 Membership number: 214194

UDIN: 24214194BKBGAA7927

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Mar 31, 2018

Report on the Ind AS financial statements

We have audited the accompanying Ind AS financial statements of SUPER SPINNING MILLS LIMITED (“the Company”), which comprise the Balance Sheet as at 31^st March, 2018, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Ind AS financial statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including Other Comprehensive Income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Rules specified in the Companies (Indian Accounting Standards) Rules, 2017 as amended from time to time. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS 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 Ind AS financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2018, its losses, Other Comprehensive Income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of changes in Equity dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with the Rules specified in the Companies (Indian Accounting Standards) Rules, 2017 as amended from time to time;

e) On the basis of the written representations received from the directors as on 31 ^st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

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

g) 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 litigation on its financial position in its Ind AS financial statements included in Note No. 40 forming part of the Ind AS financial statements;

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor’s Report) Order 2016 (“the order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure B” statement on the matters specified in paragraphs 3 and 4 of the order to the extent applicable.

Annexure - A to the Independent Auditors’ Report

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

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of SUPER SPINNING MILLS LIMITED (“the Company”) as of 31^st March 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the Ind AS financial statements.

Inherent Limitations of Internal Financial controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

ANNEXURE ‘B‘ TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date to the members of SUPER SPINNING MILLS LIMITED for the year ended 31^st March, 2018)

We report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of the immovable properties are held in the name of the company.

ii) (a) In our opinion and according to the information and explanations given to us, the management has conducted the physical verification of inventories at reasonable intervals during the year under review.

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

(c) According to the information and explanations given to us, we are of the opinion that the Company is maintaining proper records of inventories and no material discrepancies were noticed on their physical verification.

iii) (a) The Company had not granted any loans, secured or unsecured to any companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 during the year. Hence, comments on the provisions of clause (iii) (a) to (c) of the said Order do not arise.

iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans, guarantees and investments made.

v) In our opinion and according to the information and explanations given to us, during the year, the Company has not accepted any deposit within the meaning of Section 73 to 76 of the Companies Act, 2013, and rules framed there under.

vi) We have broadly reviewed the books of account maintained by the company, pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 as amended and are of the opinion that prima-facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, amounts deducted/accrued in the books of accounts in respect of undisputed statutory dues including provident fund, employees’ state insurance, income-tax, goods and service tax, sales-tax, excise duty, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have been regularly deposited during the year by the company with appropriate authorities. There are no undisputed statutory dues as referred to above as at 31^st March 2018 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, the disputed statutory dues that have not been deposited on account of matters pending before the appropriate authority are as under:

Name of Statute	Nature of Dues	Issues in the Appeal	Unpaid Amount (Rs. in lakhs)	Period to which the amount relates	Forum Where Dispute is Pending
Income Tax Act, 1961	Income Tax	Disallowance of replacement of machinery	523.74	1993-1999 2000-2004 2004-2005 2005-2009 2011-12	CIT(Appeals), Coimbatore CIT(Appeals), Coimbatore ITAT, Chennai CIT(Appeals), Coimbatore CIT(Appeals), Coimbatore
APGST Act, 1957	Sales Tax	Disallowance of Stock Transfer to branch & Tax due on other pending declaration forms	162.96	2010-11	STAT, Visakhapatnam
APGST Act, 1957	Sales Tax	Disallowance of Stock Transfer to branch & Tax due on other pending declaration forms	432.00	2011-12	STAT, Visakhapatnam
TNGST Act, 1959	Sales Tax	Levy of Penalty for Issue of C Forms	83.93	1998-99	Madras High Court, Chennai
TNGST Act, 1959	Sales Tax	Rate Difference	149.42	2004-2008	Madras High Court, Chennai
TNGST Act, 1959	Sales Tax	CST Rate Difference	0.31	2010-11	Appellate Deputy Commissioner of Commercial Taxes, Coimbatore
Central Excise Act, 1944	Excise Duty	Capital goods moved without payment of duty	49.61	2007-08	CESTAT, Chennai

viii) The company has not defaulted in repayment of loans and borrowing to financial institution, bank, government or dues to debenture holders.

ix) The company has not raised any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year. Accordingly, paragraph 3(ix) of the order is not applicable.

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

xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable Indian accounting standards (Ind AS).

xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For M/s Sethia, Prabhad Hegde & Co

Chartered Accountants

Registration No. 013367S

Timmayya Hegde

Coimbatore Partner

May 19, 2018 Membership No. 226267

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Mar 31, 2016

To

The Members of Super Spinning Mills Limited,

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of SUPER SPINNING MILLS LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managements Responsibility for the Standalone Financial Statements

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

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncement 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 the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, its losses and its 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 2016 (“the order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A” statement on the matters specified in paragraphs 3 and 4 of the order to the extent applicable.

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

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

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

d) In our opinion, the aforesaid standalone 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 the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and:

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

i. The Company has disclosed the impact of pending litigation on its financial position in its financial statements included in Note No. 29.2 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

Annexure to the Independent Auditors'' Report

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date to the members of SUPER SPINNING MILLS LIMITED for the year ended March 31, 2016)

We report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of the immovable properties are held in the name of the company.

ii) (a) In our opinion and according to the information and explanations given to us, the management has conducted the physical verification of inventories at reasonable intervals during the year under review.

