Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with respect to 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 principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and 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 have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act, Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31,2015, its Profit / Loss, and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order; to the extent applicable.

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

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 those books and proper returns adequate for the purposes of our audit have been received from branches visited by us;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from branches visited by us;

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of written representations received from the directors as on March 31,2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act;

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 18 (B) (6) (A) to the financial statements;

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable (losses).

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

1. (a) The Company has maintained proper records showing full particulars including quantitative details & situation of the fixed assets, except details like year of purchase, cost of purchase etc are not readily available.

(b) All the fixed assets have not been physically verified by the management during the year under audit, but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company & the nature of its fixed assets. No material discrepancies were noticed on such verification.

2. The nature of the Company's business / activities during the year does not involve inventories & accordingly clauses 2(a), 2(b) & 2(c) of paragraph 4 of the Companies (Auditors Report) order 2015 are not applicable to the Company.

3. (a) The company has given loans to four parties covered in the register maintained under section 189 of the Companies Act, 2013. The maximum amount involved during the year was not determined by the management, since they are in the nature of current accounts and repayable on demand. The yearend balance of loan granted together with corporate guarantee given to such parties was Rs. 518.13 lakhs, which is within the maximum limits prescribed under section 185 & 186 of the Companies Act 2013 and under RBI Directions to Non Banking Financial Companies.

There are no written terms & conditions on which loans granted to Companies, Firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013, However, no irregularities of repayment of principal amount & interest amount by the parties were noticed.

(b) Since there are no written terms & conditions on which loans granted to Companies, firms / other parties listed in the register maintained under section 189 of the Companies Act, 2013, and since they are in the nature of current accounts repayable on demand there are no overdue amounts of loans granted.

4. In our opinion & according to the information & explanations given to us, there is adequate internal control systems/procedures commensurate with the size of the company & the nature of its business, with regard to purchases & sales of fixed assets & with regard to sanction, disbursement & recovery of loans given by the Company. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weaknesses in the internal control system of the company in respect of these areas. The activities of the company do not involve purchase of Inventory and the sale of goods

5. In our opinion & according to the information & explanations given to us, the company is not required to comply with the directions issued by Reserve Bank of India under Non Banking Financial Companies (Reserve Bank) Directions, 1998, with respect to public deposits, since no deposits have been accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

6. The Central Government has not prescribed the maintenance of cost records under section 148 (1) of the Companies Act, 2013 for the nature of business of Company, Since the Company is not into manufacturing activity.

7. (a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess & other material statutory dues applicable to it. However, we are informed that the provisions of the Employees Provident Fund & Employees State Insurance Scheme are not yet applicable to the Company.

According to the information & explanations given to us, no undisputed amounts payable in respect of provident fund, employees state Insurance income tax, wealth tax, sales tax, service tax, customs duty, excise duty, value added tax cess & other material statutory dues were in arrears, as at 31-3-2015 for a period of more than 6 months from the date they became payable.

(b) According to the information & explanations given to us, except income tax, no dues of sale tax, customs duty, wealth tax, excise duty & cess which have not been deposited on account of any dispute.

There is a disputed income tax liability of Rs. 4,71,077/- for AY 06-07, which is under appeal with Commissioner of Income Tax (Appeals)-I, Bangalore. The dispute is on account of disallow ability of deduction claimed under section 10(23G) and expenses disallowed u/s 14Aand u/s 37 of the I.T. Act.

(c) There were no amounts which were required to be transferred to the Investor Education and protection fund by the company in accordance with the relevant provisions of the Companies Act, 1956 & rules made there under.

8. In our opinion, the company had no accumulated losses at the end of the financial year & the company has not incurred cash losses during the financial year covered by our audit & has not incurred cash losses during the immediately preceding financial year.

9. In our opinion & according to the information & explanations given to us, the company had generally not defaulted in repayment of dues to a Financial Institution, Bank or debenture holders.

10. We are informed that the company has given guarantee for the loan taken by another company under the same management from a Co-operative Bank for a total amount of Rs. 2,00,00,000/-. (Rs. Two crores) on the terms and conditions whereof, in our opinion, are not prima facie prejudicial to the interest of the company.

11. We are informed that, no term loans are raised by the Company during the year under audit. Hence, our comments on its utilization is not required.

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

                                   For VISHNUKANT JAJU & ASSOCIATES 

                                   CHARTERED ACCOUNTANTS 

                                   FRNo.014328W

PLACE : BANGALORE                  (VBJAJU) 

DATE : 6th May,2015                PROPRIETOR

                                   M. No. 044988