Auditor Report of Venlon Enterprises Ltd.

Mar 31, 2024

We have audited the accompanying financial statements of VENLON ENTERPRISES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss including the Other Comprehensive Income, the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, its Loss including Other Comprehensive Income, its Cash Flows and the Statement of Changes in Equity for the year ended on that date.

Basis for Opinion

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

Emphasis of Matter:

We draw attention to Note 1(B)(I) & 22(xx) of the financial statements, which describes the Company''s financial condition as of March 31, 2024 and its debt obligations. The company''s financial performance has impacted its ability to generate cash flow that it needs to settle/finance its liabilities as they fall due. The Company''s ability to continue as a going concern is dependent on its ability to raise additional funds or/and successful negotiations with lenders for deferment/settlement of its liabilities as they fall due. Our opinion is not modified in respect of this matter.

Key Audit Matters (KAM)

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements for the year ended March 31, 2024. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined that there are no key audit matters to communicate in our report.

The Company''s Board of Directors is responsible for the other information. The other information comprises the management discussion & analysis and director''s report included in the annual report but does not include the Financial Statements and our auditor''s report thereon. The above information is expected to be made available to us after the date of this auditor''s report. Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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

If based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to communicate the matter to those charged with governance.

We have nothing to report in this regard.

Management Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act, with respect to the preparation of these Financial Statements that give a true and fair view of the Financial Position, Financial Performance including Other Comprehensive Income, Cash Flows and the Statement Of Changes in Equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of the appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor''s Responsibilities for the Audit of the Financial Statements

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

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

We also:

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

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

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

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

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

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

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure-A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

d) The aforesaid financial statements comply with the accounting standards specified under section 133 of the Act;

e) The matter described in the ''Emphasis of Matter" paragraph above in our opinion, may have an adverse effect on the functioning of the Company.

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements in Note 28(i);

ii. The Company has made provisions, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long term contracts including derivative contracts;

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

iv. (a) Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the financial statements, during the year no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) Management has represented to us that, to the best of it''s knowledge and belief, as disclosed in the notes to the financial statements, during the year no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(c) based on our audit procedure conducted that are considered reasonable and appropriate in the circumstances, nothing has come to our attention that cause us to believe that the representation given by the management under paragraph (2) (i) (iv) (a) & (b) contain any material misstatement.

v. The company has not declared or paid any dividend during the year and has also not proposed dividend for the year.

For Laxminiwas & Co.

Chartered Accountants

ICAI Firm Registration Number: 011168S

Sd/-

Gaurav Shah Partner

Membership Number: 229420 UDIN No.: 24229420BKGTWX6490

Place : Mysore Dated : August 14, 2024

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Mar 31, 2015

We have audited the accompanying financial statements of Venlon Enterprises Limited ('the Company'), which comprise the balance sheet as at 31 March 2015. the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters staled in Section 134(5) of the Companies Act, 2013 (l'the Act") with respect to the preparation and presentation of these financial statements that give a true and lair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and delecting 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 ro the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement whether due io fraud or error.

Auditor's Responsibility

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

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements arc 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, hut not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of1 the accounting policies used and the reasonableness of the accounting estimates made hy 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, of the state of affairs of the Company as at 31 March. 2015 and its Loss and its Cash Flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2015 ("the Order) issued by the Centra! Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexurc a statement on the matters Specified in the paragraph 3 and 4 of the Order, to the extent applicable.

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid 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 31 March 2015 taken on record by the Board of Directors, none of the directors are disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and S

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

i. The Company docs not have any pending litigations which would impact its financial position, '

it. Thc Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses,

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

Annexure to the Independent Auditofs Report

Referred to in paragraph under the heading "Report on Other Legal and Regulatory Requirements" of our Independent Auditors' Report of even date to the members of Venlon Enterprises Limited on the financial statements for the year ended 131 March 2015.

We report that:

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

(b) The fixed assets are physically verified by the management according to a phased program designed to cover all the items over a period of three years, 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.