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

(c) According to the information and explanations given to us, we are of the opinion that the Company is maintaining proper records of inventories and no material discrepancies were noticed on their physical verification.

iii) The Company had not granted any loans, secured or unsecured to any companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 during the year. Hence, comments on the provisions of clause (iii) (a) to (c) of the said Order do not arise.

iv) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans, guarantees and investments made.

v) In our opinion and according to the information and explanations given to us, during the year, the Company has not accepted any deposit within the meaning of Section 73 to 76 of the Companies Act, 2013, and rules framed there under.

vi) We have broadly reviewed the books of account maintained by the company, pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Companies Act, 2013 and are of the opinion that prima-facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

vii) (a) According to the information and explanations given

to us and on the basis of our examination of the records of the company, amounts deducted/accrued in the books of accounts in respect of undisputed

statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, excise duty, wealth-tax, service tax, customs duty, excise duty, Value added tax, cess and other material statutory dues have been regularly deposited during the year by the company with appropriate authorities. There are no undisputed statutory dues as referred to above as at 31st March 2016 outstanding for a period of more than six months from the date they become payable.

b) According to the information and explanations given to us, the disputed statutory dues that have not been deposited on account of matters pending before the appropriate authority are as under:

Name of Statute	Nature of Dues	Issues in the Appeal	Unpaid Amount (Rs. in lakhs)	Period to which the amount relates	Forum Where Dispute is Pending
Income Tax Act, 1961	Income Tax	Disallowance of replacement of machinery	489.16	1993-94, 1994-95, 1996-97, 1998-99 to 2000-01, 2002-03 to 2008-09	CIT(Appeals), Coimbatore
APGST Act, 1957	Sales Tax	Disallowance of Stock Transfer to branch & Tax due on other pending declaration forms	162.96	2010-11	ADC, Kurnool & STAT, Visakhapatnam
TNGST Act, 1959	Sales Tax	Levy of Penalty for Issue of C Forms	83.93	1998-99	High Court, Chennai
Central Excise Act,1944	Excise Duty	Capital goods moved without payment of duty and Dispute on input duty assessed	75.98	2003-04	Commissioner of Appeals, Coimbatore

viii) The company has not defaulted in repayment of loans and borrowing to financial institution, bank, government or dues to debenture holders

ix) The company has not raised any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year. Accordingly, paragraph 3(ix) of the order is not applicable.

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

xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

Annexure - B to the Auditors’ Report Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of SUPER SPINNING MILLS LIMITED (“the Company”) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Reddy, Goud & Janardhan

Chartered Accountants

Registration No.003254S

Balakrishna S Bhat

Coimbatore Partner

30th May, 2016 Membership No.202976

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Mar 31, 2015

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

Managements Responsibility for the standalone Financial Statements

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

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone 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 and other applicable authoritative pronouncements issued by the Institute of Chartered Accountant Of India. Those Standards and pronouncement 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 the disclosures in the standalone financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its losses and its 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 2015 ("the order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order to the extent applicable.

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

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

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements included in Note No. 28 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 has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditors' Report (Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date to the members of SUPER SPINNING MILLS LIMITED for the year ended March 31,2015)

We report that:

i. a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

ii. a) In our opinion and according to the information and explanations given to us, the management has conducted the physical verification of inventories at reasonable intervals during the year under review.

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

c) According to the information and explanations given to us, we are of the opinion that the Company is maintaining proper records of inventories and no material discrepancies were noticed on their physical verification.

iii. a) The Company had not granted any loans, secured or unsecured to any companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 during the year, except in case of interest free unsecured loans granted to its subsidiaries during previous years that were outstanding at the beginning of the year were repaid in full during the current year. Hence comments on the provisions of Clause (iii) (a) to (c) of the said order do not arise.

iv. 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, with regard to the purchase of inventories and fixed assets and for the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit within the meaning of Section 73 to 76 of the Companies Act, 2013, and rules framed there under.

vi. We have broadly reviewed the books of account maintained by the company, pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Companies Act, 2013 and are of the opinion that prima-facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

vii. a) According to the information and explanations given to us and on the basis of our examination of the records of the company, amounts deducted/accrued in the books of accounts in respect of undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, excise duty, wealth-tax, service tax, customs duty, excise duty, Value added tax, cess and other material statutory dues have been regularly deposited during the year by the company with appropriate authorities. There are no undisputed statutory dues as referred to above as at 31st March 2015 outstanding for a period of more than six months from the date they become payable.

b) According to the information and explanations given to us, the disputed statutory dues that have not been deposited on account of matters pending before the appropriate authority are as under:

Name of Nature of Issues in the Unpaid Amount Statute Dues Appeal (Rs.in lakhs)

