Pasari Spinning Mills Ltd Auditors Report.

To the Members of PASARI SPINNING MILLS LIMITED

Report on the Financial Statements

We have audited the accompanying Financial Statements of M/s PASARI SPINNING MILLS LIMITED, ("the Company"), which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Cash Flow Statement for the year ended, and a Summary of Significant Accounting Policies and other explanatory information.

Managements Responsibility for the Financial Statements:

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("The Act") with respect to preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility:

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

In conducting 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 and the Order issued under section 143(11) of theAct.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors 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 Companys preparation and fair presentation of the financial statements that give a true and fairview 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 that 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:

(a) In the case of the Balance Sheet, of the State of Affairs of the Company as at March 31,2019;

(b) In the case of the Statement of Profit and Loss, its PROFIT and total Comprehensive Income for the year ended on that date;

(c) In case of the Statement of Changes in Equity, the movement and the changes in equity for the period ended on that date; and,

(d) In the case of the Cash Flow Statement, the Cash Flows for the year ended on that date.

Report on other Legal and Regulatory Requirements:

1. As required by the Companies (Auditors Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act 2013, We give in the Annexure-A, a statement on the matters specified in paragraphs 3 and 4 of the said 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 appears from our examination of those books;

c) The Balance Sheet, Statement of Profit and Loss including other comprehensive income, Statement of Changes in Equity 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 including other comprehensive income, Statement of Changes in Equity and the Cash Flow Statement comply with the Accounting Standards specified under Section 133 of the Act.

e) On the basis of written representations received from the Directors as on March 31, 2019, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2019, from being appointed as a Director in terms of section 164(2)of the Act.

f) Since the Company has stopped its Manufacturing Activities and also has not carried on any Commercial Operations in the Business of the Company, disclosure to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls does not exists and hence no disclosure to the same is being made.

g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rule, 2014, in our opinion and to the best of our information and according to the explanation given to us:

I. The company has disclosed its pending litigations and its Impact on the Financial Statements. Refer Point Number (ii) and (iii) of (C)- Other Disclosures in Note Number 21 in the Financial Statement.

ii. There are no material foreseeable losses assessed during the year and hence no provision is required to be made at the reporting date by the Company, as required under the applicable Law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

iii. The company does not have any amounts to be transferred to Investor Education and Protection Fund.

For MURALI & VENKAT

Chartered Accountants

G. SATISHCHANDRA

Partner

Membership Number: 027372

Firms Registration Number: 002162S

Place: Bangalore.

Date: 12th August, 2019

ANNEXURE-ATO THE COMPANIES AUDITORS REPORT ORDER, 2016

(Referred to in paragraph 1 of our report of even date)

i. a) The Company has maintained proper records to show full particulars including quantitative details and situation of all Fixed Assets.

b) The Fixed Assets of the Company have been physically verified by the Management during the year at reasonable intervals and no discrepancies between the book records and physical verification were noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of the immovable properties are held by the Company in its name.

ii. The company does not carry any inventory; hence no physical verification has been carried out. The Company has certain opening Stores and Spares for which no physical verification report is made available with respect to quantitative details. However, the closing Stores and Spares as on the end of theyearis NIL.

iii. In respect of the loans, secured or unsecured, granted by the company to companies, firms, limited liability partnerships or other parties, covered under Register maintained under section 189 of the Act, We report that:

a) The Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties listed in the Register maintained under section 189 of the Act.

b) Since the company has no loans granted, secured or unsecured, the reporting on terms and conditions for such Loans, repayment of Principal or Interest and any overdue thereon, does not arise.

iv. In our opinion and according to information and explanations given to us, there are no Loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Act are applicable and hence not commented upon.

v. The company has not accepted any deposit from the public, as per the provisions of section 73 to 76 or any other relevant provisions of the Act, and the rules framed there under.

vi. According to information and explanations given to us, the Company has stopped its manufacturing operations from June 2010 and no other commercial activities have also been carried out by the Company. Hence reporting on the maintenance of cost records as per Clause (vi) of the order does not arise.

vii. a) The Company is generally regular in depositing the undisputed Statutory dues with Appropriate Authorities and there are no undisputed and outstanding amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Service Tax, Sales tax, Duty of Customs, Duties of Excise, Value added tax, CGST, IGST, SGST and Cess and any other taxes, Duties or Levies applicable to the Company. The business has no remained outstanding dues of Statutory Payments as on 31st March 2019, for a period of more than six months from the date they became payable.

b) There are disputed liabilities with regard to Sales Tax, as on 31.03.2019.

Name of the Statute Nature of the Dues Amount (Rs.) For the Year
Central Sales CST 4,45,496 1999-00
Tax Act 5,80,226 2000-01
8,83,692 2001-02
Karnataka Entry KVAT 46,593 1999-00
Tax Act 98,290 2000-01
4,35,196 1999-00
46,57,137 2000-01
32,10,915 2001-02
KVAT & CST Act Penalty 5,000 1999-00
2,50,000 2000-01
18,35,296 2001-02
KVAT & CST Act Interest 3,11,968 1999-00
33,37,878 2000-01
19,18,381 2001-02
Total 1,80,16,068

However, there are no Disputed Liabilities in respect of Income Tax, Service Tax, CGST, IGST, SGST, Central Excise and Customs Duty

viii. In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment principal dues of loans borrowed from Syndicate Bank as on 31.03.2019. There are no Loans from Financial Institutions nor from Government, borrowed by the Company and there are no debenture holders with the Company.

ix. In our opinion, the Company has borrowed Term Loan from Syndicate Bank in 2012 for the purpose of settlement to labour. However, during the year company has not obtained any term loan and no money was raised by way of public offer or further public offer by the Company and hence our reporting on the disclosure of the application of funds, initial public offer orfurther public offer is not made.

x. According to the information and explanations given to us, no fraud by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi. According to information and explanations given to us, the Company has not paid any remuneration to its Directors during the year by the Company. Hence, our reporting on the disclosure of Compliance with the provisions section 197 of the Act does not arise.

xii. In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. A) According to the information and explanation given to us and based on our examination of the records of the Company, transactions by the Company with the related parties are compliance with 188 of the Act, and details of such transactions have been disclosed in the Financial Statements as required by the applicable Accounting Standards.

xiv. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year, so as to adhere to the provisions of Section 42 of the Act.

xv. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into non- cash transactions with Directors or persons connected with him and accordingly our reporting on the disclosure of Compliance with the provisions of section 192 of the Act, does not arise.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For MURALI&VENKAT

Chartered Accountants

G. SATISHCHANDRA

Partner

Membership Number: 027372

Firms Registration Number: 002162S

Place: Bangalore.

Date: 12th August, 2019