Auditor Report of Vybra Automet Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of M/s.VYBRA AUTOMET LIMITED, which comprise the Balance Sheet as at March 31,2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with general circular 15/2013 dated 13th September 2013 of the Ministry of Corporate affairs in respect of Section 133 of Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement,whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment,including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Basis of qualified opinion:

a) The company is in the process of identifying slow moving/ non moving items and the pending finalization of said process and we are not in a position to quantify the provision required to be made in the profit & loss account.

b) There are certain dies which are not in use in the regular production and also there are no present orders for those dies. We are not in a position to comment on correctness and adequacy/inadequacy of valuation,sinceitis technical in nature.

c) Debtors/Creditors are subject to confirmation Qualified Opinion

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

a) in the case ofthe Balance Sheet,ofthe state of affairs ofthe Company as at March31,2014;

b) in the case ofthe Profit and Loss Account,ofthe Loss for the year ended on that date.

c) In the case ofthe cash flow statement,ofthe cash flows for the year ended on that date.

Emphasis of matter:

The principle amount of Rs.2750 Lacs and interest of Rs.218.06 lacs is due to M/s. Edelweiss Asset Reconstruction Company (EARC). No repayment of installment and interest paid during the year. The account become irregular and lender has initiated action under SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT (SARFAESIA) Notice. Hence, no interest is provided. The company is under negotiation with the lender. (Attention is drawn towards note 6 of notes on Secure Loansofnote3Non current liabilities in the financial statements for the FY 2013-14.)

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by the Companies (Auditor''s Report) Order,2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified inparagraphs 4 and 5 ofthe Order. Subject to:

2. As required by section 227(3) of theAct,we report that:

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

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

c) The Balance Sheet, Statement of Profit and Loss and the cash flow statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and statement of cash flow statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 except AS -15:Accounting for Employee retirement benefits (Revised).

e) On the basis of written representations received from the directors as on March 31,2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditor''s Report

(Referred to in paragraph (3) of our report of even date)

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

(b) The fixed assets have been physically verified by the management and no material discrepancies were noticed all such verifications.

(c) The company has not disposed ofthe substantial part ofthe fixed Assets which will affect the going concern.

II. (a) The physical verification of the inventory has been conducted at reasonable intervals by the management.

(b) In our opinion the physical verification of inventory followed by the management is reasonable and adequate in relation to the size of company and the nature of business.

(c) In our opinion the company is maintained proper records of inventory and no material discrepancies were noticed on physical verification of inventories.

III. (a) The company has neither granted any loans nor advanced any amounts to companies/ firms or other parties covered in the register maintained under section 301 oftheCompaniesAct,1956. Since the company has not granted any loans to companies/firms or other parties covered under section 301 of the Companies Act,1956, the provisions of subclauses(b),(c)and(d)arenotapplicabletothe company.

(b) The company has not obtained Inter corporate Deposits/unsecured loans from the parties covered under section 301 ofthe Companies Act, 1956, the provisions of sub clauses (f) and (g) are not applicable to the company.

iv. In our opinion there is an adequate internal control procedure commensurate with the size of the company and nature ofthe business for purchase of inventories and fixed assets and for sale of goods.

v. (a) Accordingtoinformationandexplanationgiventous,allthe transactions required to be entered in the register pursuance to the provisions of section 301 of the Companies Act, 1956 have been so entered.

(b) According to information and explanation given to us,the transactions exceeding Rs.5 lacs covered under the register maintained under section 301 ofthe Companies Act,are reasonable having regard to the prevailing market prices at the time of entering the transaction.

vi. According to information and explanation given to us,the company has not accepted deposit from the public as per the provisions of Section 58Aand Section 58AA ofthe Companies Act, 1956.

vii. The company has an internal audit system commensurate with the size and nature of business.

viii. According to information and explanation given to us,the Central Government has prescribed for the maintenance of cost records under section 209 (1) (d) ofthe Companies Act, 1956 for the products manufactured by the Company and the company has appointed a cost consultant to design the cost records and the same is under progress.

ix. (a) As per the records of the company, it has been depositing undisputed statutory dues Sales Tax, Provident Fund/ESI and Income Tax, even though there were certain delays. The Statutory dues pending more than six| months which were undisputed as on 31.03.2014in respect of:

* Income tax payable for the AY 2008-09 Rs.8.09 lacs and

* Provident Fund of Rs.72.66 Lacs

* ESI Payable of Rs.5.62Lacs

* Sales Tax of Rs.7.02Lacs

(b) On the basis of examination of the documents and records there are no disputed Statutory Liabilities.

x. During the Financial Year under consideration,the company has incurred cash loss of Rs.21.08 Crores (Previous Year Rs.4.12 Crores) and the accumulated Losses are Rs.41.29 Crores as on 31st March, 2014 and exceeding 50% of Share Capital and free ReservesofRs.45.87 Crores.

xi. On the basis of information available and explanation given to us, the company is in the process of preparing a package for the defaulted payments / overdue payments with financial institution in view of the economic slowdown.

xii. According to information and explanation given to us,the company has not granted any loans or advances on the basis of security by way of pledgeofshares,debenturesor securities.

xiii. In our opinion,the company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society.Therefore,the provisions of clause4(xiii) of the Companies (Auditor''s Report) Order,2003 are not applicable to the company.

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

xv. According to the information and explanation given to us, the company has not given any guarantee for the loans taken by others from Bank or Financial Institution.

xvi. According to the information and explanation given to us,the company applied the Term Loans for the purpose for which the loans were obtained.

xvii. According to the information and explanation given to us and on overall examination ofthe Balance Sheet ofthe company,we report that no funds raised on short term basis have been utilized for long term investment except for working capital.

xviii. According to information and explanation given to us, the company has not made any preferential allotment of Share to parties and companies covered under section 301 of the Companies Act 1956.

xix. According to information and explanation given to us,the company has not raised any debentures during the year underaudit.

xx. According to information and explanation given to us, the company has not raised any monies from the public by way of issue of shares to the public.

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

As per our report of even date For JAWAHAR AND ASSOCIATES Chartered Accountants FRN : 0012815

Sd/- Place : HYDERABAD V.UMAPATHI Date : 29-05-2013 Partner M.No.21887

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of M/s.VYBRA AUTOMET LIMITED, which comprise the Balance Sheet as at March 31,2013, and the Statement of Profit and Loss for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility forthe Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonableassuranceaboutwhetherthefinancialstatementsare free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor''s judgment,including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

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

a) Debtors/Creditors are subject to confirmation

b) The company is in the process of identifying slow moving/ non moving items and the pending finalization of said process and we are not in a position to quantify the provision required to be madein theprofit&lossaccount.

c) There are certain dies are not in use in the regular production and also there are no present orders for those dies. We are in the opinion of provision/write off is required to make a true and fair view picture of the loss reported and further, we state that we are not in a position to quantify required for provision/write off for those dies.

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 forthe purpose of ouraudit;

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

c) The Balance Sheet, 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,Statement of Profit and Loss and statement of cash flow statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 except AS -15: Accounting for Employee retirement benefits (Revised).

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

I. Annexure to the Auditor''s Report (Referred to in paragraph (3) of our report of even date)

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

(b) Thefixed assets have been physicallyverified by the management and no material discrepancies were noticed all such verifications.

(c) The company has not disposed of the substantial part of the fixed assets which will affect the going concern.

II. (a) The physical verification of the inventory has been conducted at reasonable intervals by the management.

(b) In our opinion the physical verification of inventory followed by the management is reasonable and adequate in relation to the size of company and the nature of business.

(c) In our opinion the company is maintained proper records of inventory and no material discrepancies were noticed on physical verification of inventories.

III. (a) The company has neither granted any loans nor advanced any amounts to companies/ firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.Sincethe company has not granted any loans to companies/firms or other parties covered under section 301 of the Companies Act, 1956, the provisions of sub clauses (b), (c) and (d) are not applicable to the company.

(b) The company has not obtained Inter corporate Deposits /unsecured loans from the parties covered under section 301 of the Companies Act, 1956, the provisions of sub clauses (f) and (g) are not applicable to the company.

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

(d) The company is regular in repaying the principal amounts as stipulated and has been regular in the payments.

iV. In our opinion there is an adequate internal control procedure commensurate with the size of the company and nature of the business for purchase of inventories and fixed assets and for sale of goods.