Disallowance of

Income Tax Act, Income Tax replacement of 439.92 1961 machinery

Disallowance of APGST Art Stock Transfer to Sales Tax branch & Tax due 162.96 1957 on other pending declaration forms

TNGST Act, Levy of Penalty for Sales Tax 83.93 1959 Issue of C Forms

Capital goods moved Central Excise without payment of Excise Duty 75.98 Act,1944 duty and Dispute on input duty assessed

Name of Statute Period to Forum which the Where Dispute amount is Pending relates

Income Tax Act, 1961 1993- 94,

1994- 95,

1996-97,

1998-99 to CIT 2000-01, Coimbatore

2002-03 to 2008-09

APGST Act, 1957 ADC, Kurnool 2010-11 & STAT, Visakhapatnam

TNGST Act, 1959 1998-99 High Court, Chennai

Central Excise Act,1944 Commissioner of 2003-04 Appeals, Coimbatore

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

viii) The Company has incurred accumulated losses aggregating to Rs. 4543.11 lakhs as at end of the financial year and has incurred cash losses of Rs. 678.39 lakhs in the current financial year. However, the Company has not incurred cash losses during the immediately preceding financial year.

ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks or financial institutions. There are no debenture holders during the year.

x) In our opinion, the Company has given guarantees for banking facility availed by a subsidiary company for Rs. 140 Lakhs and according to the information and explanations given to us, the terms and conditions on which such guarantees have been given to such entities are not prima facie prejudicial to the interest of the company, considering the Company's economic interest in such entities.

xi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

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

For Reddy, Goud & Janardhan

Chartered Accountants Registration No.003254S Coimbatore Balakrishna S Bhat

7th May, 2015 Partner

Membership No.202976

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Mar 31, 2014

We have audited the accompanying financial statements of Super Spinning Mills Limited, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

b) in the case of the Statement of Profit and Loss, of the 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 the Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the 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 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. ; and

e) on the basis of written representations received from the directors as on March 31, 2014, and taken

on record by the Board of Directors, none of the directors are disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956

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

Annexure referred to in paragraph 1 of our report of even date

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

b. The assets have been physically verified by the management during the year in accordance with a phased programme of verification, which, in our opinion is reasonable, considering the size and the nature of its assets.

c. The Company has not disposed off any substantial part of the fixed assets during the year.

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

b. In our opinion, and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company is maintaining proper records of inventories. 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/advances during the year to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. An amount of Rs.79.57 lakhs is outstanding at the year end.

b. The rate of interest and other terms and conditions on which the loans/advances have been made to parties covered under Section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

c. According to the information and explanations given to us, the receipt of loans/advances and the interest amount are regular as stipulated.

d. According to the information and explanations given to us, there are no overdue amounts with respect to the above said loans/advances and as such Clause (d) is not applicable.

e. According to the information and explanations given to us, the Company has not received any secured or unsecured loans during the year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. An amount of Rs.35.00 lakhs is outstanding at year end.

f. The interest and other terms and conditions on which these loans have been borrowed are not prima facie, prejudicial to the interests of the company.

g. The repayment of principal and interest are regular as stipulated.

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 the purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5. a. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the registers 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 such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the company has complied with the provision of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

8. We have broadly reviewed the books of accounts relating to materials, labour and other items of cost maintained by the company pursuant to the rules made by the Central Government for the m ai n t e nance of cos t re c or ds u n der 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 based on the examination of books of account and records produced before us, we are of the opinion that the undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable, have been regularly deposited by the company during the year with the appropriate authorities.

b. As at 31st March 2014, according to the records of the Company and the information and explanations given to us, the particulars of disputed dues (provided / considered contingent liability, as appropriate) in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess wherever applicable that have not been deposited on account of a dispute are tabulated as in clause (c).

c. According to the information and explanations given to us and as per the records of the company the dues of sales tax/income tax/ customs duty / wealth tax/service tax / excise duty / cess, which have not been deposited on account of any dispute, are as follows:

Sl No Name of Statute Issues in the Appeal Unpaid Amount in Lakhs

1 Income Tax Disallowance of 480.55 replacement of machinery

2 APGST Disallowance of purchase 50.78 tax credit taken to set off tax collected on yarn sales

3 TNGST Levy of Penalty for Issue of 83.93 C Forms

4 Central Excise, TN Capital goods moved without 75.98 payment of duty and Dispute on input duty assessed

Name of Statute

Income Tax

APGST

TNGST

Central Excise, TN

Name of the Statue Period to Forum Where which Dispute is pending the amount relates

Income Tax 1993-94, CIT(A), Coimbatore

1994-95,

1996-97,

1999-00,

2000-01

2002-03 to

2008-09

APGST 1999-00 to DC(CT)(A), Kurnool 2003-04

TNGST 1998-99 High Court, Chennai

Central Excise, TN 2003-04 Commissioner of Appeals, Coimbatore

10. There are accumulated losses as at 31st March 2014. The Company has not incurred any cash losses during the financial year covered by our audit and 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 to a bank. There are no debenture holders during the year.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of securities by way of pledge of shares and debentures.

