Niwas Spinning Mills Ltd. இன் முடிவுகள்

Mar 31, 2014

We have audited the accompanying financial statements of NIWAS SPINNING MILLS LIMITED,(the "Company"), which comprises the Balance sheet as at 31st March, 2014 the statements of Profit & Loss and cash flow statements for the year than ended and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

The Company''s Managements is responsible for the preparation of this financial Statements that give a true and fair view of the financial position, financial performance and cash flow of the company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Company Act, 1956 ("The Act") read with the general circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the presentation of 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 Standard on Auditing issued by the Institute of Chartered Accountants of the 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 of material misstatements.

An audit involves performing procedure selected depend on the auditor''s judgment including the assessment of the risk of material misstatements in the financial statements whether due to fraud or error In making those risk assessments the auditors considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedure that are appropriate in the circumstances. An audit also include evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by managements, 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 accordance to the explanation given to us the accompanying financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India

a In the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2014; b In the case of the Statement of Profit & Loss, of the Loss of the Company 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

Report on other Legal and Regulatory Requirements

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 227of the Act, we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

As required by section 227 (3) of the Act we report that:

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

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

c) The balance sheet, statement of profit & loss and the cash flow statement dealt with by this report are in agreement with the books of accounts;

d) In our opinion the balance sheet, statement of profit & loss and Cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act 1956 to the extent applicable;

e) On the basis of written representation received from the directors as on 31st March, 2014 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2014 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) Since the central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

1. a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information. The Company has taken certain machineries on lease basis since 2004-05 and same are held by the Company over lease from lessor.

b. All the assets have not been physically verified by the management during the year but there is a regular program of verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As explained, the reconciliation of physical inventory of plant and machinery with book records is almost over and the Company is in process of reconciliation of physical inventory with book records in respect of furniture, fixtures and office equipment, hence material discrepancies, if any cannot be ascertain at this stage which in the opinion of management will be NIL.

c. The Company has not disposed-off substantial / major part of fixed assets during the year, except absolute/scrap asset of Rs.9.50 Lacs.

2. a. As explained to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, 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. In our opinion and according to the information and explanations given to us and on the basis of examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noted on physical verification as compared to books and records were not material and have been properly dealt with in the books of accounts.

3. According to the information and explanations given to us, the Company has taken certain loan from the parties listed in the Register maintained under Section 301 of the Companies Act, 1956. However, the Company has not granted any loan [secured or unsecured] to the parties listed in the Register maintained under section 301 of the Companies Act, 1956 and accordingly clause 3 (i) to (iv) and clause 3 (v) to (vi) of the order is not applicable.

4. On the basis of checks carried out during the audit and as per explanations given to us, we are of the opinion that, there are adequate internal control procedures commensurate with the size of the Company and nature of its business; with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

5. In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

a. Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered.

b. According to the information and explanations given to us, and excluding certain transactions of purchase of goods and material of special nature for which alternate quotations are not available, where each of such transactions is in excess of Rs. 5,00,000/- (Five Lacs) in respect of any party. In our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public and therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules there under are not applicable to the Company.

7. In our opinion, Company does not have any formal internal audit system commensurate with the size and the nature of its business; however we are explained that its internal control systems are adequate to cover Internal Audit systems.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained

9 a According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income- Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year except an amount of Rs 3.07 Lacs towards Contribution of P.F. not made pertaining to period May 13 to Mar 14

b According to the records of the Company and information and explanations given to us, disputed Excise Duty demands aggregating to Rs 11.82 Lacs have not been deposited. The said dispute is pending before Appellate Tribunal. Also there is a disputed Income Tax for the Ass.Yr 95-96 demands aggregating to Rs 10.18 lacs out of which Rs 8.05 lacs have been deposited / adjusted and the balance is still required to be paid.

10 The Company has accumulated losses as at the end of the year and the Company has incurred cash losses during the current and immediately preceding financial year.

