Auditor Report of Vanasthali Textile Industries Ltd.

Mar 31, 2013

Report on the Financial Statement.

We have audited the accompanying financial statements of Vanasthali Textile Industries Limited which comprises the balance sheet as at 31 st March 2013 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statement.

Management is responsible for the preparation of these financial statements that give a true & fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting standard referred to in sub-section (3C) of section 211 of the Companies act, 1956 of India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that 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 aforesaid financial statements read together with notes to accounts give a true and fair view in conformity with the accounting principles generally accepted in India :-

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

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

(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 Matters

1. As required by the Companies (Auditors'' Report) Order, 2003 as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 (collectively the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks of books and records of the company as we considered appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by section 227(3) of the Act and 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 and found them to be satisfactory;

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, 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 Subject to:

a) Attention of the members is invited to Note no. 23.11 of notes to accounts regarding short contribution of gratuity and non provision of leave encashment as required by revised AS-15 on employee benefits.

b) Refer Note no. 23.4o notes to accounts regarding non confirmation of balances with suppliers, customers, other creditors, recoverable advances and loan facility from IDBI & balance with HDFC & SBBJ banks which have been taken as per books, and are subject to confirmation/ reconciliation. The consequential impact of such confirmation & reconciliation thereof, if any, on the accounts remain unascertained.

c) Attention of the members is invited to Note no. 23.6 of Notes to Accounts wherein the company has filed its reference with BIFR and in expectancy of relief''s and concessions in the form of financial restructuring of loan liabilities and interest waivers on settlement of such loans, the management is of the view that company''s financial position will improve, the accounts have been prepared on going concern basis & no adjustments are required to the carrying amount of fixed assets on account of impairment as required by AS-28. We are unable to express our opinion on these matters.

d) Attention of the members is invited to Note no. 23.7 of Notes to Accounts, where in view of the continuous default of Interest on Term loan, the subsidy has not been provided for the current period whereas the accumulated balance of Rs316.44 lacs is still recoverable under the loans & advances, the recovery of which is doubtful. In the opinion of the management the same shall be adjusted in case the waiver of interest under the scheme of rehabilitation.

v. On the basis of the written representations received from the directors as on March 31, 2013, 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 Section 274(1 )(g) of the Act.

vi. 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 to the Auditors Report

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.

(i) In respect of its fixed assets:

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

(b) Physical verification of fixed assets was carried out during the year by the management in accordance with the companies'' policy of verifying the assets once in three years. In our opinion the frequency of verification is at reasonable intervals. No material discrepancies were noticed between the records and physical verification.

(c) During the period, the Company has not disposed off any substantial part of Fixed Assets and hence, does not affect the going concern assumption to that extent.

(ii) In respect of its inventories:

(a) The inventory of finished goods, semi finished, raw materials, stores and spare parts have been physically verified during the period by the Management except defective goods which have been valued at Net realizable value.

(b) The procedures of physical verification of inventories except defective goods followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) (a) According to the information and explanation given to us, the Company has not granted any loans secured or unsecured to companies/parties covered in the registered maintained under section 301 of the Companies Act''1956.

(b) Clause ''b'' is not applicable.

(c) Clause ''c'' is not applicable.

(d) Clause''d'' is not applicable.

(e) According to the information and explanation given to us, the Company has taken Rs.732.29 (on account Supply of Plant and Machinery- CWIP) from Millenium Holding Limited, Rs. 152.71 Lacs (on account of promoter''s fund) during the year & Rs. 564.16 Lacs (on account of supply of Plant & Machinery) of previous year, from companies/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(f) As informed to us no interest is payable on the above stated loan, hence it is not prime facie prejudicial to the interest of the company.

(g) As informed to us the lender has not demanded the repayment of this loan which may be part of Capital Subscription from Promoters during financial restructuring.

(iv) As per the information and explanations given to us, certain contracts of job work & sale of goods are of specialized nature for which comparable prices are not available. Read with above in our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for sale of goods. Further, on the basis of our examination of the books of records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of major weaknesses in the aforesaid internal control procedures.

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

(b) In our opinion and according to the information and explanations given to us, having regards to the comments in (v)(a) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of the five lakh rupees entered into during the Financial Year, because of specialized nature of items involved & absence of any comparable prices, we are unable to comment, whether the transactions were made at prevailing market prices at the relevant time.