13. In our opinion, the company is not a chit fund or a Nidhi / Mutual Benefit Fund / Society. Therefore the provisions of clause (xiii) of para 4 of the Order are not applicable.

14. According to the information and explanations given to us, the company is not dealing in or trading in any shares and securities and hence the provisions of Para (xiv) of the order are not applicable.

15. According to the information and explanations given to us, the Company has given guarantees for loans taken from banks by a subsidiary company for Rs.140 Lakhs and prima facie, the terms and conditions on which such guarantees have been extended are not prejudicial to the interest of the Company.

16.In our opinion and according to the information and explanations given to us, the term loan(s) 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 investments.

18. The company has not made any preferential allotment of shares during the year and hence the provisions of clause (xviii) of para 4 of this Order are not applicable.

19. The company has not issued any debentures during the year and hence the provisions of clause (xix) of para 4 of this Order are not applicable.

20. The company has not raised any money by way of public issues during the year and hence the provisions of clause (xx) of para 4 of this Order are not applicable.

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

For Reddy, Goud & Janardhan

Chartered Accountants

Registration No.003254S

Coimbatore Balakrishna S Bhat

28th May, 2014 Partner

Membership No.202976

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Super Spinning Mills Limited, which comprise the Balance Sheet as at March 31, 2013, and 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.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. 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 judgement, including the assessment of the risks of material misstatement in the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Statement of Profit and Loss, of the 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 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

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

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

Annexure referred to in paragraph 1 of our report of even date

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

b. The assets have been physically verified by the management during the year in accordance with a phased programme of verification, which, in our opinion is reasonable, considering the size and the nature of its assets.

c. The Company has not disposed off any substantial part of the fixed assets during the year.

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

b. In our opinion, and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company is maintaining proper records of inventories. 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/advances during the year to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. An amount of Rs. 808.63 lakhs is outstanding at the year end.

b. The rate of interest and other terms and conditions on which the loans/advances have been made to parties covered under Section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

c. According to the information and explanations given to us, the receipt of loans/advances and the interest amount are regular as stipulated.

d. According to the information and explanations given to us, there are no overdue amounts with respect to the above said loans/advances and as such Clause (d) is not applicable.

e. According to the information and explanations given to us, the Company has not received any secured or unsecured loans during the year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. An amount of Rs. 37.11 lakhs is outstanding at year end.

f. The interest and other terms and conditions on which these loans have been borrowed are not prima facie, prejudicial to the interests of the company.

g. The repayment of principal and interest are regular as stipulated.

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 the purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5. a. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the registers 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 such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the company has complied with the provision of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

8. We have broadly reviewed the books of accounts 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 based on the examination of books of account and records produced before us, we are of the opinion that the undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable, have been regularly deposited by the company during the year with the appropriate authorities.

b. As at 31st March 2013, according to the records of the Company and the information and explanations given to us, the particulars of disputed dues (provided / considered contingent liability, as appropriate) in respect of Income Tax, Wealth Tax,

Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess wherever applicable that have not been deposited on account of a dispute are tabulated as in clause ( c ).

c. According to the information and explanations given to us, the details of disputed statutory dues remaining unpaid and the forum where the dispute is pending are listed as under:

Rs.lakhs

Sl Name of Demand Issues in the Appeal No Statute Amount

1 Income Tax Disallowance of depreciation on humidification 14.61 plant

2 Income Tax Disallowance of replacement of machinery 70.69

3 Income Tax Disallowance of replacement of machinery 362.27

4 Income Tax Disallowance of Replacement of machinery 241.67

5 Income Tax Computation of book profit for MAT purpose 34.57

6 Income Tax Disallowance of Replacement of machinery 553.68

7 Income Tax Disallowance of replacement of machinery 183.81

8 Income Tax Disallowance of replacement of machinery 42.51

9 Income Tax Disallowance of replacement of machinery 228.80

10 Income Tax Exclusion of 90% insurance and interest 318.92 receipts and miscellaneous income from Sec 80HHC workings, disallowance of replaceme of machinery, validity of assessment u/s 143(3) & deduction of Sec 80IA claim from Sec 80HHC working

11 Income Tax Disallowance of replacement of machinery 230.00

12 Income Tax Disallowance of replacement of machinery 241.31

13 Income Tax Disallowance of replacement of machinery 378.53

14 Income Tax Disallowance of replacement of machinery 113.83

15 Income Tax Disallowance of replacement of machinery 15.37

16 Income Tax Disallowance of Agency Commission on 95.21 export sales, Parties Performance Incentive, Depreciation on imported car and ineligible credit as per Form 26AS

