Auditor Report of Suryaamba Spinning Mills Ltd.

Mar 31, 2024

We have audited dee Sjtocoimp allying financial statements cf SlIRYAAMEA SPINNING MILLS LIMITED the " Company''i. which comprise? the Balance Sheei as ai March 31, 2024. die iitnemeat cf Profit ar.d Lies including the Other Comprehensive Income), due Statement cf Cash Flows and the Statement of Chan set in Equity fc: the year ended en that date and notes to the inaneiai statements, including a summary of material accounting policies and ofoer explanatory information hereinafter referred to as "the financial statements" i

In o‘jt opinion and to the best of our information artel according to the explanation''s given to us. the aforesaid financial statements, give the information, required by the Companies Act. 2013. as amended i "the Act" i m the manner -so required and give a true and fan view m ccciormit; ¦ with the Indian Accounting Standards prescribed under section 133 of the Act read Kith the Companies ¦ Indian Accounting Standards.¹ Rules. 2015. a-: amended i. "Lad AS"), and other accounting principle: generally accepted in India, of the stete of affairs of the Company as at March 31. 2024. and its profits including total comprehensive income i.iossei!, its cash flows and the changes in equire for the year ended on chat date

Basis of Opinion

We conducted cur audit of the financial statement: in accordance with the Standards on Auditing ''SAs'' specified under section 143> 10) of the Act Our responsibilities under those Standards are further described in the Auditor''s Ussponsibilities for the And:: of the fnxinchil slMemertis'' section of our reptrt. We are independent of the Company in accordance with the Code of Ethics issued bv the Institute of Chartered Accountants of India . "the IC.AI" i together with the ethical requirements that are relevant to cur audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Cede of Ethics. We believe that the audit evidence, tve have obtained is sufficient and appropriate to pro-.tide a basis for our audit opinion on the financial statements

Key Audit Matters

Key audit matters are those matters that m our professional judgment, were of most Significance in our audit of the financial statements of the current period. These matters were addressed in foe context of our audit of the financial statements as a whole, and in forming our opinion thereon, and tve 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 be lev to be the key audit matter: and 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, sueluding in relation to these matters Accordmslv. cur audit included the performance of procedures designed (c- respond to our assessment of the risk of material misstatement of the financial statements. The results of our audit procedures, including the procedure: performed to address foe matter below, provide the basis for our audit opinion on foe accompanying financial statements.

The Key Audit Martel''s	Hmv was the matter addressed in our Audit
Revenue Recognition (Refer Xote \''o. 1.4.id) and 25 of the Financial Stalemontx)
Revenue is one sf the key profit drivers and is therefore susceptible to misstatement'' Revenue is measured m net of any discounts. and rebates. Revenue from sale of products is considered as key audit matter as there is a risk of accuracy of recognition and measurement of sales in the financial statements considering the following aspects: * Determination of performance obligation for recognition of revenue * Estimation of variable consideration in pricing. * Cut-off’ :s the key assertion in so far as revenue recognition i-s concerned, since an inappropriate cut-off car. result m material misstatement of results for the periods	Our audit procedures with re sards to revenue recognition is a combination of internal controls and substantive procedures which included the fell owing * Evaluated the design of l eternal control. * For evaluation of operating effectiveness of internal controls, tested revenue by verifying ca s am pie basis, agreements executed with the customers, relevant dccumentar evidence of satisfaction of performance obligation for timing of recognition of revenue, accuracy of revenue recognition including variable consideration included pricing, cut off tiansactions at the year e:id and tax amount of the invoices * Performed substantive testma by verifying the sale: invoice and usher relevant dccumentar.'' evidence ca sample bads. *¦ Obtain the balance oonfirnintian form selected samples and verified the reconciliation, if any, for the confirmation received. * Evaluated rise appropriateness of accounting policies, related disclosures made and Overall presentation in the financi al stat em e nts
Existence and Valuation of Invemeries
The Company''s inventories a: at the end of the reporting period are '' ITS9.G6 Lakhs representing M.OTSft erf the Company''s total assets. fRefer Note „Vo. 6" of the financial statements''; The existence of inventories is a he-- audit matteis due to in’, ulvdrtietii of hish ns-:, basis the nature and size of the products wherein YaliHt psr unit is relatively insignificant but high "ciumes are -involved which are distributed across different units of the Company	Lr. response tc these key matters, cur audit included, among others. ±e following principle audit procedures *¦ ’understood the management''s control aver physical inventor- connl-s and their valuation * Evaluation of design and testing of the operating effectiveness- of the internal controls relating to physical inventory counts at the plant. Tn resting these controls, we observed the inventory cycle count process on a sample basis, inspected the results of the inventory cycle count and confirmed that the "inances were approved and appropriately accounted for. * Evaluation of design ar.d testing of the operating effectiveness of the internal controls relating to purchases, sales and inventories including the automated controls. * We have performed the physical ''-eiiEcation of