(vi) As per information and explanation given to us, the Company has not accepted any deposits during the year from public to which the provisions of Section 58A, 58AA of the Companies Act, 1956 and Rules framed thereunder apply.

(vii) The company has an internal audit system which needs to be strengthened.

(viii) As per the information and explanations given to us, cost records prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956 are being maintained. However, we have not carried our detailed verification of these records.

(ix) In respect of Statutory Dues

(a) As per the books and records examined by us and information & explanations given to us, the company has not been regular in depositing Provident Fund, Income-Tax, Sales-Tax, and other statutory dues, wherever applicable, with the appropriate authorities during the period.

Details of Undisputed Statutory dues are given below:-

PARTICULARS AMOUNT (In Rs)

Contribution in PF 18,22,516

TDS 2,82,475

Contribution in ESI 8,08,317

Central Sales Tax 3,01,419

Service Tax Payable 2,05,514

TCS Payable 36,327

TOTAL 34,56,568



Detail of the dues of Sales Tax/ Income Tax/ Service Tax/ Excise duty/ cess/ Custom which has not been deposited on account of dispute are given below:



Name of the Statue Forum where Nature of Period of Amount case is pending Dues Dispute (Rs.)

Central Excise Act, 1944 CESTAT Excise Duty 2002-03 1,45,831

Central Excise Act, 1944 CESTAT Excise Duty 2003-04 2,25,998

Central Excise Act, 1944 CESTAT Excise Duty 2003-04/ 2004-05 2,16,000

Central Excise Act, 1944 CESTAT Excise Duty 2004-05 3,15,628

Central Excise Act, 1944 J.T. Comm., JPR Excise Duty 2005-06 5,92,000

Central Excise Act, 1944 CESTAT Excise Duty 2006-07 28,29,218

Central Excise Act, 1944 CESTAT Excise Duty 2007-08 4,28,817

Central Excise Act, 1944 Comm.(A), JPR Excise Duty 2007-08 35,68,937

Central Excise Act, 1944 CESTAT Excise Duty 2008-0919,16,54,243

Central Excise Act, 1944 D C Customs, Tirupur Excise Duty 2008-09 25,98,918

Central Excise Act, 1944 Raj. High Court Excise Duty 2008-09 18,36,992

20,44,12,582

Service Tax

Finance Act 1994 (Chapter V) CESTAT Service Tax 2005-06, 2006-07 4,12,673

Finance Act 1994 (Chapter V) CESTAT Service Tax 2006-07 5,53,656

Finance Act 1994 (Chapter V) CESTAT Service Tax 2007-08 9,22,118

18,88,447

Income Tax

Income Tax 1961 High Court, Delhi Income Tax 2005-06 25,10,000

Income Tax 1961 Appeal to CIT(A) Income Tax 2007-08 2,31,92,319

Income Tax 1961 Appeal to CIT(A) Income Tax 2008-09 2,73,33,723

5,30,36,042



Sales Tax/Entry Tax

RET Act, 1999 D.C.Appeal.Alwar Entry Tax 2006-07 7,04,835

RET Act, 1999 Raj.High Court (Stay) Entry Tax 2007-08 to 2012-13 14,92,735 RVAT Act, 2006 CTO.SJPR C-Form Demand 2010-11 84,330

RVAT Act, 2006 CTO.SJPR Demand Restored 1999-2000 71,205

23,53,105

(x) The Company''s accumulated losses at the end of the financial year exceed 50% of Net Worth. Further the company has incurred cash losses during this financial year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has defaulted in the repayment of dues to Financial Institutions or Banks further the company is on default from last three years and the amount of default is Rs.95,45,65,963/-.



Name of Borrower Amount (INR) Default Date Term Loan

Federal Bank 8,41,79,658 31-03-2011

Oriental Bank of Commerce 13,47,03,122 31-03-2011

Syndicate Bank 1,05,31,482 31-03-2011

IDBI 27,36,25,847 31-03-2011

Working Capital

Crystallized Bills 36,48,915 31-03-2011

Federal Bank-Foreign Bill Purchase 2,33,32,365 31-03-2011

Federal Bank-Packing Credit 2,51,16,812 31-03-2011

ABIB-Packing Credit 5,51,01,226 31-03-2011

Oriental Bank of Commerce 9,31,49,154 31-03-2011

SBBJ 2,36,95,592 31-03-2011

Bank Overdraft

Oriental Bank of Commerce & Others 22,74,81,789 31-03-2011



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

(xiii) The provisions of special statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/ Society are not applicable to the Company.