17 APGST Disallowance of purchase tax credit taken to 144.28 set off tax collected on yarn sales

18 TNGST Levy of Penalty for Issue of C Forms 83.93

19 Central Capital goods moved without payment of duty 75.98 Excise, TN and Dispute on input duty assessed

Name Period to Forum Where which the Dispute is Pending amount relates

Income Tax 1989-90 High Court, Chennai

Income Tax 1993-94 High Court, Chennai

Income Tax 1994-95 High Court, Chennai

Income Tax 1996-97 CIT(A), Coimbatore

Income Tax 1997-98 Supreme Cout, New Delhi

Income Tax 1998-99 High Court, Chennai

Income Tax 1999-00 CIT(A), Coimbatore

Income Tax 2000-01 CIT(A), Coimbatore

Income Tax 2002-03 CIT(A), Coimbatore

Income Tax 2003-04 CIT(A), Coimbatore and High Court, Chennai

Income Tax 2004-05 CIT(A), Coimbatore

Income Tax 2005-06 High Court, Chennai

Income Tax 2006-07 High Court, Chennai

Income Tax 2007-08 High Court, Chennai

Income Tax 2008-09 High Court, Chennai

Income Tax 2010-11 CIT(A), Coimbatore

Income Tax 1999-00 to DC(CT)(A), Kurnool 2003-04

Income Tax 1998-99 High Court, Chennai

Income Tax 2003-04 Commissioner of Appeals, Coimbatore

10. There are accumulated losses and in the current financial year the company has not incurred cash losses. However, there were cash losses 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 to a bank. There are no debenture holders during the year.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of securities by way of pledge of shares and debentures.

13. In our opinion, the company is not a chit fund or a Nidhi / Mutual Benefit Fund / Society. Therefore the provisions of clause (xiii) of para 4 of the Order are not applicable.

14. According to the information and explanations given to us, the company is not dealing in or trading in any shares and securities and hence the provisions of Para (xiv) of the order are not applicable.

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. In our opinion and according to the information and explanations given to us, the term loan(s) 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 investments.

18. The company has not made any preferential allotment of shares during the year and hence the provisions of clause (xviii) of para 4 of this Order are not applicable.

19. The company has not issued any debentures during the year and hence the provisions of clause (xix) of para 4 of this Order are not applicable.

20. The company has not raised any money by way of public issues during the year and hence the provisions of clause (xx) of para 4 of this Order are not applicable.

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

For Reddy, Goud & Janardhan

Chartered Accountants

Registration No.003254S

Balakrishna S Bhat

Coimbatore Partner

27th May, 2013

Membership No.202976

---

Mar 31, 2012

We have audited the attached Balance Sheet of Super Spinning Mills Limited, as at 31st March 2012, the statement of Profit and Loss 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.

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.

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

2. Further to our comments in the Annexure referred to 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, 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 Balance Sheet, the 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 Companies Act, 1956.

e. On the basis of written representations 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 of the Company are disqualified as on 31st March 2012 from being appointed as Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f. 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:

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 the statement of Profit and Loss, of the Loss of the Company 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.

Annexure referred to in paragraph 1 of our report of even date

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

b. The assets have been physically verified by the management during the year in accordance with a phased programme of verification, which, in our opinion is reasonable, considering the size and the nature of its assets.

c. The Company has not disposed off any substantial part of the fixed assets during the year.

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

b. In our opinion, and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company is maintaining proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. a. The company had made advances to two parties covered in the register maintained under section 301 of the Companies Act, 1956. The amount involved in the transaction is Rs. 826.14 Lakhs.

b. No interest is charged with respect to the above advances. However, other terms and conditions on which advances were made to the parties covered under Section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

c. According to the information and explanations given to us, the receipt of advance amount is regular as stipulated.

d. According to the information and explanations given to us, there are no overdue amounts with respect to the above said advances and as such Clause (d) is not applicable.

e. According to the information and explanations given to us, the Company had not taken any loans, secured or unsecured, from companies, firms or other parties as covered in the register maintained under section 301 of the Companies Act, 1956 and hence the provisions of clause (iii)(e), clause (iii)(f) and clause (iii)(g) of the said Order are not applicable.

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 the purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5. a. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the registers 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 such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the company has complied with the provision of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

8. We have broadly reviewed the books of accounts 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 based on the examination of books of account and records produced before us, we are of the opinion that the undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable, have been regularly deposited by the company during the year with the appropriate authorities.

b. As at 31st March 2012, according to the records of the Company and the information and explanations given to us, the particulars of disputed dues (provided / considered contingent liability, as appropriate) in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess wherever applicable that have not been deposited on account of a disputes are tabulated as in clause ( c ).

c. According to the information and explanations given to us, the details of disputed statutory dues remaining unpaid and the forum where the dispute is pending are listed as under:

Rs. Lakhs

Demand Period to which Forum Where Sl No Name of Statute Issues in the Appeal Amount the amount relates Dispute is Pending

1 Income Tax Disallowance of depreciation on humidification plant 14.61 1989-90 High Court, Chennai

2 Income Tax Disallowance of replacement of machinery 70.69 1993-94 CIT(A), Coimbatore

3 Income Tax Disallowance of replacement of machinery 362.27 1994-95 CIT(A), Coimbatore

4 Income Tax Disallowance of Replacement of machinery 241.67 1996-97 CIT(A), Coimbatore

5 Income Tax Computation of book profit for MAT purpose 34.57 1997-98 High Court, Chennai

6 Income Tax Disallowance of Replacement of machinery 553.68 1998-99 CIT(A), Coimbatore

7 Income Tax Disallowance of replacement of machinery 183.81 1999-00 CIT(A), Coimbatore

8 Income Tax Disallowance of replacement of machinery 42.51 2000-01 CIT, Coimbatore

9 Income Tax Disallowance of replacement of machinery 228.80 2002-03 CIT(A), Coimbatore

10 Income Tax Exclusion of 90% insurance and interest receipts, 318.92 2003-04 CIT(A), Coimbatore miscellaneous income, disallowance of replacement of and High Court, machinery, validity of assessment u/s 143(3) & deduction Madras of Sec 80IA claim from the deduction of Sec 80HHC

