Auditor Report of Vision Cinemas Ltd.

Mar 31, 2024

We have audited the accompanying standalone financial statements of IVl/s. VISION CINEMAS LIMITED
("the Company¹''), which comprise the Balance Sheet as at 31st March, 2024, the Statement of Profit and
Loss, the Cash Flow Statement, and a Summary of the significant accounting policies and other
explanatory information for the year then ended.

Responsibilities of Management and Those charged with Governance for the Standalone Financial
Statements

The company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies
Act, 2013 ("the Act") with respect to preparation of standalone financial statements that give a true and
fair view of the financial position, financial performance, cash flows and Changes in Equity 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 (Accounting) 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 detecting
frauds and other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and maintenance
of adequate internal financial controls, that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether due to fraud
or error.

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

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

Auditor''s Responsibilities

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act_r the accounting and auditing standards and
matters which are required to be included in the audit report under the provisions of the Act and the
Rules made thereunder.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures
in the financiaf statements. The procedures selected depend on the auditor''s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal financial control
relevant to the Company''s preparation of the financial statements that give a true and fair view in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on whether the Company has in place an adequate internal financial control system
over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating
the appropriateness of the accounting policies used and the reasonableness of the accounting estimates
made by the Company''s Directors, as well as evaluating the overall presentation of the financial
statements,

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

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing (SA''s)
specified under section 143(10) of the Companies Act, 2013. 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 there under,
and we have fulfilled our other ethicaf responsibilities in accordance with these requirements and the
iCAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except
the matter given in the "Emphasis of Matter" section, the aforesaid standalone financial statements give
the information required by the Act in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India, of the state of affairs of the Company as at 3lst
March, 2024, and its profit/bss, its cash flows and changes in equity for the year ended on that date.

Emphasis of Matter

* The payable and receivable balances as reported are subject to confirmation of balances from the
Parties.

* The aggregate of advance to subsidiary as on 31st March,. 2023 was Rs. 672,94 Lakhs which has
increased to Rs, 674.28 Lakhs as on 31st March, 2024, However, in the opinion of the management,
these are good and recoverability are not doubtful, We obtained explanation from the Management
regarding their judgement on the recoverability of these funds and found these judgment to be
appropriate,

* Rs. 827.16 Lakhs reported under Short-term Loans and Advances represent monies receivable from
Vasanth Colour Labs Limited.. The Management is confident of its recoverability and we find the
explanation provided by the management on the same appropriate.

Auditor''s opinion is not modified in respect of the matter emphasized.

Report On Other Legal And Regulatory Requirements

As required by section 143(3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit. However, confirmation of
balances from third parties are not made available for our verification.

(b) In our opinion, proper books of account as required by taw have been kept by the Company so far
as it appearsfrom our examination of those books,

(c) The Balance sheet, the statement of Profit and Loss, the Cash flow statement and the Statement
of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the financial statements does not comply with the Ind AS specified under section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) on the basis of the written representations received from the Directors as on 31st March, 2024
taken on record by the Board of Directors none of the directors is disqualified as on 31''¹ March,
2024 from being appointed as a director in terms of Section 164 (2) of the Act,

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

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with the
requirements of section 197(16) of the Act, as amended, we report that no remuneration was
paid to any of the Directors during the year.

(h) With respect to the other matters to be included in the Auditors¹ 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:

t. The Company has below ongoing litigations which may have impact on its standalone
financial statements:

* Penalties imposed by the Bombay Stock Exchange on the Company on various

grounds. The Company has made a representation contesting the grounds for
imposition of these penalties and the relevant documentation/ supporting are
presented and are under consideration of the Stock Exchange for waiver of the
same.

ii. The Company does not have any long-term contracts including derivative contracts for
which there are any foreseeable tosses.

1iL There were no amounts which are required to be transferred to Investor Education and
Protection Fund by the Company.

iv. The management has represented that, to the best of its knowledge and belief, other than
as disclosed in the notes to the accounts, no funds have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the company to or in any other person(s) or entity(ies), including foreign entities
("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall, whether, directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the company ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;

V. The management has represented, that, to the hest of its knowledge and belief, other than
as disclosed in the notes to the accounts, no funds have been received by the company
from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the
understanding, whether recorded in writing or otherwise, that the company shall, whether,
directly or indirectly, lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

vi. Based on audit procedures which we considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (i) and (ii) contain any material mis-statement.