(xiv) According to the information and explanations given to us, and according the records as produced, in our opinion, the company has maintained proper records of transactions and contracts relating to dealing and trading in shares and timely entries have been made therein. Further the investments wherever made have been held in the name of the company only.

(xv) 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.

(xvi) We are informed that company has not obtained any new term loan during the year.

(xvii) According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we report that no new funds raised on Short-Term basis have been used for Long-Term investment.

(xviii) The company has not made any preferential allotment of shares during the year.

(xix) The company has not made issued any debentures during the year.

(xx) There were no public issues during the year.

(xxi) During the course of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the company, noticed and reported during the year, nor have we been informed of such case by the management.



For Jain Raj Associates

FRN. 007535N

Chartered Accountants



Sd/-

CA P K JAIN

Proprietor

M.No:086396

New Delhi, Dated: June 28, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Vanasthali Textile Industries Ltd as at 31st March 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the period ended on that date, annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These 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 (Amendment Order 2004) issued by the Central Government 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) As per written representation received, none of the directors is disqualified as on 31st March 2012, from being appointed as a director in terms of section 274(1) (g) of Companies Act, 1956.

(v) In our opinion, the Balance Sheet, Statement of Profit and Loss and the 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 subject to:

a) the non provision of leave encashment as required by revised AS-15 on employee benefits.

b.) Refer note no. 23.5 of Notes to Accounts wherein the company has filed its reference with BIFR arid in expectancy of reliefs and concessions in the form of financial restructuring of loan liabilities and interest waivers, the management is of the view that company's financial position will improve, the accounts have been prepared on going concern basis & no adjustments are required to the carrying amount of fixed assets on account of impairment as required by AS-28.

c.) Refer note no. 23.7 recognition of subsidiary under TUF for Rs 124.65lacs for the year & accumulated balances of Rs 316.44lacs, in spite of default in payment of interest to banks.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements subject to note no 23.3 of notes to accounts regarding non confirmation of balances with suppers, customers other creditors, recoverable advances and loan facility from IDBI & balance with HDFC banks have been taken as per books, and are subject to confirmation/reconciliation, note no 23.6 regarding inventory valuation which is being taken solely on the basis of report of HARDICON LTD. & note no 23.8 regarding withhold, set off & adjustment of 1577.79 lacs from assets & corresponding liabilities as per terms of Share Purchase Agreement (SPA) and read together with notes to 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 Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

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

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

Referred to in paragraph 3 of our report of even date.

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

(b) Physical verification of fixed assets was carried out during the year by the management in accordance with the companies' policy of verifying the assets once in three years. In our opinion the frequency of verification is at reasonable intervals. No material discrepancies were noticed between the records and physical verification.

(c) During the period, the Company has not disposed off any substantial part of Fixed Assets and hence, does not affect the going concern assumption to that extent.

(ii) (a) The inventory of finished goods, semi finished, raw materials, stores and spare parts have been physically verified during the period by the Management except finished & semi finished goods for which provision for devaluation has been made in the books of accounts.

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

(c) On the basis of our examination of the records of inventory and the report on Inventory valuation conducted by M/s HARDICON Ltd., there was material discrepancies noticed in valuation & realiseability thereof. Necessary Provision has been made in the Profit & Loss Accounts (Refer note no. 23.6.)

(iii) (a) According to the information and explanation given to us, the Company has not granted any loans secured or unsecured to companies/parties covered in the registered maintained under section 301 of the Companies Act'1956.

(b) Clause 'b' is not applicable.

(c) Clause 'c' is not applicable.

(d) Clause'd' is not applicable.

(e) According to the information and explanation given to us, the Company has taken unsecured loan of Rs 564.16 Lacs (on account of supply of plant & machinery) from companies/parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(f) As informed to us no interest is payable on the above stated loan, hence it is not prime facie prejudicial to the interest of the company.

(g) As informed to us the lender has not demanded the repayment of this loan which may be part of Capital Subscription from Promoters during financial restructuring.

(iv) As per the information and explanations given to us, certain contracts of job work & sale of goods are of specialized nature for which comparable prices are not available. Read with above in our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for sale of goods. Further, on the basis of our examination of the books of records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of major weaknesses in the aforesaid internal control procedures.