11 Income Tax Disallowance of replacement of machinery 230.00 2004-05 CIT(A), Coimbatore

12 Income Tax Disallowance of replacement of machinery & Deduction 251.84 2005-06 CIT(A), Coimbatore u/s Sec 80IA

13 Income Tax Disallowance of replacement of machinery 378.53 2006-07 CIT(A), Coimbatore

14 Income Tax Disallowance of replacement of machinery, Deduction u/s 131.36 2007-08 CIT(A), Coimbatore 80IA, Disallowance of cost of acquisition while computing long term capital gain, disallowance of depreciation on windmills

15 Income Tax Disallowance of replacement of machinery 15.37 2008-09 CIT(A), Coimbatore

16 TNGST Act Levy of Penalty for Issue of C Forms 83.93 1998-99 High Court, Madras

17 Central Excise, Capital goods moved without payment of duty and 75.98 2003-04 Commissioner of Tamil Nadu Dispute on input duty assessed Appeals, Coimbatore

10. There are accumulated losses and in the current financial year the company has incurred cash losses. However, there were no cash losses 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 to a bank. There are no debenture holders during the year.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of securities by way of pledge of shares and debentures.

13. In our opinion, the company is not a chit fund or a Nidhi / Mutual Benefit Fund / Society. Therefore the provisions of clause (xiii) of para 4 of the Order are not applicable.

14. According to the information and explanations given to us, the company is not dealing in or trading in any shares and securities and hence the provisions of Para (xiv) of the order are not applicable.

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. In our opinion and according to the information and explanations given to us, the term loan(s) 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 investments.

18. The company has not made any preferential allotment of shares during the year and hence the provisions of clause (xviii) of para 4 of this Order are not applicable.

19. The company has not issued any debentures during the year and hence the provisions of clause (xix) of para 4 of this Order are not applicable.

20. The company has not raised any money by way of public issues during the year and hence the provisions of clause (xx) of para 4 of this Order are not applicable.

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

For Reddy, Goud & Janardhan

Chartered Accountants

Registration No.003254S

Balakrishna S Bhat

Coimbatore Partner

22nd May, 2012 Membership No.202976

---

Mar 31, 2011

We have audited the attached Balance Sheet of Super Spinning Mills Limited, as at 31 st March 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statementbased on our Audit.

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.

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

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

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

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956.

e. 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 of the Company are disqualified as on 31" March 2011 from being appointed as Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f. 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:

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 the Profit and Loss Account, of the profit of the Company 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.

Annexure referred to in paragraph 1 of our report of even date

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

b. The assets have been physically verified by the management during the year in accordance with a phased programme of verification, which, in our opinion is reasonable, considering the size and the nature of its assets. c. The Company has not disposed off any substantial part of the fixed assets during the year.

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

b. In our opinion, and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company is maintaining proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. a. The company had made advances to two parties covered in the register maintained under section 301 of the Companies Act, 1956. The amount involved in the transaction is Rs.952.23 Lakhs.

b. No interest is charged with respect to the above advances. However, other terms and conditions on which advances were made to the

parties covered under Section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

c. According to the information and explanations given to us, the receipt of advance amount is regular as stipulated.

d. According to the information and explanations given to us, there are no overdue amounts with respect to the above said advances and as such Clause (d) is not applicable.

e. According to the information and explanations given to us, the Company had not taken any loans, secured or unsecured, from companies, firms or other parties as covered in the register maintained under section 301 of the Companies Act, 1956 and hence the provisions of clause (iii)(e), clause (iii)(f) and clause (iii)(g) of the said Order are not applicable.

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 the purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5. a. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the registers 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 such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the company has complied with the provision of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

8. We have broadly reviewed the books of accounts 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 based on the examination of books of account and records produced before us, we are of the opinion that the undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable, have been regularly deposited by the company during the year with the appropriate authorities.

b. As at 31st March 2011, according to the records of the Company and the information and explanations given to us, the particulars of disputed dues (provided / considered contingent liability, as appropriate) in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess wherever applicable that have not been deposited on account of a disputes are tabulated as in clause ( c).

c. According to the information and explanations given to us, the details of disputed statutory dues remaining unpaid and the forum where the dispute is pending are listed as under:

Name of Issues in the Appeal Amount Period to statute which the amount relates

Income Tax Disallowance of depreciation 14.61 1989-90 on humidification plant

Income Tax Disallowance of replacement 70.69 1993-94 of machinery

Income Tax Disallowance of replacement 362.27 1994-95 of machinery

Income Tax Disallowance of replacement 241.67 1996-97 of machinery

Income Tax Computation of book profit 34.57 1997-98 for MAT Purpose

Income Tax Disallowance of replacement 553.68 1998-99 of machinery

Income Tax Disallowance of replacement 183.81 1999-00 of machinery

Income Tax Disallowance of replacement 42.51 2000-01 of machinery

Income Tax Disallowance of replacement 228.80 2002-03 of machinery

Income Tax Exclusion of 90% insurance 318.92 2003-04 and interest receipt, miscellaneous income, Disallowance of replacement of machinery validity of assessment u/s 143(3) & deduction of Sec 80IA claim from the deduction of Sec 80HHC

Income Tax Disallowance of replacement 230.00 2004-05 of machinery

Income Tax Disallowance of replacement 251.84 2005-06 of machinery & Deduction u/s Sec 80IA

Income Tax Disallowance of replacement 378.53 2006-07 of machinery

Income Tax Disallowance of replacement 131.36 2007-08 of machinery, Deduction u/s 80IA, Disallowance of cost of acquisition while computing long term capital gain, disallowance of depreciation on windmills

Income Tax Disallowance of replacement 15.37 2008-09 of machinery

TN General Levy of Penalty for Issue of 83.93 1998-99 Sales C Forms Tax Act

Central Rebate claim on Exports 14.20 2004-05 Excise, TN & 2005-06

Central Valuation of Cotton Yarn sent 273.06 2000-01, Excise, TN to other units, Deemed cenvat 2001-02, credit - opening stock & 2002-03 Capital goods moved without & 2003-04 payment of duty and Dispute on input duty assessed

Service Tax Service Tax on Lorry Freight 0.31 2006-07 - availment of abatement

Name of Forum where statute dispute is pending

Income Tax High Court, Chennai

Income Tax CIT(A) Coimbatore

Income Tax CIT(A) Coimbatore

Income Tax CIT(A) Coimbatore

Income Tax High Court, Chennai

Income Tax CIT(A) Coimbatore

Income Tax CIT(A) Coimbatore

Income Tax CIT Coimbatore

Income Tax CIT(A) Coimbatore

Income Tax CIT(A) Coimbatore and High Court Madras

Income Tax CIT(A), Coimbatore

Income Tax ACIT & ITAT, Chennai

Income Tax ACIT, Coimbatore

Income Tax CIT(A), Coimbatore

Income Tax CIT(A), Coimbatore

TN General High Court, Madras salesTax Act

Central Excise, CESTAT, Chennai TN

Central Excise Commissioner of T N Appeals, Coimbatore

Service Tax Asst. Commissioner Tirupur

10. There are accumulated losses. The company has not incurred cash losses in the current Financial year and 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 to a bank. There are no debenture holders during the year.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of securities by way of pledge of shares and debentures.

13. In our opinion, the company is not a chit fund or a Nidhi / Mutual Benefit Fund / Society. Therefore the provisions of clause (xiii) of para 4 of the Order are not applicable.

14. According to the information and explanations given to us, the company is not dealing in or trading in any shares and securities and hence the provisions of Para (xiv) of the order are not applicable.

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. In our opinion and according to the information and explanations given to us, the term loan(s) 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 investments.

18. The company has not made any preferential allotment of shares during the year and hence the provisions of clause (xviii) of para 4 of this Order are not applicable.

19. The company has not issued any debentures during the year and hence the provisions of clause (xix) of para 4 of this Order are not applicable.

20. The company has not raised any money by way of public issues during the year and hence the provisions of clause (xx) of para 4 of this Order are not applicable.

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

For Reddy, Goud & Janardhan Chartered Accountants Registration No. 003254S Balakrishna S Bhat Partner Membership No.202976

Coimbatore 26th May, 2011

---

Mar 31, 2010

The Members of Super Spinning Mills Limited, We have audited the attached Balance Sheet of Super Spinning Mills Limited, as at 31st March 2010, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our Audit.

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.

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

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

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

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956.

e. 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 of the Company is disqualified as on 31st March 2010 from being appointed as Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f. 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:

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 the Profit and Loss Account, of the profit the Company 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.

Annexure referred to in paragraph 1 of our report of even date

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

b. The assets have been physically verified by the management during the year in accordance with a phased programme of verification, which, in our opinion is reasonable, considering the size and the nature of its assets.

c. The Company has not disposed off any substantial part of the fixed assets during the year.

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

b. In our opinion, and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company is maintaining proper records of inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. a. The company had made advances to eight parties covered in the register maintained under section 301 of the Companies Act, 1956. The amount involved in the transaction is Rs.2,919 Lakhs. b. No interest is charged with respect to the above advances. However, the other terms and conditions on which advances were made to the parties covered under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

c. According to the information and explanations given to us, the receipt of advance amount is regular as stipulated.

d. According to the information and explanations given to us, there are no overdue amounts with respect to the above said advances such Clause (d) is not applicable.

e. According to the information and explanations given to us, the Company had not taken any loans, secured or unsecured, from companies, firms or other parties as covered in the register maintained under section 301 of the Companies Act, 1956 and hence the provisions of clause (iii)(e), clause (iii)(f) and clause (iii)(g) of the said Order are not applicable.