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

(b) In our opinion, the procedures of physical verification of inventory' 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records which lias been properly dealt with in the books of account were not material.

3. (a) The Company has not granted unsecured loans to Companies covered in the register maintained under Section 189 of the Companies Act. 2013 ('the Act').

(b) Accordingly, paragraph 3(iii)(b) and 3(iii)(c) of the Order are not applicable to the Company.

4. In our opinion and according to the information and exp I actions given to us, them are adequate internal control systems which 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. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us. we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. The Company has not accepted any deposits from the public within the meaning of Section 73 to 76 or any other Relevant Provisions of the Companies Act, 2013 and the rules framed there under. No order hasdbeen passed by National Company Lawr Tribunal or Reserve Hank of India or any Court or any other Tribunal.

6. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuance to the Rules made by the Central Government, the maintenance of cost records has been prescribed under section 148(1) of the Companies Act, 2013 and are of the opinion that prim a facie, the prescribed accounts and records have been made and maintained in respect of the products manufactured by the Company, We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, no undisputed statutory dues including provident fund, employees' state insurance, sales lax. wealth lax, service tax, customs duty, value added tax, excise duty, cess and other material statutory dues as applicable with the appropriate authorities, except income tax ( I DS) where there has been a slight delay. The Company has since remitted the income tax (TDS).

(b) According to the information and explanations given to us, there arc no dues of Provident fund. Income tax, Sales tax. Wealth tax, Service tax, Custom duty. Value added tax, Pxcise duty and Cess which have not been deposited on account of any dispute,

(c) According to the information and explanations given to us, no amounts were required to be transferred to the investor education and protection fund in accordance with relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under. Accordingly, paragraph 7(c) of the Order is not applicable to the Company in respect of amounts being transferred to such fund within time.

8. In our opinion, the accumulated losses of the Company are more than fifty percent of its net worth. The Company has incurred cash losses during the financial year covered by our audit. However the company had not incurred cash loss during the immediately preceding financial year.

9. According to the records of the Company examined by us and die information and explanations given to us. the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date. The Company has not issued any debentures.

10. in our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the vear.

11, In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained

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

FotjRAU & NATHAN Chartered Accountants Firm Registration # 003178S

N.VAfWANAmAygX Partner Membership# 022573

Place : MYSURU Date : 30 May, 2015

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Mar 31, 2014

We have audited the accompanying financial statements of Venlon Enterprises Limited ("the Company") which comprise the Balance Sheet as at 31 st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management ''s Responsibility for the financial statements

Management is responsible for the preparation and the fair presentation 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-seel ion (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.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have 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 audit procedures selected depend on the auditors'' 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 that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our audit opinion on the financial statements.

Opinion

Reference is invited to the details in note number 30(E)(ii) of additional notes / disclosures to the financial statements regarding the changes in accounting practice as required by paragraph 46A of Accounting Standard AS -11 issued by "The Institute of Chartered Accountants of India" and the ''consequential impact on the financial statements.

Further to the above, 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 lair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act. we enclose 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 purposes of our audit.

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

c. The Balance Sheet, the State memt 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 Balance Sheet, the 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 Act. except for treatment of inter-divisional transfers as referred to note number 30(j) of additional notes / disclosures to the financial statements.

c. On the basis of the written representation received from the directors, as at March. 2014. and taken on record by the Board of Directors, we report that none of the directors is disqualified as at 31st March, 2014 from being appointed as directorin terms of Clause (g) of Sub Section (1) of Section 274 of the ACL

Annexure to the Independent Auditors'' Report

Referred to in paragraph I under the heading "Report on Other Legal and Regulatory Requirements" of our Report of even date to the members of Venlon Enterprises Limited for the year ended 31st March, 2014.

We report that:

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

(b) The fixed assets are physically verified by the management according to a phased program designed to cover all the items over a period of three years, 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) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year. And therefore, do not affect the going concern assumption.

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

(b) In our opinion, the procedures of physical verification of inventory 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records which has been properly dealt with in the books of account were not material.