	inventories on a sample basis for establishing the existence of inventor.'' as at the end of the reporting period. * For a representative sample, verification that the finished goods inventories were correctly measured, using a recalculation cu" the measurement cf those inventories based on the cost of acquiring them from suppliers and considering the costs cf directly attributable to such goods * Assessed the hey estimates used by the Company A management to determine the net realisable "aloe and the consistency thereof with the Company’s policy on provision for non-mo-.frig inventory and performed a sensitivity analysis on the estimated selling price and compared with.flue cost per item.
Carrying Value of Trade Receivables
As at March 31. 2GZ4. trade receivables constitute approximately 1634% ci total assets of the Company ¦ Refer '' ora .Yo. " of the financial statements) The Companv is required to regularly assess the recoverability ef its trade receivables. The Company applied, expected credit Loss (EGLl model for measurement and recognition of impairment lost on trade receivables. The Company uses a provision matrix to determine impairment loss allowances. The provision matrix is based on its historically ebsered default rates over the expected life cf trade receivable1 and is adiusted for forward looting estimates. This is a hey audit matters as significant judgement is involved to establish the provision matrix.	Our audit procedures included, among other the followings: * Evaluated die Company’s accounting policies pertaining to impairment of financial assets and assessed compliance with those policies m term of bid AS - 109. “FmayiSUdifesframerits ” f Assessed and tested the design and operating effectiveness- of the Comp an’-'':- internal financial controls over, provision for expected credit Less (ECL ¦ * Evaluated the management s assumption and judgement relating to various parameters which included die historic a! default rates and business environment in which the entity operates for estimating the amount of-such provision. * Evaluated the management''s assessment of recoverability of the outstanding recewables and recoverability of the overdue aged receivables throng Ei inquiry with the management, and analysis of the collection fends in respect cf receivables. * Assessed and read the disclosures made by the Company in the financial statements.

Information Oilier them the Financial Statements and Auditor’? Report thereon

Ins Company''s Management and tiie Board of Directors are responsible far the other information. The ether information comprises the information included in the Management''s Discussion sad .Analysis Beard''s Report including Armjejture Eo the Beard’s Report, Report on Corporate Governance. Business Responsibility and

Sustainability Report and Shareholder''s mforaiaticiij but doea not me Jude the consolidated financial statements, standalone financial statement-: and cur auditor''s report thereon

Our opinion on the financial statements dees not ccver the other information and we dc not express any form of assurance conclude a thereon.

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

If, based on the wort we have perfcrimed, we conclude that there 13 a material misstatement of this ether information; we are required to report that fact We have nothtr.g to report in this regard

Manasemenfs Responsibility" for the Financial Statements

The Company''s Management -and the Board of Directors are responsible for the matters stated in Section 13-^'' :i of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, the financial performance including the other comprehensive income i Losses), cash flows ana changes m equity of the Company in accordance with the accounting principle generally accepted m India, including the Indian Accounting Standards

Li preparing the financial statements, the Company''s Management and the 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 cf accounting unless the (Company’s management and Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so

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

Auditor''s Responsibilities far cite Audit of Financial Statements

Our objectives are ic obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due zc fraud or error, and tc issue an auditor''s report that includes our cpinion Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 3As will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if. individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As nan cf an audit in accordance with SAa, we exercise professional lodgment and maintain professional skeptic ism throughout the audit. We alsc: ¹