11 Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has defaulted in the repayment of dues to financial institutions banks and debenture-holders

12 According to the information and explanations given to us, 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 or Mutual Benefit Fund/ Societies are not applicable to the Company

14 a The Company is not in the business of

dealing or trading in shares. Based on the records examined by us and according to the information and explanations given to us we are of the opinion that the Company is maintaining proper record of the investments, which are negligible and that timely entries have been made in these records

b Based on our audit procedures and to the best of our knowledge and belief and according to the information and explanations given to us, the investments including shares and securities have been held by the Company in its own name

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

16 According to the information and explanations given to us, the terms loans raised during the year have been applied for the purpose for which they were raised.

17 According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa

18 The Company has not made any preferential allotment to parties and companies covered under register maintained under section 301 of the Companies Act, 1956 during the year and the question of whether the price at which the shares have been issue prejudicial to the interest of the Company does not arise

19 According to the information and explanations given to us and the records examined by us, securities have been created in respect of the debentures issued

20 The Company is a Sick Industrial Company within the meaning of clause (O) sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act 1985

21 The Company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise

22 To the best of our knowledge and belief and according to the information and explanations given to us no fraud on or by the Company was noticed or reported during the year

For B. M. Gattani & Co. Chartered Accountants Place : Camp - Solapur Firm Reg. No. 113536W Date : 28-05-2014 (B. M. Gattani) Proprietor Membership No. 47066

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Mar 31, 2012

We have audited the attached Balance Sheet of NIWAS SPINNING MILLS LIMITED, as at 31st March, 2012 and the Profit & Loss Account and the Cash Flow statement for the year ended on that date. 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.

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 misstatements. An audit also includes assessing the examining on test basis, evidence supporting the amounts and disclosure 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.

We report as follows:

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) 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. Further to our comments in the Annexure referred to in paragraph 1 above.

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

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

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

iv) In our opinion, subject to the notes on accounts, the Balance Sheet and Profit & Loss Account and Cash flow Statement dealt by this report comply with the accounting standards as referred to in subsection (3C) of Section 211 of the Companies Act, 1956;

v) On the basis of written representation received from the Directors, as on 31st March 2009 and taken on record by the board of Directors, we report that all of the Directors are 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 Companies Act, 1956. vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the Company's Accounting Policies and the Notes thereto, give the information required by the Companies Act, 1956, in the manner so required and give subject to note no B-4 regarding non provision of interest on secured loans, a true and fair view in conformity with the accounting principles generally accepted in India. (Subject to the Notes and Significant Accounting Policies given in Note 1)]

a. In the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2012; and

b. In the case of the Profit & Loss Account, of the Loss of the Company 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.

ANNEXURE OF THE AUDITOR'S REPORT Referred to in paragraph 1 of our Report of even date.

1.

a. The Company has maintained proper records showing full particulars including quantitative de- tails of fixed assets. The Company has taken certain machineries on lease basis since 2004-05 and same are held by the Company over lease from lesser.

b. All the assets have not been physically verified by the management during the year but there is a regular program of verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As explained, the reconciliation of physical inventory of plant and machinery with book records is almost over and the Company is in process of reconciliation of physical inventory with book records in respect of furniture, fixtures and office equipment, hence material discrepancies, if any can not be ascertain at this stage which in the opinion of management will be NIL. c. The Company has not disposed-off any substantial / major part of fixed assets during the year, except absolute / scrap asset of Rs. 21.44 Lacs. 2.

a. As explained to us the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company & the nature of its business.

c. In our opinion and according to the information and explanations given to us and on the basis of examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noted on physical verification as compared to books and records were not material and have been properly dealt with in the books of accounts.

3. According to the information and explanations given to us, the Company has not taken any loan from the parties listed in the Register maintained under Section 301 of the Companies Act, 1956; neither the Company has granted any loan [secured or unsecured] to the parties listed in the Register maintained under section 301 of the Companies Act, 1956 and accordingly clause 3 (i) to (iv) and clause 3 (v) to (vi) of the order is not applicable.