V. (a) According to information and explanation given to us, all the transactions required to be entered in the register pursuance to the provisions of section 301 of the Companies Act, 1956 have been so entered.

(b) According to information and explanation given to us, the transactions exceeding Rs.5 lacs covered under the register maintained under section 301 of the Companies Act, are reasonable having regard tothe prevailing market prices at the time of entering the transaction.

VI. According to information and explanation given to us, the company has not accepted deposit from the publicasperthe provisions of Section 58Aand Section 58AA of the Companies Act,1956.

VII. The company has an internal audit system commensurate with the size and nature of business.

VIII. According to information and explanation given to us, the Central Government has prescribed for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for the products manufactured by the Company and the company has appointed a cost consultant to design the cost records and the same is under progress.

iX. (a) As per the records of the company, it has been depositing undisputed statutory dues Sales Tax, Provident Fund/ ESI and Income Tax, even though there were certain delays. The Statutory dues pending more than six months which were undisputed as on 31.03.2013 in respect of Incometaxpayableforthe AY''2008-09 Rs.8.09 lacs and Provident Fund of Rs.55.22Lacs

ESIPayableof Rs.11.72 Lacs

SalesTaxof Rs. 5.75 Lacs

(b) On the basis of examination of the documents and records there are no disputed Statutory Liabilities.

X. During the Financial Year under consideration, the company has incurred cash loss of Rs.4.12 Crores and the accumulated Losses are Rs.16.63 Crores as on 31st March,2013 and not exceeding 50% of Share Capital and free Reserves of Rs.45.87Crores.

XI. On the basis of information available and explanation given to us, the company is in the process of preparing a package for the defaulted payments / overdue payments with financial institution in view of the economic slowdown.

XII. According to information and explanation given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares,debentu res or securities.

XIII. In our opinion, the company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions ofclause4(xiii)ofthe Companies (Auditor''s Report) Order,2003 are not applicable to the company.

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

XV. According to the information and explanation given to us, the company has not given any guarantee for the loans taken by others from Bankor Financial Institution.

XVI. According to the information and explanation given to us, the company applied the Term Loans for the purpose for which the loans were obtained.

XVII. According to the information and explanation given to us and on overall examination of the Balance Sheet of the company, we report that no funds raised on short term basis have been utilized for long term investment except forworking capital.

XVIII.According to information and explanation given to us, the company has made preferential allotment by conversion of Share Warrants to parties covered under section 301 of the Companies Act 1956. In our opinion the price is as per the SEBI Preferential Allotment Rules and not prejudicial to the interest of the company.

XIX. According to information and explanation given to us, the company has not raised any debentures during the year under audit.

XX. According to information and explanation given to us, the company has not raised any monies from the public by way of issue of shares to the public.

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



As per our report of even date

For JAWAHAR AND ASSOCIATES

Chartered Accountants FRN:0012815

Sd/-

Place: HYDERABAD V.UMAPATHI

Date : 29-05-2013 Partner

M No. 21887

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Mar 31, 2012

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

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

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

4. Further to our comments in the Annexure referred to above, and subject to :

a) Debtors/Creditors are subject to confirmation

b) The company is in the process of identifying slow moving/non moving items and the pending finalization of said process and we are not in a position to quantify the provision required to be made in the profit & loss account.

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

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

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

(IV) In our opinion, the Balance sheet, Profit and Loss Account and Cash Flow statement dealt with by this report comply with accounting standards referred to except AS-15 retirement benefits to employees,in sub-section (3c)of the Section 211 of the Companies Act, 1956;

(V) On the basis of written representations received from the Directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director in terms of Clause (g) of sub-section (1) of section 274 of the Companies Act,1956.

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

a) in the case of the Balance sheet, of the state of affairs of the Company as at 31st March,2012

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

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

Annexure to the Auditor's Report

(Referred to in paragraph (3) of our report of even date)

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

(b) The fixed assets have been physically verified by the management and no material discrepancies were noticed all such verifications.

(c) The company has not disposed of the substantial part of the fixed assets which will affect the going concern.