* Evaluate the appropriateness cf account ins policies used ant the reasonableness of accounting estimates and related disclosures made by the Company.: Managempnjt and Board of Directors

* Conclude on the appropriateness of management⁷ s use of the going concern basis of accounting and. based on the audit evidence obtained. whether a materia: unceriainr.^- exLsts related to events or conditions that mav cast significant doubt on the Company''s ability to continue as a gc-ing concern If’-ve conclude that a material uncertainty exists, we are required to draw attention m our auditor''s report to the related disclosures na the financier statements or. if such disclosure? 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 trails actions and events in a manner that achieves fair presentation

Materiality is the magnitude of misstatements in the fir.aiiCLai statements that, individually or in aggregate, makes it probable that the economic decisions of reasonably knowledgeable users of the financial statements may be influenced We consider quantitative materiality and qualitative factors in (i) planning the scope of cur audit wort and in evaluating the results cf cur work, and (ii) to evaluate die effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and siamncant audit hndmas. including ar.v significant deficiencies m internal control that we identif.¹ during our audit.

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

From the matters c o oimunicaied with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements at the current serio-d and are therefore the key audit matters. We describe these matters in our auditor’s re-sors unless lav or regulation precludes uublic disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated m our report because the adverse consequences cf doing -so would reasonably be expected to outweigh ±e public interest benefits of such communication.

Repo it on Other Legal and Regulatory Requirements

1. As required by the Companies ( Auditor’s Reporti Order. 2020 ( the Order’¹''- issued by the Central Government of India in terms of sub-section (Li) of Section 141 of the Act we gi''-e in the Annevure “A", a statement c n the matters specified in paragraph 3 and paragraph 4 of the said Order.

2. As-required by Section 143131 of die Act based on our audit, we report that:

a. We have sought and obtained all tii-e information and explanations which to the best of c-ur knowledge and belief were necessary for the purpose: of our audit.

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

c. the Balance Sheet the Statement of Profit and Loss including the Other Comprehensive Income .Losses... the Statement of Cash Flows and die Statement of Changes in Equity.¹ dealt with this Reports are in agreement with the relevant books of account.

d. In cur opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of die Act. read with the Companies (Indian Accounting Standardsi Rules, 2015. as amended, time tG time.

e. On the basis of the written representation received horn the directors as on March SI. 202 A taken on the record by the Board of Directors, none of directors j: disqualified a3 on March 31. 2024. from being appointed a:- a director in term of Section 1|54( 2''- cfthe AcL

f. Willi respect to Edequacv of the internal financial controls with reference to these financial statements of the Company and the operaiatg Effedweness of such centre], refer tc our separate report in Annexure ^L"B“ Our reteon expresses an unmodified cpmicG outlie adequacy and operating effectiveness of the Company''s internal financial controls with reference to financial state men:;.

g. With, respect tv the ether matters 1g be included m the Auditor''s Report tn accordance with the requirement? of Section 197{1 b; of the Act. as amended, time to time, in our opinion and to the best of our information and. explanations given to us. the remunerations paid provided by the Company to its directors during the reporting period is in accordance with the provision of Sechon 197 bf the .Act. Tlie remuneration paid to any directors is not tn excess cf the limit laid down under section 19” of the Acts The Ministry of Corporate Affairs ("MCA”} has not prescribed other details under section 19”; 16) of the Act which are required to be commented upon by us

h With respect tc the other matters tc be included m the independent Auditor s Report in accordance with Rule 11 cf the Companies i Audit and Auditors''! Rules. It; 4. as amended, time tc time, m cur cuinicn and to the best of cur information and according to the explanations given to us.

,.ii The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer ''‘Nofe.Xo. 41’ of the financial statements.