4. On the basis of checks carried out during the audit and as per explanations given to us, we are of the opinion that, there are adequate internal control procedures commensurate with the size of the Company and nature of its business; with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

5. In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

a. Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered.

b. According to the information and explanations given to us, and excluding certain transactions of purchase of goods and material of special nature for which alternate quotations are not available, where each of such transactions is in excess of Rs. 5,00,000/- (Five Lacs) in respect of any party. In our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public and therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules there under are not applicable to the Company.

7. In our opinion, Company does not have any formal internal audit system commensurate with the size and the nature of its business; however we are explained that its Internal control systems are adequate to cover Internal Audit systems.

8 We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained.

9 a According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance Income-Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty Cess and other statutory dues with the appropriate authorities during the year. b According to the records of the Company and information and explanations given to us, disputed Excise Duty demands aggregating to Rs. 11.82 Lacs have not been deposited. The said dispute is pending before Appellate Tribunal. Also there is a disputed Income Tax for the Ass.Yr 95-96 demands aggregating to Rs 10.18 lacs out of which Rs 7.38 lacs have been deposited & the balance is still required to be paid.

10 The Company has accumulated losses as at the end of the year and the Company has incurred cash losses during the current and immediately preceding financial year.

11 Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has defaulted in the repayment of dues to financial institutions banks and debenture-holders.

12 According to the information and explanations given to us, 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 or Mutual Benefit Fund/ Societies are not applicable to the Company.

14.

a. The Company is not in the business of dealing or trading in shares. Based on the records examined by us and according to the information and explanations given to us, we are of the opinion that the Company is maintaining proper record of the investments, which are negligible and that timely entries have been made in these records.

b. Based on our audit procedures and to the best of our knowledge and belief and according to the information and explanations given to us, the investments including shares and securities have been held by the Company in its own name.

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

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans have been applied for which they were raised. During the year under report there are no fresh term loans availed.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa.

18. The Company has not made any preferential allotment to parties and companies covered under register maintained under section 301 of the Companies Act, 1956 during the year and the question of whether the price at which the shares have been issue prejudicial to the interest of the Company does not arise.

19. According to the information & explanations given to us & the records examined by us, securities have been created in respect of the debentures issued.

20. The Company is a Sick Industrial Company within the meaning of clause (O) sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

21. The Company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

22. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For B. M. Gattani & Co.

Chartered Accountants

Place : Camp - Solapur Firm Reg. No. 113536W

Date : 04-09-2012 (B. M. Gattani)

Proprietor

Mem. No. 47066

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Mar 31, 2011

We have audited the attached Balance Sheet of NIWAS SPINNING MILLS LIMITED, as at 31st March, 2011 and the Profit & Loss Account and the Cash Flow statement for the year ended on that date. 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

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 misstatements An audit also includes assessing the examining on test basis, evidence supporting the amounts and disclosure 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.

We report as follows:

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) 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. Further to our comments in the Annexure referred to in paragraph 1 above

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

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

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

iv) In our opinion, subject to the notes on accounts, the Balance Sheet and Profit & Loss Account and Cash flow Statement dealt by this report comply with the accounting standards as referred to in subsection (3C) of Section 211 of the Companies Act, 1956;

v) On the basis of written representation received from the Directors, as on 31st March 2009 and taken on record by the board of Directors we report that all of the Directors are disqualified as on 31st March 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of Companies Act 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us the said accounts, read together with the Company's Accounting Policies and the Notes thereto, give the information required by the Companies Act, 1956, in the manner so required and give subject to note no B-4 regarding non provision of interest on secured loans, a true and fair view in conformity with the accounting principles generally accepted in India. (Subject to the Notes and Significant Accounting Policies given in Schedule K)]

a In the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2011; and

b In the case of the Profit & Loss Account, of the Loss of the Company 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

ANNEXURE OF THE AUDITOR'S REPORT Referred to in paragraph 1 of our Report of even date.