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

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

For Pradeep Kumar Devaraj & Associates

Chartered Accountants

Firm Registration No.:023317S

Pradeep Kumar Devaraj
Proprietor

Membership No. 242223
UOIN:24242223BKCPPX9417

Place: Bangalore
Date: 24^lil May, 2024

I 3 rn» am in, PM

---

Jun 30, 2011

We have audited the attached Balance Sheet of Vision Technology India Limited as at 30th June 2011, the Profit and Loss Account for the year ended on that date and the cash flow statement of the 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 our opinion on these financial statements based on our audit.

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

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

2. We draw attention to:

- The amounts recoverable from Vasanth Color Laboratories Limited, which are doubtful. Further the company has not provided for the same, hence the Loss is understated by Rs.4,79,94,770/- with respect to Loans and Advances.

3. Further to our comments in the Annexure referred to in Para 1 and also Para 2 above, we report that:

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

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

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

d) In our opinion, the Balance, Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

e) On the basis of written representations received from the directors, as on 30th June 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion, and according to the best of our information and according to the explanations given to us, the said accounts read with the Accounting Policies and Notes thereon in Schedule 28, give the information required by the Companies Act, 1956 in the manner so required and gives 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 3f 30 June 2011,

b) In the case of Profit and Loss Account, of the profit for the year ended on that date, and

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

ANNEXURE

Re: M/s. VISION TECHNOLOGY INDIA LIMITED, Bangalore

(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) As per the information and explanations given to us, fixed assets have not been physically verified by the management during the year.

c) The Company has not disposed off any fixed assets during the year and hence provisions of this clause are not applicable to the Company.

ii) The company has not held any inventory at any time during the year and hence in our opinion, the provisions of Clause 4(ii)(a), (b) and (c) of the said order are not applicable to the company.

iii) a) The company has not granted any loans secured/unsecured to companies, firms, or other parties covered in the register maintained under the Section 301 of the Companies Act 1956 during the year. Hence provisions of sub-clause (b) to (d) of clause (iii) of the order are not applicable.

e) The Company has taken interest free unsecured loans from Directors, who are covered in the register maintained under the Section 301 of the Companies Act, 1956. The maximum amount involved in such transactions is Rs.4.5 crores and the balance as at the end of the year is Rs.2.56 crores.

f) The terms and conditions on which unsecured loans taken from parties covered under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the company.

g) The Company is regular in repaying the principal amount as stipulated.

iv) In our opinion and according to the information and explanations given to us, the internal control should be further strengthened in order to be commensurate with the size of the company and the nature of its business with regard to purchase of plant 8t machinery, equipment and with regard to the sale of goods and services. However, on the basis of our examination and information and according to the explanations given to us, we have neither come across, nor have we been informed of any instance of major weaknesses and continuing failure to correct 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 all 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 respect of each of the transactions exceeding the value of five lakhs rupees in respect of any party in the financial year under review made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956, they have been made at prices which are reasonable with regard to the prevailing market prices at the relevant time.

vi) The company has not accepted any deposit from the public and as such the provisions of paragraph 4(vi) of the said Order are not applicable.

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

viii) The Central Government has not prescribed the maintenance of cost records as required under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

ix) a) According to the information and explanations given to us and on the basis of our examination of books of accounts, the company has not been regular in depositing with appropriate authorities any undisputed statutory dues including, Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income- Tax, Sales-Tax, Wealth-Tax, Customs duty, Excise Duty, Cess and other material statutory dues applicable to the company. Following are the Statutory Dues which are outstanding for a period of more than Six Months from the date they became payable:

a) Tax Deducted At Source Rs.2,32,294/-

b) Service Tax Rs.11,02,845/-

c) Profession Tax Rs.53,405/-

d) VAT Rs.82,229/-

b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs Duty Wealth Tax, Excise Duty and Cess, which have not been deposited on account of any dispute.

x) In our opinion, the Company's accumulated losses at the end of the financial year are less than fifty percent of its net worth and it has not incurred any cash losses in the financial year and in the immediately preceding financial year.

xi) According to information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence provisions of this clause is not applicable.

xii) According to information and explanations given to us, the company has not granted loans and 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.