3. (at The Company has not granted unsecured loans to Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken unsecured loans from thirteen Companies and three other parties covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year is Rs. 1,845.59 lacs and the year- end balances of such loan aggregates to Rs, 1,8,17.09 lacs respectively.

(c) In our opinion, the rate of interest and other terms and conditions of such loans are not, prima Jade, prejudicial to the interest of the Company.

(d) The company is regular in repaying the principal amounts as stipulated and is also regular in payment of interest, where applicable.

4. In our opinion and according to the information and explanations given to us,there are adequate internal control systems which commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us. we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of eon tracts or arrange merits that need to be entered into the register in pursuance of 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, transactions made in pursuance of such contracts or arrangements have been made at. prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other Relevant Provisions of the Companies Act, 1956 and the rules framed there under. No order has been passed by National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal,

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuance to the Rules made by the Central Government, the maintenance of cost records has been prescribed under clause (d) of Sub section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained in respect of the products manufactured by the Company, We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (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 generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, sales tax. wealth tax. service tax. customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities, except income lax (TDS) where there has been a slight delay. S he Company has since remitted the income tax (TDS).

(b) According to the information and explanations given to us, there arc no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty. Excise duty and Cess which have not been deposited on account of any dispute.

10. in our opinion, the accumulated losses of the Company are not more than fifty percent of its net worth. The Company has not incurred cash losses during the financial year covered by our audit. However rite company had Incurred cash loss during the immediately prceeding finarcial year.

11. According to the records of the Company examined by us and the information and explanations given to us. the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date. The Company has not issued any debentures.

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 provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company.

14. In our opinion, the Company is not a dealer or trader or trader in shares, securities, debentures and other investments;

15. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. In our opinion, and according to the information and explanations given to us. on an overall basis, the term loans have been applied for the purposes for which they were obtained,

17. On the basis of overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

19. The company has not issued any debentures.

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

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

For RAU & NATHAN Chartered Accountant Firm Registration # 0031 78S

N. VAIDYANATHAN Partner, Membership # 22573

Place: MYSORE Date: 30th May, 2014

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Mar 31, 2013

We have audited the accompanying financial statements of Venlon Enterprises Limited ("the Company") which comprise the Balance Sheet as at 31st March. 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the financial statements

Management is responsible for the preparation and the fair presentation 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.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have conductcd 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 audit procedures selected depend on the auditors'' 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 that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable 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 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:

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

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

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

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Centra! Government of India in terms of sub-section (4A) of Section 227 of the Act, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the Order.

2) As required by Section 277 (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 purposes of our audit.

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

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

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Act, except for treatment of inter-divisional transfers as referred to note number 31 (j) of additional notes / disclosures to the financial statements.

e. On the basis of the written representation received from the directors, as at 31st March, 2013, and taken on record by the Board of Directors, we report that none of the directors is disqualified as at 31st March, 2013 from being appointed as director in terms of Clause (g) of Sub Section (1) of Section 274 of the Act.

Annexure to the Auditors'' Report

Referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our Report of even date to the members of Venlon Enterprises Limited for the year ended 31st March, 2013.

We report that:

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

(b) The fixed assets are physically verified by the management according to a ; phased program designed to cover all the items over a period of three years, 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) Tn our opinion and according to the information and explanations given to us. no substantial part of fixed assets has been disposed off by the Company during the year. And therefore, do not affect the going concern assumption,

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

(b) In our opinion, the procedures of physical verification of inventory 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records which has been properly dealt with in the books of account were not material.

3. (a) The Company has not granted unsecured loans to Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken unsecured loans from thirteen Companies and three other parties covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year is Rs.1,288.88 lacs and the year- end balances of such loan aggregates to Rs.1,175.07 lacs respectively.

(c) In our opinion, the rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the Company.