a The Company has maintained proper records showing full particulars including quantitative details of fixed assets The Company has taken certain machineries on lease basis since 2004-05 and same are held by the Company over lease from lesser.

b All the assets have not been physically verified by the management during the year but there is a regular program of verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As explained, the reconciliation of physical inventory of plant and machinery with book records is almost over and the Company is in process of reconciliation of physical inventory with book records in respect of furniture, fixtures and office equipment, hence material discrepancies, if any can not be ascertain at this stage which in the opinion of management will be NIL.

c The Company has not disposed-off any substantial / major part of fixed assets during the year

2

a As explained to us the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b In our opinion and according to the information and explanations given to us, 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 In our opinion and according to the information and explanations given to us and on the basis of examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noted on physical verification as compared to books and records were not material and have been properly dealt with in the books of accounts.

3. According to the information and explanations given to us, the Company has not taken any loan from the parties listed in the Register maintained under Section 301 of the Companies Act, 1956; neither the Company has granted any loan [secured or unsecured] to the parties listed in the Register maintained under section 301 of the Companies Act, 1956 and accordingly clause 3 (i) to (iv) and clause 3 (v) to (vi) of the order is not applicable.

4 On the basis of checks carried out during the audit and as per explanations given to us, we are of the opinion that, there are adequate internal control procedures commensurate with the size of the Company and nature of its business; with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

5 In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

a Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered.

b According to the information and explanations given to us, and excluding certain transactions of purchase of goods and material of special nature for which alternate quotations are not available, where each of such transactions is in excess of Rs.5,00,000/- (Five Lacs) in respect of any party. In our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public and therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules there under are not applicable to the Company.

7 In our opinion, Company does not have any formal internal audit system commensurate with the size and the nature of its business; however we are explained that its Internal control systems are adequate to cover Internal Audit systems.

8 We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained.

9 a According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance Income-Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty Cess and other statutory dues with the appropriate authorities during the year. b. According to the records of the Company and information and explanations given to us, disputed Excise Duty demands aggregating to Rs. 11.82 Lacs have not been deposited. The said dispute is pending before Appellate Tribunal. Also there is a disputed Income Tax for the Ass.Yr 95-96 demands aggregating to Rs 10.18 lacs out of which Rs 7.38 lacs have been deposited and the balance is still required to be paid.

10. The Company has accumulated losses as at the end of the year and the Company has incurred cash losses during the current and immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has defaulted in the repayment of dues to financial institutions banks and debenture-holders.

12. According to the information and explanations given to us, 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 or Mutual Benefit Fund/ Societies are not applicable to the Company.

14.

a. The Company is not in the business of dealing or trading in shares. Based on the records examined by us and according to the information and explanations given to us we are of the opinion that the Company is maintaining proper record of the investments, which are negligible and that timely entries have been made in these records.

b. Based on our audit procedures and to the best of our knowledge and belief and according to the information and explanations given to us, the investments including shares and securities have been held by the Company in its own name.

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

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans have been applied for which they were raised. During the year under report thee are no fresh term loans availed.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa.

18. The Company has not made any preferential allotment to parties and companies covered under register maintained under section 301 of the Companies Act, 1956 during the year and the question of whether the price at which the shares have been issue prejudicial to the interest of the Company does not arise.

19. According to the information and explanations given to us and the records examined by us, securities have been created in respect of the debentures issued.

20. The Company is a Sick Industrial Company within the meaning of clause (O) sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

21. The Company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

22. To the best of our knowledge and belief and according to the information and explanations given to us no fraud on or by the Company was noticed or reported during the year.

For B. M. Gattani & Co.

Chartered Accountants

Place : Camp - Solapur

Date : 27-08-2011 (B. M. Gattani)

Proprietor

Mem. No 47066

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Mar 31, 2010

We have audited the attached Balance Sheet of NIWAS SPINNING MILLS LIMITED, as at 31st March, 2010 and the Profit & Loss Account and the Cash Flow statement for the year ended on that date. 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.