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

(b) In our opinion and according to the information and explanations given to us, having regards to the commentsin (v)(a) above, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of the five lakh rupees entered into during the Financial Year, because of specialized nature of items involved & absence of any comparable prices, we are unable to comment, whether the transactions were made at prevailing market prices at the relevant time.

(vi) As per information and explanation given to us, the Company has not accepted any deposits during the year from public to which the provisions of Section 58A, 58AA of the Companies Act, 1956 and Rules framed thereunder apply.

(vii) The company has an internal audit system which needs to be strengthened.

(viii) As per the information and explanations given to us, cost records prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956 are being maintained. However, we have not carried our detailed verification of these records.

(ix) In respect of Statutory Dues

(a) As per the books and records examined by us and information & explanations given to us, the company has not been regular in depositing Provident Fund, Income-Tax, Sales-Tax, and other statutory dues, wherever applicable, with the appropriate authorities during the period.

Details of Undisputed Statutory dues are given below:- Vanasthali

PARTICULARS AMOUNT (In Rs)

Employees Contribution in PF 3,90,283

TDS 3,23,881

Employees Contribution in ESI 51,207

Central Sales Tax 44,247

Service Tax Payable on Freight 23.320

Service Tax Payable on Commission 9,999

TCS Payable 8,735

TOTAL 8,51,672

Detail of the dues of Sales Tax/ Income Tax/ Service Tax/ Excise duty/ cess/ Custom which has not been deposited or account of dispute are given below:

Name of the Statue Forum where Nature of pending case is Dues

Central Excise Act, 1944 Supreme Court Excise Duty

Central Excise Act, 1944 Supreme Court Excise Duty

Central Excise Act, 1944 High Court Excise Duty

Central Excise Act, 1944 High Court Excise Duty

Name of the Statute pending Period of Amount Dispute (Rs.)

Central Excise Act, 1944 2008-09 95,042,002

Central Excise Act, 1944 2008-09 9,702,603

Central Excise Act, 1944 2008-09 386,843

Central Excise Act, 1944 2008-09 490,222

Name of the Statue Forum where Nature of pending case is Dues

Central Excise Act, 1944 High Court Excise Duty

Central Excise Act, 1944 High Court Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Central Excise Act, 1944 CESTAT Excise Duty

Service Tax

Finance Act 1994 (Chapter V) CESTAT Service Tax

Finance Act 1994 (Chapter V) CESTAT Service Tax

1994 (Chapter V) CESTAT Service Tax

1994 (Chapter V) CESTAT Service Tax

1994 (Chapter V) CESTAT Service Tax

1994 (Chapter V) CESTAT Service Tax

1994 (Chapter V) Commissioner Appeal Service Tax Jaipur

Finance Act 1994 (Chapter V) Commissioner Appeal Service Tax Jaipur

Finance Act 1994 (Chapter V) Commissioner Appeal Service Tax Jaipur

Finance Act 1994 (Chapter V) AC Alwar Service Tax

Income Tax

Income Tax 1961 High Court, Delhi Income Tax

Income Tax 1961 Appeal to CIT(A) Income Tax

Tax 1961 Appeal to CIT(A) Income Tax

Name of the Statute pending Period of Amount Dispute (Rs.)

Central Excise Act, 1944 2008-09 486,856

Central Excise Act, 1944 2008-09 473,071

Central Excise Act, 1944 2008-09 757,610

Central Excise Act, 1944 2008-09 333,018

Central Excise Act, 1944 1998-99 118,635

Central Excise Act, 1944 1998-99 107,312

Central Excise Act, 1944 1998-99 63,474

Central Excise Act, 1944 1998-99 81,780

Central Excise Act, 1944 1999-2000 131,880

Central Excise Act, 1944 2005-06 592,000

Central Excise Act, 1944 2006-07 2,829,218

Central Excise Act, 1944 2008-09 36,432

111,632,956

Finance Act 1994 (Chapter V) 2007-08 229,732

Finance Act 1994 (Chapter V) 2005-06,2006-07 412,073 Finance Act

Finance Act 1994 (Chapter V) 2006-07 444,050 Finance Act

1994 (Chapter V) 2007-08 193,825 Finance Act

1994 (Chapter V) 2006-07 109,606 Finance Act

1994 (Chapter V) 2007-08 498,561 Finance Act

1994 (Chapter V) 2006-07 675,175

Finance Act 1994 (Chapter V) 2007-08 718,684

Finance Act 1994 (Chapter V) 2007-08 6,402,836

Finance Act 1994 (Chapter V) 2007-08 366,745

10,051,287

Income Tax

Income Tax 1961 2005-06 25,10,000

Income Tax 1961 2007-08 2,31,92,319 Income

Income Tax 1961 2008-09 2,73,33,723

Tax 1961 5,30,36,042

(x) The Company's accumulated losses at the end of the financial year exceed 50% of Net Worth. Further the company has incurred cash losses during this financial year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has defaulted in the repayment of dues to Financial Institutions or Banks further the company is on default from last three years and the amount of default is Rs.82,27,64,226/-.