(d) The company is regular in repaying the principal amounts as stipulated and is also regular in payment of interest, where applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems which commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid interna) control procedures.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered into the register in pursuance of 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, transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other Relevant Provisions of the Companies Act, 1956 and the rules framed there under. No order has been passed by National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuance to the Rules made by the Central Government, the maintenance of cost records has been prescribed under clause (d) of Sub section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained in respect of the products manufactured by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (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 generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities, except income tax (TDS) where there has been a slight delay. The Company has since remitted the income tax (TDS).

(b) According to the information and explanations given to us. there are no dues of Income tax. Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess which have not been deposited on account of any dispute.

10. In our opinion, the accumulated losses of the Company are not more than fifty percent of its net worth. Further, the Company has incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date. The Company has not issued any debentures.

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 provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company. .

14. In our opinion, the Company is not a dealer or trader or trader in shares, securities, debentures and other investments.

15. In our opinion, and according to the information and explanations given to us. the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year,

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

19. The company has not issued any debentures.

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

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

For RAU & NATHAN

Chartered Accountants

Firm Registration # 003178S

N. VAIDYANATHAN

Partner

Membership # 22573

Place : MYSORE

Date : 30th May, 2013

---

Mar 31, 2012

1) We have audited the attached Balance Sheet of VENLON ENTERPRISES LIMITED (‘the Company’) as at 31st March 2012, the Profit and Loss Statement and the Cash Flow Statement of the Company 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 misstatements. 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 in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (‘the Act), we enclose in the Annexure a statement on the matter specified in Paragraphs 4 and 5 of the said Order.

4) Further to our comments in the Annexure referred to in Paragraph 3, we report that:

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

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Statement and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub section 3(c) of Section 211 of the Act, except treatment of inter Divisional transfers as referred to note number 31(j) of additional notes / disclosures to the financial statements.

e. On the basis of the written representation received from the directors, as at 31st March 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as at 31st March 2012 from being appointed as directors in terms of Clause (g) of Sub Section (1) of Section 274 of the Act.

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

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

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

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

Referred to in paragraph 3 of the Auditors’ Report of even date to the members of Venlon Enterprises Limited for the year ended 31st March 2012.

We report that:

1. (a) The Company has maintained proper records showing full

particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the management according to a phased program designed to cover all the items over a period of three years, 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) In our opinion and according to the information and explanations given to us, no substantial part of fixed assets has been disposed off by the Company during the year. And therefore, do not affect the going concern assumption.

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

(b) In our opinion, the procedures of physical verification of inventory 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records which has been properly dealt with in the books of account were not material.

3. (a) The Company has not granted unsecured loans to Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken unsecured loans from two Companies/other parties covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year is Rs.473.96 lacs and the vear-end balances of such loan aggregates to Rs.441.83 lacs respectively.

(c) In our opinion, the rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the Company.

(d) The company is regular in repaying the principal amounts as stipulated and is also regular in payment of interest, where applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems which commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have been

informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered into the register in pursuance of 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, transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other Relevant Provisions of the Companies Act, 1956 and the rules framed there under. No order has been passed by National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuance to the Rules made by the Central Government, the maintenance of cost records has been prescribed under clause (d) of Sub section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained in respect of Formaldehyde & Polyester Chips. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (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 generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, sales tax, wealth tax. service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities, except income tax (TDS) where there has been a slight delay. The Company has since remitted the income tax (TDS).

(b) According to the information and explanations given to us, there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess which have not been deposited on account of any dispute.

10. In our opinion, the accumulated losses of the Company are not more than fifty percent of its net worth. Further, the Company incurred cash losses during the financial year covered by our audit. It has not incurred cash loss during the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date. The Company has not issued any debentures.

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 provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company.

14. In our opinion, the Company is not a dealer or trader or trader in shares, securities, debentures and other investments.

15. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

19. The company has not issued any debentures.

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

21. 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, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor we have been informed of any such case by the management.

For RAU & NATHAN

Chartered Accountants

Firm Registration # 003178S

PLACE: MYSORE N.VAIDYANATHAN

DATE: 30th May 2012 Partner.