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 misstatements. An audit also includes assessing the examining on test basis, evidence supporting the amounts and disclosure 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.

We report as follows:

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) 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. Further to our comments in the Annexure referred to in paragraph 1 above.

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

i) 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 and the Profit & Loss Account and Cash Flow Statement dealt by this report are in agreement with the books of account;

iv) In our opinion, subject to the notes on accounts, the Balance Sheet and Profit & Loss Account and Cash flow Statement dealt by this report comply with the accounting standards as referred to in subsection (3C) of Section 211 of the Companies Act, 1956;

v) On the basis of written representation received from the Directors, as on 31st March 2009 and taken on record by the board of Directors, we report that all of the Directors are disqualified as on 31st March 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with together with the Company's Accounting Policies and the Notes thereto, give the information required by the Companies Act, 1956, in the manner so required and give subject to note number B(1) (c) of significant accounting policies forming part of the accounts for non provision of Gratuity note no B(1)(d) regarding delayed payment of installments to ARCIL and non provision of interest thereof and note no 11 regarding non provision of interest on secured loans, a true and fair view in conformity with the accounting principles generally accepted in India (Subject to the Notes and Significant Accounting Policies given in Schedule K)]

a. In the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2010; and

b. In the case of the Profit & Loss Account, of the Loss of the Company 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.

ANNEXURE OF THE AUDITOR'S REPORT Referred to in paragraph 1 of our Report of even date.

1. a . The Company has maintained proper records showing full particulars including quantitative details of fixed assets. The Company has taken certain machineries on lease basis since 2004-05 and same are held by the Company over lease from lessor.

b . All the assets have not been physically verified by the management during the year but there is a regular program of verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As explained, the reconciliation of physical inventory of plant and machinery with book records is almost over and the Company is in process of reconciliation of physical inventory with book records in respect of furniture, fixtures and office equipment, hence material discrepancies, if any can not be ascertain at this stage which in the opinion of management will be NIL.

c . The Company has not disposed-off any substantial / major part of fixed assets during the year.

2.a . As explained to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, 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 . In our opinion and according to the information and explanations given to us and on the basis of examination of the records of inventory, the Company is maintaining proper records of inventory. The discrepancies noted on physical verification as compared to books and records were not material and have been properly dealt with in the books of accounts.

3. According to the information and explanations given to us, the Company has not taken any loan from the parties listed in the Register maintained under Section 301 of the Companies Act, 1956; neither the Company has granted any loan [secured or unsecured] to the parties listed in the Register maintained under section 301 of the Companies Act, 1956 and accordingly clause 3 (i) to (iv) and clause 3 (v) to (vi) of the order is not applicable.

4 . On the basis of checks carried out during the audit and as per explanations given to us, we are of the opinion that, there are adequate internal control procedures commensurate with the size of the Company and nature of its business; with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

5 . In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956: a . Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that needed to be entered into the register maintained under section 301 have been so entered. b. According to the information and explanations given to us, and excluding certain transactions of purchase of goods and material of special nature for which alternate quotations are not available, where each of such transactions is in excess of Rs. 5,00,000/- (Five Lacs) in respect of an y part y. In our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing prices at the relevant time.

6 . In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public and therefore, the provisions of Section 58A and 58AA of the Companies Act, 1956 and Rules there under are not applicable to the Compan y.

7 . In our opinion, Company does not have any formal internal audit system commensurate with the size and the nature of its business; however we are explained that its Internal control systems are adequate to cover Internal Audit systems.

8 . We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been maintained. W e ha ve not, howev er , made a detailed examination of the records with a view to determining whether they are accurate or complete.

9. a. According to the records of the Company and

information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty Cess and other statutory dues with the appropriate authorities during the year. b. According to the records of the Company and information and explanations given to us, disputed Excise Duty demands aggregating to Rs. 11.82 Lacs have not been deposited. The said dispute is pending before Appellate Tribunal. Also there is a disputed Income Tax for the Ass.Yr 95-96 demands aggregating to Rs 10.18 lacs out of which Rs 6.31 lacs have been deposited and the balance is still required to be paid. The matter is under subjudiced.