. li :¦ The Company did net have any long-term contracts including derivative contract? for which there were aw material foreseeable losses

(tui There has been no delay in traitsferring the amounts required to be transferred to the investor Education and Protect ion Fund by the Company

; iy a) Tlte Management has represented that tc the best of its knowledge and belief, no funds (which are material either individually or in the aggregate ¦ have been advanced or teamed or invested (either from borrowed fund or share premium or any other sources or hind cf funds''i by the Company tc or in any other person or entities, including the foreign entities (“Intermediaries” i. with the understanding, whether recorded m writing or otherwise, that the Intermediaries shall, whether, directly or indirectly tend or rawest in ether persons or entities identified m any manner whatsoever by or on behalf of the Company [ "LTtnnate Beneficiaries''⁷; or provide any guarantee., security or the like tc or on behalf of the Ultimate Beneficiaries;

b) The Management ha? rep?etented, that, to the best of it? knowledge and belief, no funds {which are material either individually or in the aggregate i have been received bv the Compatv arum an" person or entities, including foreign entities ( "Funding Parties”). with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, dtreat!;, or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘''Ultimate Beneficiaries” ;¦ or provide any guarantee, security or the like on behalf o: the Ultimate Beneficiaries:

c) Based ea such audit procedures that have been considered reasonable and appropriate n: the circumstances, nothing ha:- come to our notice that has caused us to believe that the representations under sub clause (ii and (h) of Rule 11(e), as prc-''ided under -a- and (b above contain any material misstatement

(v) As stated in ''Xotc No. 44 " tc the fininciai statements:

a) The final divideod proposed in the previous year, declared acid paid by the Comtanv durins the reporting period is in accordance with section 123 of file Act, as- applicable

b) During the reporting period and until the date of this report the Company has not declared or paid any interim dividend m accordance with section 113 of the Act. as applicable.

c) The Board of Directors of the Compaiv^- has proposed the final dividend for the period, which is subiect to the approval of the shareholders at their ensuing Annual General Meeting i.AGMj The amount of dividend proposed is in accordance with the section III of the Act. as applicable

:v- 3ased :n cur esaminaticn. which included teat check, tie Coapar.v has used accounting software for maintaining Ltv hboka| cf accdunls for the financial period ended March 11. 21124 which has a feature of reccr-dian audit crab edit J02) facilities and the sair.e has operated throughout the ''aerird for all the relevant transactions recorded til the software Further durtr.a the course of car audit, did cot come ? cross any instance of the audit trail feature ieing tampered with

As proviso tc Rule 3(1 ¦ of the Companies (A:counts ¦ Rules. 2014 is applicable from April 01. 2022. reporting under ?.ule ll^ai of the Companies (Audit and Auditors;¹ Rule 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial period ended March 11, 2!)24

Fcr SLAVISH N JAIX £ CO-

Chartq*ed Acca xtiian:: FRK N^To. 013S4J0W

Place i Nagpur AHPIT AGRAWAL

Dated: May 28. 2024 Partner

UDIN Np.: 241 ^-r539SEKAQOPd525 Membership No. 1753OS

1

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

* Obtain an understanding of internal financial control: relevant to the audit m order to design audit procedures that are appropiiate in. the circumstances. Voder Section I43j3\^;- of the Act, we are also responsible for expressing our :pinion on whether the Company has an adequate internal financial controls svstem with, reference tc financial statements in place and the operating effectiveness of nuch controls.

---

Mar 31, 2015

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

Management's responsibility for the financial Statements:

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting principles generally accepted in India, including the accountings standards specified under Section 133 of the Act, read with Rule 7 of 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 duet of raudor error.

Auditor's Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply 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 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 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 a basis for our audit opinion on the financial statements.

Opinion:

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

a) In the case of the Balance Sheet, of the State of affairs of the Company as at 31st March, 2015,

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 Cash flow statement, of the Cash Flows for the year ended on that date.

Report on Other legal & 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 subsection (11) of section 143 of the Companies Act, 2013, we give in 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 them formation 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 it appears from our examination of those books;

c) The Balance Sheet and 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 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 m 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 tous:

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

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

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

The Annexure referred to in paragraph 1 under "Report on other legal & Regulatory Requirements" of our Report of even date to the members of SURYAAMBA SPINNING MILLS LIMITED, on the financial statements for the year ended 31st March 2015, we report that:

(i) a) The Company has maintained proper records showing full particulars clouding quantitative details and situation of fixed assets

b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such vindication.

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

b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act.