Name of Borrower Amount (INR) Default Date

Term Loan

Federal Bank 7,12,47,295 31-03-2011

Oriental Bank of Commerce 13,31,10,808 31-03-2011

Syndicate Bank 91,01,863 31-03-2011

IDBI 24,99,01,847 31-03-2011

Working Capital

Crystallized Bills 6,74,86,852 31-03-2011

Federal Bank 4,06,95,298 31-03-2011

ABIB 8,40,46,011 31-03-2011

Oriental Bank of Commerce 9,14,26,989 31-03-2011

SBBJ 1,84,36,895 31-03-2011

Bank Overdraft

Oritental Bank of Commerce & Others 5,73,10,368 31-03-2011

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

(xiii) The provisions of special statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/ Society are not applicable to the Company.

(xiv) According to the information and explanations given to us, and according the records as produced, in our opinion, the company has maintained proper records of transactions and contracts relating to dealing and trading in shares and timely entries have been made therein. Further the investments wherever made have been held in the name of the company only.

(xv) 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.

(xvi) We are informed that company has not obtained any term loan during the year. According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, we report that no funds raised on Short-Term basis have been used for Long-Term investment.

(xvii) The company has not made any preferential allotment of shares during the year.

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

(xix) There were no public issues during the year.

(xx) The company has not made issued any debentures during the year.

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

For Jain Raj Associates

Firm No007535N

Chartered Accountants

CA. P.K. Jain

Proprietor

M.No.86396

New Delhi, Dated: 3rd September, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of VANASTHALI TEXTILE INDUSTIRES LIMITED, as at 31st March 2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report) order, 2004 issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956, we enclose 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 purpose 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 the 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 subject to the non provision of leave encashment as required by revised AS-15 on employee benefits.

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

(i) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements subject to the non provision of leave encashment as required by revised AS-15 on employee benefits together with other notes thereon and attached thereto give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :-

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

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

The Annexure referred to in the Auditor's Report to the members of VANASTHALI TEXTILE INDUSTIRES LIMITED for the year ended 31st March. 2011. We report that:

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

(b) Physical verification of fixed assets was carried out during the year by the management in accordance with the companies policy of verifying the assets once in three years. In our opinion the frequency of verification is at reasonable intervals. No material discrepancies were noticed between the stock record and physical verifiction.

(c) There was no substantial disposal of Fixed Assets during the year.

(i) (a) The inventory of the company has been physically verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us, the procedure of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of records of inventory, The company has maintained proper records of inventory. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compare to the book records. company has not granted any loans secured or unsecured to companies/ parties covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion and according to the information and explanation given to us, The company has not granted any loans secured or unsecured to companies/ parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) (iii) (a) In our opinion and according to the information and explanation given to us, The company has not taken loan from companies / parties covered in the register maintained under section 301 of the Companies Act, 1956 during the year..

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

(d) In respect of loans taken by the company, the principal and the interest has not been paid regularly further stated that the status of all loan accounts in Banks are NPA as on 31.03.2011.

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

(v) (a) In our opinion and according to the information and explanation given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, having regards to the comments in

(v) (a) above, the transactions made in pursuance of contacts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of the five lakh rupees in respect of any party during the year have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time

(vi) In our opinion and according to the information and explanations given to us the Company has not accepted any deposit from the public during the year and hence the provisions of clause 4

(vi) of the Companies (Auditors Report) Order 2003 regarding deposit from the public are not applicable to the company.

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

(viii) As per information and explanations given to us, cost records prescribed by the Central Government u/s 209 (1) (d) of the Companies Act, 1956 are being maintained. However, we have not carried our detailed verification of these records.

(ix) (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues including provident fund, employees state insurance, Income-tax, sales-tax, wealth-tax, customs duty, excise duty, cess and other material statutory dues as applicable have generally been regularly deposited by the company during the year with the appropriate authorities. According to the information and explanations given to us, there are no arrears of outstanding statutory dues as mentioned above as at 31st March, 2011 for a period of more than six months from the date they become payable.