II. (a) The physical verification of the inventory has been conducted at reasonable intervals by the management.

(b) In our opinion the physical verification of inventory followed by the management is reasonable and adequate in relation to the size of company and the nature of business.

(c) In our opinion the company is maintained proper inventory records and no material discrepancies were noticed on physical verification of inventories.

III. (a) The company has neither granted any loans nor advanced any amounts to companies/firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Since the company has granted any loans to companies/firms or other parties covered under section 301 of the Companies Act, company.

(b) The company has not obtained Inter corporate deposits/unsecured loans from the parties covered under section 301 of the companies Act, 1956, the provisions of sub clauses (f) and (g) are not applicable to the company.

(c) In our opinion, the terms and conditions on which loan has been taken from company liste in register maintained under section 301 of the Companies Act, 1956 are not, prima facie,pre judicial to the interest of the Company.

(d) The company is regular in repaying the principal amounts as stipulated and has been regular in the payments.

IV. In our opinion there is an adequate internal control procedure commensurate with the size of the company and nature of the business for purchase of inventories and fixed assets and for sale of goods.

V. (a) According to information and explanation given to us, all the transactions required to be entered in the register pursuance to the provisions of section 301 of the Companies Act, 1956 have been so entered.

(b) According to information and explanation given to us, the transactions exceeding Rs. 5 lacs covered under the register maintained under section 301 of the Companies Act, are reasonable having regard to the prevailing market prices at the time of entering the transaction.

VI. According to information and explanation given to us, the company has not accepted deposit from the public as per the provisions of Section 58A and Section 58AA of the Companies Act,1956.

VII. The company has an internal audit system commensurate with the size and nature of business.

VIII. According to information and explanation given to us, the Central Government has prescribed for the maintenance of cost records under section 209(1) (d)of the Companies Act, 1956 for the products manufactured by the Company and the company has appointed a cost consultant to design the cost records and the same is under progress.

IX. (a) As per the record of the company, it has been depositing undisputed statutory dues Sales Tax, Provident Fund/ESI and Income Tax, even though there were certain delays. The Statutory dues pending more than six months which were undisputed as on 31.03.2012 in respect of

- Income tax payable for the AY 2008-09 Rs. 29.05 lacs and

- Provident Fund of Rs. 19.70 Lacs

- ESI Payable of Rs. 3.15 Lacs

- Sales Tax of Rs. 10.39 Lacs

(b) On the basis of examination of the documents and records there are no disputed statutory liabilities.

X. During the Financial Year under consideration, the company has not incurred any cash loss (Previous Year Rs. 822.86 lacs) and the accumulated Losses are Rs. 19.03 Crores and not exceeding 50% of Share Capital and free Reserves of Rs. 42.20 Crores.

XI. On the basis of information available and explanation given to us, the company has obtained restructed package for defaulted payments/over due payments from the banks inview of the economic slow down.

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

XIII In our opinion, the company is not a chit Fund or a Nidhi/Mutual Benefit Fund/Society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

XIV. In our opinion, the company is not dealing in or trading to 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 the information and explanation given to us the company has not given any guarantee for the loans taken by others from Bank or Financial Institution.

XVI. According to the information and explanation given to us, the Company applied the Terms Loans for the purpose for which the loans were obtained.

XVII. According to the information and explanation given to us and on overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been utilized for long term investment except for working capital.

XVIII. According to information and explanation given to us, the company has made preferential allotment by conversion of Share Warrants to parties covered under section 301 of the Companies Act 1956. In our opinion the price is as per the SEBI Preferential Allotment Rural and not prejudicial to the interest of the company.

XIX. According to information and explanation given to us, the company has not raised any debentures during the year under audit.

XX According to information and explanation given to us, the company has not raised any monies from the public by way of issue of shares to the public.

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



For JAWAHAR AND ASSOCIATES Chartered Accountants

Sd/- V.UMAPATHI PARTNER

Place : Hyderabad Date : 23-05-2012

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Mar 31, 2010

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

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

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs4 and 5 of the said order.

4 Further to our comments in the Annexure referred to above.and subject to:

a) Debtors/advances are subject to confirmation

b) The company is in the process of identifying slow moving/non moving items and the pending finalization of said process and we are not in a position to quantify the provision required to be made in the profit & loss account.