(iv) In our opinion and according to the information and explanations given to us, Theresa adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory fixed assets and for sale of goods.

(v) The Company has not accepted deposits from the public covered by the provisions of Second 73 to 76 of the Compares' Act,2013.

(vi) We have broadly reviewed the Cost records maintained by the Company prescribed by the Central Govt for the maintenance of cost records under Section 148 (1) of the Act and are of the opinion that prima facie the presented accounts and records have been made and maintained However we have not made a detailed examination of the records.

(vii)a) According to the information and explanations given to us and based on the records of the company examined by us, the company is regular in depositing the undisputed statutory dues, including Provident Fund, Employees' State Insurance Income-tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other maternal statutory dues, as applicable, with the appropriate authorities in India. Employees' State Insurance is not applicable to the company for the current year.

b) According to the information and explanations given to us and based on the records of the company examined by us, there are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes.

c) There are no amounts which are required to be transferred to Investor Education and Protection Fund in accordance with the Relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(viii) The company had no accumulated losses and has not incurred cash losses during the financial year covered by our audit or in the preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(x) The company has not given any guarantee

for loans taken by others from bank or financial institutions.

(xi) In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which the loans were obtained.

(xii) In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For S.Venkatadri&Co.,

Chartered Accountants

Firm'sRegnNo. 004614

(K.SRINIVASARAO)

Place: Hyderabad PARTNER

Date:28-May-2015 M.No. 201470

---

Mar 31, 2014

We have audited the accompanying financial statements of SURYAAMBA SPINNING MILLS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year 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"). 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 31st March, 2014;

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

c) In the case of Cash flow statement, of the Cash Flows for the year ended on that date.

Report on Other legal & Regulatory requirements:

1. As required by the Companies (Auditor''s Report) Order, 2003 ("theOrder") 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 and 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 subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditor''s Report

The Annexure referred to in paragraph 1 of Our Report of even date To The members of SURYAAMBA SPINNING MILLS LIMITED. on the accounts of the company for the year ended 31st March, 2014. We report that:

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

b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, the company has not disposed off any substantial part of its fixed assets, affecting the going concern status of the company.

ii) . a) The inventory has been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable and adequate.

b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

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

iii) . a) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) (b), (c) and (d) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the company.

e) The company has taken unsecured loans from directors covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 417.14 Lakhs, and the year end balance of loans is Rs.417.14Lakhs

f) In our opinion, the rate of interest and other terms and conditions on which loan taken from the above parties are not, prima facie, prejudicial to the interest of the company.

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

v) a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered.

b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements with the parties entered in the register maintained under Section 301 of the Companies Act,1956 and exceeding the value of rupees five lakhs hence the reporting requirement under this clause does not apply.

vi) . The company has not accepted any deposits from the public governed by sections 58 A and 58 AA of the companies act 1956 for the year under reference. As per the information and explanations given to us no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

viii) ¦We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government U/s 209 (1) (d) of the companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have not, however, carried out detailed examination of the same.

ix) . a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is regular in depositing undisputed statutory dues including income tax, Provident Fund, Employees state insurance, sales tax, wealth tax, custom duty, excise duty, cess, Service Tax and other material statutory dues as applicable, with the appropriate authorities. Investor education and protection fund and are not applicable to the company for the current year. No undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31.03.2014 for a period of more than six months from the date of becoming payable.

b) According to the information and explanations given to us, and the records of the company examined by us, there are no dues of sales tax, income tax, Service Tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

x) . The company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xi) . In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii) .In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

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

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

xv) . The company has not given guarantees for loans taken by others from banks or financial institutions.

xvi) .In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which the loans were obtained.

xvii) . According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii) . According to the information and explanations given to us, the company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year, and the rate at which shares are allotted is not prima facie prejudicial to the interests of the Company.

xix) .According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

xx) . The company has not raised any money by way of public issue during the year.

xxi) .In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For S.Venkatadri & Co.,

Chartered Accountants

Firm''s Regn No. 004614S

(K.SRINIVASA RAO)

PARTNER

M.No. 201470

Place : Hyderabad Date : 30.05.2014

---

Mar 31, 2013

Report on the Financial Statements :

We have audited the accompanying financial statements of SURYAAMBA SPINNING MILLS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year 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"). 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 31st March, 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 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 ("theOrder") 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 and Statement of Profit and Loss and Cash Flow Statement dealt widi 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 subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from die directors as on March 31, 2013, and taken on record by the Board of

Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g)of sub-section (1) of section 274 of the Companies Act, 1956.