Membership #2573

---

Mar 31, 2010

1) We have audited the attached Balance Sheet of VENLON ENTERPRISES LIMITED as at list March 2010, the Profit and Loss Account and the Cash I low Statement of the Company 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 lhe 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Sec. 227 (4A) of the Companies Act, 1956, we give in the Annexure a statement on die matter specified in Paragraphs 4 and 5 of the said Order.

4) Further to our comments in the Annexure referred to in Paragraph 3 above:

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

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

c. The attached Balance Sheet, the Profit and Loss account and the Cash Flow Statement dealt widi by this report are in agreement wiUi die books of account.

d. In our opinion, the Balance Sheet. Profit and loss account and the (ash Flow Statement comply widi the requirement of Accounting Standards referred to in sub section 3(c) of Sec. 211 of the Companies Act 1956 except Treatment of inter divisional transfers as referred to in serial number 5 Schedule 20 - Notes on Accounts.

e. On the basis of (he written representation received from the directors, anil taken on the record by the Board of Directors, we report that none of the directors is disqualified as on 31 si March 2010 from being appointed as directors in terms of Clause (g) of Sub Sec. (1) of Sec. 274 of the Companies Act, 1956.

Further to the above, in our opinion and to the best of our information and according to the explanations given to us, the accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

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

ii) in die case of Profit and Loss account, of the loss for the year ended on that date and

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

ANNRXURE Referred to in paragraph 3 of the Auditors Report of even date to the members of Venlon Enterprises Limited on the financial statements for the year ended 31st March 2010.

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

(b) The fixed assets are physically verified by Ihe management according to a phased program designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard 1o tbe si/e ol the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us. no substantial part of fixed assets has been disposed off by the Company during the year.

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

(b) In our opinion, the procedures of physical verification of inventory 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 inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to hook records which has been properly dealt with in the books of account were not material.

3. (a) The Company has not granted unsecured loans to Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has taken unsecured loans from Companies/other parties covered in the register maintained under Section 301 of the Act. The number of such companies/other parties is 3. Ihe maximum amount involved during the year is Rs.2167.86 lacs and the year-end balances of such loan aggregates to Rs.2066.68 lacs respectively.

(c) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(d) The company is regular in repaying the principal amounts as stipulated ami is also regular in payment of interest, where applicable.

4. In our opinion and according to the information and explanations given lO us, ihere are 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 tor the sale of goods and services, further, on the basis of our examination of the books and records of the company ami according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) In our opinion and according to the information and explanations given to us the particulars of contracts or arrangements that need to be entered into the register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion ami according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements have been made at prices are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other Relevant Provisions of the Companies Act, 1956 and the rules framed there under. No order has been passed by National Company l.aw Tribunal or Reserve Bank of India or any Court or any other Tribunal.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuance to the Rules made by the Central Government, the maintenance of cost records has been prescribed under clause (d) of Sub section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made ami maintained in respect of Formaldehyde & Polyester Chips. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (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 generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, sales lax. wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate auuiorities, except income tax (TDS) where there has been a slight delay. The Company has since remitted the income tax (TDS).

(b) According to the information and explanations given to us. Ihere are no dues of Income tax. Sales tax. Wealth tax. Service tax. Custom duty, Excise duty and Cess which have not been deposited on account of any dispute.

10. The Company has accumulated losses ;is al March 31,2010 and it has not incurred cash losses in the financial year ended on that date. ITte company has incurred cash losses in the immediately preceding financial year.

11. According to the records of the (ompany examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as al the balance sheet date. The Company has not issued any debentures.

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 provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company.

14. In our opinion, the Company is not a dealer or trader or trader in shares, securities, debentures and other investments.

15. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

17. Cm the basis of overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us. there are no funds raised on a short-term basis, which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

19. The company has not issued any debentures.

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

21. 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, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor we have been informed of any such case by the management.

For RAU & NATHAN Chartered Accountants Form Registration # 003178S



N.VADYANATHAN Partner Mrmbership # 22573

PLACE: MYSORE

DATE: 29th May 2010