Ginni Filaments Ltd

TO THE MEMBERS OF GINNI FILAMENTS LIMITED

1. We have audited the attached Balance Sheet of Ginni Filaments Limited as at31st March, 2012, the Statement of Profit and Loss and also the Cash Flow Statement forthe year ended on that date annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with Auditing Standards generally accepted inIndia. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material mis-statement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basisfor our opinion.

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

4. Further to our comments in the Annexure referred to in paragraph 3 above, we reportthat:

(i) We have obtained all the information and explanations, which to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;

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

(iv) In our opinion, subject to our comments hereinafter, the Balance Sheet, Statementof Profit and Loss and Cash Flow statement dealt with by this report, comply with theAccounting Standards referred to in sub-Section (3C) of Section 211 of the Companies Act,1956.

(v) On the basis of written representations received from the Directors, as on 31stMarch, 2012 and taken on record by the Board of Directors, we report that none of theDirectors is disqualified as on 31st March, 2012 from being appointed as a Director interms 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 theexplanations given to us, the said financial statements read together with SignificantAccounting Policies and Notes thereon and attached thereto give, the information requiredby the companies Act, 1956 in the manner so required and give a true and fair view inconformity 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 31stMarch, 2012,

b. in the case of the Statement of Profit and Loss, of the loss for the year ended onthat date; and

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

Referred to in paragraph 3 of our report of even date on accounts for the year ended31st March, 2012 of Ginni Filaments Limited

(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The company has physically verified certain assets during the year in accordancewith a programme of verification which, in our opinion, is reasonable having regard to thesize of the company and the nature of its assets. No material discrepancies were noticedon such verification.

(c) Fixed assets disposed off during the year were not substantial and therefore do notaffect the going concern status of the company.

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

(b) The procedures of physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the company and the nature of itsbusiness.

(c) The company is maintaining proper records of inventory. We are informed that thediscrepancies identified on physical verification of inventories as compared to bookrecords were not material and have been properly dealt with in the books of account.

(iii) As informed to us, the company has not granted/taken any loans, secured orunsecured to/from companies, firms or other parties covered in the register maintainedunder section 301 of the companies Act, 1956. Consequently, the requirements of clauses(iii) (b), (c), (d), (f) and (g) of paragraph 4 of the Order are not applicable for thecurrent year.

(iv) In our opinion and according to the information and explanations given to us,there is an adequate internal control system commensurate with the size of the company andthe nature of its business for the purchase of inventory, fixed assets and for the sale ofgoods and services. During the course of our audit, we have not observed any continuingfailure to correct major weakness in internal control system.

(v) (a) In our opinion and according to the information and explanations given to us,the transactions made in pursuance of contracts or arrangements, that need to be enteredin the Register maintained under section 301 of the Companies Act, 1956 have been soentered.

(b) According to information and explanations given to us, there is no transaction orarrangements exceeding the value of Rupees five lakhs in respect of any party during theyear and hence the question of reasonable prices in respect of such transactions withregard to prevailing market price does not arise.

(vi) The company has not accepted any deposit from the public during the year.

(vii) In our opinion, the company has an internal audit system commensurate with itssize and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the company pursuantto the Rules made by the Central Government for the maintenance of cost records undersection 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However, we have notmade a detailed examination of such accounts and records with a view to determine whetherthey are accurate or complete.

(ix) (a) According to the records of the company, undisputed statutory dues includingprovident fund, investor education and protection fund, Income tax, sales tax, wealth tax,service tax, custom duty, excise duty, cess and other material statutory dues applicableto it have generally been regularly deposited with the appropriate authorities. Accordingto the information and explanations given to us, no undisputed amounts payable in respectof the aforesaid dues were outstanding as at 31st March, 2012 for a period of more thansix months from the date they became payable.

(b) According to the information and explanations given to us the statutory dues thathave not been deposited on account of matters pending before appropriate authorities areas under:

(x) The company’s accumulated losses at the end of the financial year are lessthan fifty per cent of its net worth. The Company has incurred cash losses during thefinancial year covered by the audit. It has not incurred cash losses in the immediatelypreceding financial year.

(xi) According to the information and explanations given to us, the company has notdefaulted in repayment of dues to financial institutions, banks or debenture holders.

(xii) The company has not granted loans and advances on the basis of security by way ofpledge of share, debentures and other 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’sReport) 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 theCompanies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xv) According to the information and explanations given to us the company has notgiven any guarantee for loans taken by others from Bank or financial institutions.

(xvi) To the best of our knowledge and belief and according to the information andexplanations given to us, no term loans are availed by the company during the year.

(xvii) According to the information and explanations given to us and on an overallexamination of the Balance Sheet of the company, we report that no funds raised on shortterm basis have been used for long term investment.

(xviii) The company has not made any preferential allotment of shares during the year.

(xix) The Company has created security or charge in respect of debentures issued.

(xx) The Company has not raised any money by a public issue during the year.Accordingly, the provisions of clause 4(xx) of the Companies (Auditor’s Report) Orderare not applicable.

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