To,

The members of,

SURYAAMBA SPINNING MILLS LIMITED.

on the accounts of the company for the year ended 31 st March, 2013. We report that:

(0-

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

b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, die company has not disposed off any substantial part of its fixed assets, affecting die going concern status of the company.

(ii).

a) The inventory has been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable and adequate.

b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

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

(iii).

a) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) (b), (c) and

d) of the. Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the company.

e) The company has taken unsecured loans from directors covered in die register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 310.10 Lakhs, and the year end balance of loans is Rs. 134.95 Lakhs

f) In our opinion, the rate of interest and other terms and conditions on which loan taken from the above parties are not, prima facie, prejudicial to die interest of the company.

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

v).

a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of die Act mat need to be entered into the register maintained under section 301 have been so entered.

b) In our opinion and according to die information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements with the parties entered in die register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs hence the reporting requirement under this clause does not apply.

vi). The company has not accepted any deposits from the public governed by sections 58 A and 58 AA of the companies act 1956 for the year under reference. As per the information and explanations given to us no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

viii).We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government U/s 209 (1) (d) of the companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have not, however, carried out detailed examination of the same.

ix).

a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is regular in depositing undisputed statutory dues including income tax, Provident Fund, Employees state insurance, sales tax, wealth tax, custom duty, excise duty, cess, Service Tax and other material statutory dues as applicable, with the appropriate authorities. Investor education and protection fund and are not applicable to the company for the current year. No undiputed amounts payable in respect of the aforesaid dues were outstanding as at 31.03.2013 for a perod of more than six months from die date of becoming payable.

b) According to the information and explanations given to us, and the records of the company examined by us, there are no dues of sales tax, income tax, Service Tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

x). The company has no accumulated losses and has not incurred any cash losses in the financial year under reference, however it has incurred cash losses in the immediately preceding financial year.

xi). In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii).In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

xiii).In our opinion, and according to die information and explanations given to us, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of die Companies (Auditor''s Report) Order, 2003 are not applicable to die company.

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

xv). The company has not given guarantees for loans taken by odiers from banks or financial institutions.

xvi).In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which the loans were obtained.

xvii).According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long- term investment.

xviii).According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

xix).According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

xx). The company has not raised any money by way of public issue during the year.

xxi).In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.



For S. Venkatadri & Co.,

Chartered Accountants

Firm''s Regn No. 004614S





(K. SRINIVASA RAO)

PARTNER

M.No. 201470



Place: Hyderabad

Date : 25.05.2013

---

Mar 31, 2012

1. We have audited the attached Balance sheet of SURYAAMBA SPINNING MILLS LIMITED, as at 31st March 2012, the Statement of Profit & Loss and also the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our Audit;

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

iii) The Balance Sheet, the Statement of Profit and Loss and cash flow statement dealt with by this report are in agreement with the books of account;

iv) In Our Opinion, the Balance Sheet, Statement of Profit and Loss and cash flow statement dealt with by this report comply with the accounting Standards referred to in Sub section (3C) of Section 211 of the Companies Act, 1956;

v) On the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is 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;

vi) In our opinion and to the best of our information and according to the explanations given to us, they said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the State of affairs of the Company as at 31st March, 2012;

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

C) In the case of Cash flow statement, of the Cash Flows for the year ended on that date.

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

b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

c) During the year, the company has not disposed off any substantial part of its fixed assets, affecting the going concern status of the company.

(ii)-

a) The inventory has been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable and adequate.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

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

(iii).

a) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) (b), (c) and (d) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the company, e) The company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4 (iii) (f) and (g) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the company.