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 the purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control.

5. a. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the registers 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 such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to information and explanations given to us, the company has complied with the provision of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

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

8. We have broadly reviewed the books of accounts 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 based on the examination of books of account and records produced before us, we are of the opinion that the undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable, have been regularly deposited by the company during the year with the appropriate authorities.

b. As at 31st March 2010, according to the records of the Company and the information and explanations given to us, the particulars of disputed dues (provided / considered contingent liability, as appropriate) in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess wherever applicable that have not been deposited on account of a disputes are tabulated as in clause(c).

c. According to the information and explanations given to us, the details of disputed statutory dues remaining unpaid and the forum where the dispute is pending are listed as under:

Name of

Issues in the Appeal statute

Income Tax Disallowance of depreciation on humidification plant

Income Tax Disallowance of Bonus

Income Tax Disallowance of replacement of machinery

Income Tax Payment to AP Electricity Board and disallowance of

bonus provision under MAT Income Tax Disallowance of replacement of machinery

Income Tax Disallowance of depreciation

Income Tax Disallowance of replacement of machinery

Income Tax Disallowance of replacement of machinery

Income Tax Levy of interest u/s 234D

Income Tax Validity of assessment, exclusion of 90% interest income

for section 80HHC Income Tax Deduction u/s 80IA

Income Tax Allowance of bad debts

Income Tax Disallowance of replacement of machinery &

deduction u/s 80IA Income Tax Disallowance of replacement of machinery

Income Tax Disallowance of replacement of machinery, deduction

u/s 80IA, disallowance of cost of acquisition of land

for Long term capital gain & disallowance of depreciation

on windmills

The Andhra Pradesh Disallowance of Purchase Tax Credit taken to set off tax Govt. Sales Tax Act collected on Yarn Sales

TN General Sales Levy of Penalty for Issue of C Forms

Tax Act

Central Excise.TN Rebate Claim on Exports

Central Excise. TN Valuation of Cotton Yarn sent to other units, Deemed

cenvat credit – opening stock & Capital goods moved without payment of duty

Service Tax Service Tax on Lorry Freight – availment of abatement

Name of Amount Period to which Forum where statute the amount relates dispute is pending

Income Tax 14.61 1988 - 89 High Court, Chennai

Income Tax 33.30 1994 - 95 ACIT Coimbatore

Income Tax 241.67 1995 - 96 CIT(A) Coimbatore

Income Tax 76.87 1997 - 98 High Court, Chennai

Income Tax 183.81 1998 - 99 CIT(A) Coimbatore

Income Tax 66.03 1999 - 00 ACIT Coimbatore

Income Tax 42.51 1999 - 00 CIT(A) Coimbatore

Income Tax 228.80 2001 - 02 CIT(A) Coimbatore

Income Tax 4.20 2001 - 02 ITAT, Chennai

Income Tax 7.67 2002 - 03 High Court, Chennai

Income Tax 10.91 2003 - 04 ACIT Coimbatore

Income Tax 3.03 2003 - 04 ITAT, Chennai

Income Tax 251.84 2004 - 05 ITAT, Chennai

Income Tax 378.53 2005 - 06 TAT, Chennai

Income Tax 131.35 2006 - 07 CIT(A) Coimbatore

The Andhra Pradesh 189.64 1999 - 00 to DC(CT) (A) Kurnool Govt. Sales Tax Act 2003 - 04

TN General Sales 83.93 1998 - 99 High Court, Chennai

Central Excise. TN 19.29 2004 - 05 & CESTAT, Chennai

2005 - 06

Commissioner of

Central Excise. TN 43.49 2003 - 04 Appeals, Coimbatore

Service Tax 0.31 2006 - 07 Comissioner of

Appeals, Tiruppur

10. There are accumulated losses and in the current financial year the Company has not incurred cash loss. However there were cash losses 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 to a bank. There are no debenture holders during the year.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of securities by way of pledge of shares and debentures.

13. In our opinion, the company is not a chit fund or a Nidhi / Mutual Benefit Fund / Society. Therefore the provisions of clause (xiii) of para 4 of the Order are not applicable.

14. According to the information and explanations given to us, the company is not dealing in or trading in any shares and securities and hence the provisions of Para (xiv) of the order are not applicable.

15. According to the information and explanations given to us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanations given to us, the term loan(s) 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 investments.

18. The company has not made any preferential allotment of shares during the year and hence the provisions of clause (xviii) of para 4 of this Order are not applicable.

19. The company has not issued any debentures during the year and hence the provisions of clause (xix) of para 4 of this Order are not applicable.

20. The company has not raised any money by way of public issues during the year and hence the provisions of clause (xx) of para 4 of this Order are not applicable.

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

For Reddy, Goud & Janardhan

Chartered Accountants

Registration No. 003254S

Balakrishna S Bhat

Coimbatore Partner

29th May, 2010 Membership No.202976