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

xv) According to information and explanations given to us, in our opinion, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi)ln our opinion, the company has not raised any term loans during the year. Accordingly, the provisions of clause 4(xvi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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

xviii) During the year, the company has not made preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956 except in the case of two parties to whom shares have been allotted on a preferential basis and in our opinion, the price at which the shares have been issued is not prejudicial to the interest of the Company.

xix) During the year, the company has not issued any debentures.

xx) The Company has not raised any money by public issues during the year and hence, the provisions of paragraph 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

For S.JANARDHAN a ASSOCIATES

CHARTERED ACCOUNTANTS

Registration No. 00531 OS



Sd/-

Place : Bangalore (VIJAY BHATIA)

Date : 16.11.2011 PARTNER

Membership No.201862

---

Jun 30, 2010

We have audited the attached Balance Sheet of Vision Technology India Limited as at 30th June 2010 and the Profit and Loss Account for the year ended on that date and also the cash flow statement of the 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 our opinion on these financial statements based on our audit.

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

1. 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 sub- section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. We draw attention to:

• The amounts recoverable from Vasanth Color Laboratories Limited, which are doubtful. Further the company has not provided for the same, hence the Loss is understated by Rs. 4,78,46,889/- with respect to Loans and Advances.

3. Further to our comments in the Annexure referred to in Para 1 and also Para 2 above, we report that:

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

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

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

d) In our opinion, the Balance , Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

e) On the basis of written representations received from the directors, as on 30th June 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion, and according to the best of our information and according to the explanations given to us, the said accounts read with the Accounting Policies and Notes thereon in Schedule 28, give the information required by the Companies Act, 1956 in the manner so required and gives 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 30th June 2010,

b) In the case of Profit and Loss Account, of the profit for the period ended on that date, and

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



Re: M/s. VISION TECHNOLOGY INDIA LIMITED, Bangalore

(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) As per the information and explanations given to us, fixed assets have not been physically verified by the management during the year.

c) The Company has not disposed off any fixed assets during the year and hence provisions of this clause are not applicable to the Company.

ii) The company has not held any inventory at any time during the year and hence in our opinion, the provisions of Clause 4 (ii) (a), (b) and (c) of the said order are not applicable to the company.

iii)

a) The company has not granted/taken any loans secured/unsecured from/to the company, firms, other parties covered in the register maintained under the Section 301 of the Companies Act 1956.

iv) In our opinion and according to the information and explanations given to us, the internal control should be further strengthened in order to be commensurate with the size of the company and the nature of its business with regard to purchase of plant St machinery, equipment and other assets if any. However, on the basis of our examination and information and according to the explanations given to us, we have neither come across, nor have we been informed of any instance of major weaknesses and continuing failure to correct 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 all 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 respect of each of the transactions exceeding the value of five lakhs rupees in respect of any party in the financial year under review made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956, they have been made at prices which are reasonable with regard to the prevailing market prices at the relevant time.

vi) The company has not accepted any deposit from the public and as such the provisions of paragraph 4(vi) of the said Order are not applicable.

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

viii) The Central Government has not prescribed the maintenance of cost records as required under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

ix)

a) According to the information and explanations given to us and on the basis of our examination of books of accounts, the company has not been regular in depositing with appropriate authorities any undisputed statutory dues including, Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Customs duty, Excise Duty, Cess and other material statutory dues applicable to the company. Following are the Statutory Dues which are outstanding for a period of more than Six Months from the date they became payable:

a) Tax Deducted At Source Rs. 2,20,768/-

b) Service Tax Rs. 11,02,845/-

c) Profession Tax Rs. 53,405/-

d) VATRs. 82,229/-

b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs Duty Wealth Tax, Excise Duty and Cess, which have not been deposited on account of any dispute.

x) In our opinion, the Companys accumulated losses at the end of the financial year are less than fifty percent of its net worth and it has not incurred any cash losses in the financial year and in the immediately preceding financial year.

xi) According to information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence provisions of this clause is not applicable.