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

v)-

a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered.

b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements with the parties entered in the register maintained under Section 301 of the Companies Act,1956 and exceeding the value of rupees five lakhs hence the reporting requirement under this clause does not apply.

vi). The company has not accepted any deposits from the public governed by sections 58 A and 58 AA of the companies act 1956 for the year under reference. As per the information and explanations given to us no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

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

ix).

a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is regular in depositing undisputed statutory dues including income tax, Provident Fund, Employees state insurance, sales tax, wealth tax, custom duty, excise duty, cess, Service Tax and other material statutory dues as applicable, with the appropriate authorities. Investor education and protection fund and are not applicable to the company for the current year. No undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31.03.2012 for a period of more than six months from the date of becoming payable.

b) According to the information and explanations given to us, and the records of the company examined by us, there are no dues of sales tax, income tax, Service Tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute.

x). The company has no accumulated losses and has not incurred any cash losses in the immediately preceding financial year, however during the financial year covered by our audit company has incurred cash losses.

xi). In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii). In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv). In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company, xv). The company has not given guarantees for loans taken by others from banks or financial institutions.

xvi). In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which the loans were obtained.

xvii).According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long- term investment.

xviii).According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

xix). According to the information and explanations given to us, during the period covered by our audit report, the company has not issued any debentures.

xx). The company has not raised any money by way of public issue during the year.

xxi). In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For S.Venkatadri & Co.,

Chartered Accountants

Firm's Regn No.004614S

(K.SRINIVASA RAO)

PARTNER

M.No.201470

Place: Hyderabad

Date : 29.05.2012

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of SURYAAMBA SPINNING MILLS LIMITED, SECUNDERABAD (A.P) as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto/These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 me financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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

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

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

iii) The Balance Sheet, Profit and Loss Account and Cash Flow statement dealt with by this report are in agreement with the books of account

iv) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub- section (3C) of Section 211 of the Companies Act, 1956.

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

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read in conjunction with the Schedules annexed therewith give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2010;

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

0 in the case of cash flow statement, of the cash flows for the year ended on that date.

Annexure to the Auditors Report: referred to in paragraph 3 of our report of even date,

Re: SURYAAMBA SPINNING MLLS LIMITED, SECUNDERABAD.

1. a) The Company has maintained proper records showing full particulars, includ- ing quantitative details and situation of fixed assets.

b) As explained to us, the management has physically verified most of the fixed assets during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of the assets. As informed, no material discrepancies were noticed on such verification.

c) During the year the Company has not disposed off any of its fixed assets.

2. a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b) In our opinion, 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 inventory. The discrepancies noticed on physical verification between the physical stocks and book records were not material.

3. a) During the year, the Company has neither

taken nor granted any loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In view of our comment in paragraph 3(a) above, (III) (b), (c), (d) and (e) of paragraph 4 of the aforesaid order are not applicable to the Company. ft In our opinion the rate of interest and other terms and conditions on which loans have been taken from the other parties listed in the register maintained under Section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

g) According to the information and explanation given to us, terms have been stipulated for payment of the principal amount and interest thereon. The Company is regular in payment of the principal amount and interest thereon.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and 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 system.

5. a) According to the information and

explanations given to us by the Management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register to be maintained under that section b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

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

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

8. We have broadly reviewed the books of account 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 in respect of yarn and are of the opinion that prime facie the prescribed accounts and records have been made and maintained. The Central Government has not prescribed the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for any other products of the Company.

9. a) According to the records of the Company, apart from certain instances of delays the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it. b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income- tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at March 31,2010for a period of more than six months from the date they became payable.

10. The Company has no accumulated losses as at the end of the financial year. 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 any financial institutions and Banks.

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

13. The Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report Order, 2003 are not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies

(Auditors Report) Order, 2003 are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

16. In our opinion and according to the information and explanations given to us the term loans were applied for the purpose for which the loans were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

18. During the year, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. During the year, the Company has not issued any debentures , therefore the question of creating security or charge in respect thereof does not arise

20. During the year, the Company has not made any public issue and therefore the question of disclosing the end use of money raised by public issue does not arise.

21. Based upon the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

for BRAHMAYYA& CO. Chartered Accountants Firm Regn.No.000513S

(K.S.RAO) Partner Membership No.15850

Place : Hyderabad Date : 2nd August, 2010