Name Of the Statute Forum where case Nature of Dues Period of AMOUNT (Rs) is pending Dispute

The Custom Act 1962 CESTAT.Ahmedabad Custom Duty 2004-05 216,000

Central Excise Act 1944 CESTAT "Excise Duty 2008-09 95,042,002

Central Excise Act 1944 AC.AIw. Excise Duty 2008-09 386,843

Central Excise Act 1944 AC.AIw. Excise Duty 2008-09 490,222

Central Excise Act 1944 Excise Duty 2008-09 36,432

Central Excise Act 1944 Comm.(A)-JPR Excise Duty 2008-09 41,318

Central Excise Act 1944 Comm. (A), Jaipur Excise Duty 2008-09 261,735

Central Excise Act 1944 Comm.(A)-JPR Excise Duty 2008-09 479,611

Central Excise Act 1944 Commi.(A)-JPR Excise Duty 2008-09 125,764

Central Excise Act 1944 Excise Duty 2008-09 486,856

Central Excise Act 1944 Excise Duty 2008-09 473,071

Central Excise Act 1944 CESTAT Excise Duty 2008-09 757,610

Central Excise Act 1944 CESTAT Excise Duty 2008-09 333,018

Central Excise Act 1944 Comm.(A)-JPR Excise Duty 2009-10 325964

Central Excise Act 1944 CESTAT Excise Duty 1998-99 118,635

Central Excise Act 1944 CESTAT Excise Duty 1998-99 107,312

Central Excise Act 1944 CESTAT Excise Duty 1998-99 63,474

Central Excise Act 1944 CESTAT Excise Duty 1997-98 81,780

Central Excise Act 1944 Comm. (A), Jaipur Excise Duty 1999-2000 131,880

Central Excise Act 1944 Jt.Commiss ioner-JPR Excise Duty 2005-06 592,000.00

Central Excise Act 1944 CESTAT Excise Duty 2006-07 2,829,218

103,164,745.00

Service Tax

Finance Act 1994 (Chapter-V) CSTAT Service Tax 2007-08 229,732

Finance Act 1994 (Chapter-V) CSTAT 2005-06, 412,673

Service Tax 2006-07

Finance Act 1994 (Chapter-V) CSTAT Service Tax 2006-07 444,050

Finance Act 1994 (Chapter-V) CSTAT Service Tax 2007-08 193,825

Finance Act 1994 (Chapter-V) CSTAT Service Tax 2006-07 109,606

Finance Act 1994 (Chapter-V) CSTAT Service Tax 2007-08 498,561

Finance Act 1994 (Chapter-V) Comm.(A), Jaipur Service Tax 2006-07 675,175

Finance Act 1994 (Chapter-V) Comm.(A), Jaipur Service Tax 2007-08 718,684

Finance Act 1994 (Chapter-V) Comm. Jaipur Service Tax 2007-08 6,402,836

Finance Act 1994 (Chapter-V) AC, Alwar Service Tax 2007-08 366,745

10,051,887

Income Tax Act, 1961 High Court, Delhi Income Tax 2004-05 2,510,000

Income Tax Act, 1961 Appeal to CIT(A) Income Tax 2006-07 56,481,631

Income Tax Act, 1961 Appeal to CIT(A) Income Tax 2007-08 28,712,500

87,704,131

ESI Commissioner ESI 0.64

0.64

Grand Total 201,136,763.64

(b) Detail of the dues of Sales Tax/Income Tax/Service Tax/ Excise duty/cess/Custom which has not been deposited on account of dispute are given below

(x) The Company's accumulated losses at the end of the financial year exceed 50% of Net Worth. Further the company has incurred cash losses during this financial year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in the repayment of dues to Financial Institutions or Banks further the company is on default from last two years and the amount of default is Rs.82,43,98,495 I-

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion the Company is not a Chit Fund or a Nidhi / Mutual benefit Fund / Society. Hence the provisions of clause 4 (xiii) of the companies (Auditor's Report) Order, 2003 are not applicable.

(xiv) According to the information and explanations given to us and according to the records as produced, in our opinion, the Company has maintained proper records of transactions and contracts relating to dealing and trading in shares and timely entries have been made therein. Further the investments wherever made have been held in the name of the Company only.

(xv) 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.

(xvi) 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 obtained.