10. The Company has accumulated losses as at the end of the year and the Company has incurred cash losses during the current and immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has defaulted in the repayment of dues to financial institutions, banks and debenture-holders.

12. According to the information and explanations given to us, 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 or Mutual Benefit Fund/ Societies are not applicable to the Company.

14. a. The Company is not in the business of dealing or trading in shares. Based on the records examined by us and according to the information and explanations given to us, we are of the opinion that the Company is maintaining proper record of the investments, which are negligible and that timely entries have been made in these records.

b. Based on our audit procedures and to the best of our knowledge and belief and according to the information and explanations given to us, the investments including shares and securities have been held by the Company in its own name.

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

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans have been applied for which they were raised. During the year under report there are no fresh term loans availed.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa.

18. The Company has not made any preferential allotment to parties and companies covered under register maintained under section 301 of the Companies Act, 1956 during the year and the question of whether the price at which the shares have been issue prejudicial to the interest of the Company does not arise.

19. According to the information and explanations given to us and the records examined by us, securities have been created in respect of the debentures issued.

20. The Company is a Sick Industrial Company within the meaning of clause (O) sub-section

(1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

21. The Company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

22. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For B. M. Gattani & Co. Chartered Accountants Place : Camp - Solapur

Date : 28-08-2010 (B. M. Gattani)

Proprietor Mem. No. 47066

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Mar 31, 2009

We have audited the attached Balanca Sheet of NIWAS SPINNING MILLS LIMITED, as at 31st March, 2009 and the Profit & Loss Account and the Cash Flow statement for the year ended on that date. 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.

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 wnether the financial statements are free of material misstatements. An audit also includes assessing the examining on test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also include 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.

We report as follows :

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) 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. Further to our comments in the Annexure referred to in paragraph 1 above.

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

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

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

iv) In our opinion, subject to the notes on accounts, the Balance Sheet and Profit & Loss Account and Cash flow Statement dealt by this report comply with the accounting standards as referred to in subsection (3C) of Section 211 of the Companies Act, 1956;

v) On the basis of written representation received from the Directors, as on 31st March 2009 and taken on record by the board of Directors, we report that all of the Directors are disqualified as on 31st March 2009 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with together with the Companys Accounting Policies and the Notes thereto, give the information required by the Companies Act, 1956, in the manner so required and give subject to note number 8 (1) (c) of significant accounting policies forming part of the accounts for non provision of Gratuity, note no. B (1) (d) regarding delayed payment of instalments to ARCIL and non provision of interest thereof and note no. 11 regarding non provision of interest on secured loans, a true and fair view in conformity with the accounting principles generally accepted in India (Subject to the Notes and Significant Accounting Policies given in Schedule K)]

a. In the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2009; and

b. In the case of the Profit & Loss Account, of the Loss of the Company 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.

ANNEXURE OF THE AUDITORS REPORT Referred to In paragraph 1 of our Report of even date.

1. a. The Company has maintained proper records showing full particulars Including quantitative details of fixed assets. The Company has taken certain machineries on lease basis since 2004-05 and same are held by the Company over lease from lessor.

b. All the assets have not been physically verified by the management during the year but there Is a regular program of verification, which In our opinion, Is reasonable having regard to the size of the Company and the nature of Its assets, As explained, the reconciliation of physical Inventory of plant Bnd machinery with book records Is almost over and the Company Is In process of reconciliation of physical Inventory with book records in respect of furniture, fixtures and office equipment, hence material discrepancies, If any can not be ascertaJn at this stage which In the opinion of management will be NIL.

c. The Company has not dlsposed-off any substan- tial / major part of Fixed Assets during the year,

2. a, As explained to us, the Inventory has been physically verified during the year by the management. In our opinion, the frequency of verification Is reasonable.

b, In our opinion and according to the Information and explanations given to us, 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, In our opinion and according to the Information and explanations given to us and on the basis of examination of the records of Inventory, the Company Is maintaining proper records of Inventory, The discrepancies noted on physical verification as compared to books and records were not material and have been properly dealt with In the books of accounts.