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

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

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

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

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

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

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

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph (3) of our report of even date)

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

(b) The fixed assets have been physically verified by the management and no material discrepancies were noticed all such verifications.

(c) The company has not disposed of the substantial part of thefixed assets which will affect the going concern.

II. (a) The physical verification of the inventory has been conducted at reasonable intervals by the management.

(b) In our opinion the physical verification of inventory followed by the management is reasonable and adequate in relation to the size of company and the nature of business.

(c) In our opinion the company is maintained proper records of inventory and no material discrepancies were noticed on physical verification of inventories.

III. a) The company has neither granted any loans nor advanced any amounts to companies/ firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.Since the company has not granted any loans to companies/firms or other parties covered under section 301 of the Companies Act, 1956, the provisions of sub clauses (b), (c) and (d) are not applicable to the company.

(b) The company has obtained Inter corporate deposits/unsecured loans from the parties covered under section 301 of the Companies Act, 1956.

Name of the Party Amount Due as on 31.03.2010 Maximum Amount Due during the year

Sri V A Norhi Nil Nil



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

(d) The company is regular in repaying the principal amounts as stipulated and has been regular in the payments.

IV. In our opinion there is an adequate internal control procedure commensurate with the size of the company and nature of the business for purchase of inventories and fixed assets and for sale of goods.

V. (a) According to information and explanation given to us,all the transactions required to be entered in the register pursuance to the provisions of section 301 of the Companies Act, 1956 have been so entered.

(b) According to information and explanation given to us, the transactions exceeding Rs.5 lacs covered under the register maintained under section 301 of the Companies Act, are reasonable having regard to the prevailing market prices at the time of entering the transaction.

VI. According to information and explanation given to us,the company has not accepted deposit from the public as per the provisions of Section 58A and Section 58AA of the Companies Act, 1956.

VII. The company has an internal audit system commensurate with the size and nature of business.

VIII. According to information and explanation given to us,the Central Government has prescribed for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 for the products manufactured by the Company and the company has appointed a cost consultantto design the cost records and the same is under progress.

IX. (a) As per the records of the company, it has been depositing undisputed statutory dues Sales Tax, Excise Duty, Provident Fund/ESIeven though there were certain delays. The Statutory dues as on 31.03.2010 in respect of

- Gratuitypayable Rs.56.04 lacs

- Income tax payable for the AY 2008-09 Rs.29.05 lacs and

- ProvidentFundofRs.55.65Lacs

- ESIPayableoi:Rs.2.38Lacs

b) On the basis of examination of the documents and records there are no disputed statutory liabilities.

X. The company has incurred a cash loss of Rs. 1386.44 lacs in the financial year 2009-10 (Previous Year Rs.897.67 lacs). The accumulated losses are less than fifty percentage of net worth of the company at the end of the financial year.

XI. On the basis of information available and explanation given to us, the company has obtained restructured package for defaulted payments/overdue payments from the banks inviewoftheeconomicslowdown.

XII. According to information and explanation given to us,the company has not granted any loans or advances on the basis of security by way of pledge of shares.debentures orsecurities.

XIII. In our opinion, the company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society.Therefore,the provisions of clause 4(xiii) of the Companies (Auditors Report) Order,2003 are not applicable to the company.

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 the information and explanation given to us, the company has not given any guarantee for the loans taken by others from Bankor Financial Institution.

XVI. According to the information and explanation given to us, the company applied theTerm Loans for the purpose for which the loans were obtained.

XVII. According to the information and explanation given to us and on overall examination of the Balance Sheet of the company, we report that no funds raised on short term basis have been utilized for long term investment except for working capital.

XVIII. According to information and explanation given to us, the company has not made any preferential allotment of shares to parties covered under section 301 of the Companies Act, 1956.

XIX. According to information and explanation given to us, the company has not raised any debentures during the year underaudit.

XX. According to information and explanation given to us, the company has not raised any monies from the public by way of issue of shares to the public.

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

For JAWAHAR AND ASSOCIATES

Chartered Accountants

Sd/-

Place ; Hyderabad V.UMAPATHI

Date : 7th June, 2010 PARTNER