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

(xviii) The company has not made any preferential allotment of shares during the year.

(xix) The company has not issued any debentures during the year.

(xx) There was no public issue during the year.

(xxi) According to the information and explanations given to us, during the year, no fraud on or by the Company has been noticed or reported.

M/S RAKESH RAJ & ASSOCIATES CHARTERED ACCOUNTANTS

Reg.No.005145N

Place : FARIDABAD DEVENDER KUMAR

DATE : 13-06-2011 PARTNER

M. No. 508825

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of VANASTHALI TEXTILE INDUSTIRES LIMITED as at 31 st March 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) order, 2004 issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956, we enclose 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 purpose 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 the 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 subject to the non provision of leave encashment as required by revised AS-15 on employee benefits.

(v) on the basis of the 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 st 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 financial statements subject to the non provision of leave encashment as required by revised AS-15 on employee benefits together with other notes thereon and attached thereto 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 loss for the year ended on that date; and

(c) in the case of the Cash Flow statement, of the Cash Flows for the year ended on that date,

The Annexure referred to in the Auditors Report to the members of VANASTHALI TEXTILE INDUSTIRES LIMITED for the year ended 31st March, 2010. We report that:

(I) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) Physical verification of fixed assets was carried out during the year by the management in accordance with the companies policy of verifying the assets once in three years. In our opinion the frequency of verification is at reasonable intervals. No material discrepancies were noticed between the stock record and physical verification,

(c) There was no substantial disposal of Fixed Assets during the year (ii) (a) The inventory of the company has been physically verified by the management at reasonable intervals,

(b) In our opinion and according to the information and explanation given to us, the procedure of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of records of inventory, The company has maintained proper records of inventory,

As explained to us, there was no material discrepancies noticed on physical verification of inventory as compare to the book records.

(iii) (a) In our opinion and according to the information and explanation given to usjhe company has granted loan to one party covered in the register maintained under section 301 of the Companies Act, 1956, the maximum amount and year end amount outstanding during the year being Rs. 5.11/- Lacs which is overdue for many years and the Company has filed a suit for recovery of the same.

(b) In our opinion and according to the information and explanation given to us, The company has taken loan from four companies / parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 5,10,40,208/- and year-end balance of such loan amounted to Rs. 1,85,40,208/-.

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

(d) In respect of loans taken by the company, the principal and the interest has not been paid regularly,

(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 and fixed assets and for the sale of goods.

(v) (a) In our opinion and according to the information and explanation given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

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

(vi) In our opinion and according to the information and explanations given to us the Company has not accepted any deposit from the public and hence the provisions of clause 4 (vi) of the Companies (Auditors Report) Order 2003 regarding deposit from the public are not applicable to the company.

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

(viii) As per information and explanations given to us, cost records prescribed by the Central Government u/s 209 (1) (d) of the Companies Act, 1956 are being maintained.

(ix) (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues including provident fund, employees state insurance, Income-tax, sales-tax, wealth-tax, customs duty, excise duty, cess and other material statutory dues as applicable have generally been regularly deposited by the company during the year with the appropriate authorities. According to the information and explanations given to us, there are no arrears of outstanding statutory dues as mentioned above as at 31 st March, 2010 for a period of more than six months from the date they become payable.

(b) Detail of the dues of Sales Tax/Income Tax/Service Tax/ Excise duty/cess/Custom which has not been deposited on account of dispute are given below:

Name of the Statute Forum where Nature of Dues Period of Amount in Rs.