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

xiii)ln our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

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

xv) According to information and explanations given to us, in our opinion, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi)ln our opinion, the company has not raised any term loans during the year. Accordingly, the provisions of clause 4(xvi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

xviii) During the year, the company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) During the year, the company has not issued any debentures.

xx) The Company has not raised any money by public issues during the year and hence, the provisions of paragraph 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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



For S.JANARDHAN a ASSOCIATES

CHARTERED ACCOUNTANTS

egistration No.00531OS



Sd/-

Place: Bangalore (VIJAY BHATIA)

Date: 25.11.2010 PARTNER

Membership No.201862

---

Jun 30, 2009

We have audited the attached Balance Sheet of Vision Technology India Limited as at 30th June 2009 and the Profit and Loss Account for the year ended on that date and also the cash flow statement of the 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 our opinion on these financial statements based on our audit.

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

1. 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 sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. We draw attention to:

- The amounts recoverable from Vasanth Color Laboratories Limited, which are doubtful. Further the company has not provided for the same, hence the Loss is understated by Rs. 22,634,789 with respect to Loans and Advances.

3. Further to our comments in the Annexure referred to in Para 1 and also Para 2 above, we report that:

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

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

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

d) In our opinion, the Balance , Profit and Loss Account and Cash Flow Statement dealt with by this report have been prepared in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956;

e) On the basis of written representations received from the directors, as on 30th June 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion, and according to the best of our information and according to the explanations given to us, the said accounts read with the Accounting Policies and Notes thereon in Schedule 28, give the information required by the Companies Act, 1956 in the manner so required and gives 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 30th June 2009,

b) In the case of Profit and Loss Account, of the profit for the period ended on that date, and

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

ANNEXURE

Re: M/s. VISION TECHNOLOGY INDIA LIMITED, Bangalore

(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) As per the information and explanations given to us, fixed assets have not been physically verified by the management during the year.

c) The Company has not disposed off any fixed assets during the year and hence provisions of this clause are not applicable to the Company.

ii) The company has not held any inventory at any time during the year and hence in our opinion, the provisions of Clause 4 (ii) (a), (b) and (c) of the said order are not applicable to the company.

iii) a) The company has not granted/taken any loans secured/unsecured from/to the company, firms, other parties covered in the register maintained under the Section 301 of the Companies Act 1956.

iv) In our opinion and according to the information and explanations given to us, the internal control should be further strengthened in order to be commensurate with the size of the company and the nature of its business with regard to purchase of plant 6t machinery, equipment and other assets if any. However, on the basis of our examination and information and according to the explanations given to us, we have neither come across, nor have we been informed of any instance of major weaknesses and continuing failure to correct 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 all 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 respect of each of the transactions exceeding the value of five lakhs rupees in respect of any party in the financial year under review made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956, they have been made at prices which are reasonable with regard to the prevailing market prices at the relevant time.

vi) The company has not accepted any deposit from the public and as such the provisions of paragraph 4(vi) of the said Order are not applicable.

vii) The company does not have a system for internal audit, and in our opinion, the internal audit system should be implemented considering the Companys size and nature of its business.

viii)The Central Government has not prescribed the maintenance of cost records as required under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956.

ix) a) According to the information and explanations given to us and on the basis of our examination of books of accounts, the company has not been regular in depositing with appropriate authorities any undisputed statutory dues including, Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Customs duty, Excise Duty, Cess and other material statutory dues applicable to the company. Following are the Statutory Dues which are outstanding for a period of more than Six Months from the date they became payable:

a) Tax Deducted At Source Rs. 206,105/-

b) Service Tax Rs. 1,043,176/-

c) Profession Tax Rs. 53,405/-

d) VAT Rs. 82,229/-

b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs Duty Wealth Tax, Excise Duty and Cess, which have not been deposited on account of any dispute.

x) In our opinion, the Companys accumulated losses at the end of the financial year are less than fifty percent of its net worth and it has not incurred any cash losses in the financial year and in the immediately preceding financial year.

xi) According to information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence provisions of this clause is not applicable.

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

xiii)ln our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

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

xv) According to information and explanations given to us, in our opinion, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi)ln our opinion, the company has not raised any term loans during the year. Accordingly, the provisions of clause 4(xvi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

xviii) During the year, the company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) During the year, the company has not issued any debentures.

xx) The Company has not raised any money by public issues during the year and hence, the provisions of paragraph 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

For S.JANARDHAN a ASSOCIATES CHARTERED ACCOUNTANTS Sd/- Place: Bangalore (VIJAY BHATIA) Date: 25.11.2009 PARTNER Membership No. 201862