3. According to the Information and explanations given to us, the Company has not taken any loan from the parties listed In the Register maintained under Section 301 of the Companies Act, 1956; neither the Company has granted any loan [secured or unsecured] to the parties listed In the Register maintained under section 301 of the Companies Act, 1956 and accordingly clause 3 (I) to (Iv) and clause 3 (v) to (vl) of the order Is not applicable.

4. On the basis of checks carried out during the audit and as per explanations given to us, we are of the opinion that, there are adequate Internal control procedures commensurate with the size of the Company and nature of Its business; with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

5. In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

a. Based on audit procedures applied by us, to the best of our knowledge and belief and according to the Information and explanations given to us, we are of the opinion that the transactions that needed to be entered Into the register maintained under section 301 have been so entered,

b. According to the Information and explanations given to us, and excluding certain transactions of purchase of goods and material of special nature for which alternate quotations are not available, where each of such transactions Is In excess of Rs. 5,00,000/- (Five Lacs) In respect of any party, In our opinion, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing prices at the relevant time.

6. In our opinion and according to the Information and explanations given to us, the Company has not accepted deposits from the public and therefore, the provisions of Section 5SA and 58AA of the Companies Act, 1956 and Rules there under are not applicable to the Company.

7. In our opinion, Company dots not have any formal Internal audit system commensurate with the size and the nature of Its business; however we are explained that its Internal control systems are adequate to cover Internal Audit systems.

B. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facia the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

9. a. According to the records of the Company and

Information and explanations given to us, the Company has been regular In depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty Cese and other statutory dues with the appropriate authorities during the year except Investor Education and Protection Fund. b. According to the records of the Company and Information and explanations given to us, disputed Excise Duty demands aggregating to Rs. 11.82 Lacs have not been deposited. The said dispute Is pending before Appellate Tribunal. Also there Is a disputed Income Tax for the Ass.Yr 95-96 demands aggregating to Rs 10.18 lacs out of which Rs 6.06 lacs have been deposited and the balance Is still required to be paid. The matter Is pending at the High Court.

10. The Company has accumulated losses as at the end of the year and the Company has Incurred cash losses during the current and immediately preceding financial year.

11. Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has defaulted In the repayment of dues to financial institutions, banks and debenture-holders.

12. According to the information and explanations given to us, 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, Nldhi or Mutual Benefit Fund/Societies are not applicable to the Company.

14. a, The Company Is not In the business of dealing or trading In shares. Based on the records examined by us and according to the Information and explanations given to us, we are of the opinion that the Company Is maintaining proper record of the Investments which are negligible and that timely entries have been made In these records,

b. Based on our audit procedures and to the best of our knowledge and belief and according to the Information and explanations given to us, the Investments Including shares and securities have been held by the Company In Its own name.

15. According to the Information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial Institutions.

16. To the best of our knowledge and belief and according to the Information and explanations given to us, term loans have been applied for which they were raised, During the year under report there are no fresh term loans availed.

17. According to the Cash Flow Statement and records examined by us and according to the Information and explanations given to us, on overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term Investment and vice versa.

18. The Company has not made any preferential allotment to parties and companies covered under register maintained under section 301 of the Companies Act, 1956 during the year and the question of whether the price at which the shares have been Issue prejudicial to the Interest of the Company does not arise.

19. According to the Information and explanations given to us and the records examined by us, securities have been created In respect of the debentures Issued.

20. The Company Is a Sick Industrial Company within the meaning of clause (0) sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

21. The Company has not raised money by any public Issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

22. To the best of our knowledge and belief and according to the Information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For B. M. Gattanl & Co. Chartered Accountants Place : Camp - Solapur

Sd/- Date : 25-08-2009 (B. M. Gattani)

Proprietor Membership No. 47066