case is Pending Dispute

The Custom Act, 1962 CESTAXA hmedabad Custom Duty 2004-05 216,000.00

Sub Total of Custom Duty 216,000.00

The Central Excise Act, 1944 CESTAT Excise Duty 2008-09 95,042,002

The Central Excise Act, 1944 ACAIw. Excise Duty 2008-09 386,843

The Central Excise Act, 1944 ACAIw. Excise Duty 2008-09 490,222

The Central Excise Act, 1944 ACAIw. Excise Duty 2008-09 36,432

The Central Excise Act, 1944 Comm. (A)-JPR Excise Duty 2008-09 41,318

The Central Excise Act, 1944 Comm. (A), Jaipur Excise Duty 2008-09 261,735

The Central Excise Act, 1944 Comm. (A)- JPR Excise Duty 2008-09 479,611

The Central Excise Act, 1944 Commi. (A)-JPR Excise Duty 2008-09 125,764

The Central Excise Act, 1944 Commi. (A)- JPR Excise Duty 2008-09 486,856

The Central Excise Act, 1944 Commi. (A) -JPR Excise Duty 2008-09 473,071

The Central Excise Act, 1944 CESTAT Excise Duty 2008-09 757,610

The Central Excise Act, 1944 CESTAT Excise Duty 2008-09 333,018

The Central Excise Act, 1944 Comm.(A) -JPR Excise Duty 2009-10 325,964

The Central Excise Act, 1944 CESTAT Excise Duty 1998-99 118,635

The Central Excise Act, 1944 CESTAT Excise Duty 1998-99 107,312

The Central Excise Act, 1944 CESTAT Excise Duty 1998-99 63,474

The Central Excise Act, 1944 CESTAT Excise Duty 1997-98 81,780

The Central Excise Act, 1944 Comm. (A), Jaipur Excise Duty 1999-2000 131,880

The Central Excise Act, 1944 CESTAT Excise Duty 1999-2000 592,000

The Central Excise Act, 1944 Joint. Commiss- ioner- JPR Excise Duty 2005-06 592,000

The Central Excise Act, 1944 CESTAT Excise Duty 2006-07 2,829,218

Sub Total of Excise Duty 103,756,745.00

Finance Act 1994 (Chapter-V) CESTAT Service tax 2007-08 229,732

Finance Act 1994 (Chapter-V) CESTAT Service tax 2005-06, 2006-07 412,673

Finance Act 1994 (Chapter-V) CESTAT Service tax 2006-07 444,050

Finance Act 1994 (Chapter-V) CESTAT Service tax 2007-08 193,825

Finance Act 1994 (Chapter-V) CESTAT Service tax 2006-07 109,606

Finance Act 1994 (Chapter-V) CESTAT Service tax 2007-08 498,561

Finance Act 1994 (Chapter-V) Comm.(A), Jaipur Service tax 2006-07 675,175

Finance Act 1994 (Chapter-V) Comm.(A), Jaipur Service tax 2007-08 718,684

Finance Act 1994 (Chapter-V) Comm. Jaipur Service tax 2007-08 6,402,836

Finance Act 1994 (Chapter-V) AC, Aiwar Service tax 2007-08 366,745

Sub Total of Service Tax 10,051,887.00

Income Tax Act, 1961 High Court, Delhi Income tax 2004-05 2,510,0- 00.00

Income Tax Act, 1961 Appleal to CIT(A) Income tax 2004-05 208,500.- 00

Income Tax Act, 1961 Appleal to CIT(A) Income tax 2006-07 56,481,63- 1.00

Sub Total of Income Tax 59,200,131.00

Rajasthan,Sales Tax Commisioner of sales taxVat 2004-05 34,898.00

Rajasthan,Sales Tax Commisioner of sales taxVat 2005-06 9,495.00

Sub Total of Vat 44,393.00

ESI Commisioner ESI 544,100.00

Sub Total of ESI 544,100.00

Grand Total 173,813,256.00



(x) The Companys accumulated losses at the end of the financial year exceeds 50% of its Net Worth. Further the company has incurred cash losses during this financial year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has slightly defaulted in the repayment of dues to Financial Institutions or Banks interest on loans take from banks amounting to Rs. 131.20 lacs of principal amount of Rs. 154.47 lacs which because due for payment from January, 2010 onward till March, 2010 was actually pain in July, 2010.

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion the Company is not a Chit Fund or a Nidhi / Mutual benefit Fund / Society. Hence the provisions of clause 4 (xiii) of the companies (Auditors Report) Order, 2003 are not applicable.

(xiv) According to the information and explanations given to us and according to the records as produced, in our opinion, the Company has maintained proper records of transactions and contracts relating to dealing and trading in shares and timely entries have been made therein. Further the investments wherever made have been held in the name of the Company only.

(xv) 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.

(xvi) 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 obtained.

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

(xviii) The company has not made any preferential allotment of shares during the year.

(xix) The company has not issued any debentures during the year.

(xx) There was no public issue during the year.

(xxi) According to the information and explanations given to us, during the year, no fraud on or by the Company has been noticed or reported.



M/sRAKESH RAJ & ASSOCIATES

CHARTERED ACCOUNTANTS Reg.No.005145N

ANNAPURNA GUPTA

Place : FARIDABAD PARTNER

Date : 12th August, 2010 M. No. 90858